The pension funds of BAE Systems and the Zurich Investment Foundation have bought the Sofitel Gatwick North Terminal hotel in the UK through a joint venture.

Schroders made the acquisition on behalf of BAE Pension Funds Investment Management, which manages the pension funds of the UK company, and Immobilien Europa Direkt, an investment vehicle of Zurich Investment Foundation.

The 518-bed hotel has direct access to the airport terminal and also includes 5,000sqft of office space.

Ben Ward, senior property specialist at BAE, 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.”

It is the ninth hotel transaction carried out by Schroder Real Estate since it acquired specialist hotel platform Algonquin Management Partners last year.

Schroders now manages 51 hotels assets with 10,000 bedrooms and a value of £2bn (€2.22bn).

The hotel will continue to be operated by its previous owner, Arora Hotels.

Duncan Owen, global head of Schroder Real Estate, said: “This prime location has the potential to deliver long-term income within a sector that provides defensive qualities in conjunction with upside potential through active management.”