Hilton completes sale-and-leaseback deal

Hilton has raised £336m from the sale and leaseback of 10 of its UK hotels.

The hotels have been sold to a limited partnership formed by two private property companies, Rotch and Farnsworth, and the Bank of Scotland.

Under the agreement Hilton has entered into turnover-based operating leases on the properties for the next 27 years. The rentals are based on an average of 28.8% of hotel turnover, plus £3.1m per year, with a guaranteed minimum rent of £17.5m a year.

The Hilton-branded hotels in the deal, which have a total of 2,043 bedrooms, are at Cobham and Croydon in Surrey; East Midlands airport; Kensington, London; Leeds city centre; Northampton; Nottingham; Tewkesbury; Watford, and York.

Bayerische Landesbank and Bank of Scotland financed the deal and were advised by consultant Insignia Hotels.

The money raised will be used to reduce Hilton's net borrowings of £1.5b.

by Ben Walker