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Mayfair Capital’s PITCH acquires top trading hotel from Town Centre Securities

Mayfair Capital’s Property Income Trust for Charities (PITCH), the top performing specialist property Fund for charities over 10 years (as at 31 December 2021, source MSCI/AREF[1]), has purchased a Premier Inn hotel in Leeds. The property was acquired from Town Centre Securities PLC (TCS), the property investment, development and car parking company, for £16.08m, reflecting a net initial yield of 4%.

The acquisition enhances PITCH’s ability to provide long-term, sustainable and growing income for charity investors. The property provides a WAULT of 20.3 years and a WAULT to break of 15.3 years.  

The property, a modern, purpose-built hotel was constructed in 2017 and comprises 136 bedrooms over eight floors with a bar and restaurant facility on the ground floor. The hotel is let to Premier Inn Hotels Ltd with an attractive and rare guarantee from its owner, Whitbread Plc, until 2042 with indexed rent reviews. Since opening the hotel has delivered strong trading results and has been open throughout the pandemic.

TCS is progressing plans to bring forward further development on the remainder of the waterside site to deliver a truly mixed-use destination within this key location.

Mayfair Capital’s thematic approach to investing looks to capitalise on long-term structural changes in the economy by identifying drivers of occupational demand across five key areas – change and disruption, connectivity, climate and environment, communities and clustering, and consumers and lifestyle. This asset scores highly across all areas, particularly climate and environment, connectivity and consumers and lifestyle.

The building has strong sustainability credentials with an EPC rating of A, on-site solar panel-based renewable energy production and electric vehicle charging points. Following the acquisition, the intention is deliver a net zero carbon in operation asset, in alignment with requirements of the UKGBC Net Zero Carbon Buildings Framework.

The hotel is situated in a dominant position in the centre of Leeds, just three minutes’ walk from Leeds City Train Station and forming part of the Whitehall Riverside development. Leeds is also a strong thematic location which benefits from excellent rail, road and airport networks and scores above the UK average on the communities and clustering theme, according to the Swiss Life Thematic Cities Index, particularly outperforming in a range of employment metrics.

 

 

 

Hector Ahern, investment associate, at Mayfair Capital said:

“After muted activity in the hotel sector during 2021, the outlook for long let hotels appears to be improving rapidly. As the largest operator with a strong balance sheet, Premier Inn has remained largely stable, with well-located assets and strong fundamentals. It remains the operator of choice for most institutional real estate investors.”

Simon Martindale, fund director of the Property Income Trust for Charities, added:

“This asset is an excellent addition to the portfolio which increases the Fund’s weighting to alternatives and provides secure and long income that will rise ahead of inflation. We expect the strong hotel fundamentals and thematic credentials of the asset to underpin performance during the hold period.”

 

Craig Burrow, development director at TCS, said:

“The strategic disposal of this strong investment asset will enable us to progress with the next phase of development at Whitehall Riverside. TCS has a long-term commitment to the regeneration of this key waterside site and continues to work closely with Leeds City Council to maximise its potential. We are looking forward to bringing our future plans to fruition.”

Ben Hall, Partner at NorthCap, said:

“We are so pleased to have been able to facilitate this ‘off market’ investment transaction by leveraging our long-standing relationships. TCS were a pleasure to deal with, with both parties doing exactly what they said at the outset. It was great to be able to help Mayfair Capital in securing this superb long let hotel asset in the centre of Leeds.”

TCS was unrepresented in the transaction and NorthCap acted for the purchaser

 

[1] MSCI/AREF UK All Balanced Property Funds Index

 

 

Hector Ahern
Hector Ahern
Senior Investment Associate
Hector Ahern
Hector Ahern
Senior Investment Associate

Hector joined Mayfair Capital (now Swiss Life Asset Managers UK) in February 2021 to work with both the Transactions and PITCH Teams. His responsibilities include acquisitions and disposals across all of Swiss Life Asset Managers UK Funds and assisting the PITCH Team with fund and asset management duties.

Previously, he spent nearly five years at Knight Frank in their Alternative Investment Team focusing on operational property.

He has a degree in Economics & Politics from Durham University and a Real Estate MSc from the University Of Reading.

Property Income Trust for Charities

A Fund managed by Swiss Life Asset Managers UK Limited

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