a&o Hostels is continuing its aggressive push for growth, acquiring a Berlin office block that will be converted to create Europe’s largest hostel.
The acquisition is part of a commitment from a&o’s backers, StepStone and Proprium, to invest up to EUR500 million to substantially grow the a&o brand into a world leader in the hostel space. The property, near the city’s famous Checkpoint Charlie, will be the brand’s fifth site in Berlin, and take its capacity in the city to 8,000 beds.
Another Office Conversion
The freehold purchase from sellers PIMCO Prime Real Estate on behalf of Allianz, will now have around EUR40 million spent on it. a&o will undertake an upgrade of the building envelope to improve its environmental performance, and convert the interior to a 610 room property with 2,500 beds. With construction permits and a main contractor already in place, the expectation is that the transformation will be complete in time for an opening in early 2027.
“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% increase on 2023,” noted a&o chief executive, Oliver Winter. “It’s also the city that is synonymous with a&o, having opened our first hostel in Berlin Friedrichshain over 25 years ago.”
Now the biggest hostel brand in the market, a&o welcomed 2.8 million guests during 2025, who booked 6.6 million overnight stays. In recent months, the group has acquired properties in London and Manchester, extending its presence in the UK market. It also recently acquired Schulz Hotels, adding more beds in Germany.
Also in the a&o development pipeline is a new hostel in Heidelberg, currently under construction. The 118 room conversion of an existing building close to the main station will open for business in early 2027. And, thanks to the acquisition of the Schulz hotel business, there is a further 326 room property in development, also in Berlin. This will open by mid 2027, with a&o having the option of running it under its main brand, or maintaining the Schulz name.
Building the Berlin Buzz
As a major international destination, Berlin is also attracting plenty of hotel development, across all segments of the market. In the hybrid and hostel space, Meininger is refurbishing its Meininger Hotel Berlin Mitte, with completion by the middle of 2026.
British budget hotel brand Premier Inn is also growing fast in Germany, and Berlin is a key market for the company. Premier Inn Berlin Spandau will open in late 2027, with the group taking over a project previously earmarked for a Super 8 hotel with GSH. In 2027, it will open the 270 room Premier Inn Berlin-Lichtenberg, while there are also Premier Inns planned for Spittelmarkt, and Kurfurstendamm.
