Inflation Hedging Investment For Sale Uncapped RPI Increasing Travelodge Hotel Income plus Office Income

Exchange House | Cecil Street | Carlisle | CA1 1NL


subject to contract

Click To Purchase


  • Attractive hotel & office investment

  • Primarily (85%) let to Travelodge Hotels in effect to Feb 2041

  • Lease to Travelodge Hotels provides for Uncapped RPI rent increases

  • Zero value allocated to vacant office element

  • Freehold

  • £2,525,000, subject to contract

  • 6.5% True Net Initial Yield

  • Low capital value of £603 per sq metre / £56 per sq ft



Carlisle is located within the county of Cumbria, approximately 488 km (305 miles) north west of Central London, 187 km (117 miles) north of Manchester, 293 km (183 miles) north of Birmingham, 93 km (58 miles) west of Newcastle, 154 km (96 miles) south east of Glasgow and 146 km (91 miles) south of Edinburgh.

The city benefits from good road communications being situated approximately 3 km (2 miles) west of Junction 43 and 5 km (3 miles) south of Junction 44 of the M6 Motorway. The A74(M) is approximately 5 km (3 miles) to the north and provides direct access to the M74 and Glasgow to the north west. In addition, the A7 and A69 link Carlisle City Centre directly with Edinburgh to the north and Newcastle to the east respectively.

The city is connected to the national railway network by Carlisle Station. Journey times are approximately 3 hours 30 minutes to London Euston, 2 hours 50 minutes to Birmingham New Street, 1 hour 15 minutes to Edinburgh, 1 hour 14 minutes to Glasgow Central, 1 hour 50 minutes to Manchester Piccadilly and 1 hour 20 minutes to Newcastle. Newcastle International Airport is approximately 91 km (57 miles) east of Carlisle and is accessed via the A69.

The University of Cumbria is headquartered in Carlisle with a history dating back to 1882. In addition, Carlisle is home to a castle and a cathedral hence it is a city rich in both culture and heritage.


Exchange House is situated close to Carlisle city centre and within the immediate vicinity of the new Cumbria County Council headquarters building and the English Gate Plaza leisure and office complex. Carlisle Railway Station is in close proximity.

English Street which is the prime retail destination for the city, is less than a five minute walk to the west and home to various national retailers including Boots, Marks & Spencer, River Island, Joules, White Stuff and WHSmith.

The subject property is also in close proximity to The Lanes Shopping Centre which provides over 60 retail and restaurant units with many of the national, multiple high street retailers present. These include Primark, Next, River Island, JD Sports and New Look. There is also dedicated car parking for 600 vehicles.



The subject property comprises a 61 bedroom Travelodge hotel arranged over basement, ground and four upper floors, along with offices at1st floor level and a self-contained ground floor dental surgery.

We draw your attention to the Asbestos Reinstatement Report of December 2021 which can be found in the dataroom, advising of the presence of asbestos in a basement boiler room.


The property has been measured by Commercial Measured Surveys Limited, reporting as follows.

Travelodge Hotel
Floor Use Area (sq m) Area (sq ft)
Fifth Plant 107.20 1,154
Fourth Bedrooms 612.00 6,588
Third Bedrooms 699.70 7,532
Second Bedrooms 699.80 7,533
First Access 32.20 347
Ground Reception 286.10 3,080
Basement Plant 735.00 7,911
Total Gross Internal Areas   3,172.00 34,145
61 Bedrooms


Offices (Vacant)
Floor Use Area (sq m) Area (sq ft)
First (GIA) Offices 653.8 7,037
Ground (GIA) Access 24.9 268
Total Gross Internal Areas   678.7 7,305
First (NIA) Offices 552.6 5,948


Dental Surgery
Floor Use Area (sq m) Area (sq ft)
Ground (GIA) Offices 337.3 3,631
Ground (NIA) Offices 327.0 3,520


  Area (sq m) Area (sq ft)
Hotel 3,172.00 34,145
Offices 678.7 7,305
Dental Surgery 337.3 3,631
Total Gross Internal Area 4,188 45,081

A set of floor plans is available to download and the measured survey report will be re-addressed to a purchaser at a cost of £995 + VAT.






The hotel is let to Travelodge Hotels Limited on effectively a full repairing and insuring lease from 7th April 2008 and expiring on 6th April 2033. As part of Travelodge’s CVA arrangements the landlord has the option to grant a reversionary lease to Travelodge extending the term through to 18th February 2041. Hence, there are in effect approximately 19 years remaining on the occupational lease.

