Union Investment has acquired the main Grand Palais building of the Steigenberger Grandhotel & Spa tourist hotel complex in Seebad Heringsdorf on the island of Usedom in the Baltic Sea.
Financial details were not disclosed.
The property is located in a prime position on the seafront promenade, just a few minutes’ walk from the pier and the 40 km long sandy beach. The buildings Palais Wilhelm and Palais Bismarck remain the property of the seller.
The acquisition is being made for open-ended real estate fund immofonds 1, which is marketed solely in Austria. The vendor and lessee is Resort Hotel Kaiserbad.
Madeleine Groß, team manager, investment management hospitality DACH at Union Investment said: 'We entered the resort hotel segment last year when we acquired the Caro & Selig Autograph Collection hotel on Lake Tegernsee.
'With the Grand Palais of the Steigenberger Grandhotel & Spa in Heringsdorf, we have now managed to secure the second property of this kind.
'Despite these challenging times, we intend to continue expanding our resort hotel portfolio going forward and will invest selectively if the conditions are right.'
'Acquiring the Grand Palais in Heringsdorf enables us to add another property in Germany to our real estate holdings and diversify our fund’s hotel portfolio,' added Petia Zeiringer, a member of the management board at Union Investment Real Estate Austria and fund manager of immofonds 1.
Usedom is Germany’s second largest island and one of the best-known holiday destinations on the Baltic Sea coast.
Due to its room sizes, facilities and construction quality, the 5 star Steigenberger Grandhotel & Spa is one of the few hotels on the island in the upper upscale/luxury segment.
The Grand Palais currently has 120 guest rooms, with a further 10 set to be added by 2025. The hotel also features two restaurants, a bistro, a wellness area with indoor and outdoor pools, and conference space. The current lease runs for 20 years.
The vendor and future lessee is planning to carry out extensive energy efficiency improvements in consultation with Union Investment. This work is scheduled for completion in 2027 and will bring the building – which dates from 2011 – up to the latest sustainability standards.