ACRON, the indirect real estate investment specialist, has acquired the Radisson Blu Hotel and Casino in St. Gallen, Switzerland. The closing took place on October 31, 2012. The property, the only four-star superior hotel in St. Gallen, was completed in 2003 and partially renovated in 2011.
St. Gallen-based Hotel Betriebs Management AG (HBM) has operated the hotel and adjacent parking garage since 2007, while Grand Casino St. Gallen has been responsible for the casino since 2003. Long-term leases have been signed for the entire property and run until 2032 for the hotel and parking garage and 2023 for the casino. ACRON will present this investment opportunity to interested qualified investors in a private placement in Switzerland and Germany.
ACRON has acquired the building complex consisting of the Radisson Blu and Casino St. Gallen four-star superior business hotel and a three-level underground parking garage. The property is only a few minutes by foot from the historic district featuring the Abbey District, a UNESCO World Heritage Site, and situated ideally in relation to OLMA Messen St. Gallen, the city's trade show venue.
With around 19,000 m² of net leasable area, the hotel offers 123 modern rooms with 246 beds, seven conference rooms of various sizes featuring state-of-the-art technology, restaurants, in-house fitness and sauna rooms, 145 parking spaces in an underground parking garage, and a casino with a type-A license. As a franchise hotel, the Radisson Blu St. Gallen is linked to the international reservation system of the Radisson-Carlson Hotel Group.
In 2011, it was named Franchise Hotel of the Year. The indexed triple-net lease runs for 20 years with an option to extend for another 10 years. Grand Casino St. Gallen, a wholly owned subsidiary of Swiss Casinos Holding AG, operates the casino. The indexed triple-net lease runs until 2023 (term of the type-A concession) and is automatically extended for the same duration when the operating concession is renewed.
"This acquisition expands our portfolio of attractive hotel properties. Thanks to its central location, excellent occupancy rates, and experienced hotel management by HBM, the Radisson Blu and Casino in St. Gallen promises our investors stable earnings for many years to come. Indexing of the rents in addition to the triple-net leases boosts the safety and transparency of this investment and allows for optimal protection against inflation," says Kai Bender, CEO of ACRON AG.
According to Urs Peter Koller, Chairman of HBM's Board of Directors, "ACRON is the ideal partner for us. Thanks to ACRON's proven years of experience with successful investments in hotel properties and its financial strength, we quickly found common ground. As the parent company of HBM, Remi Finanz- und Verwaltungs AG will also take a stake in ACRON HELVETIA X Immobilien AG. This is evidence that we not only believe in the property, but also that our ties to St. Gallen remain strong. HBM as the franchisee remains connected to Radisson as before, so from the outside the day-to-day business will not change. We are looking forward to our partnership with ACRON going forward."
St. Gallen is a university city and, at the same time, the trade show and conference center of eastern Switzerland with over 100 events and 800,000 visitors annually. Further growth in Swiss conferences is planned. As of July 2012, the city of St. Gallen had 1,318 hotel beds to offer, divided among 20 hotels. In addition to the four-star superior Radisson Blu Hotel and Casino, St. Gallen has three four-star hotels, six three-star hotels, five hotels with two stars and five unclassified hotels. There are no five-star hotels. The capacity of hotels in St. Gallen is thus barely sufficient, particularly during conferences.
The investment was transferred to a Swiss single-property stock corporation, ACRON HELVETIA X Immobilien AG. This structure combines the advantages of a direct real estate investment (transparency, identifiability, streamlined cost structure) with the benefits of a