The lease is subject to rent reviews based upon increases in the Retail Price Index without any caps. The last rent review was 7th April 2018 at which time the rent was set at £170,739 per annum. The next rent review occurs 7th April 2023 and five yearly thereafter. Note that as part of the recent CVA, the rent was reduced to 70% of the contracted rent during 2021.

There are no tenant arrears (statement 23rd Feb 2022)


The office accommodation is currently vacant and has been on the market at quoting rent of £12,000 per annum - £21.72 per sq metre / £2.0 per sq ft.

Dental Surgery

The dental surgery is let to Oasis Dental Care (Central) Limited on effectively a full repairing and insuring lease from 29th July 2010 until 28th July 2030. The lease ended 28th July 2025 but was extended on 7th February 2020 in return for granting the tenant 24 months’ rent at half rent. The lease is not subject to rent review.

The rent under the lease is £30,000 per annum (£91.74 per sq ft / £8.52 per sq ft).

Note that rooftop telecommunications equipment was previously let to Telefonica at £12,500 per annum.


Therefore, an investor will benefit from a total gross income of £200,739 per annum.  

The income for an investor will increase once the vacant office is let.


Service Charge and Rates

The service charge expenditure for the last three years was as follows:

Period 01.01.22 – 31.12.2022 (budget) £32,463
period 01.01.2021 – 31.12.2021 (budget) £111,251 (“Major Repairs £81,238”)
period 01.01.2020 – 31.12.2020  £109,942 (“Major Repairs £90,792”)
period 01.01.2019 – 31.12.2019  £80,671 (“Major Repairs £65,263”)
period 01.01.2018 – 31.12.2018  £44,583 (“Major Repairs £15,000”)

Service charge information can be found within the data room.

The “Major Repairs” relate to a project to undertaken during 2019 which involved concrete repairs, corrosion treatment, coping repairs and new lead flashings”.. Note that the final year of collection for the “Major Repairs” was 2021, so will not form part of the 2022 service charge budget. Please refer to the Health & Safety file within the data room for further information. Please also see the guarantee in respect of the works.

The current non-recoverable income in respect of the vacant office accommodation is as follows:

Service Charge £6,351.91 (exc VAT)
Insurance £822.32 (exc VAT)
Rates £19,456
Total Liability £26,630.23 (exc VAT)

With the current gross income at £200,739 per annum, the true net income to an investor is currently £174,109 per annum.


On 29th November 2021 Travelodge announced its results for the quarter ended 30th September 2021:

• Total revenue up 9.9% to £229.5m (2019: £208.8m, 2020: £88.2m)
• Average room rate up 13.3% at £64.04 (2019: £56.53, 2020: £41.11)
• EBITDA profit of £134.0m (2019: £111.5m, 2020: £31.0m)
• EBITDA (adjusted) profit of £87.2m (2019: profit of £57.5m, 2020: profit of £4.1m)
• Cash of £151.4m at 30 September 2021
• 15 new hotels opened
• Total network now 593 hotels and 45,285 rooms as at 30 September 2021

The budget market remains resilient, with revenue as a percentage of 2019 levels ahead of the total hotel market, driven by the strong levels of domestic leisure demand and a good recovery in ‘blue collar’ business demand. The company’s Chief Executive, Craig Bonnar, announced:
“Following the lifting of all Covid-19 restrictions Travelodge has delivered a record trading performance in quarter 3. We saw a significant increase in demand post 19 July, with very strong levels of domestic leisure demand across the UK this summer, good ‘blue collar’ business demand and we also benefited from the reduced VAT rate.

“The budget segment continues to recover ahead of the total UK market, and Travelodge has continued its seven-year track record of outperformance against the market segment. Whilst forecasting remains a challenge, and we continue to face a range of possible outcomes, we expect to return to 2019 RevPAR levels during 2022, driven by continued leisure and ‘blue collar’ business demand offsetting a slower recovery in ‘white collar’ corporate demand.

"With our large network of hotels stretching the length and breadth of the UK, a strong brand heritage which appeals to a wide mix of customers and our low cost business model, we are well positioned to benefit from the on-going recovery and future growth opportunities. So, whilst we do continue to face uncertainty in the short-term, we remain confident in the long-term prospects for budget hotels."

