Salford hotel sold for £12m

BP Pension Fund has bought the Ibis Budget hotel in Salford Quays for £12m, a net initial yield of 5.05%.

The 210-bedroom hotel on Trafford Road is let to Accor UK Economy Hotels, which holds a parent company guarantee on the property for 22 years from June 2008.

The property is held leasehold for 150 years from 20 March 2003 at a peppercorn rent. The current rent is £640,817, the equivalent of around £3,000 for each room.

BP Investment Management purchased the long leasehold investment on behalf of BP Pension Fund, advised by Hoddell Stotesbury Morgan and NJB Hotel & Leisure Property.

The hotel underwent a full refurbishment and rebranding last year from the Etap chain to Ibis Budget to bring it in line with the rebranding by hotel operator Accor.

The vendor was unrepresented.