Principal Real Estate Europe has confirmed the exchange of contract for the sale for €545m of its remaining portfolio of 11 high quality, city centre hotels in major European cities in its Principal Hotel Immobilien Spezial Fonds to AXA IM – Real Assets, which has acquired the portfolio on behalf of clients in an off-market transaction.

The portfolio being sold comprises over 2,300 rooms in 7 Hotels in Germany including the Mondial Hotel am Dom MGallery in Cologne, the NH Hotels in Duesseldorf and Cologne, two Mercure Hotels in Berlin and Hannover, the Intercity hotel in Leipzig and the Steigenberger hotel in Kiel as well as 4 hotels in other major European cities like the Hilton Danube hotel in Vienna; the Ibis hotel The Hague City centre, the Lux Hotel Lisboa Park, and the NH Hotel Turin Centre. The closing of the transaction is expected during the 4th Quarter 2019.

Jochen Schafer-Suren, CEO of Principal’s Hotel and Leisure Division, commented: “At Principal we are proud of the results of our first-ever hotel fund product which with this transaction will come to its successful conclusion as we will unwind the fund in early 2020 and return capital and profits to our institutional investors. It highlights the expertise of our strong team of 7 dedicated hotel real estate specialists to develop well-designed hotel real estate investment strategies, select attractive hotel markets and assets, execute effectively acquisitions, financings, and asset management initiatives all the way to managing eventual disposals strategies.

After this very successful first Principal hotel fund, we will focus on investing over €400m of capital available for new hotel investments of our existing second hotel fund focused on value-add hotel investments across Europe. Furthermore, we will leverage our expertise in hotel real estate which attracts more and more investors due to its attractive long-term income generation by developing new well-designed hotel real estate investment strategies in Europe and the US as markets mature and evolve to serve investors in delivering attractive returns with institutional type-high quality hotel assets and risk return profiles”.