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Press Release

GEG German Estate Group Acquires Villa Kennedy in Frankfurt

Frankfurt, 02.03.2016

The GEG concluded a contract regarding the acquisition of the Villa Kennedy landmark hotel, one of the core assets in Germany's luxury hotel market. The property was sold by Commerz Real: It was part of the open-end real estate funds “hausInvest”. The two parties agreed not to disclose the purchase price. The financing of the transaction was accompanied by Deutsche Pfandbriefbank (pbb).

Villa Kennedy – a Landmark Core Property
Completed in 2006, the Villa Kennedy hotel complex is one of the leaders of Frankfurt's luxury hotel market which includes twelve 5-star hotels, the other top three being the Jumeirah, Frankfurter Hof, and Hessischer Hof. On a floorplate of 7,400 sqm, the hotel provides 19,250 sqm of lettable area, 720 sqm of office accommodation, and 126 car parking spots. Its 163 spacious rooms are fit out with bespoke high-end amenities.
The central building of the hotel complex is the listed historic Villa Speyer mansion that the Jewish banker Eduard Beit von Speyer, member of one of the leading families of entrepreneurs in Imperial Germany, raised at the turn of the twentieth century. It is characterised by its eclectic use of Gothic and Renaissance architectural elements, a historicist style also adopted by the recently constructed buildings.

The completion of the nearby German Football Association Academy in late 2018 will further enhance the appeal of this hotel site.

The landmark hotel with its historic character has been run since its completion by the globally active luxury hotel operator Rocco Forte on a long-term leasehold agreement. Despite very difficult conditions during the time of the financial crisis and its aftershocks, Rocco Forte managed to position the location as a prospering premium hotel and as a sought event location.

 
Frankfurt's Hotel Market
The hotel market in Frankfurt has recently experienced a decidedly dynamic development, with the number of overnight stays alone rising by 77% between 2005 and 2014. Especially luxury hotels saw their performance and capacity utilisation improve dramatically: In the years 2012 to 2014, the segment's yield performance rose by roughly 20% to EUR 151 whereas the overall market reported a growth of merely 2.5% to EUR 81 over the same period of time. This dynamic prompted a surge in investor interest, and resulted in a record transaction volume in 2015. Meanwhile, the hotel property market in Germany as a whole registered a transaction total of EUR 4.5 billion, which implies a year-on-year increase by 44%.

Ulrich Höller, CEO of GEG: “With the acquisition of the prestigious Villa Kennedy, GEG commits itself in a hotel property that is known far beyond the borders of Germany. By doing so, we are showcasing the bandwidth of the GEG business model, which in addition to the classic segments of office and retail property also focuses on premium products in the hotel segment.”

About GEG German Estate Group:
Formed in early 2015 and having its registered office in Frankfurt am Main, GEG has positioned itself as one of Germany's leading investment and asset management platforms in the commercial real estate sector. GEG focuses on investments in the landmark core property segment, opportunistic investments, and property developments. The company commits both equity capital and third-party investor capital. GEG is jointly owned by KKR, a globally leading investor with commitments in diverse asset classes including private equity, energy, infrastructure, real estate, and credit products, and by the Frankfurt-based Deutsche Immobilien Chancen-Group.

For more details on GEG, please visit us on the Internet at www.geg.de.

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