First Sponsor, CDL, Tai Tak pay $136m for Frankfurt hotel

The Le Meridien Frankfurt Hotel is near the main train station in the city centre and has an aggregate land size of about 4,405 sq m.
The Le Meridien Frankfurt Hotel is near the main train station in the city centre and has an aggregate land size of about 4,405 sq m.PHOTO: FIRST SPONSOR

Property company First Sponsor Group is making its first foray into Germany with the acquisition of the Le Meridien Frankfurt Hotel.

The company and key shareholders City Developments (CDL) and Tai Tak Estates are paying about €85 million (S$135.9 million) for the hotel.

The freehold Le Meridien Frankfurt Hotel is leased to MHP Parkhotel with a lease expiry date of May 31, 2040 and is operated under the Le Meridien brand on the basis of a franchise granted by Starwood.

It is a near the main train station in the city centre and has an aggregate land size of about 4,405 sq m.

First Sponsor and its partners said in a joint statement yesterday that they have entered into a sale and purchase agreement for the acquisition expected to be completed late this month or early January.

First Sponsor chairman Calvin Ho Han Leong said: "First Sponsor has successfully diversified from a China-centric real estate player to become a significant property player in the Netherlands since entering the Dutch market in 2015."

Mr Kwek Eik Sheng, CDL's chief strategy officer and head of asset management, believes that the demand for hotels in Frankfurt will increase as Brexit will prompt businesses, including banks, to move operations and activities to the city.

"At the same time, it will also enable CDL to enhance our recurring income stream and enlarge our geographical footprint for strategic diversification," he said.

Earlier this year, CDL entered the Munich market through CDL Hospitality Trusts' acquisition of Pullman Hotel Munich.

CDL Hospitality Trusts also bought The Lowry Hotel in Manchester in May for about £52 million (S$93.8 million).

A version of this article appeared in the print edition of The Straits Times on December 08, 2017, with the headline 'First Sponsor, CDL, Tai Tak pay $136m for Frankfurt hotel'. Print Edition | Subscribe