UK: Aviva Investors’ Lime Property Fund has acquired the freehold interest in a London aparthotel scheme, which it will lease to the London Borough of Barking and Dagenham.
The property, a 22-storey tower located within Zone 1 on Commercial Road, Aldgate, will provide approximately 190 apartments alongside facilities including a gym, café, private restaurant, bar and co-working members club with a garden and terrace. The asset will be operated under The Gate brand and is expected to open in early 2020.
Aviva Investors has also confirmed an agreement with the London Borough of Barking and Dagenham to lease the asset once the fit-out process has been completed, with the freehold transferring to the Borough at expiry of the lease for a nominal value.
Mark Wells, director, real estate origination, Aviva Investors, said: “This income-strip deal should generate a significant income stream for the Borough on a strong asset, whilst also providing our pension fund clients with consistent, long-term income in a sector that continues to demonstrate sound fundamentals. The transaction is aligned to the Lime Property Fund’s strategy of acquiring robust assets that benefit from the presence of a high-quality tenant, which we believe will provide investors with consistent, inflation-linked performance over the long term.”
Cllr Cameron Geddes, cabinet member for regeneration and social housing, says: “Like local authorities up and down the country, over the past decade Barking and Dagenham’s budget has reduced by two thirds. It’s no secret that councils across the country are suffering from cuts to the level of funding they get from government. In Barking and Dagenham, we’re finding innovative ways to support the funding of vital services for our residents. This investment is much-needed and supports our ambition to use opportunities for growth and investment, while maintaining services for our most vulnerable residents. We’re looking forward to working with Aviva Investors on this exciting project.”
The Lime Property Fund is a long-income real estate fund with a net asset value of £2.3 billion. It was launched in 2004 and is targeting property investments that provide inflation-linked or fixed-rental uplifts let to strong tenants on leases of at least 15 years, cross sector, UK wide.
