The UII Hotel No. 1 thematic fund established by Union Investment on April 1, 2013 has secured its first property by signing a sale and purchase agreement for Motel One "Deutsches Museum" in Munich.
The Union Investment real estate fund for institutional investors focuses on hotel properties in Germany and Europe that offer a stable flow of income, primarily targeting the growing budget and midscale segment. The fund has already been successfully placed with banks, pension schemes and insurance companies. Its target size in the medium term is €250 million. Union Investment aims to diversify the portfolio further by working with several different partners on the hotel operator side.
The budget hotel operated by industry pioneer Motel One is in the immediate vicinity of the Deutsches Museum. Its proximity to the city center and high occupancy rate are consistent with the fund’s investment criteria. "Motel One is an excellent partner, with whom we have already conducted transactions in Hamburg, Amsterdam and Brussels on behalf of our retail funds. The property in Munich offers a high level of income stability because it appeals to business travelers and leisure customers alike through being conveniently located for the trade show site and city center," says Dr. Christoph Schumacher, a member of the management team at Union Investment Institutional Property GmbH, Hamburg.
Opened in January 2011, Motel One "Deutsches Museum" offers a total of 469 rooms across a gross floor area of around 10,826 m² and has 192 underground parking spaces. The building is fully let to Motel One Germany Betriebs GmbH on a long-term lease. The parties agreed not to disclose details of the purchase price.
Union Investment currently holds 30 hotels in its open-ended property funds for retail and institutional investors, representing a total value of around €1.8 billion. The hotel portfolio is broadly diversified across 15 major European business centers and 22 hotel brands in the 2 to 5-star segment. Union Investment has invested some €400 million in the budget and midscale segment in the past three years, including hotels operated by brands such as Motel One, InterCity and Holiday Inn Express.
Source: Union Investment