Dalata Hotel Group has agreed the sale and leaseback of its Clayton Hotel in Cardiff to M&G Real Estate, one of the world's largest property investors.
Consideration for the transaction is £22.1 million and is expected to be completed by mid-June.
The hotel will be let on a new 35 year FRI (fully repairing and insuring) lease for an initial rent of £1.15 million per annum and will be subject to five yearly rent reviews, index-linked to the Retail Price Index. Dalata will retain the fixtures and fittings within the hotel to the value of £2.1 million and also the benefit of a 20 year restaurant sub-lease to Viva Brazil Cardiff Ltd, expiring in 2032.
The Clayton Hotel Cardiff is a 216-room, 4-star hotel with a bar, restaurant, fitness suite and extensive conference facilities, located within walking distance of both the Principality Stadium and Cardiff Central station. In 2016, the venue generated EBITDAR of £2.3 million.
The consideration is payable in cash and the proceeds of the transaction will be used to reduce net debt arising from recent acquisitions.
Dalata's deputy CEO of business, development and finance, Dermot Crowley, said, “The sale and leaseback of Clayton Cardiff is consistent with our stated strategy of growing our UK portfolio primarily through operating leases.”
M&G Real Estate's head of long income, Matthew Stone, added, "We are delighted to have agreed this bespoke transaction with Dalata, which reflects our strategy of working with occupiers to set the lowest possible rent in return for a long lease commitment."
