Development partner

Martin Schaller manages an international hotel portfolio. Leases, renovation programmes and repositioning are his speciality. He anticipates an unusual launch in spring 2020, when 2028Union Investment will rebrand one of its portfolio hotels for the first time. A day in Berlin with the 2028Head of Asset Management Hospitality.

Martin Schaller is just one of the 30 million visitors who spend the night in Germany’s capital Berlin each year. This time he’s staying at the Hotel Intercontinental Berlin near Tiergarten Park. As Schaller sits in the lobby of the luxurious conference and event hotel on this June morning, he looks on with interest as foreign hotel guests chat and laugh. They carry parasols as they start off on a sightseeing jaunt under Berlin’s summer sun. Schaller, who also likes to travel on his time off, is Head of Asset Management Hospitality at Union Investment and he’s always happy to see satisfied guests. Particularly at “his” hotels. He is responsible for the international hotel portfolio of Union Investment Real Estate GmbH in Hamburg totalling €4.4 billion in nine countries and 34 cities. For him, the hotel business is more than a career; it’s also his passion.

Schaller, a native of Mainz, Germany, is a hotel expert who works all over the world at the intersection of markets, real estate and contract models. His professional motto: “Never stop getting better”. He wants to make his hotels “even more attractive to guests and even more successful for operators and owners”, because the earning power of the hotel operation affects the value of the hotel property. He’s constantly putting that principle to the test. “Think of it as a theatre”, explains Schaller. “We as the real estate investor supply the building, which is the stage; the hotel operator provides the right scenery depending on the programme; and together we make sure the performance is hit.” 

Today three “strategic fits” will offer some insight into his work. This means three hotel properties, three operators and three concepts. The three partnerships in Berlin may differ, but all of them offer good prospects for the long haul. Schaller explains: “It’s our job to understand and pay attention to what makes a hotel a long-term success so we can develop the right strategy for the property, thereby supplying continuous cash flows to our investors.” What’s important to him is “balancing the interests” among hotel operators, tenants and owners, which allows them to work together to maximize the earning power of the operation and therefore the property and to secure its long-term economic success. “Berlin is one of the most dynamic hotel markets in Germany and overall it offers a positive outlook for the future”, says Schaller, “but continuously refining concepts and brand profiles is far more important today than it was ten years ago.”

Continuously refining concepts and brand profiles has become much more important.

In-house expertise in international hotel business

Schaller is the department head who, along with his 15-person team, manages Union Investment’s hotel portfolio of 40 hotel brands (20 umbrella brands) in the most important West European and North American core markets from Hamburg. There are also two team leaders, one for Germany and the other International. “We have the in-house expertise to understand whatever is necessary to run the hotel business”, explains Schaller. “One reason for this is that many of our experts come from the field of hotel operations. Many people have an entire career in their CV, so we could theoretically actually provide a general manager.” Schaller, who has more than 20 years of experience in the hotel and real estate industry, also holds credentials in hotel management. After his training, he studied business administration, tourism and real estate management. He originally wanted to be a hotel director but then became fascinated with the hotel properties themselves. This was followed by jobs in hotel-related real estate consulting and in investment management for the hotel business, turning him into a hotel and real estate expert with international experience.


Martin Schaller (41) trained in hotel management, has degrees in business administration and real estate economics (IREBS) and is a Member of the Royal Institution of Chartered Surveyors (MRICS). He has specialised in hotel properties since 2004. Schaller moved to Union Investment Real Estate GmbH in Hamburg from the real estate consultant Christie + Co in Frankfurt am Main in 2009. At Union Investment he was initially responsible for hotel transactions in Germany and abroad, implementation of the strategy of investing in budget hotels, and the first specialised hotel fund. He has been the Head of Asset Management Hospitality since 2014 and received the Hama Europe Achievement Award in 2017.

Schaller and his team use a wide range of asset management tools for the total of 77 hotel properties in their charge. This primarily includes the structuring of contracts, which also contain specific clauses allowing the team to influence areas such as the use of reserves for furniture, fixtures and equipment or efforts to increase brand loyalty. Other examples include performance analysis and benchmarking and of course renovation, such as the work that recently started at the Intercontinental Berlin, the first “strategic fit” of the day.

