UK property firm Land Securities has said its property partnership business Land Securities Trillium (LST) has acquired a portfolio of hotels from the world's fourth-largest hotel operator Accor as part of a sale and leaseback deal. The group, whcih became a real estate investment trust (REIT) in January, will pay £439 mln (EUR 660 mln) for the portfolio, with a commitment to invest about £35 mln over the next four years in property improvement works.

UK property firm Land Securities has said its property partnership business Land Securities Trillium (LST) has acquired a portfolio of hotels from the world's fourth-largest hotel operator Accor as part of a sale and leaseback deal. The group, whcih became a real estate investment trust (REIT) in January, will pay £439 mln (EUR 660 mln) for the portfolio, with a commitment to invest about £35 mln over the next four years in property improvement works.

The portfolio comprises 30 hotels operated under the IBIS two-star and Novotel three-star brands, representing about a third of the hotels owned or operated by Accor in the UK, Land Securities said in a press release issued on Monday.

LST will lease each hotel back to Accor on a 84-year leasing contract which will include 12-year rolling breaks, while retaining responsibility for the lifecycle maintenance of the properties. Rental income for each hotel is based on an agreed percentage of the hotel's annual turnover.

The hotels are mainly located in city-centre locations across the UK, with a weighting towards London. It is expected that this portfolio will be included in the REIT qualifying portfolio. Based on 2006 performance, the portfolio would have generated gross rent in excess of £27 mln per annum.

'We have had a tremendous start to 2007 with over £2 bn committed to growing our business', said LST's ceo Ian Ellis. 'This acquisition represents the first step in the development of a long-term relationship with Accor as its UK property partner, helping them to achieve their core objective of expanding their share in the UK hotels market'.

Last Friday, Land Securities Trillium won the right to buy Royal Mail's surplus property portfolio of more than 300 sites, valued at around £110m.