London icon to provide super returns for members

LGIAsuper is set to breathe new life into an iconic London establishment, with an $18 million investment in Chelsea's The Sloane Club.

CEO Kate Farrar visits The Sloane Club in Chelsea, London

First published: September 12

The landmark club, in one of the city’s most exclusive neighbourhoods, is a 75,000 sq ft, quintessentially British institution that dates back to the 18th century.

Acquired through LGIAsuper’s UK-based property partner Clearbell Capital, the investment is a rare opportunity to purchase an historic building with the potential for solid returns for fund members.

LGIAsuper’s investment in The Sloane Club will be used to refurbish the club’s 133 luxurious accommodation and drawing rooms, its day spa and restaurant.

This is not the first time LGIAsuper, which serves more than 80,000 members, has partnered with Clearbell to revitalise an old asset. The fund’s portfolio already includes the successful and highly profitable revival of several underutilised and neglected commercial and retail property assets both in Australia and overseas.

A shopping centre in the historical university city of Durham in north England, for example, was repurposed to include cinemas and additional dining options, generating outstanding returns of more than 18% at exit.

The Sloane Club investment has been structured as a joint venture with Queensway, an expert in hospitality management and operator of numerous London hotels, including the fashionable Montagu Place Hotel in Marylebone.

LGIAsuper CEO Kate Farrar said the purpose of the investment was to generate increased returns for members while diversifying the fund’s investment portfolio.

“We are seeking to create value by embarking on a refurbishment program that will respect the history and heritage of the property,” Ms Farrar said.

“Advanced hotel management technologies will reposition the food and beverage offering in a way that is expected to drive an increase in The Sloane Club’s membership and returns to investors.”

The investment speaks to LGIAsuper’s growing interest in offshore portfolio diversification. More than 70% of the fund’s listed share assets are based outside of Australia.

Ms Farrar said the organisation’s long-term strategy, which includes a diversified portfolio, was aimed at ensuring members continued to receive strong and sustainable returns.

“LGIAsuper is committed to supporting Australian and regional businesses, but diversification of asset size, location and type is important to ensure we can achieve solid investment returns for our members,” Ms Farrar said.

“Diversification is a crucial part of our strategy and reduces the exposure to any one particular asset or risk factor. That is why our portfolios are carefully constructed across a range of asset classes such as Australian shares, international shares, property, infrastructure, agricultural and alternative investments.

“We leave no stone unturned globally and locally in our search for the best investments for our members.”