Union Investment buys seafront resort hotel in Usedom

Union Investment has acquired the Grand Palais building of the Steigenberger Grandhotel & Spa resort hotel complex in Seebad Heringsdorf on the island of Usedom.

Located by the seafront, on the island divided between Germany and Poland in the Baltic Sea, the Grand Palais has 120 rooms, two restaurants, a wellness area with indoor and outdoor pools and conference space. An additional ten rooms will be added to the hotel by 2025 and extensive energy efficiency improvements are scheduled to be completed by 2027.

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.

Why it matters

The deal showcases the resilience and potential of the resort hotel sector even in challenging circumstances. Perhaps the returning interest in the central and eastern Europe as well as the Baltics, signals a return to normalcy post-pandemic. Before the pandemic hit, Hilton announced plans to open 167-room Hilton Świnoujście Resort & Spa in Świnoujście, Poland, while Radisson Hospitality signed an agreement for a new hotel in Riga, and IHG planned to open a 280-room Holiday Inn in Latvia in September 2022.

What they said

Petia Zeiringer, a member of the management board at Union Investment Real Estate Austria and fund manager of immofonds 1 said: “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.

Madeleine Groß, team manager, Investment Management Hospitality D-A-C-H at Union Investment added: “Despite these challenging times, we intend to continue expanding our resort hotel portfolio going forward and will invest selectively if the conditions are right.”