DFI pays €116m for 5-star Berlin hotel and plans enhancement

Private equity property investor Deutsche Finance International and German property company Cells Group have jointly acquired the 394-key five-star Sheraton Berlin Grand Hotel Esplanade from Archer Hotel Capital and Event Hotels in a €116 million deal.

DFI’s pan-European value add fund is the majority shareholder in the transaction. DFI said the acquisition presents an opportunity to unlock embedded value through asset management initiatives.

Current plans include a programme of works to improve and reposition the property by creating a new mixed-use destination with offices and food and beverage outlets, alongside the upgraded hotel. Improving the asset’s ESG credentials will be a key focus.

The 32,000 sq m hotel is located near Großer Tiergarten in Berlin-Mitte, close to the Embassy Quarter and opposite the Bauhaus Archive.

The district is home to large international and domestic companies and political institutions, the Kurfürstendamm shopping avenue and the Tiergarten park.

“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,” said Daniel Filser, head of German investments at DFI.

Financing for the acquisition is provided by Berliner Sparkasse. The buyers were advised by GSK Stockmann, Ernst & Young, HFK Rechtsanwälte, Cushman Wakefield and CBRE while the seller was advised by Freshfields Bruckhaus Deringer, Ernst & Young, Eastdil Secured and CBRE.

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