Lothbury Investment Management has bought a hotel in London on behalf of a UK pension fund.

The real estate investment manager said it acquired the Travelodge hotel on Union Street, Southwark for £56.3m (€63.8m), as part of a segregated mandate for the pension fund.

The freehold property comprises 202 bedrooms with three retail/restaurant units totalling 7,250sqft at ground level. The building was constructed in 2008.

Lothbury said the acquisition is part of its strategy for this mandate to acquire prime assets, with index-linked rent reviews and strong residual or alternative use values.

Mike Toft, a senior fund manager and executive director of Lothbury Investment Management, said: “This is an important purchase for the fund. With 30 years remaining and reviews linked to RPI, with no cap, it has a very attractive lease structure and excellent residual value that fits well within the portfolio of prime assets held for this major UK pension fund.

“Its location next to Southwark Underground station and close to the South Bank of the River Thames is well established but also rapidly evolving, so will provide the fund with attractive longer-term redevelopment opportunities.”