Modernisation during ongoing operation
Even the best hotels eventually need updating. The Hilton Munich City opened in 1989 and has been part of Union Investment's portfolio since 1998. In order to continue meeting the demanding requirements of the Hilton brand and hotel guests in Munich, the hotel is currently being fully refurbished.
The Hilton Munich City is a landmark building in Haidhausen, the artists’ quarter of Munich, close to Rosenheimer Platz square and the Gasteig cultural centre. Major tourist attractions, such as the Deutsches Museum and the old town, are within easy reach of the hotel. The 490-room property is one of the largest hotels in Union Investment's Portfolio.
The starting point
At the end of 2016, the Asset Management Hospitality team succeeded in agreeing a new general lease with Hilton, thereby securing the famous brand’s long-term commitment to the location. The new lease was made possible by an agreement between the two sides to plan and implement a comprehensive refurbishment of the hotel, to be completed by 2019.
The special challenge of the upgrading project is that all work will be carried out without closing the hotel, thereby enabling the property to continue generating valuable rental income. The objective is to modernise the fabric and design of the building and also to ensure a high degree of sustainability. Upon completion of the refurbishment work, high-quality sustainability certification will be sought for the Hotel.
“By securing a long-term commitment to the property by Hilton, one of the leading tenants in our hotel portfolio, we are ensuring the hotel’s continued positive performance.”
Martin Schaller, Head of Asset Management Hospitality
The project includes upgrading the building services, complete refurbishment of the rooms (including the bathrooms), kitchens and corridors, and remodelling of the eating areas and conference space. Union Investment and Hilton drew up the refurbishment programme together and collaboratively assigned responsibility for the individual aspects of the project.
“The Hilton Munich City is a landmark hotel which already enjoys a leading position in the Munich market. The refurbishment being carried out together with Union Investment will significantly improve the property.”
Jochem-Jan Sleiffer, Hilton’s Senior Vice President, Operations, Full Service Hotels, Continental Europe
Ahead of the upgrading work, the Asset Management Hospitality team, working closely with Real Estate Project Management, contributed its expertise around structuring complex contractual relationships in the hotel and construction sector. The upgrading work and optimised use of space are expected to increase the hotel's earning power and therefore also the rent payable.