Union Investment acquires two hotel projects in Poland

2 min reading time

Published on 08/01/20 - Updated on 17/03/22

The two planned hotel properties in Kraków and Katowice that will be managed under the Accor brands ibis Styles and Mercure have been acquired from UBM for its new special fund UII EuropeanM. They are scheduled for completion in Autumn 2021.

The German bank DZ Bank's investment Union Investment’s Off-Plan acquisition was made from UBM Development, the leading hotel developer in Europe whose strategic focus is on the three asset classes Hotel, Residential and Office. The development projects have been acquired as the seed portfolio for the new special fund UII EuropeanM. The purchase price of the 259-rooms ibis Styles Mogilska in Kraków and the 268-room Mercure Mlynska in Katowice is approximately EUR 86 million in total. Both properties have 25-year leases.

Poland is an important growth market for major international hotel chains. With the development of these properties, the Accor Group will expand its offering with one new hotel each in Katowice and Krakow in 2021, when the projects are scheduled for completion. The property in Krakow, the second largest city in Poland, will be a modern design hotel: the ibis Styles Mogilska, located near the historic center. Close to the main railway station and the city centre in Katowice, the Mercure Mlynska is also under construction. This hotel will meet the highest standards for sustainability under the motto “green and clean”, for example with natural materials and recycled furniture.

Wolfgang Kessler, a member of the Management Board of Union Investment Institutional Property GmbH explains:

UII EuropeanM is a logical strategic addition to our range of products for institutional customers. The risk-return profile of the fund is designed to make it possible to exploit investment opportunities in European real estate markets that are not covered by a traditional core profile. 

For several years now, Union Investment’s UII GermanM special fund has provided investors with a similar vehicle, but focused on the German property market. The new fund invests predominantly in the four commercial use types of office, hotel, logistics and retail, focusing on midscale properties in European real estate markets. Locations of interest are European cities, dynamic growth regions and established specialist locations. The fund follows a core and core plus strategy overall, which includes secondary locations, and has a target size of approximately EUR 1 billion.

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