a&o Hostels Acquires Berlin Office Building for 2,500-Bed Hostel Conversion

a&o Hostels has acquired a vacant office building in central Berlin and plans a €40 million conversion to create a 2,500-bed hostel, with a targeted opening in Q1 2027.

a&o Hostels has completed the freehold purchase of a 31,000-square-meter vacant office building on Rudi-Dutschke-Straße in central Berlin from PIMCO Prime Real Estate on behalf of Allianz. The acquisition is part of a&o’s ongoing €500 million investment program and marks its fifth asset in Berlin, bringing its total bed count in the city to 8,000 upon completion.

The company will undertake a €40 million conversion of the property to deliver a hostel with approximately 2,500 beds, expected to be the largest hostel in Europe. The completed scheme will include 610 rooms, offering a mix of 31% private and 69% shared accommodation. The property is located in the Kreuzberg district, a short walk from Checkpoint Charlie and 15 minutes from Berlin’s Central Station.

A building permit has been granted for the project. ANES Bau has been appointed as the general contractor, and a&o is targeting a Q1 2027 opening date.

StepStone Group and Proprium Capital Partners sponsored the management-led acquisition of a&o at the end of 2023 and have invested approximately €500 million in the platform over the past 18 months. The investment program focuses on converting office and hotel properties that are no longer in use or for which capital expenditure to meet current standards is not economically viable.

a&o’s expansion strategy has resulted in an increase of 11,000 beds, both operational and under development or refurbishment, across Europe in the past 24 months. Recent acquisitions have included assets in Manchester, London, Brighton, Brussels, Antwerp, and Heidelberg, as well as the Schulz Hotel platform.

The transaction continues a&o’s pan-European expansion and investment in the hostel sector, which is projected to reach €8.2 billion in value by 2029.