Leading legal business DWF has advised Whitbread, the UK’s largest hotel, restaurant and coffee shop operator, on the national hospitality business’ first forward funding transaction for its hub by Premier Inn hotel chain, as part of the company’s strategic plan to carry out a number of such transactions this year with proceeds of £100 to £150 million.

Whitbread, which owns Premier Inn and Costa, has exchanged contracts with property fund manager Legal and General for the sale, development and leaseback of its 389-room hub by Premier Inn hotel in Kings Cross for £84.5million in cash.

DWF advised Whitbread, led by real estate partners Paul Inman and Mel Williams, DWF National Head of Hospitality, with support from DWF director Shaun Hill in the construction team and DWF partner Jon Stevens in the corporate tax team, on the sale of the site to Legal and General with a 25 year lease and the forward funding agreement for completion of the development. The site is currently under construction and located next to King’s Cross railway station.  The transaction will produce a net yield of just under 4% against an annual revenue of £3.5million for Legal and General.

Paul says: “Whitbread is a long-standing client and we’re pleased to have worked with them on this flagship transaction, which highlights our ability to handle large, complex deals efficiently and deliver high quality service against tight timescales.”

Simon Hobbs, Estates Director at Whitbread Hotels and Restaurants, commented: “This transaction demonstrates our ability to create new opportunities from our freehold estate, leverage the quality of our covenant and recycle value. We have an ongoing working relationship with DWF and they have delivered a high quality professional result on time and to budget.”

DWF’s national real estate team has been involved in a number of significant transactions in the hotel and leisure sector this year, including using business premises renovation allowances (BPRA) to secure a £15million investment to transform Durham’s Old Shire Hall into a luxury hotel and using BPRA to secure a £40million fund raising venture to convert Cardiff’s disused historical Coal Exchange building into a 200-room hotel.