3-star hotel with the occupancy rate of 80%.
The building is renovated in 2018: lobby, restaurant and all guest rooms are repaired at the expense of the new operator.
With the loan IRR will be up to 10% per annum.
Up to 65% leverage from the purchase amount, 2% interest payment per annum.
The tenant is a hotel chain with more than 50 hotels in Germany and Austria.
The lease agreement is valid for 20 years.
Type of lease: Double net — the tenant pays for the primary full renovation and all operating expenses. The owner takes on the tax payment, insurance and capital repairs if necessary. Other details of the contract are negotiable between the owner and the tenant on an individual basis.
Notary (state registration) is 1.5 – 2%.
Acquisition tax is 4.5%.
The brokerage fee is 3% + 19% VAT (in total 3.57%).
Location and nearby objects
The property is located next to the Bilhaven Harbor, in 3 km from the Hamburg Central Station and in 10 km from the Hamburg Airport. In 2018 a new metro station is opening in a 3-minute walk from the hotel.
The city thrives in the direction of the Bilhafen harbor. We have every reason to forecast that in 10 years Hamburg prime-centre will reach this area. The construction of a large top class residential complex and a new 5-star hotel is starting just opposite to the property.
The hotel guests can use all services of a neighbour 4-star hotel, they are connected by walkways. This neighborhood is the advantage:
- the hotel does not require sizeable staff;
- access to the services of a more upscale hotel;
- possibility to fully automate the management in future.
Explicit potential to increase the profitability.