Swiss Life buys German hotel group 'to balance portfolio'

Swiss Life Asset Managers Real Estate France has completed the purchase of a hotel portfolio (the "Pearl" portfolio) from LFPI Deutschland, part of the French LFPI Group, in a sale-and-leaseback transaction. A further French investor is understood to be a co-investor in the deal.

The Pearl portfolio was bought for two funds managed by Swiss Life REIM (France) – the first for an institutional club deal fund focused on economy and mid-scale hotels, and the second for public mutual fund, SwissLife Dynapierre. According to Frederic Bol, head of portfolio management at Swiss Life Asset Managers Real Estate France, the deal is "a great investment opportunity, one which equally balances our German and French hotel operations in our institutional funds."

The portfolio includes 10 quality hotels with 905 rooms in Berlin, Hamburg, Düsseldorf and regional cities, with the most prominent being the Indigo Hotel at Düsseldorf-Victoriaplatz. The hotels will remain operated by LFPI Hotels Management Deutschland, which also continues to run a broader German hotel portfolio.

A capital expenditure programme has been planned for three of the assets, which operate mainly under the Accor (Ibis, Ibis Styles and Mercure) brands, as well as IHG and Best Western. The others have mostly recently been upgraded.

French group LFPI started in Germany in 2011, focusing on buying hotels in secondary cities such as Karlsruhe and Aachen, while operating as a franchisee for leading international brands. To date, however, about half its hotels are in Germany's largest cities. Last year LFPI Deutschland's CEO Philipp Bessler said the goal was to build up the portfolio to about 20 or 30 hotels, both owned and franchised.