Internos has exchanged contracts for the acquisition of two new hotels – the Ibis Munich City West, Germany, and Ibis City Centre The Hague, Netherlands – for a total investment of EUR37m on behalf of the Internos Hotel Real Estate Fund.
The acquisition of the Ibis Munich City West closed this week and the closing of the Ibis The Hague City Centre (pictured) is planned in the coming weeks. These two acquisitions represent the fifth and sixth hotel Internos has acquired for the Internos Hotel Real Estate Fund. The hotels were acquired in two separate transactions from private vendors.
Both hotels are existing properties with strong cash flow track records, are well located in strategic locations in their respective cities and operated under long leases by the Accor Group.
The stable income of the six hotels strong portfolio and enhanced diversification together with conservative debt of only 40 per cent LTV contribute to the fund’s low risk profile whilst generating good income. As a result of the attractive pricing of all six acquisitions to date and due to historically low interest rates, so far achieved and forecast annualised dividend yields are in excess of the 7.5+ per cent pa net target together with a forecast IRR of 11+ per cent pa net.
The fund is structured as a German Spezial Fonds operated by Internos Kapitalanlagegesellschaft (KAG). Based on additional equity raised from the seed investors and new investors since the first closing the target assets under management (AUM) volume size is forecast to reach or even exceed EUR300m.
The fund manager is Jochen Schäfer-Suren, Internos partner in charge of Internos’ hotel and leisure division, who together with Internos’ dedicated hotel and leisure team works closely together with Paul Muno, partner and managing director of the Internos KAG, and the Internos team in Germany.
Schäfer-Suren says: “These latest acquisitions together with continued historical low interest rates secured very attractive returns as well as enhanced diversification thus reducing the portfolio’s risk profile further whilst simultaneously enhancing the quality of returns. Due to the continued support of our seed investors and new investors we have raised additional equity that allows us to acquire over EUR100m worth of further hotels. Therefore we are actively looking for more hotels to acquire for the remainder of 2013.”
Muno says: “The success of our first fund under the aegis of Internos Global Investors Kapitalanlagegesellschaft (KAG) has proven again that Spezialfonds are still the appropriate investment vehicle for institutional investors in the German market. Accordingly we plan to use our KAG platform to develop additional Spezialfonds products for various sectors and risk profiles and can also respond individually to customer needs and provide customized investment solutions.”