Secure Income REIT acquires UK leisure and hotel portfolios for €489m

The London AIM-listed property company revealed the transactions on Friday as it announced its 2017 annual results. 

The pure hotel portfolio comprises 59 properties let to hospitality group Travelodge. The investment volume of £212 mln represents a net initial yield og 6.1% and a weighted average unexpired leases term of 23.5 years.   

Manchester Arena
The leisure assets are spread across the UK. The investment volume of £224 mln represents a net initial yield of 5.9% and with a weighted average unexpired lease term of 18 years. 

The portfolio includes Manchester Arena, a 3-hectare site on top of Manchester Victoria station. The complex includes the UK's largest indoor arena by capacity, at 21,000 seats, which is let for 27 years to SMG, the world's largest venue management company. There is also 14,864 m2 of office and additional leisure space, a 1,000 space multi-storey car park and advertising hoardings.

Other elements in the portfolio include the Brewery at Chiswell Street, the largest catered events space in the City of London; 17 hotels let to Travelodge; and 18 freehold high street pubs let to or guaranteed by Stonegate, one of the UK's largest privately managed pub operators.

Expanded portfolio
To fund the deals, Secure Income plans to raise up to £315 mln by placing more than 86 million ordinary shares with institutional investors. The shares will be priced at 365 pence each, equal to the 31 December 2017 EPRA NAV per share adjusted for the completion of the transaction. 

Secure Income owned 81 healthcare and leisure assets, valued at £1.8 bn, at end-December 2017. The new acquisitions enlarges the portfolio to 177 assets and a pro forma portfolio value of £2.2 bn.

EPRA NAV per ordinary share at end-December 2017 was 370.4 pence, up 14.5% on the previous December. Adjusted EPRA EPS came to 13.6 pence, up 20.4% year-on-year. 

Image: Manchester Arena