Aviva Investors, the global asset management business of Aviva, has acquired a hotel development site in London's Docklands area for £106 mln (€124 mln).
The deal, earmarked for the Lime Property Fund, involves the development by London-focused developer, Rockwell, of a 30-storey 400-bed Premier Inn hotel.
Whitbread, Premier Inn’s parent company, will take a 35-year lease on the hotel and restaurant at an initial rent of £4.4 mln per annum, subject to 5-yearly rent reviews to annual increases in CPI.
Designed by architects SimpsonHaugh, the 30-storey development will provide a gateway to Canary Wharf and is scheduled for completion in early 2022.
Kris McPhail, Fund Manager, Aviva Investors, said: 'We are pleased to participate in this scheme with Rockwell and play a part in rejuvenating the site. The transaction provides our investors with an attractive 35-year inflation linked income stream from a market-leading UK corporate, underpinned by strong real estate with excellent transport links. These are exactly the type of investments we target for the Lime Property Fund.'
The Lime Property Fund is a long-income real estate fund with a net asset value of £2.7 bn. It targets property investments that provide inflation-linked or fixed-rental uplifts let to strong tenants on leases of at least 15 years, cross-sector, UK-wide.
Rockwell announced the completion on Thursday of a £106 mln deal with Aviva to fund the delivery of the hotel.
The sale was facilitated by CBRE who acted as the agents on Rockwell’s behalf. Commenting on the deal, Lewis Corby, Director at CBRE said: 'We received strong investment demand, principally from institutional buyers. In the low interest environment, investors continue to be attracted to secure long-dated, asset-backed income. With 400 bedrooms, it is set to become the largest Premier Inn hotel in Central London.'
Avison Young acted on behalf of Aviva Investors.