TAB, the real estate finance and investment house, has launched its new fractional ownership model, TAB Property, with the purchase of two Travelodge hotels located in Chigwell and Snaresbrook.
TAB Property allows investors to commit as little as £1,000 (€1,167) to part-own real estate assets and earn returns from both rental income and capital growth without having to take on debt.
The Travelodge hotel in Chigwell, Greater London was bought for £3.68 mln. The purpose-built property comprises 34 beds across two storeys.
The second Travelodge hotel was bought for £2.385 mln, located in Snaresbrook, Greater London. The 7,303 ft2 purpose-built property sits across two storeys.
Both properties are expected to provide investors with a 7.62% net yield, resulting in a total annual return of £462,000, with an additional 2.5% projected capital growth.
Duncan Kreeger, CEO and Founder of TAB said: 'As an advocate for democratising real estate investment, I'm excited to introduce our latest fractional ownership product, following our acquisition of Travelodge Hotels in Chigwell and Snaresbrook.
'Our platform empowers users to tailor their property ownership to meet specific goals, allowing them to diversify their investment portfolio.
'We've crafted an intuitive, user-friendly experience aimed at widening access to property investment, enabling more individuals to tap into the returns traditionally reserved for those with substantial capital.
'Our experienced team is constantly looking for new investment opportunities, and these acquisitions are just the beginning for TAB Property.'
TAB said it evaluated over 350 opportunities worth a combined £1 bn before acquiring the properties, studying long-term covenants and expected capital growth.
Travelodge Hotels is the largest hotel chain in the UK with a total revenue of just under £1 bn in 2022. Both properties are under an FRI lease set to expire in late 2035, with an option to extend until July 2041.
The commercial assets, priced at £327 per ft2, boast gross yields of 9.33% and 9.32%, respectively, surpassing recent Travelodge transactions traded at a 7.50% yield.
Notably, both properties hold the potential for expanding the number of rooms.
Parties involved in the purchase were law firm Brecher and accountancy, advisory and tax support from BKL.