Arjun-backed Welcome Break secures long-term lease extensions and completes £815 million refinancing

• Welcome Break secures 75-year lease extensions on eight sites, creating unique ‘quasi-freehold’ status.

  
  

• In conjunction with lease extensions, a £815 million refinancing has been agreed with syndicate of banks and investors to refinance existing debt and fund new projects.

  
  

• The two milestones provide Welcome Break with long-term stability and demonstrate strength of business.

Arjun Infrastructure Partners (“Arjun”), the European mid-market infrastructure investor, has today announced that its portfolio company Welcome Break, one of the UK’s largest operators of motorway service areas, has successfully concluded a landmark agreement with National Highways and the Department for Transport to extend leases at eight of its sites for a further 75 years.

Welcome Break operates 60 motorway service areas and 31 hotels across the UK, employing more than 6,000 people. The business is at the forefront of the UK’s transport decarbonisation agenda, operating one of the country’s largest EV fast-charging networks. The eight sites with new 75-year lease extensions are Newport Pagnell (M1), Corley (M6), Woodall (M1), Birchanger (M11), Warwick (M40), Membury (M4), Keele (M6) and Leicester Forest East (M1). All sites are located on land owned by National Highways, England’s Strategic Road Network operator.

The long-term lease extensions strengthen the company’s estate by moving a significant proportion of its assets towards ‘quasi-freehold’ status, improving credit quality and enhancing long-term value. The first-of-its-kind agreement in the motorway services space demonstrates the essential role Welcome Break plays in the UK’s transport infrastructure, providing critical facilities to more than 80 million motorists annually.

In parallel to the lease extensions, Welcome Break has completed a £815 million refinancing, comprising an all-senior debt package raised from a syndicate of leading UK and international banks, together with long-term core infrastructure investors. The refinancing will enable full repayment of the group’s existing debt and includes a £200 million undrawn facility to support Welcome Break’s active pipeline of growth projects.

Arjun first invested in Welcome Break in 2017 with a long-term ownership horizon, recognising its role as an essential part of the UK motorway network and its positive contribution to local communities. Since Arjun’s initial investment, the business has continued to expand and modernise its network.

Charles Hazelwood, Partner at Arjun Infrastructure Partners, commented: “With over £6 billion of AUM invested in UK and European infrastructure, we’re firm believers in the opportunity of UK infrastructure investment. We’re incredibly proud to see Welcome Break achieve the dual milestones of long-term lease extensions and a successful refinancing. A perfect example of the real infrastructure we invest in – assets with stable cash flows, inflation protection and long-term contracts – Welcome Break’s success truly exemplifies our investment strategy, generating sustainable growth in essential services, while delivering long-term value for local communities and investors.”

John Diviney, Chief Executive at Welcome Break said: “We are delighted to have concluded this long-term lease agreement with the Department for Transport and National Highways. With the certainty that this agreement gives us, we can now focus on our plans to enhance the customer experience across these eight locations. We will be investing to expand our existing EV charging infrastructure at each of the sites and also upgrading a range of other facilities. We are also delighted to have completed this landmark refinancing, supported by our key relationship banks and long-term infrastructure partners. This new facility strengthens our balance sheet, provides significant flexibility to fund growth, and positions Welcome Break to continue investing in enhancing the customer experience across our network.”

Keir Mather, the Department for Transport Minister said: “Motorway service areas are key to keeping Britain moving – supporting drivers, boosting local economies, and helping us transition to cleaner transport. This landmark agreement with Welcome Break will secure thousands of new jobs, deliver major new investment, and expand EV charging across key sites. To deliver our Plan for Change, we're backing the roads industry, to boost jobs and grow the economy."

Advisors on the lease transaction: Welcome Break was advised by Newmark (commercial real estate) and Freeths (legal). The Department for Transport and National Highways were advised by CBRE (commercial real estate) and Eversheds Sutherland (legal).

Advisors on the refinancing: Welcome Break was advised by Evercore (financial adviser) and Simpson Thacher & Bartlett LLP (borrower’s counsel). The lenders were advised by Latham & Watkins LLP (legal).