Overview
Travelodge Group is a sector specific wholesale hotel fund which offers Investors access to the high yielding 3 star hotel sector.
The portfolio is totally dedicated to Travelodge branded hotels and is geographically diverse, with assets in Queensland, New South Wales, Victoria, Western Australia and New Zealand.
Travelodge Group owns 13 hotels, with a total gross value (including brand names) of $375.2 million.
The Travelodge hotel portfolio is leased to Value Lodging Pty Ltd, a subsidiary of the Toga Hospitality Group.
Key Fund terms
Structure
Stapled trust and company
Return targets
Five year IRR target of 15 per cent per annum (net of fees)
Fund life and liquidity
Open ended fund
Management
All of the hotels are operated under long term leases to Toga Hospitality, one of Australia's largest hotel management companies
Fund management fees
Fund management fee - 0.35 per cent per annum of gross asset value
Acquisition fees of 1.00 per cent of purchase price
No other fees
Distributions
Trust distributions of cash earnings paid monthly
Hotel investment criteria
All hotels must meet Travelodge brand criteria. Usually involves capital works for new acquisitions
Minimum room size 22 square metres
Each location to offer significant proportion of corporate business
Resort locations not considered, nor new build
Investment Committee
Four member Investment Committee approve all major investment decisions and any related party transactions.