AXA Investment Managers - Real Assets (AXA IMRA) has emerged as the buyer of a portfolio of 11 European hotels from Principal Real Estate's Hotel Immobilien Spezial Fonds in an off-market deal worth €545 mln.
The portfolio being sold comprises over 2,300 rooms in seven hotels in Germany including the Mondial Hotel am Dom MGallery in Cologne, the NH Hotels in Duesseldorf and Cologne, two Mercure Hotels in Berlin and Hannover, the Intercity hotel in Leipzig and the Steigenberger hotel in Kiel as well as four hotels in other major European cities like the Hilton Danube hotel in Vienna; the Ibis hotel The Hague City centre, the Lux Hotel Lisboa Park, and the NH Hotel Turin Centre.
The closing of the transaction is expected during the fourth quarter of 2019.
The transaction will conclude the disposal of the entire portfolio of Principal’ Europe’s first hotel real estate fund which first closed in 2012, acquired 16 hotels until 2016 and earlier started a disposal process including among other the sale of three hotels in Amsterdam, Frankfurt and Nuernberg in 2018.
Since 2012 the core+ investment vehicle consistently exceeded annual distribution targets and based on the disposal proceeds from the sale of the entire hotel portfolio far exceeded its IRR targets.
'At Principal we are proud of the results of our first ever hotel fund product which with this transaction will come to its successful conclusion as we will unwind the fund in early 2020 and return capital and profits to our institutional investors,' said Jochen Schafer-Suren CEO of Principal’s Hotel and Leisure Division.
Principal will now focus on investing over €400 mln of capital available for new hotel investments of its existing second hotel fund focused on value-add hotel investments across Europe, added Schafer-Suren. 'Furthermore, we will leverage our expertise in hotel real estate which attracts more and more investors due to its attractive long-term income generation by developing new well-designed hotel real estate investment strategies in Europe and the US as markets mature and evolve to serve investors in delivering attractive returns with institutional type-high quality hotel assets and risk return profiles,'.