Union Investment institutional real estate fund acquires 4-star hotel in Munich (DE)

Union Investment has purchased the angelo Hotel Munich Westpark in Munich from UBM Realitätenentwicklung AG for its UniInstitutional German Real Estate fund. By doing so, Union Investment was able to successfully invest some of the cash raised in the fund’s second subscription phase, which attracted an additional €100 million of funding commitments by the end of September.

As with the first subscription phase in October 2012, the institutional real estate fund with a focus on properties in Germany was heavily oversubscribed. To ensure a broadly diversified investor base, each investor was issued with a maximum of €2 million worth of units. The minimum investment amount for the fund is €500,000.

Following on from office investments in Darmstadt and Frankfurt am Main, the 4-star angelo hotel in Munich city center is the first hotel investment for the fund. The property is let on a 20-year lease with an option to extend. The lessee is MG Sendling Hotelbetriebs GmbH, a subsidiary of Münchener Grund Immobilien Bauträger AG, which is part of the Austrian UBM Realitätenentwicklung AG group of companies. The six-storey designer hotel on Albert-Roßhaupter-Straße has 207 rooms and suites plus 78 parking spaces in an underground car park. Opened in January 2013, the hotel also features meeting rooms which can be flexibly configured. Thanks to its central location, it is the ideal base for both business and holiday activities. Comprising approximately 13,300 m² of rental space, angelo Munich Westpark also includes some 3,370 m² of office and retail space, which is also fully let.

The size of the investment is fully consistent with the target structure of the fund. The investment focus of UniInstitutional German Real Estate is on lot sizes between €20 and 50 million. “We currently see good to very good sourcing opportunities in this price segment, particularly in mid-sized German cities,” said Dr. Christoph Schumacher, a member of the management team at Union Investment Institutional Property GmbH, Hamburg. “We are optimistic that our product will achieve its target size of €500 million within three years.”

angelo Munich Westpark was opened in January 2013. It is located in the Sendling district close to the city center on a main arterial street and enjoys excellent transport links via the Munich tram and metro network. The hotel group behind the expanding designer brand is Vienna International Hotels & Resorts, which specializes in 3- to 4-star hotels in inner-city locations.

Union Investment's hotel portfolio currently comprises 32 hotels with a total value of more than €1.8 billion.

Source: Union Investment

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