Singapore’s CDL and Friends Acquire Frankfurt Hotel for $100M

With investors from China still hobbled by that country’s restrictions on capital outflows, the mainland slowdown is leaving the stage open for buyers from one of Asia’s smallest nations to land deals in a growing list of locations.

Today, the German business hub of Frankfurt was added to that record when Singapore mainboard-listed developers First Sponsor Group and City Developments Ltd, together with privately held Singapore holding firm Tai Tak Estates jointly announced an agreement to purchase the Le Méridien Frankfurt Hotel for an expected €85.0 million ($100.1 million) including transaction costs.

The deal for the historic 300-room hotel is the second German acquisition this year for the CDL Group, which also controls LSE-listed Millennium and Copthorne Hotels, and sees the Singapore developer teaming up with some familiar partners in this new market.

Buying a Piece of Central Frankfurt

The Singaporean trio’s new acquisition, which is expected to close in approximately one month, is a freehold property on a 4,405 square metre site located close to the main train station in Frankfurt’s central district of Bahnhofsviertel. The hotel includes a 1905 vintage wing with 80 rooms, together with a 1970s era addition with another 220 rooms. The property is currently leased to Munich-based management firm MHP Parkhotel GmbH with a lease expiry date of 31 May 2040, and is operated under Starwood’s “Le Méridien” brand.

“First Sponsor is pleased to have the opportunity to directly co‐invest with CDL and Tai Tak in the acquisition of Le Méridien Frankfurt,” Calvin Ho Han Leong, chairman of First Sponsor said in a statement. “As First Sponsor continues to build our property holding business segment’s recurrent income stream, our first foray into Germany together with Tai Tak and CDL marks another exciting chapter of our European growth story.”

CDL’s Millennium and Copthorne unit, together with Tai Tak are controlling shareholders in First Sponsor, which has previously been involved in developing hotel, residential and commercial projects in mainland China, and more recently has been investing in residential and hotel projects in the Netherlands. Tai Tak Estates is the holding firm for the family of former UOB bank executive Ho Sim Guan, and the privately held concern still owns over four percent of the bank, in addition to other investments.

CDL Expands European Hotel Holdings

“As a major hub for commerce, tourism and transportation, Frankfurt is a compelling destination for acquisitions in Germany which is the largest economy in Europe. Moreover, with Brexit, hotels in Frankfurt will see increasing demand as businesses including banks are shifting their operations and activities to this German city,” said Kwek Eik Sheng, chief strategy officer and head of asset management with CDL.

Kwek added that the deal would allow CDL to expand its geographic footprint after the group-managed CDL Hospitality Trust acquired the Pullman Hotel Munich in June of this year for $112 million. The trust also picked up the Lowry Hotel in Manchester, England in May for around GBP 52 million.

Those CDL group deals come in addition to First Sponsor having agreed in July to acquire Dutch hotel group Queens Bilderberg (Nederland) for €171.4 million, giving it ownership of 16 hotels totalling 1,633 rooms across the Netherlands.