AXA and ATP JV inks £180m London hotels deal

The deal marks the first overseas investment of Denmark’s largest pension fund in the hospitality sector.

AXA Investment Managers – Real Assets has acquired two City of London hotels from Chelsfield Partners for £180 million (€240 million; $258 million).

The property investment arm of the French insurance giant purchased the pair of hotels on behalf of a 50/50 joint venture between ATP, Denmark’s largest pension fund, and AXA Insurance Companies.

The two freehold assets, situated in City of London locations at St Paul’s and Gracechurch Street, provide a total of 468 bedrooms and seven retail/restaurant units between them, with a total area of 204,000 square feet.

“This transaction represents an attractive investment, adding two high-quality, well-located freehold central London assets to our over €6 billion UK portfolio, which benefit from having income secured on long-term contracts in addition to significant underlying alternative use value through retail/restaurant leases,” said Huw Stephens, head of UK transactions, AXA IM – Real Assets.

Michael Nielsen, chief executive of ATP Real Estate, commented: “We are happy to see our international real estate strategy diversifying also to the hospitality sector. The long-term secure income profile fits the investment needs for ATP very well.”

AXA has previous experience investing in the hotels sector and the London market. The firm currently manages a hotel portfolio of around €2 billion, having invested approximately €500 million in the sector since the beginning of 2015.