Hotel with a 15-year lease in Bonn, North Rhine Westphalia, Germany

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Hotel with a 15-year lease in Bonn, North Rhine Westphalia, Germany

3,700,000 €
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  • Yield
    6.0%
Details
Property parameters
  • Total rooms: 50
  • Hotel rating: 3
Financial performance
  • Minimum owner's capital: 3,700,000 €
  • Annual income: 222,000 €
Tenants
  • Fully let
Transaction costs
  • Notary (state registration): 1.5%
  • Acquisition tax: 6.5%
  • Broker: 4.0% + VAT

The hotel with a long-term lease agreement in Bonn.

Description

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.

Completion: 2021.

Purchase without renovation costs: € 3,700,000.

Purchase with renovation costs: € 4,090,000.

Financial performance

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%.

Tenants

The property is fully let.

The lease agreement is valid for 15 years with the extension options 2x5 years.

Advantages

  • 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.

Transaction costs

Notary (state registration) is 1.5–2%.

Acquisition tax is 6.5%.

Brokerage fee is 4% + VAT 19% (total 4.76%).

Location

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.

  • Property on the map
    Location right down to the building, street or city
  • Other properties
    Other offers nearby

Tranio helps to manage property after purchase

Our local team at Tranio in Germany will take up property management or recommend professional German partners.

The terms and conditions of our engagement depend on the condition and location of the property and are to be discussed in each particular case.

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  • icon Property maintenance and insurance
  • icon Search for tenants, contracting, and control over rent collection
  • icon Arrangements for bookkeeping and tax advice

Сonstruction loan as an alternative to commercial property investment

Developers with a good track record that give warranties or procure a record in the land register.

There is no need to incorporate a legal entity or open an account in Germany.

No extra charges to maintain or operate the property.

Comparing a hotel purchase with a construction loan

Investment vehicle
Hotel
Construction loan
Yield per annum
6.0%
8—10%
Investment budget
3,700,000 €
from 300,000 €
Buying expenses
10—15%?
  • 1 – 1,5 % — lawyer
  • 2,3 – 3,2 % — notary and state registration
  • 3,5 % – 6,5 % — acquisition tax
  • 3-6% + VAT — broker's fee

Percentage of the property value

0—2%?

The expenses on an independent legal review of the project

Investment term
from 5 years
to 3 years
Risk level
Low
Moderate
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