The hotel with a long-term lease agreement in Bonn.
The hotel includes about 50 rooms.
There is a plan for a renovation of the hotel, which will last 18 months.
Deal structure: Forward Deal.
Purchase without renovation costs: € 3,700,000.
Purchase with renovation costs: € 4,090,000.
Annual income in 2021 — € 169,000 (€ 320 per room per month).
Annual income in 2022 — € 195,000 (€ 370 per room per month).
Annual income from 2023 — € 222,000 (€ 420 per room per month).
After renovation, the annual income will be € 245,000 (€ 465 per room per month).
The yield is 6%.
The property is fully let.
The lease agreement is valid for 15 years with the extension options 2x5 years.
- Reasonable price.
- Above-average yield (market standard for hotels ~ 5%).
- A long-term lease with a rental rate without reference to fluctuations in the tenant's revenue.
- Good condition of the building.
- Prime location.
Notary (state registration) is 1.5–2%.
Acquisition tax is 6.5%.
Brokerage fee is 4% + VAT 19% (total 4.76%).
The building is located in Bonn, a big city in North Rhine-Westphalia with a population of more than 300,000. The distance from the hotel to the city center is about 7 km.
North Rhine-Westphalia is the land of the Federal Republic of Germany with a population of 17.5 million people (the most populated of the German lands). It ranks 4th in Germany in terms of area.
22% of Germany’s GDP comes from NRW. The main industry in NRW is engineering and equipment manufacturing, biotechnology, chemical industry, and etc.
North Rhine-Westphalia is the center of trade in Germany, because it houses the headquarters of several leading German trading concerns with the largest turnover, for example, Deutsche Telekom AG, ALDI NORD, Die Deutsche Post, Bayer, Lufthansa Group, REWE. DE.