DIFA Immo-Invest buys Radisson SAS hotel in Manchester

Hamburg, 10 May 2004 – The first cross-border investment for the DIFA Immo-Invest Fund has been clinched with the acquisition of the Radisson SAS Hotel Manchester Airport. This four-star hotel was completed in 1998 and is located at the heart of the airport complex. Leased for 22-plus years to a creditworthy tenant in the shape of SAS Hotel Manchester Limited, occupancy was more than 82 per cent in 2003. As the UK’s second largest airport outside London, 19 million passengers per year currently pass through Manchester Airport, placing it 11th in a league table of European airports. “Manchester’s growing importance for international and intercontinental air traffic means occupancy rates at the Radisson SAS, and therefore rental revenues, are set to continue rising,” says Ingo Hartlief, the board member at Hamburg-based DIFA Deutsche Immobilien Fonds AG responsible for institutional real estate business, when asked about DIFA’s first venture in Manchester.

The Radisson SAS Hotel Manchester Airport offers 360 rooms across nine levels, including six luxury suites, as well as 170 parking spaces and extensive conference facilities with an auditorium on the ground floor. Of the four airport hotels it is the only one directly linked to the three passenger terminals and is also close to the new station for regional rail and bus services, with the city’s rapid transit tram system due to be integrated in the near future. Planning permission for further hotels within the airport site will not be granted until 2017 at the earliest.

Institutional investors benefit from international focus

In the four months since inception, DIFA Immo-Invest has attracted some 230 million euros of investment. Available to a fixed group of institutional investors it is targeted primarily at banks, insurance companies and pension funds wishing to increase the real estate element in their portfolio while enjoying the advantages of a fund solution. The investment focus of this Union Investment Institutional (UIN) fund is on office, hotel and retail properties within the European Economic Area (EEA). The DIFA Immo-Invest portfolio currently comprises four properties, including the C&A flagship store on Schildergasse in Cologne, one of Germany’s busiest shopping streets. The fund is committed to keeping the liquidity ratio low in order to ensure that investors benefit from the best possible asset allocation. According to Hartlief, “The DIFA Immo-Invest Fund chiefly invests in medium-sized properties in Europe and seeks to make the most of different market cycles by diversifying as widely as possible. In addition to high returns we are pursuing a strategy of minimising risk with regard to the overall portfolio of this fund.”