Singapore-based real estate firm First Sponsor Group has formed a joint venture with its two key shareholders, City Developments and Tai Tak Estates, to buy the Le Méridien Frankfurt Hotel in Germany for €85 million in late December 2017 or early January 2018.

The hotel is currently leased to MHP Parkhotel, and the lease is not scheduled to expire until May 31, 2040.

The deal was sparked by the UK’s looming split from the European Union, which City Developments Chief Strategy Officer and Head of Asset Management Kwek Eik Sheng said would drive demand to Frankfurt as businesses shift operations to the Continent. “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 in a statement.

The Le Méridien Frankfurt Hotel comprises two buildings—a historic part with protected status built in 1905 that has 80 rooms, and a modern part built in the 1970s with 220 rooms.

Earlier this year, City Developments 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.