M&B sells off Innkeeper’s Lodge sites

WEST MIDLANDS pubco Mitchells & Butlers has disposed of 52 of its Innkeeper’s Lodges to Travelodge in a 25-year deal worth £75m.

The lodges, which have 2,000 rooms and are all adjacent to the company’s restaurant and pubs, represent the majority of its lodge business.

M&B has also arranged a sale and leaseback arrangement for eight of its pubs which will yield a further £16m.

Estate manager Prupim, part of Prudential has taken most of the properties, with Travelodge leasing and operating the lodges, and M&B continuing to lease and run the pubs.

M&B’s chief executive Adam Fowle said: “This transaction is in line with our strategy of disposing of the non core assets and focusing the business on expanding the number of sites of our market leading restaurant and pub brands which have significant growth potential.”

In March, following an acrimonious boardroom battle, new M&B chairman Jim Lovering announced a new strategy for the company which would see an increased focus on food outlets such as Toby Carvery and Harvester.

The deal will boost Travelodge’s estate to 452 hotels and increase its room stock to 30,504 across the UK, Ireland and Spain.

The 52 UK hotels, which include a number of grade ll listed buildings, range from 21 to 85 rooms and are adjacent to a Mitchells & Butlers restaurant and pub. 

Travelodge said it was seeking to retain all 430 staff from Mitchells & Butlers and would recruit a further 115 positions, which include 25 hotel manager roles and 90 hotel staff.

Travelodge has signed a 25 year lease on the properties and will embark on a £10 million conversion programme over the next four months.

Travelodge’s Executive Chairman, Grant Hearn said: “This innovative deal represents the whole of last year’s growth in one move. I believe this deal also signifies a great move for Mitchells & Butlers as they refocus on value and growth from their core pub brands. We are very excited to be part of such a ground breaking deal.”

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