Site consultation at the Intercontinental

Renovation work at the Intercontinental follows an extension of the agreement between IHG (Intercontinental Hotels Group) and Union Investment, explains Schaller. Some €60 million is being spent to make the hotel “state of the art” again. The joint refurbishment project includes two construction phases over three years, requiring an on-site construction office. Schaller is meeting with Yvonne Brabant, his team leader for Germany, and Michael Rieping, the technical project manager, there today. Rieping has spent several days a week in Berlin since construction began. He was jointly appointed by IHG and Union Investment and reports to a Steering Committee made up of employees from both parties. He will also provide support for coordination while the hotel stays open. The complete renovation of the ballroom – 1,520 square metres in size – began in May. Aernout de Jong, the general manager of Intercontinental Berlin, also attends the consultation. The group considers plans and discusses current issues and ideas. One unanswered question is whether greening of the hotel’s flat roof will be possible – a structural engineering problem. A subsequent visit to the ballroom, which has been gutted, offers an impressive look at the large, vacant space. This requires some imagination. A few parts of the ceiling lights are all that’s left to recall the ballroom’s former glory. The new design concept will take shape and the ultramodern technology will be installed over the next three months. Bookings for Berlin’s largest ballroom are already well underway, Aernout de Jong tells Schaller. This is an important point, since there’s a business plan behind every renovation project.

Increased revenue at the Pullman Schweizerhof

Union Investment and the Accor Hotels Group have already successfully completed the refurbishment of the Pullman Berlin Schweizerhof hotel. Schaller has his next appointment there at two this afternoon. It’s not a long walk, but the midday sun is blazing. Schaller is cordially welcomed by hotel director Michael Czernik and both men immediately immerse themselves in conversation. “Guests really like the new design”, reports Schaller. Union Investment works with an outside provider to analyse ratings portals, so it’s in the picture. “We’re very satisfied”, confirms the hotel director. As expected, the revenue generation index (the hotel’s share of revenue compared with competitors) has improved. Michael Czernik suggests some fine-tuning: dividing the Presidential Suite into two moderate-sized suites, which will increase revenue and capacity utilisation. Furnishings will also be modernised. Schaller visits and inspects the hotel, then proceeds by taxi through midsummer Berlin.

Michael Czernik (right), director of Pullman Berlin Schweizerhof hotel, and Martin Schaller take stock. Both of them are very satisfied with the refurbishment of the hotel they worked on together. The design concept is highly rated by guests.
Gene Glover

Inspiration for rebranding a portfolio hotel

On a tree-lined side street to the Kurfürstendamm, the well-known shopping boulevard in the Charlottenburg district, Schaller arrives at Hotel am Steinplatz, a historic jewel in the Art Nouveau style. General manager Iris Baugatz is waiting for him in the lobby. Her boutique hotel – not owned by Union Investment – reflects a modern interpretation of the 1920s. As Schaller reports, this “best practice” in the high-end lifestyle/boutique segment inspired him to do some repositioning of his own. A Union Investment portfolio hotel will for the first time be “rebranded” and its concept completely realigned. The days of the Berlin luxury hotel Sofitel on the beautiful Gendarmenmarkt square will end when the lease runs out. After the change of operator, the hotel will be converted into an individual boutique hotel. The franchisee and lessee will be MHP (Munich Hotel Partners). The restructured hotel will have its own name, the Luc, and, like its sister hotel on the Steinplatz square, it will be operated “under the fast-growing brand Autograph Collection Hotels by Marriott International”, explains Schaller. He is certain that the change of operator and brand will make the hotel a prestigious addition to the Gendarmenmarkt in Berlin.

Showing courage and individuality

The name Luc, one of the nicknames of the Prussian King Frederick the Great, is intended to inspire hotel guests and inspire curiosity about the history of the popular hotel location. “What I want is to design hotels that we don’t forget, that show courage and individuality, and that people will talk about.” Schaller and Baugatz are happy they will both be part of the “soft brand” Autograph Collection. “It combines the selling strength of Marriott, the world’s largest hotel chain, and the necessary freedom for a lifestyle/boutique concept,” says Schaller. So he’s also enthusiastic about the third “strategic fit” of the day: “We are creating a promising outlook for the earning power of the hotel chain and therefore also for our property.”

By Elke Hildebrandt

Title image: Gene Glover

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