Travelodge plans hotels sale-and-leaseback deals

Budget hotel chain Travelodge plans to raise £400m via sale and leaseback of its 136-strong property portfolio. The Permira-owned company aims to use the capital to pay off debt and "significantly accelerate" its brand rollout.

Travelodge chief executive Grant Hearn said that the move was in part a response to the "very keen" prices the company had received on recent individual asset sales.

He added: "The sale will also allow us to reduce our cost of funding by paying down a large proportion of our existing debt, while still leaving us with the flexibility to take advantage of other investment opportunities."

Travelodge has appointed CB Richard Ellis to handle the deal, and the firm has drawn up a closed list of 30 potential buyers. The properties will be secured on 25- or 35-year leases.