DEVELOPER St Modwen has sold the lease for its Premier Inn hotel at Trentham Gardens for £10 million.

The company, which has played a key role in regeneration schemes in North Staffordshire, has agreed a deal with Danish company KS Habro Stoke.

KS Habro, part of the Habro Properties Group, now has a 150-year ground lease on the hotel, which is let for 35 years to Premier Inn for £590,000 a year.

Director Mike Herbert said the deal showed there was still cash available for firms in the construction sector.

He said: "Despite the much-publicised current economic difficulties, there remains good demand for quality product in quality locations.

"Delivering highly complex and top quality long term regeneration projects not only produces good confidence from occupiers, but also strong demand from investors."

The 119-bedroom hotel opened in March and was originally destined to be a Tulip Inn Hotel, until Premier Inn acquired Golden Tulip UK in 2007.

The deal comes as welcome respite for St Modwen, the firm behind the Trentham Lakes development, after revealing a £20 million half-year loss in June.

Habro spokesman Claus Mathiesen said: "The acquisition of this new hotel fits perfectly into our buying criteria."