Travelodge has raised £128m through a sale and leaseback transaction with Prestbury.

The 17 UK-based hotels will now be leased back to the budget chain on a 25–30-year term.

Prestbury’s CEO, Nick Leslau, said: “We are delighted to have added to our existing portfolio of Travelodge hotels.”

Travelodge will use £100m of the proceeds to repay debt and the remaining £28m will be reinvested in growing the business.

Travelodge finance director Jon Mortimore said: “This leaseback releases extra funds to really drive the growth of our business. There are significant opportunities to step up expansion in the UK both through accommodation and new revenues through our online business. This transaction provides us with the flexibility to bring forward and accelerate our growth plans.”