German fund manager Commerz Real has issued a fund for European hotel real estate in partnership with Deutsche Hospitality, the umbrella brand of Steigenberger Hotels.
The Commerz Real European Hotel Fund was issued through Luxembourg-based CR Fund Management and has a planned total volume of €250 mln, of which 40% will be equity capital. Commerz Real said it expected a return of 5.5% per annum for investors.
'With this fund we are offering a small, exclusive group of investors with a core-plus or value-add strategy the possibility to profit from the expertise of the Steigenberger Group and that of our proven hotel team,' said Johannes Anschott, board member of Commerz Real responsible for institutional business.
Structured as an open-ended special alternative investment fund, in the form of an SCA - a partnership limited by shares - it will develop a risk-diversified portfolio of as many as eight three to five-star hotels from the Steigenberger Hotels and Resorts, Jaz in the City, MAXX by Steigenberger and Intercity Hotel brands in key European locations.
Steigenberger Hotels is participating with around €12 mln. A further €92 mln of hotels is to be acquired from professional and semi-professional investors, according to Commerz Real.
The acquisitions will be properties under construction or hotels with a residual lease term of about 18 months. In the framework of the cooperation, Steigenberger will conclude long-term lease agreements for these hotels following the acquisition. The fund will then sell them again after a holding period of at least five years.
'With the hotel fund we can jointly make new, long-term investments as equals and continue to develop Deutsche Hospitality with its Steigenberger, IntercityHotel, MAXX by Steigenberger and Jaz in the City brands for our guests,' concluded Matthias Heck, chief financial officer of Deutsche Hospitality.