Travelodge Hotels Limited (Co. No. 0769170) has reported the following figures:

  31st December 2020 31st December 2019
Revenue £280.4 million £713.2 million
Pre-Tax Profits (Loss) (£161.2 million) (£4.9 million)
Net Assets £25.2 million £192.8 million

In 1985, Travelodge became Britain’s first value hotel brand when it launched in the UK, opening its first hotel at Barton under Needwood in the heart of England. Travelodge is now the UK’s largest independent hotel brand, with more than 581 hotels and 43,928 guest bedrooms across the UK and Ireland at 31st December 2020.

Travelodge hotels can be found in the centre of major cities, including London, Edinburgh, Cardiff, Manchester, Birmingham, Belfast, Dublin, Barcelona, and Madrid; in most of Britain’s larger towns, as well as in the classic seaside locations and vital roadside stops (Source:

The company has been significantly impacted by the Covid-19 pandemic, with the majority of hotels closed for large periods since March 2020. As a result, the company proposed a Company Voluntary Arrangement (CVA) which was approved on 19th June 2020. The CVA formed part of Travelodge’s recovery plan, which included steps taken to (i) re-open its hotels once the UK Government restrictions are lifted, (ii) reduce operating and capital costs, (iii) raise additional funds and (iv) temporarily reduce rents paid to landlords.

The recovery plan offered the best approach to address the short-term challenges facing the business as a result of the COVID-19 outbreak and to secure the future of its more than 10,000 employees.

The CVA proposed a schedule of differing rent levels, depending on the hotel’s categorisation, with some hotels receiving full rents and the majority receiving a temporary reduction in the rent payable covering the period between April 2020 and the end of 2021. All hotels return to full contractual rents in 2022. The subject property was rated a Category B, meaning 70% of the contracted rent is paid until 31st December 2021, at which point it reverts to full rent.

Unlike most CVAs, there were no proposed hotel closures or permanent rent reductions. Prior to the outbreak of COVID-19, Travelodge entered 2020 with a record level of cash reserves and delivered five straight years of strong growth, outperforming the midscale and economy sector and its peers.

Oasis Dental Care (Central) Limited (Co. No. 00505769) has reported the following figures:

  31st December 2020 31st December 2019
Revenue £54,476,000 £59,442,000
Pre-Tax Profits (Loss) £5,829,000 (£21,799,000)
Shareholders’ Funds (Deficit) £4,124,000 (£11,818,000)

The principal activity of the Company is the operation of dental practices.

The Company’s ultimate parent undertaking is The British United Provident Association Limited (Bupa) who has reported the following figures:

  31st December 2020 31st December 2019
Revenue £12,118 million £12,316 million
Pre-Tax Profits (Loss) £410 million (£78 million)
Net Assets £7,198 million £7,026 million

Bupa is an international healthcare company providing health insurance for individual and corporate customers along with health provisions including health assessments, GP services, physiotherapy, hospitals plus around 1,000 dental centres across the UK, Ireland, Australia, Spain, Chile, New Zealand, Poland, Brazil and Hong Kong. For further information see



The property has been registered for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).


We are instructed to seek offers in the region of £2,525,000 (Two Millions, Five Hundred and Twenty Five Thousand Pounds), subject to contract, reflecting a true net initial yield of 6.5%, assuming standard purchaser’s costs of 6.38%.

We assess the income from Travelodge Hotels Limited and Oasis Dental Care (Central) Limited at 6.5%. In effect, this means that no value has been attributed to the vacant office element of 552.6 sq m / 5,948 sq ft.

Please note that a purchaser will be re-charged the costs of the measured survey (£995 + VAT) which are provided in the data room.

Please note that a purchase will be charged a Transaction Fee of £10,000 + VAT.


Investment Considerations

  1. The property provides 20 years of income from Travelodge Hotels Limited;

  2. The rent increases from Travelodge are based upon increases in the Retail Price Index, uncapped;

  3. A purchase at the asking price reflects an attractive true net yield of 6.5% and a low capital value of £603 per sq metre / £56 per sq ft;

  4. Our analysis of the asking price attaches zero value to the vacant offices, providing an opportunity to enhance value;

  5. We suggest there is an opportunity to potentially increase the income by letting the roof to a telecommunications company.

Please note that the photographs were shot in 2020.

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Contact Us

Singer Vielle   +44 (0) 207 935 7200
Dale Henry +44 (0) 203 701 1356
Neil Singer +44 (0) 203 478 9120
Daniel Elia +44 (0) 203 701 1353

Vendors Solicitor

Eversheds Sutherland +44 (0) 292 047 7385
Jonathan Woodward