Deutsche Finance International (DFI), a European private equity real estate investor, has joined forces with Cells Group to acquire the 32,000 m2 Sheraton Berlin Grand Hotel Esplanade from Archer Hotel Capital and Event Hotels for €116 mln.
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. 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. Financing for the acquisition is provided by Berliner Sparkasse.
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.’
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.
The buyers have been advised by GSK Stockmann, Ernst & Young, HFK Rechtsanwälte, Cushman Wakefield and CBRE while the seller has been advised by Freshfields Bruckhaus Deringer, Ernst & Young, Eastdil Secured and CBRE.
