Weeks after purchasing four London hotels for £1 bn (€1.2 bn) from Grange Hotels, Queensgate Investments has divested the ground rent of three of the properties to long income asset manager Alpha Real Capital.
Financial details were not disclosed, but Alpha said the deal represented its largest transaction to date.
'We are delighted to have acquired the ground rents of these three hotels from Queensgate,' said Hugo James, partner and head of long income at Alpha. 'The location and quality of the properties provides confidence in their long term income generating capabilities and value.'
Alpha executed the deal on behalf of its Index Linked Income Fund (ILIF). The hotel portfolio includes the Grange St Paul's EC4, Grange City EC3 (pictured) and Grange Holborn WC1.
The properties have been leased by Queensgate to Fattal Hotel Group, a €2 bn hospitality firm with 200 hotels across 18 countries, and will be operated under the Jurys Inn and Leonardo brands.
Fattal has agreed to inject significant funds to refurbish the properties, rebranding the St Pauls and City hotels to the luxury Leonardo Royal portfolio. The Holborn hotel will become Fattal’s first Nyx Hotel property in the UK.
The new investment takes ILIF’s total assets past £1.4 bn across more than 500 properties.
James 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.'
