The investment trust said the outstanding quarter’s rent due from Travelodge amounted to 6.4% of its annual rental income, and that while it has been engaged in discussions with the chain’s senior team for a number of weeks they had “yet to provide any proposals for dealing with the outstanding amounts due”.
While the REIT said it was “extremely aware of and sensitive to the challenges facing so many businesses today in this unprecedented pandemic, Travelodge has over 580 hotels with more than 44,500 rooms and recently reported record earnings of £129.1mln with net debt of c. £311mln”.
As a result, the company said it was “disappointed and surprised that they [Travelodge] have not yet presented a proposal”.
“In light of this, Secure Income REIT plc has already reluctantly initiated actions to recover this debt, but remains hopeful that this matter can still be settled prior to those options being fully pursued”, the group said.
The company’s announcement came in response to recent press reports that Travelodge is currently ins talks with a number of landlords regarding its rent payments as it struggles to save cash amid government lockdowns in the UK and Ireland.
Hoteliers and the rest of the travel sector, including major airlines and cruise operators, have been hit hard by the pandemic as lockdown measures and travel restrictions have all but eliminated passenger traffic around the world.
Shares in Secure Income REIT were down 8.8% at 310p in mid-afternoon trading on Monday.