MWB Group, the operator of the Hotel du Vin and Malmaison hotel, has announced it has exchanged contracts on the sale and leaseback of four of its Malmaison branded hotels for a total consideration of £86.6m, with the proceeds to be used to reduce its debt levels. The Charterhouse Square hotel in the City is being sold to and leased back from funds managed by DEKA Immobilien GmbH whilst the other three properties in Birmingham, Newcastle and Manchester are being sold to and leased back from funds managed by Legal and General Property Limited. The hotel properties will, on completion, be leased back to Malmaison for a total initial annual rent of £6.1m. MWB said that the amount paid for the deal reflected “a yield which management considers to be a strong outcome for shareholders in the current market environment”. It also said that additional residual value from the deal had not yet been determined but it believed that when added to the cash consideration for of £86.8 million, the total will “compare favourably” with the aggregate book value of the properties at 31 December 2010 of £142.4m. The company said that the proceeds from the transactions would be used to reduce the indebtedness of Malmaison, which as at 31 December 2010, amounted to £272.1m. The group said it continued to be in discussions with a number of parties regarding the sale and leaseback or outright sale of a number of its hotel assets, as it looks to reduce its debt levels. It said it continued to operate within the terms of the existing facilities. Richard Balfour-Lynn, chief executive, said: "I am pleased that we have made great progress along the path towards achieving more suitable debt levels within both Malmaison and the group. We are fortunate to have the confidence of such strong institutions that recognise the outstanding long term prospects of our hotel businesses."