Secure Income REIT has penned a deal to purchase a £193 mln (€232 mln) portfolio of Travelodge hotels in the UK.
The acquisition is conditional on the placing of £140 mln ordinary shares at a price of 298.6 pence per share.
The announcement comes as the company unveiled its interim results for the first six months of the year, displaying a 2.1% increase in portfolio valuation and an EPRA NAV uplift.
'I am delighted to report a very positive first half for the group,' commented Martin Moore, independent non-executive chairman of the company. 'Our EPRA NAV per share has continued to rise, up 6.2% over the six months to 30 June 2016 to just over 300p, and we are pleased to have made our maiden quarterly dividend payment in August. We are very excited to have secured an opportunity to expand our business with the £193 mln Travelodge transaction which, if supported by shareholders, will raise our dividend yield, lengthen our lease duration even further, degear the business and diversify our covenant profile.'
Should the deal complete, the company estimates a 14% increase in the dividend yield to 4.5% on the placing price.
Secure Income REIT's H1 results also showed a further reduction in net loan to value ratio, to 59.5%, down from 61% at 31 December 2015. The company announced a weighted average unexpired lease term of 23.1 years with no breaks, and passing rent of £78.5 mln as at 30 June 2016 with annual fixed or RPI uplifts, secured wholly against global listed businesses.
