Internos pays €75m for German hotel assets

European, owner-managed real estate fund manager Internos has completed the acquisitions of the Maritim hotel in Dresden and the Mercure City hotel in Berlin in two separate transactions worth €75 mln.

The properties were bought from AXA Investment Managers and ActivumSG respectively, on behalf of the Internos Hotel Real Estate Fund I.

The latest purchases take the number of hotels acquired by the fund to 11 since its first closing in mid 2012. Both hotels are operated under long term leases with Maritim and Accor.

Following these two acquisitions the fund reached a size of €340 mln, Internos said, adding that it continues to actively pursue investment opportunities. The fund is expected to have a size of €450 mln once fully invested.

'We are pleased to continue to deploy the fund’s capital with this momentum while also delivering and exceeding the fund’s required returns,' said Jochen Schäfer-Suren, partner and head of Internos' Hotel and Leisure division. The vehicle is forecast to generate income returns in excess of 7.5% dividend per annum for the coming years.

Schäfer-Suren: 'We are now well diversified in Europe and have covered the key markets in Germany. Jointly with the capital from our Value Add fund, we have additional investment capacity of up to €250 mln for which we are pursuing secure income and value add opportunities.'

Since its formation by Andrew Thornton and Jos Short in 2008, Internos has opened offices in London, Frankfurt, Amsterdam, Paris, Lisbon, Luxembourg, Madrid and Milan reaching €4.1 bn of assets under management.

The European hotel sector has emerged as one of the top performing property sectors last year offering returns of 6.6% versus returns of 5.9% for the wider market, according to the IPD Pan Europe Annual Hotels Index.

Hotels outperformed all property types in 2013 except industrial. Of the 12 countries measured, the UK saw the strongest performance in 2013 with a total return of 11.2%, more than double the 2012 figure of 5.2%. The UK was followed by Austria at 6.4%.