Alpha Real Capital has invested in the ground rents of a £1bn (€1.16bn) portfolio of central London hotels.

It is the largest transaction for the company’s £1.4bn Index Linked Income Fund, which targets inflation-linked income for UK defined benefit pension schemes.

The three hotels were acquired earlier this year by Queensgate Investments, which has leased them to Fattal Hotel Group.

The St Pauls and City hotels will be rebranded as luxury Leonardo Royal hotels, and the Holborn hotel will become Fattal’s first Nyx Hotel property in the UK.

Hugo James, partner and head of long income at Alpha Real Capital, said: “The location and quality of the properties provides confidence in their long-term income-generating capabilities and value.”

He added: “We have a strong pipeline of new transactions in due diligence and believe that commercial ground rents are now a well established asset class for investors and an attractive funding source for owners of operating assets”.

 

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