DFI, CELLS Group acquire Berlin hotel for €116m

DFI, CELLS Group acquire Berlin hotel for €116m
Sheraton Berlin Grand Hotel Esplanade

Deutsche Finance International (DFI) and CELLS Group have acquired the 32,000 sq m Sheraton Berlin Grand Hotel Esplanade from Archer Hotel Capital and Event Hotels for €116 million.

DFI’s pan-European value add fund is the majority shareholder in the transaction.

DFI believes that the acquisition presents an opportunity to unlock embedded value through a series of asset management initiatives that fully leverage the hotel’s prime location, utilising DFI’s expertise in operational and customer centric real estate coupled with the development skills and local expertise of CELLS Group. 

DFI said current plans include a programme of works to improve and reposition the property, creating a prime new mixed-use destination comprising offices and new food and beverage outlets, alongside an upgraded hotel.  A key focus of the project will be to improve the asset’s ESG credentials, targeting the highest sustainability standards.

The 394-key five-star hotel is situated in a highly attractive location near Großer Tiergarten in Berlin-Mitte, close to the Embassy Quarter and opposite the Bauhaus Archive. The district is home to many large international and domestic companies, as well as important political institutions and a significant number of restaurants, bars, shops and other amenities.  The hotel also benefits from strong public transport links and is located in close proximity to a number of Berlin’s main tourist attractions including the famous Kurfürstendamm shopping avenue and the Tiergarten park.

Daniel Filser, Head of German Investments at DFI, commented: “Berlin is one of Europe’s most exciting and fastest growing cities. We believe that this transaction presents us with a strong opportunity to invest in repositioning the property to unlock embedded value by creating a first class mixed use destination that incorporates offices, restaurants and bars alongside an upgraded hotel.  As with all our regeneration projects, we will place a major emphasis on achieving strong sustainability credentials, including environmental and place-making benefits. Furthermore, we expect the property to benefit from both the post pandemic recovery and the city’s continued emergence as an international business hub and one of Europe’s most liquid real estate markets.”

Dirk Ruppert, Partner and Chief Investment Officer at CELLS Group, commented: “We are very happy to acquire another property together with DFI in Germany. Located in the very heart of Berlin, this asset presents a number of exciting opportunities to enhance its offering and maximise its potential, while ensuring that hospitality continues to play a major role given the popularity of this well-located hotel. Alongside DFI, we will look to appoint a world class architect to assess our options while, in the meantime, continuing hotel operations based on the current multi-year lease.”

Dominic Seyrling, Director Investments at Archer Hotel Capital, added: “The sale of the hotel represents a rare win-win situation for all parties involved. It was a pleasure working with DFI and CELLS Group throughout this transaction.  We believe that they are the right party to bring a new life to this historically important property and we are looking forward to seeing the buyer’s plan come to fruition.”

This is DFI and CELLS Group’s second deal together following the acquisition of the Holstenwall 20-22 value add office repositioning opportunity in central Hamburg, Germany.