Early termination of lease at Safestay Berlin

In brief · summary, not quotable

Safestay plc has announced the early termination of its lease for the Berlin Kurfürstendamm property, effective upon the landlord's notice, which will result in the cessation of operations at this site. The company intends to place the operating subsidiary, Hotel Auberge GmbH, into liquidation, with no expected material recourse to the wider Group as there are no parent company guarantees. This decision is driven by sustained operational and commercial challenges, including an EBITDA loss of approximately €220,000 in FY25 and an estimated €300,000 to €500,000 in required capital expenditure. Safestay anticipates this exit will improve its future cash profile and remove a loss-making operation, while affirming its continued interest in the German market.

Full announcement

Select text to share a quote on X · sign in to keep highlights & notes in your SSTY notes

Safestay plc (AIM: SSTY), one of Europe's largest hostel groups, announces that the landlord of its Berlin Kurfürstendamm Hotel (the "Property") has served notice to terminate the lease ahead of the contractual expiry on 31 December 2026. Following termination of the lease, Safestay will cease operations at the Property.

The Property has faced sustained operational and commercial challenges, including ongoing trading losses, building-related issues and the prospect of material capital expenditure being required in order to continue operating the site to the standard expected by the Group. Following receipt of the termination notice and having considered the alternatives available to the Group, the Board has concluded that an early exit from the Property is the most commercially appropriate outcome for Safestay and in the best interests of shareholders.

The Property is operated through Hotel Auberge GmbH, an indirect wholly owned subsidiary of Safestay plc. Following termination of the lease, the Group intends to place Hotel Auberge GmbH into liquidation. The Company has taken legal advice in relation to this process and, on the basis of that advice, does not expect the liquidation to create material recourse to the wider Group. There are no parent company guarantees in place.

The Board believes that this outcome is expected be beneficial to the Group. The Berlin Kurfürstendamm site has been loss-making, with an EBITDA loss of approximately €220,000 in FY25, and would otherwise have required an estimated €300,000 to €500,000 of further investment to address Property-related issues. Exiting the site now is therefore expected to improve the Group's future cash profile and remove a loss-making operation from the portfolio.

This decision relates to a specific site and does not affect the Group's broader interest in the German market. Safestay will retain its German holding structure and continues to see attractive opportunities in Germany over the medium term.

Kitzbühel Alpine, Austria Franchise
Kitzbühel Centre, Austria Franchise
Brussels Grand Place, Belgium
Prague Charles Bridge, Czechia
Athens Monastiraki, Greece
Naples, Italy
Pisa Centrale, Italy
Warsaw Old Town, Poland
Lisbon Bairro Alto, Portugal
Bratislava Presidential Palace, Slovakia
Barcelona Gothic, Spain
Barcelona Passeig de Gracia, Spain
Calpe Seafront, Spain (in development)
Córdoba Mezquita Catedral, Spain
Madrid Central, Spain
Brighton, UK
Edinburgh Cowgate, UK Franchise
London Elephant & Castle, UK
London Kensington Holland Park, UK
York Micklegate, UK

Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.