AXA Investment Managers - Real Assets has announced that it has forward committed to the acquisition of the shell & core from the Berkeley Group on behalf of a large US Pension Fund, and undertake the fit-out of a new hotel complex within the 250 City Road development scheme in central London. This represents a total investment of approx. €126 mln (£90 mln). Construction of the hotel is already underway, and shell & core delivery is planned for early 2018.
The City Road hotel will be fitted out and operated in conjunction with NH Hotel Group. The eight-storey hotel’s exterior envelope was designed by British architects Foster + Partners as an upscale space in the London sub-market and will comprise 190 bedrooms, a restaurant, bar gym and meeting rooms, accessible by members of the public in addition to hotel guests. NH Hotel Group will operate the hotel under its nhow brand.
The Berkeley Group secured planning permission for the 5.5 acre 250 City Road development project in August 2014 and, in addition to the four-star hotel, the 11,000 m² (1.2 million ft²) mixed-use scheme will incorporate 6,967 m² (75,000 ft²) of office space, approx. 3,716 m² (40,000 ft²) of retail space and 933 residential apartments, all of which is set within two acres of new public realm. The scheme, adjacent to Old Street roundabout, is well positioned to benefit from the anticipated emergence of East London’s Tech City due to both its central location and connectivity, with a number of tube and over ground stations situated nearby.
As the London hotel market continues to experience exponential growth driven by both domestic momentum and a buoyant international travel market, AXA IM - Real Assets aims to contribute to creating a destination which will appeal to tourists, business guests and residents alike. This new complex will add to AXA IM - Real Assets’ existing €1.5 bln hotel portfolio and further strengthens its existing €2.7 bln alternatives platform including healthcare facilities, hotels, and forestry assets, primarily in Europe.
Hideki Kurata, Head of Alternatives at AXA IM - Real Assets, commented: “The acquisition ties in to the ongoing expansion of our alternatives platform, which is uniquely structured with sector experts working seamlessly with our local transaction teams, as we continue to diversify our investment offering. The hotel market is underpinned by robust economic fundamentals and this transaction extends our relationship with NH Hotel Group. Our aim is to leverage our team’s specialist knowledge of both the hotels sector and the London market together with the world-class expertise of NH Hotels to generate attractive returns for our clients.”
Huw Stephens, Head of UK Transactions at AXA IM - Real Assets, commented: “250 City Road is another excellent addition to our steadily increasing Central London portfolio. The robust levels of activity we have undertaken in this market over the past few years are synonymous with our belief in London’s place as a leading global city and its continued ability to attract international investors. We believe that these key fundamentals will provide further attractive opportunities to identify and secure deals which create value for our clients.”
JLL and Hall Kemp acted as joint-advisers to the vendor.
