London, September 22, 2010 – McAleer & Rushe Group has today announced a forward funding deal selling its latest Jury’s Inn development in Gateshead for in excess of £19m to Aviva Investors reflecting a Net Initial Yield of 7.25%.
Stephen Surphlis, McAleer & Rushe Group’s Property Director commented,
“Securing Aviva Investors as an investment partner demonstrates the quality of investment product available in this instance, and is evidence that good developments with strong tenant covenants will attract institutional funding despite challenging market conditions.”
Chris McCormick, Fund Manager at Aviva Investors added:
“Millennium Quay is an exciting development area in the city and combined with a 35 year, indexed linked lease from Jury’s Inn this presents a sound investment opportunity.”
Due for completion in September 2011, the 204 bedroom, five floor hotel benefits from a prime waterfront position located on South Shore Road just a short walking distance from internationally recognisable landmarks including the Gateshead Millennium Bridge, The Baltic, The Sage and is in close proximity to Newcastle city centre.
John Brennan, CEO of Jurys Inn hotel group said,
“We’re very pleased with the investment by Aviva, which we believe is a very strong endorsement of the strength of the Jurys Inn business model. The opening of Gateshead will be the tenth new Jurys Inn hotel to open as part of our current expansion programme and will bring the total number of hotels we have in the UK to 25.
“This excellent development and prime location fits right in with our customer proposition of ‘Exceptional Everyday City Hotel’ and we look forward to welcoming new guests to the hotel in 2011, as we continue to position Jurys Inn as a clear mid-market leader in the UK hotel market.”
McAleer & Rushe Group’s ‘Millennium Quay’, also has planning permission for a new 60,000sq.ft. riverside office building forming Phase II of the centrally located development.
Steerforth Partners advised the McAleer & Rushe Group and Knight Frank acted for Aviva Investors.