a&o Hostels (a&o), Europe’s largest and fastest-growing hostel chain with 31,500 beds under management, announces the freehold purchase of a 31,000sq m vacant office building in a prime central Berlin location, from PIMCO Prime Real Estate on behalf of Allianz. StepStone Group and Proprium Capital Partners sponsored the management led acquisition of a&o at the end of 2023 and together they have invested c. €500M into the platform’s expansion over the last 18 months.
In line with its adaptive reuse strategy, a&o will leverage its in-house development arm to undertake a €40M conversion programme to deliver Europe’s largest hostel, with c. 2,500 beds.
The transaction extends a&o’s dominant footprint in Berlin, which will total 8,000 beds once the property is complete, a leading tourism & leisure destination where the first a&o hostel opened back in 2000. Located on Rudi-Dutschke-Straße, in the heart of Berlin’s Kreuzberg tourist district, the completed scheme will total 610 rooms offering a mix of private (31 per cent) and shared (69 per cent) space.
Oliver Winter, CEO of a&o Hostels, commented: “Offering a unique blend of history, culture, modern innovation, green spaces and affordability, Berlin is one of Europe’s leading leisure and tourism hotspots, welcoming 13 million visitors in 2024, a 7.5 per cent increase on 2023. It’s also the city that is synonymous with a&o, having opened our first hostel in Berlin Friedrichshain over 25 years ago. Leveraging our in-house development capabilities will enable us to deliver another highly sustainable, modern hostel and the largest in Europe. This landmark investment is a major statement of our ambition, as we continue to drive the rapid growth of the a&o platform. Democratising access to prized urban destinations is a core pillar of our strategy – combining our deep investment and operational expertise and the sector’s favourable tailwinds will drive even stronger overnight stay and revenue performance.”
