AS a new three star Premier Inn prepares to open in York city centre on Saturday, the land on which it stands has been sold for £10.45 million.

The new 91 bedroom four storey hotel next door to the Reel Cinema in Blossom Street will generate 50 jobs and opens for business on Saturday (April 10).

It is the result of the conversion of 1960s-built offices which once housed railway organisations, including Network Rail.

Its former owner, the Prudential, sold it in 1999 to a consortium called The Blossom Street Venture, which with the help of York-based developers, The Helmsley Group, converted the offices into the hotel, while Whitbread Plc, the Premier Hotels parent company, agreed to a 25 year lease.

Now, ironically, the developed site has been sold back to the Pru in the shape of its land investment arm PRUPIM. The deal represents slightly more than the original asking price.

PRUPIM will now have the benefit of an annual rent for the hotel of £646,000 - representing a net initial yield of 5.85 per cent. There will be graduated rent increases up to £1.06 million by year 2020.

The hotel is yards from another 102-bedroom Premier Inn complex, whose freehold is owned by Whitbread. The two are separated only by the New York Club, although the car parks behind are linked.

A new pub within the Premier Inn has been created. Called Longboat, it is part of the hotel's Table Table branding.

A spokeswoman for Premier Inn said there were already a number of bookings for rooms on the opening night, Room prices start at £49.