Principal Real Estate Europe has bought the Cour des Loges Hotel in Lyon, France for its hotel fund.

The manager said its Principal Hotel Real Estate Fund II fund has paid €24.5m to acquire the five-star 60-room hotel from a local real estate investor group.

Principal said as part of the transaction and its value-add strategy, it has entered into a long-term lease with the Radisson Hotel Group, and in cooperation with Radisson will renovate and reposition the hotel under the Radisson Collection brand.

Jochen Schaefer-Suren, CEO of Principal’s hotel and leisure division, said: “The Cour des Loges in Lyon is a unique hotel and a great acquisition for our Hotelfund II and we are thankful to our operating partner Radisson, one of the leading international hotel groups with a very strong covenant, with whom we were able to sign a long-term lease agreement.

“The location, paired with the quality of the asset and the potential of the planned renovation and repositioning, is exactly the kind of value-add hotel investments Principal is looking for. As a result, we are still looking for further hotel investments for Hotelfund II in 2020 and beyond.”