The Charities Property Fund (“The Fund”), managed by Savills Investment Management, has purchased the Jurys Inn hotel in Brighton from McAleer & Rushe for £28.23 million. The property is a modern, purpose-built hotel extending to 234 rooms and is located in the city centre adjacent to the train station.
The lease has an unexpired term of in excess of 27 years with five-yearly rent reviews linked to uncapped RPI, with the next review due in 2017. The price reflects a net initial yield of 5.25%.
Harry de Ferry Foster, Fund Director, commented: “This is the second Jurys Inn Hotel we have acquired from McAleer & Rushe, having purchased one in Derby earlier this year. The asset perfectly suits the Fund’s requirements by providing good quality income secured to a recently restructured business under the new ownership of Lone Star and is underpinned by the attractive fundamentals of a prime location, modern real estate and an income stream indexed to RPI.
“Brighton generates strong leisure demand, which translates to good levels of hotel occupancy. The hotel market is undersupplied and it is hard to develop new stock within the city. The Fund has deliberately grown its exposure to alternative property sectors in recent years with a weighting of approximately 20%. We continue to find value in non-mainstream sectors that are becoming increasingly institutional in their appeal for property investors.”
The purchaser was advised by Cooper Rose and Gerald Eve. The vendor was advised by Steerforth.
The Fund passed the £1 billion milestone in assets under management in September, strengthening its position as the largest charity-specific property fund in the UK. In the previous 12 months the Fund grew by £220 million and acquired 40 properties at an average yield of 6.7%.
Key to the Fund’s rapid growth has been its ability to generate a consistently high level of income while continuing to outperform the IPD/AREF All Balanced Property Funds Index. On average the Fund has delivered 5.6% net income over the past five years and in the last 12 months alone it has distributed £45 million of income. It has now outperformed the Index for eight years in a row.
http://www.propertyweek.com/charities-property-fund-buys-jurys-inn-in-brighton/5077827.article
Contacts:
Patrick Evans / Stephen Sheppard / Saira Khan
Citigate Dewe Rogerson
Tel: +44 (0)20 7638 9571