Safestay (AIM:SSTY) said the landlord of its Berlin Kurfürstendamm hotel has served notice to terminate the lease ahead of the contractual expiry on 31 December, and the group will cease operations at the property.
The site recorded an EBITDA loss of approximately €220,000 in FY25, has faced sustained trading losses and building-related issues, and would otherwise have required an estimated €300,000 to €500,000 of further investment to meet the group's standards, so the board concluded an early exit is the most commercially appropriate outcome.
The property is operated through Hotel Auberge, an indirect wholly owned subsidiary, and following termination of the lease the Group intends to place Hotel Auberge into liquidation; the company has taken legal advice and does not expect the liquidation to create material recourse to the wider group and there are no parent company guarantees in place.
Exiting the site now is expected to improve the future cash profile and remove a loss-making operation from the portfolio, the company said.
The decision relates to this specific site and does not affect Safestay's broader interest in the German market, Safestay said, with the group retaining its German holding structure and continuing to see attractive opportunities in Germany over the medium term.
