Hamburg-based Union Investment Real Estate AG has made its first hotel investment in Central Europe with the acquisition of the Radisson Blu four-star hotel in Krakow for its UniImmo: Europa open-ended real estate fund.
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The Radisson Blu four-star hotel in Krakow, Poland.
The transaction was carried out by UBM Realitätenentwicklung AG of Vienna and is worth around 32 million. The gross yield of the property is 7.5%.
In operation since June 2003, the business hotel is leased until 2029.
"We are delighted to have UMB involved in this investment as a highly-experienced partner. The acquisition further diversifies UniImmo: Europa's hotel portfolio and widens its international scope," says Dr Frank Billand, member of the Management Board of Union Investment Real Estate AG responsible for the hotel segment.
Benefiting from a high level of liquidity, the real estate fund has acquired a hotel portfolio that currently comprises seven properties, including the Marriott Hotel Champs-Élysées, Arcotel Kaiserwasser in Vienna and Steigenberger Fleetinsel in Hamburg. In total, Union Investment now holds 21 hotels with some 6,350 rooms in six European countries.
In addition to the long lease and strong tenant, the Radisson Blu's central location on the Zwierzyniecka shopping street close to Krakow's historic old town and Wawel Royal Castle should deliver stable long-term rental income for UniImmo: Europa.
Opened in June 2003 and offering rental space of 16,892 m², the hotel has 196 rooms and suites, with above-average occupancy rates for the city. It has a high proportion of business and convention guests, as well as a relatively large number of leisure guests. "The hotel is extremely well positioned in the Krakow market," says Billand. "If Poland joins the eurozone as planned, the economy will benefit along with the hotel's occupancy rates."
Union Investment entered the Polish property market in 2008, acquiring the 3 Stawy shopping center in Katowice in October of that year for sister fund UniImmo: Global in a deal worth around 95 million.
Source: Union Investment Real Estate AG
