French SCPI fund Iroko Zen has purchased a Premier Inn Hotel in Sunderland.
Located in the city centre at 1-3 Hind Street, the hotel comprises 125 bedrooms and a Thyme Bar & Grill arranged over ground and five upper floors.
The sale price of £7.8 million represents a net initial yield of 7.65 per cent including rental top-up, or 6.59 per cent excluding top-up.
Premier Inn Hotels Limited has a 25-year lease with a passing rent of £544,411 per annum which expires in September 2040, with a parent guarantee from Whitbread Group. The tenant has a break option in year 10, and the lease had around 10.5 years term certain at the time of sale.
Savills and Gowling WLG represented Savills Investment Management. Avison Young and Herbert Smith Freehills represented Iroko Zen on the transaction.
What they said
Peter Atkinson, director of Investment at Savills said: “It was a pleasure to close this deal to Iroko, in line with our client’s divestment strategy. As the second property we have sold to a French SCPI fund in the last few months, it’s clear that there is continued confidence in both Sunderland and the wider Northeast region for inward investment.”
Why it matters
This acquisition highlights continued foreign investor appetite for UK regional real estate, reflecting a growing trend among investors to diversify away from saturated urban centres and capture higher returns in well-located secondary cities.