Real estate developer Citygrove intends to significantly expand its activities in Germany following the successful realisation of three hotel projects. The company aims to build an extensive investment portfolio. The first expansion phase in Germany was successfully concluded with construction projects in Düsseldorf, Lübeck and most recently in Hannover. Mark Farrugia, Development Director at Citygrove, emphasised that Germany is now the third major market for the company, after the UK and Spain, and that activities there would be intensified.
DKB Bank remains an important partner for the financing of these ventures. Citygrove has refinanced its three previous real estate investments in Germany on a long-term basis, as its strategy is geared towards sustained portfolio growth. The loan taken out for these three hotel properties amounts to EUR 83 million. Two of the projects were realised in joint ventures with the British real estate specialist Burlington Capital.
Although Citygrove generally develops all types of commercial and residential projects, the focus in Germany will continue to be on accommodation offerings. Mr Farrugia explained that this sector offers particularly numerous opportunities for profitable investments in Germany, as many cities generate high demand both as economically strong centres and as tourist destinations. This results in a need for modern, sustainable properties for accommodation capacities in numerous locations.
Dynamic hotel market and sustainable development
The German hotel market also proves attractive to investors, as it is undergoing a transformation process. Many established, often family-run businesses in older and smaller properties are not being continued, while new accommodation capacities are being created in modern properties with high-quality furnishings and technology. Mr Farrugia described this market as "extremely dynamic and exciting".
The hotel in Hannover is the second property development for the Premier Inn chain in Germany, with whom Citygrove also cooperates successfully in the UK. A Premier Inn was previously built in Lübeck. Chris-Norman Sauer, Managing Director Property Germany & Austria at Premier Inn Deutschland, expressed positivity about the collaboration and emphasised the intention to further intensify it in Germany. Premier Inn aims to become the market leader in the budget segment in Germany and plans a corresponding expansion of the currently 75 operational hotels, also through long-term lease agreements.
The hotel recently opened in Hannover, with 220 rooms, is architecturally prominently located on Hamburger Allee and Friesenstraße, directly by the main railway station. Mr Farrugia highlighted the significance of this property within the well-known Bredero complex, particularly as an entrance to the Lister Meile, which was considered in its appropriate appearance. Glass façades on the ground floor allow views into the public hotel areas and optically integrate the Premier Inn into the central location.
The other two hotels are also located in outstanding positions: The "The Niu" brand hotel in Düsseldorf is situated in a prime central location in the state capital of North Rhine-Westphalia, near the main railway station and the Bürgerpark. In Lübeck, the Premier Inn was built in immediate proximity to the historic old town.
Focus on ESG criteria
Citygrove's projects also set standards in terms of sustainability. The hotel in Hannover was awarded the "excellent" rating according to the requirements of the BREEAM certificate. Construction Director Robinson underlined the importance of sustainable construction and adherence to ESG criteria as key objectives, as the higher efficiency possible in ongoing operations due to these factors is indispensable. The other two Citygrove hotels in Düsseldorf and Lübeck also received BREEAM certifications.
