Singapore: CDL Hospitality Trust acquires Munich hotel for $112m
Singapore-based CDL Hospitality Trusts (CDLHT) has acquired four-star rated Pullman Hotel Munich in Germany for up to $112 million (€98.9 million).
The acquired hotel, including its office and retail components, will be fully funded by debt financing and is accretive with a net property income yield of 5.6 per cent for FY 2016.
CDHLT is a stapled group comprising CDL Hospitality Real Estate Investment Trust (H-REIT), a real estate investment trust, and CDL Hospitality Business Trust (HBT). The group’s assets are valued at S$2.5 billion.
Acquiring the high quality asset at Bavaria, CDHLT considers the deal a rare opportunity as it strengthens its portfolio and earnings base through diversification.
Vincent Yeo, CEO of CDLHT’s managers, said Munich is a compelling destination for the company’s first acquisition in continental Europe, allowing CDLHT to benefit from a potential economic recovery in the region through exposure to the largest economy in Europe.
CDLHT also disclosed of raising S$255.4 million by launching a fully underwritten and renounceable rights issue as it realigns its capital structure through partially repaying its existing borrowings. This is expected to enhance the Singapore-listed firm’s financial flexibility through reduced gearing and increased debt headroom.