UK hotel chain and hospitality operator Premier Inn has signed a lease agreement with IREIT Global for around 10,348m² of gross floor area in Berlin Campus in Germany.
This move is a step towards transforming the 12% of net lettable office property into a mixed-use asset.
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The 20-year lease agreement, which has no break option, will yield an annual rent of €2.2m ($2.32m) upon completion of the hotel segment by the first half of 2027, and €2.6m after a four-year step-up period, with annual indexation thereafter.
The lease is a component of IREIT Global’s Project RE:O, aimed at redeveloping Berlin Campus into a multi-let asset.
The property’s location near Ostkreuz railway station makes it a key connection point to central Berlin.
The building application for the refurbishment has been submitted, with works expected to start in Q2 2025.
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By GlobalDataIREIT Global Group CEO Peter Viens said: “We are excited to welcome Premier Inn as our tenant in Berlin Campus. The achievement of this significant milestone shows the validity of our repositioning project and demonstrates IREIT’s capabilities to manage a significant asset management project. We are also working hard on another hospitality lease concept in Berlin Campus that we hope to be able to announce in the near future.”
With an estimated capital expenditure of €42m, the refurbishment comprises €22m for Premier Inn’s hotel segment and €20m for new entrance and facade upgrades. Funding for the project will come from a combination of cash and debt.
Viens added: “Our joint sponsors, Tikehau Capital and City Developments Limited, have expressed support for the repositioning initiative and signing of the hospitality lease. They are confident in the upside potential and long-term attractiveness of Berlin Campus post repositioning and will assist in all ways to facilitate the successful execution of Project RE:O within schedule and deliver an iconic building that will anchor the future resilience of IREIT’s portfolio.”
The repositioning of Berlin Campus is anticipated to contribute positively to the city’s sustainable urban development, with the property expected to achieve LEED Gold certification, reflecting its high-tech concept and use of eco-friendly building materials.
