London-based Avignon Capital has acquired two hotels in the German cities of Berlin and Frankfurt for €48.5 million. The off-market deal is the company's first step into the hotel industry as it seeks to diversify its growing European portfolio.
Both hotels are leased to the German Meininger chain and were built in 2010 (Berlin) and 2011 (Frankfurt), respectively.
The 296-guestroom Berlin Meininger is situated directly on Washingtonplatz, near Berlin’s main railway station in the Europacity district. Meanwhile, the Frankfurt Meininger has 168 guestrooms and is located in Frankfurt’s Gateway Gardens with easy access to the Frankfurt Airport.
Meininger has 16 hotels across Europe’s key tourist and business cities, and is planning to double this number over the next two years.
“The booming German hotel industry presented us with an opportunity to diversify our portfolio whilst sticking to our philosophy of investing in attractive locations with strong growth fundamentals,” Eric Mounier, CEO at Avignon Capital said in a statement. “The hotels’ exceptional proximity to Berlin and Frankfurt’s prime transportation hubs will be key to the future value and growth of this investment; combined with the stable cash flow from the long-term leases and good covenant strength of the properties, we are delighted with this acquisition. Q1 2017 has been a great period for Avignon Capital and its investors and we look forward to taking this momentum into the rest of the year.”