Phoenix Group, the UK’s largest long-term savings and retirement business, and BlueWater Capital, the specialist long-income investor, have invested in two long-dated commercial ground leases. The ground rents are secured on well-located operating assets that are structured to provide a robust and stable cashflow to back Phoenix Group’s long-dated annuity liabilities.

The first investment comprises a 318-unit commercial private rented asset that was recently re-purposed from redundant office space. It is located adjacent to Wembley Park tube station (Zone 4) in North London and a 2-minute walk from Wembley Football Stadium. Tenants have access to co-working facilities and a communal kitchen, as well as a gym, private cinema and additional social spaces with a pool table, table football and table tennis equipment.

The second investment was made in a dual branded hotel building located adjacent to Heathrow Airport, offering 190 self-catering apartments (branded as Staybridge Suites®) and 433 more traditional hotel rooms (branded as Holiday Inn®), with restaurants and a large car park to the rear. The hotel is well placed to service the airport, attracting a range of guests, from passengers to pilots and airport staff to contractors, with easy access to Terminals 2, 3 and 5 via the 24/7 Heathrow Hoppa shuttle bus.

The asset will generate long-term inflation-linked income from a modern, well-managed hotel with potential opportunity for further growth. The building is highly efficient with excellent soundproofing, ensuring an ‘A’ rated energy performance certificate (EPC) and a ‘Green Building’ classification under the Phoenix sustainability criteria.

Phoenix Group worked alongside AgFe, the independent advisory and asset management firm to complete both transactions. BlueWater Capital sourced and structured the transactions and will provide real estate management and investment advisory services going forward.