Union Investment has received official planning permission for the planned conversion of the listed “Proffa” office building in Helsinki. The property, located in the city centre, will be transformed from an office space of approximately 3,160 square metres into a hotel with a total of 84 rooms. A long-term lease agreement for 30 years has already been concluded with the Ruby Group, an experienced hotel operator, for the future hotel use.
The investment sum for this repositioning amounts to approximately EUR 11.5 million. The completion of the project is scheduled for the end of 2027. A portion of the commercial spaces on the ground floor of the building will be retained, while other areas will be reconfigured to optimise the property's attractiveness and functionality.
Strategic Repositioning Secures Cash Flow
Bastian Stuhke, Senior Asset Manager Hospitality at Union Investment, explained that the transformation represents an example of the company's active asset management approach. The implementation of modern office concepts in this specific building was deemed significantly difficult due to the original structural layout from residential use, the partial historic building protection, as well as many load-bearing walls and convoluted spaces. Therefore, the property strategy was comprehensively reviewed, and the potential for hotel use was analysed in detail.
The location, market, and profitability analysis, combined with the property's characteristics, resulted in a positive assessment. The Ruby brand's hotel concept was considered strategically suitable for this property. The “Proffa” property has been part of the portfolio of the open-ended real estate special fund DIFA-Fonds Nr. 3 since 2019. The change of use now initiated is aimed at securing a long-term stable cash flow for the fund. Furthermore, the quality of the property will be significantly enhanced, which positively influences the conditions for new and re-lettings of the existing spaces on the ground floor.
Complexity and History of the Property
Thomas Stancel, Technical Project Manager at Union Investment, pointed out that the complexity of the building structure required special expertise in its conception. Following intensive analyses of various hotel operator concepts, the Ruby Group was chosen because the company has experience in converting historic buildings in central locations. A general contractor, who has already successfully completed high-quality hotel conversions, was secured for the project.
The “Proffa” building was originally designed as a residential building in 1900 by architect Theodor Höijer. Over time, it was extended multiple times and converted for office use in the 1970s. The last modernisation took place in 2008. The property is located on a prominent corner plot in the city centre of Helsinki, within walking distance of the Kamppi Centre, which offers excellent connections to public transport.
