LaSalle Investment Management's pan-European fund Encore+ has made its debut hospitality investment, acquiring two hotel properties in Munich from Commerz Real.
Financial details were not disclosed.
The assets are situated at the same site in north Munich, and comprise both an Ibis Budget and Adagio access hotel with a total of 322 rooms across some 10,000 m2 of rental space.
David Ironside, fund manager of Encore+, LaSalle Investment Management, said: 'We are delighted to have made this acquisition. Munich is a leading European business and tourist hub. The site has excellent public transport and an outstanding track record.
'Munich has higher occupancy rates than the average German budget market and is growing rapidly. Our investment adds both diversity and exposure to Munich’s hotel market, offering returns to complement the portfolio.'
The acquisition is the first hotel investment for Encore+, following its strategy to further diversify the fund by acquiring alternative assets, notably leased hotels in Western European cities.
According to the fund, the Munich hotel market is a national leader in terms of average room rates, revenue per available room (RevPAR) and adherence to LaSalle’s DTU+E criteria, assessing assets’ long-term resilience to changes in demographics, technology, urbanisation and the environment.
Andreas Wesner, head of investment for Germany at LaSalle Investment Management, said: 'This is our first move into the alternatives market, and an important acquisition for Encore+.
'The assets have a particularly resilient track record in a hotel market benefiting from strong tailwinds, where the key performance metrics already surpass the national average. We’re very pleased to have been able to complete this acquisition on behalf of our investors.'
The deal follows the fund’s prior acquisitions in Munich of Westend Yards in March 2019 and the ElseBella portfolio of two office properties in December 2018.
LaSalle worked on the transaction with Greenberg Traurig (Legal & Tax), Arcadis (Technical), Knight Frank (Valuation) and Colliers International (Buy-Side Advice). The seller was advised by CBRE and Taylor Wessing (Legal & Tax).