• Travelodge makes another move on mid market

Travelodge has taken on the leases of six hotels from Menzies in a further sign of the march of budget players into mid market territory.

The UK's number two budget operator said it expects to do a total of 15 conversions of existing hotels in the current year.

The Menzies hotels have been transferred at a nil premium and Travelodge capitalised up the rents payable for the full 25 year term to give a headline figure of £85m for the deal.

The hotels, in Edinburgh, Bath, Newcastle, Coventry, Oldham and Stevenage, will have £14m invested in them to increase the room count from 650 to 719. Being taken out are gyms, restaurants and meeting rooms.

The freeholder of the properties will remain Menzies current owner, R20, the Robert Tchenguiz investment vehicle. R20 bought Menzies in October 2006 together with aAim for £180m. A further acquisition of hotels was made by Menzies last August when it paid £54m for eight Thistle branded properties.

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