Union Investment has returned to the German hotel market with a deal for a hotel under development in Stuttgart for €137 mln.
Situated in Stuttgart's Europa district, the property has been acquired via a forward funding deal from developer Strabag Real Estate, and should be completed by December of this year.
The Turm am Mailänder Platz property, with 21 storeys above ground and a height of around 60 metres, will be added to the holdings of open-ended real estate fund Unilmmo: Deutschland.
Andreas Löcher, head of investment management hospitality at Union Investment said: 'The hotel investment markets are slowly re-emerging. The pandemic has passed its peak, so now is the perfect time for us to re-enter the market, enabling us to secure a strong position.
'We are planning to expand our high-quality portfolio of some 80 hotels and are focusing on core products with resilient concepts and operators. In this context, we consider the premium budget segment and apartment hotels to be particularly interesting.'
The space has already been let to operators Adina Hotels and Premier Inn. The hotels are expected to open in early 2022.
On completion, Premier Inn will occupy the base of the building (storeys 1-6) while the Adina Apartment Hotel will be located in the tower (storeys 7-21). A bistro and retail space are planned for the ground and first floors.
There will also be a 180 m2 outdoor terrace on the seventh floor, while total of 76 parking spaces will be provided for cars. DGNB Gold certification is being sought.
In recent year, Strabag Real Estate has developed nine hotels in major German cities. An Adina Apartment Hotel is currently under construction in Cologne, while a Premier Inn hotel was recently completed in Hamburg.
Axel Möhrle, head of Strabag's Stuttgart division, said: 'With Union Investment, we have been able to attract a strong and reliable investor for our project, who places greater emphasis on the long-term stability of the core property in a prime location than on the temporarily difficult market environment.'
Real estate services provider CBRE brokered the deal for Strabag. 'This is an outstanding high-rise project that is unparalleled in Germany. We are pleased that we were able to accompany SRE in the sale of the double hotel in this excellent location. It will set new standards in terms of quality and concept for Stuttgart,' said Olivia Kaussen, head of hotels at CBRE.
