Travelodge has launched a £100m joint property fund with Twenty10 Fund Management to continue the growth of its budget hotels in the UK.
The fund, which will consist of £50m equity, £50m bank debt and a £500k investment made by Travelodge , will as of 2010 be used to fund the budget hotel chain’s aim to open 600 more hotels by 2020.
Targeting new developments as stand alone properties and mixed use schemes, Travelodge will primarily use the fund to open five new hotels in London and other major UK cities every year, each of which will be leased back to the group on 25-35 year leases.
Paul Harvey, managing director of development at Travelodge, said the fund would enable the group to continue with their UK growth drive.
“This funding will ensure that we are more nimble and enable us to capitalise on opportunities that are presented to us without an investment partner,” he said. “We are now establishing ourselves as the number one hotel brand in many of the country’s largest cities and this new fund will push our growth even further.”
Travelodge expansion continues
The venture with Twenty10 Fund Management comes six months after Travelodge launched a similar £100m fund with Meghraj , named Tamesis Capital, to acquire 8-14 going concern hotels.
Travelodge, which currently operates 28,000 rooms in 385 hotels, will account for 10 per cent of the total accommodation available in the UK when it reaches its operational target of 70,000 rooms in 10 years time.