Preston Premier Inn on market for £8.7m 

Kames Capital is looking to offload the 140-bedroom Fox Street building, let to the hotel operator until 2036. 

Preston’s Premier Inn hotel is located in the city centre and generates a net income of £796,206 a year. 

Kames has instructed CBRE to sell the building, which is being marketed with a price tag of £8.7m. 

The sale would reflect a net initial yield of 8.5%. 

Premier Inn’s 25-year lease, signed in 2011, accounts for 91% of the asset’s total income. The building’s ground floor occupiers include German Doner Kebab, clothing retailer Hollywood Exports and Kaspa’s Desserts. 

Premier Inn’s lease has a built-in break option in 2031. 

Preston’s hotel market could suffer from “a severe supply and demand imbalance in the short to medium term”, according to marketing documents prepared by CBRE. 

There is currently one 80-bedroom hotel under construction in the city and the lack of supply could be “exacerbated by the significant regeneration and HS2 development activity which is expected to increase both leisure and business tourism into the city”, CBRE added. 

Earlier this year, Preston City Council adopted a regeneration framework for the area around the city’s train station. 

The framework sets out a vision for grade A office space, an enhanced retail and leisure offer, and new housing. 

Mayfair Capital bought a similarly sized Premier Inn in Leeds earlier this year for £16m. The 136-bedroom hotel was sold by Town Centre Securities in an off-market deal.