Scarborough Borough Council has completed its first acquisition since adopting a new commercial property investment strategy.
ESH can reveal that the council has purchased the Travelodge Hotel in central Scarborough for £14m from a UK charity.
The 140-room hotel on St Nicholas Cliff is located above the town’s South Bay. It is let to Travelodge for an unexpired term of almost 30 years with five yearly rent reviews. Following September’s rent review, the price reflects a net return of 5.9%.
Richard Bradley, Scarborough Borough Council’s commercial director, said: “This is our first major investment since adopting our commercial property investment strategy earlier in the year. The strategy focuses on acquiring commercial property investments that can result in positive financial returns for the council to help support our public service delivery. The purchase of the Travelodge Hotel building was an ideal opportunity for us and we will continue to seek other investment opportunities going forward.”
Scarborough Borough Council was advised by Edgerley Simpson Howe and NJB Hotel & Leisure Property. It is the latest council to invest in commercial property.
Data exclusively compiled for Property Week found that councils’ spending spree totalled £994m between January and June, and Scarborough’s acquisition will further add to the total that is expected to beat last year’s £1.8bn figure by the year-end.