A joint venture between the BAE pension funds and Immobilien Europa Direkt has acquired the Sofitel at Gatwick North Terminal with the help of Schroders.
The investment is designed to fit with the BAE schemes' risk averse investment strategy, while delivering long-term income.
It is the ninth hotel acquisition transacted by Schroder Real Estate after it integrated specialist hotel investment management platform Algonquin Management Partners, which it acquired in May last year. Schroders now manages 51 hotel assets at a value of £2bn.
The buyers were advised by CMS, Stephenson Harwood, Carey Olsen, Osborne Clark, and PwC, while the seller was advised by Burges Salmon and Eastdil Secured.
BAE Systems Pension Funds Investment Management senior property specialist Ben Ward said: "This investment provides an attractive combination of increasing occupier demand as the airport expands capacity, but with relatively few supply threats.
"Schroders' deal structuring also worked particularly well for our risk averse investment strategy."
Schroder Real Estate global head Duncan Owen added: "We are delighted to enter into a joint venture with a compatible long-term investor such as BAE Pension Funds. Acquiring the Sofitel London Gatwick hotel utilises Schroders' expert hotels platform, supporting attractive returns for both investors.
"This prime location has the potential upside to deliver long-term income within a sector that provides defensive qualities in conjunction with upside potential through active management."
The hotel comprises 518 bedrooms, 565 parking spaces, five food and beverage outlets, 11 meeting rooms, and 5,000 square feet of office accommodation. It will continue to be operated by the previous owner, Arora Hotels, under a lease which providers a long-term income.
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