ATP acquires 4-star hotel in Munich

Denmark’s largest pension fund ATP and an unnamed Dutch institutional investor represented by CBRE GIP have acquired the Hotel Holiday Inn Munich City Center for €187.5m from Invesco Real Estate.

Global investment manager Invesco Real Estate sourced the transaction and will serve as the asset manager of the property going forward. The hotel is operated and leased by German based Event Hotel Group in the Haidhausen district of the city.

‘We see the Munich hotel investment as a great opportunity to leave another footprint in the German real estate market,’ said Michael Nielsen, CEO of ATP Real Estate. ‘Invesco recently bought a portfolio of 13 hotels (from funds managed by affiliates of Apollo Global Management for €530m) and put some of them into its hotel fund. We then acquired the remaining hotel,’ he told REFIRE

The 4-star hotel comprises 582 rooms, conference facilities to host up to 600 people and underground parking facilities. The hotel was originally built in 1973 and fully refurbished in 2004 to 2006. As part of the plan for the hotel, the rooms will be renovated in the course of the next three years. ‘We intend to spend around €10m on renovating it,’ Nielsen said.

So far this year, ATP Real Estate has invested around €250m in European real estate, including deals at home and its latest deal in Munich. ‘We don’t have a target for the full year – it depends on the opportunities that arise. However, we’ve noticed that competition has increased a lot in the German market, with higher prices and lower returns. In principal, we will consider any real estate assets, although our preference is for offices and retail. We haven’t done any deals yet but we could be looking at niche segments as student housing, too,’ Nielsen added.

ATP formed part of a consortium of 24 Danish institutional investors who issued a writ against lenders Morgan Stanley and Carnegie earlier this month, citing prospectus liability. The Danish institutional investors claim they have suffered a loss of DKK767m following their investment in shares in Danish bunker supplier OW Bunker prior to its bankruptcy in November 2014 on the basis of a prospectus by the two lenders which was ‘insufficient in material aspects’. Other investors in the consortium include Kapitalforeningen Mermaid Nordic, PensionDanmark Pensionsforsikringsaktieselskab and Danske Invest Nordic Opportunities Fund.

‘This decision is based on new information in extensive exhibits from the bankruptcy estate, which we were given access to only this spring,’ said Tomas Krüger Andersen, head of legal, investments, ATP, speaking on behalf of the consortium. ‘We believe that the banks knew about OW Bunker’s speculative activities and that the banks contributed to misleading investors. Against this background, we believe that they may be liable to pay damages.’

ATP is a Danish public pension fund with €108b of AUM. ATP Real Estate is a subsidiary of ATP, investing in both directly and indirectly held real estate assets on behalf of ATP, with €5.1b of AUM.