Deka buys InterContinental Warsaw hotel from Warimpex, UBM

Joint owners Warimpex Finanz- und Beteiligungs and UBM Realitätenentwicklung have announced the signing of a preliminary agreement on Warsaw's flagship InterContinental hotel to the WestInvest InterSelect retail real estate fund of Germany’s DekaBank.

The selling price, which can still rise depending on the performance of the hotel, is EUR 103 mln, and well above the asset's book value, the sellers said on Wednesday. Closing of the deal is conditional on the fulfilment of the standard closing conditions.

Warimpex and UBM, which jointly developed the core 45,000-m² property, will be leasing the hotel back under a fixed agreement and will run the hotel under the brand InterContinental until 2027. Each of them owns a 50% stake in the five-star hotel.

‘The deal is the first hotel transaction of significant size reported in Warsaw this year, and the largest in decades,' said Malgorzata Dankowska of agents Horwath HTL told PropertyEU. The advisory group has been advising Deka on its Polish investments for over five years. In 2009, the German fund manager also acquired the andel’s hotel in Krakow from Warimpex. In 2011, Warimpex with partners also sold the Jan III Sobieski hotel, currently operating under the Radisson Blue brand, to Wenaasgruppen for around EUR 50 mln.

‘Deka is a financial investor in the property, and doesn’t take over the operational activity as the asset will still be operated as an Intercontinental hotel,’ she added. The investor has been in negotiations with the vendors for nearly a year.

'The successful conclusion of this deal is a positive signal from the transaction markets, and again affirms our commitment to the Polish market. For Warimpex, the sale of this outstanding property is especially encouraging because we acquired the first pieces of land back in 1997 and were able to lay the foundation for the successful project by preparing these plots for construction. This investment is now having a positive effect on our earnings and liquidity position in 2012,' said Franz Jurkowitsch, CEO of Warimpex.

For UBM CEO Karl Bier, it is important to be able to still participate in the future development of the hotel: 'By retaining ownership of the operating company until 2027, we have secured future profit potential.'

The five-star InterContinental hotel in Warsaw opened in 2003 and provides 414 rooms. Located the central commercial district of Warsaw, it is a highlight in the Warsaw skyline. The InterContinental Hotels Group will remain responsible for managing the hotel after the change in ownership.

With this purchase, Deka’s WestInvest Interselect fund increases its exposure to hotel assets to 11%, further diversifying its portfolio. ‘Due to the stable economic climate, investing in Poland generates sustainable earnings and offers value creation potential,’ the buyer said.