KanAm Grund Group's latest institutional fund, Fokus Süddeutschland, has purchased part of the Stuttgart Cloud No 7 building for an undisclosed sum.
The vendor was property company Cloud No 7 Hotel GmbH, backed by the Stuttgart-based developer Schwäbische Wohnungs.
The 61 metre-tall building houses Germany's first 'Jaz' design hotel by Steigenberger Hotels plus retail and parking space.
The 166-room hotel ocupies ten stories, with conference areas and a spa on the lower levels. It is let under a 20-year fixed term lease to Jaz Hotel, a 100% subsidiary of Steigenberger Hotels.
Residential apartments on the building's higher floors do not form part of the transaction. The retail space has been developed independently of the hotel and is accessible separately via Mailander Platz.
The deal follows the fund's initial acquisition in Frankfurt last summer, when it purchased a shopping centre in Frankfurt-Höchst.
Focusing on the southern German states of Bavaria, Baden-Württemberg and Hesse, home to around 36% of the country's population, the fund is targeting a volume of €300 mln within two years and an annual dividend payout of 4-5%.
According to KanaAm, these three states are the regions with the highest income levels and lowest unemployment figures in Germany.
The fund management said it conducts a qualitative and quantitative analysis for the selection of suitable properties in the target region, with 16 defined target markets being continually examined on the basis of 39 indicators.
