INTERNOS Global Investors, the pan-European owner-managed real estate fund manager with €4.1 billion AUM, announces the closing of the acquisition of the Steigenberger InterCity Hotel Leipzig from B & L Gruppe on behalf of the INTERNOS Hotel Real Estate Fund I (the “Hotel Fund”). This is the 10th hotel to be acquired for the Hotel Fund since its first closing 18 months ago. Together with the recently announced acquisition of the Maritim Dresden, which will close shortly, the latest acquisitions represent circa €70 million of investments by INTERNOS for the INTERNOS Hotel Real Estate fund since the beginning of 2014.
The InterCity Leipzig opened in May 2013 and is operated under a long lease by InterCity Hotels, a 100% subsidiary of Steigenberger Hotels. The property is a brand new, high quality, 4 star hotel with 166 rooms, a restaurant, bar and appropriate meeting facilities. It is located in a prime location in the very heart of Leipzig, next to the main train station and opposite the new shopping center “Höfe am Brühl”. The headquarters of the Saxony Landesbank is being developed next to the hotel. The triple-A location and the quality of the building and innovative, income oriented hotel concept make this property a perfect fit with the Hotel Fund’s investment strategy. It also brings further diversification to the fund portfolio by adding a new hotel brand, tenant and city.
Following these two recent acquisitions and commitments, assets under management for the Hotel Fund I will reach circa €310 million. Based on recently raised and expected additional equity, total AUM is forecast to exceed €400 million. The Fund is poised to continue generating annual income returns in excess of 7.5% dividend p.a. for the next few years strong cash flow, long leases with mostly fixed indexed rent and very attractive low interest rate financing fixed for five years.
Jochen Schäfer-Suren, Partner in charge of INTERNOS’ Hotel and Leisure division, commented: “Despite tripling the equity raised since the first Closing in July 2012, we have now deployed circa. 90% of the total equity in line with the investment strategy, while exceeding target income returns of 7.5% p.a. In addition we have two or three more acquisitions in progress and thus expect to deploy the remaining equity by this summer.
"Later in 2014, we plan to launch a successor fund to our first hotel real estate fund focused on the same core, income oriented investment strategy and 3-4 star existing leased hotels across Europe. In parallel we are currently pursuing various opportunities to invest the €200 million capital from the Value Add Fund, which is focused on hotel real estate across Europe with capital growth opportunities via cyclical market recovery, renovations and repositioning such as changes to brands, leases or operators.”
Source: Tavistock
