Commerz Real has set up a 鈧�250m European hotel real estate fund with German luxury hotel company Deutsche Hospitality.
The Commerz Real European Hotel Fund will receive 鈧�12m capital from Deutsche Hospitality鈥檚 subsidiary Steigenberger Hotels as a co-investor.
A further 鈧�92m of capital is expected to be received from investors. The plan is to raise 鈧�250m capital in total.
Commerz Real said the fund, which targets an annual internal rate of return of at least 5.5%, expects to invest in up to eight three- to five-star hotels.
Johannes Anschott, the board member of Commerz Real responsible for institutional business, said: 鈥淲ith this fund we are offering a small, exclusive group of investors with a core-plus or value-add strategy the possibility to profit from the expertise of the Steigenberger Group and that of our proven hotel team.
鈥淭hus as a co-investor Steigenberger is a member of the investment committee, and in cooperation with the hotel experts from Commerz Real will analyse every investment with regard to location, concept and profit potential.鈥�
The fund will plans to buy properties under construction or hotels with a residual lease term of about 18 months.
As part of the deal, Steigenberger will conclude long-term lease agreements for these hotels following the acquisition. The fund will then sell them again after a holding period of at least five years.
鈥淭hus we will be making specific use of the potential for value appreciation and ensuring the portfolio remains young and healthy,鈥� Anschott said.
Matthias Heck, the CFO of Deutsche Hospitality, said: 鈥淲e have a business relationship with Commerz Real going back many years which is characterised by mutual trust.
鈥淲ith the hotel fund we can jointly make new, long-term investments as equals and continue to develop Deutsche Hospitality with its Steigenberger, IntercityHotel, MAXX by Steigenberger and Jaz in the City brands for our guests.鈥�
