Premier Inn’s owner is preparing to sell and lease back at least £1 billion worth of its established hotels to help finance future expansion.
Whitbread noted signs of recovery in the property investment market and said it had a selection of sites with “an opportunity to generate additional value.”
In the first half of 2025, Whitbread completed the sale and leaseback of two hotels for £56 million, achieving an average yield of just over 4%. The company is also moving forward with the sale and leaseback of seven additional hotels in various regional locations across the UK.
As part of a five-year strategy to return at least £2 billion to shareholders, the group plans to “recycle” a minimum of £1 billion worth of its more mature properties through sale and leaseback agreements.
Chief Executive Dominic Paul stated that confidence in the five-year strategy has led Whitbread to commit to a £250 million share buyback over the next 12 months.
He added: “With a more favourable outlook in the property investment market, we will look to recycle at least £1b of our more mature property assets to fund future growth and drive higher financial returns.'
Whitbread reported a 1% decline in revenue for the 52 weeks ending 27 February 2025, with pre-tax profits down 14% to £483 million.
The group attributed the drop in profits to planned restaurant closures across its portfolio, weaker demand in the UK market, and rising costs.
Last year, the Premier Inn operator revealed plans to convert 112 branded restaurants into hotel rooms and to fully exit 126 restaurant sites.
Over the next 12 months, the group plans to open between 1,000 and 1,200 new rooms in the UK, with 500 to 700 of those located in former food and beverage establishments.
