This autumn, Redwood undertook the international press launch of AMF Fastigheter’s first hotel signing, to anchor its upcoming 130,000 sq m mixed-use development at Urban Escape Stockholm. The leading Scandinavian hotel operator, Petter Stordalen of Nordic Choice Hotels, has been secured for the development. The deal marks the largest hotel contract in Stockholm’s history and comprises a business and boutique concept, covering 30,000 sq m with 540 bedrooms.
Urban Escape Stockholm is one of the most significant urban regeneration projects currently under way in a European Capital City and will seamlessly integrate the wider business ecosystem of the Swedish Capital. Once completed, the development will comprise 62,000 sq m of central, modern, flexible office space and 38,000 sq m of retail and leisure in addition to the 30,000 sq m of hotel and conference space.
Nordic Choice Hotels was up against a line-up of over 60 different leading hotel operators to win the competitive contract. The agreement means that almost one third of the space available at Urban Escape Stockholm is now let. The hotels will include lounges, cafes, conference and co-working spaces, showrooms and permanent office space.
Mats Hederos, CEO at AMF Fastigheter, comments: “After extensive analysis, we believe this combination of hotels, services and offices, integrated with a unique retail and leisure offer, will provide our investors with the best returns. It is the largest project we have undertaken and we are certain that it will safeguard our development pipeline for the future. With an average return of seven per cent in the last five years across all of AMF Pension’s investment streams, our property portfolio has produced returns of 6.6 and 7.2 per cent in the last 10 and 20 years respectively – highlighting property’s effectiveness at balancing a capital portfolio.
“Petter Stordalen’s experience perfectly complements our vision of creating a dynamic, multifunctioning space that fosters the creativity and efficiency of emerging domestic and international talent. These hotel concepts are critical to the success of a development that will redefine what a city can provide to the modern professional.”
Construction on Urban Escape Stockholm is scheduled to commence by the end of this year, with the hotels opening by early 2017. It will involve the redevelopment of a forgotten part of Central Stockholm, across the whole city block between Regeringsgatan and Brunkebergstorg. It is the next phase in Stockholm’s evolution and will revitalise one of the most renowned public squares and further enhance the connectivity, attractiveness and flow of Stockholm’s city centre. This will all take shape around AMF Fastigheter’s Gallerian – the city’s most successful shopping centre with 18.2 million visitors per annum.