26 April 2021
Comeback of the hotel market: Union Investment secures flagship project in Stuttgart
• Union Investment acquires "Turm am Mailänder Platz" from STRABAG Real Estate
• Central location in Europa district close to the new main railway station
Following a six-month pause on investment during the coronavirus pandemic, Union Investment is one of the first players to return to the German hotel market. The Hamburg-based real estate investment manager has acquired a hotel tower under development in Stuttgart’s Europa district via a forward funding deal. The purchase price is around EUR 137 million. The acquisition will be added to the holdings of open-ended real estate fund Unilmmo: Deutschland. Completion is planned for December 2021.
“The hotel investment markets are slowly re-emerging. The pandemic has passed its peak, so now is the perfect time for us to re-enter the market, enabling us to secure a strong position. We are planning to expand our high-quality portfolio of some 80 hotels and are focusing on core products with resilient concepts and operators. In this context, we consider the premium budget segment and apartment hotels to be particularly interesting.”
Andreas Löcher, head of Investment Management Hospitality at Union Investment.
The "Turm am Mailänder Platz" is being sold by the developer, Strabag Real Estate GmbH (SRE). In recent years the company has developed nine hotels in major German cities. An Adina Apartment Hotel is currently under construction in Cologne, for example, while a Premier Inn hotel was recently completed in Hamburg. "With Union Investment, we have been able to attract a strong and reliable investor for our project, who places greater emphasis on the long-term stability of the core property in a prime location than on the temporarily difficult market environment," says Axel Möhrle, head of SRE's Stuttgart division. He is looking forward to continuing the trusting cooperation until the hotel ensemble is expected to be completed at the end of the year.
Real estate services provider CBRE brokered the deal for SRE. "This is an outstanding high-rise project that is unparalleled in Germany. We are pleased that we were able to accompany SRE in the sale of the double hotel in this excellent location. It will set new standards in terms of quality and concept for Stuttgart," says Olivia Kaussen, Head of Hotels at CBRE.
With 21 storeys above ground and a height of around 60 metres, the “Turm am Mailänder Platz” will be one of the city’s landmark buildings. The project is located in Stuttgart’s Europa district, one of the most important urban development schemes in Germany. The main railway station is just a few minutes’ walk away. In addition, the location will soon have a direct subway connection to the airport and to the trade show site, both of which can be reached in just 30 minutes.
The space is already let to operators Adina Hotels and Premier Inn. Adina Hotels is widely regarded as a leading extended stay provider in the European hotel market. During the pandemic, all Adina hotels remained open without exception, with some even achieving solid occupancy levels. Premier Inn is part of Whitbread PLC, the UK’s leading hospitality company, and is a market leader in the premium budget hotel segment. The hotels are expected to open in early 2022.
On completion, Premier Inn will occupy the base of the building (storeys 1 to 6) while the Adina Apartment Hotel will be located in the tower (storeys 7 to 21). A bistro and retail space are planned for the ground and first floors. There will also be a 180 sq m outdoor terrace on the seventh floor. A total of 76 parking spaces will be provided for cars. DGNB Gold certification is being sought.
For Union Investment Real Estate GmbH