JV Making $143M Travelodge Acquisition

SYDNEY-The Travelodge portfolio of eight hotels in Australia, together with the Travelodge brand and trademark rights for approximately 30 countries, are being acquired by a joint venture of NRMA Motoring and Services, JF Meridien Trust and James Fielding Trust. The $143-million transaction is expected to close in March. The seller is the Pritzker family, a source familiar with the transaction tells GlobeSt.com.NRMA Motoring and Services is a division of NMRA, one of Australia’s leading insurance, motoring and travel companies. JF Meridien Trust and James Fielding Trust are part of James Fielding Group, an Australia-based diversified property group. The Pritzker family includes, among others Robert Pritzker and his children, Liesel and Mathew. Recently, the two children each won $500 million in settlement money from their lawsuit regarding the removal of $1 billion in assets from their trusts by the family during the 1990s, according to published reports.The Travelodge properties that the family sold comprise eight properties with 1,355 rooms across the major markets of Australia–Sydney, Melbourne and Brisbane. Six of the hotels are located in Sydney. Toga, owner of the serviced apartment manager and developer Medina, will lease the entire portfolio of recently constructed hotels from the Travelodge Joint Venture. With Barana Group, Toga recently acquired a number of four-star hotels in Sydney and Melbourne and branded them “vibe” hotels.The sale was brokered by Geordie Clark, managing director of Jones Lang LaSalle Hotels. Clark says the off market transaction attracted significant interest from domestic and international investors. “Investors recognized the value of the well-established Travelodge brand, the diversification of the existing portfolio and the potential to roll out a highly profitable model across the region,” says Clark. NRMA’s investment in the Travelodge Hotel Group was the company’s first direct investment under its revised long term investment strategy, which has it focusing on “investment opportunities which have stable capital values, regular income and are long term in nature,” says NRMA Motoring & Services director Michael Tynan. Tynan says the acquisition represents around 8% of the company’s total investment portfolio and has a forecast income yield of at least 8% per annum.The transaction was entered into on the last day of 2004, ending a record year for hotel investment in Australia, according to JLL Hotels. When the final tally is complete, hotel sales are expected to have topped the A$1.5-billion market for the first time on record.