Thursday, 10 September 2026
Union Investment is moving ahead with the conversion of a historic office property in central Helsinki into a hotel after receiving planning approval for the project. The investment manager will commit approximately €11.5 million to the transformation of the Proffa building, with completion targeted for late 2027.
Around 3,160 sqm of existing office accommodation will be converted into 84 hotel rooms. Ruby Group has agreed to operate the property under a 30-year lease, giving Union Investment a long-term hospitality tenant before construction work is completed. Parts of the ground-floor commercial accommodation will remain, while other areas will be adapted as part of the wider repositioning.
The project reflects a growing challenge facing owners of older European office buildings. Proffa’s internal configuration, including numerous structural walls and irregular spaces, makes the introduction of contemporary office layouts difficult. Heritage restrictions affecting parts of the property create additional limitations. Rather than undertaking an extensive office refurbishment within those constraints, Union Investment concluded that hospitality offered a more suitable long-term use.
“The transformation in Helsinki is a current example of our active asset management approach,” said Bastian Stuhke, Senior Asset Manager Hospitality at Union Investment. He said the building’s structural characteristics made modern office concepts considerably more difficult to implement, prompting the company to assess alternative uses. Analysis of the location, hotel market, financial potential and physical characteristics of the property ultimately supported the decision to proceed with hospitality.
The conversion represents another stage in the unusually varied history of the building. Designed by architect Theodor Höijer and completed in 1900 as residential property, Proffa was subsequently expanded before being converted into offices during the 1970s. Its most recent major modernisation took place in 2008.
Union Investment has held the property since 2019 through its DIFA-Fonds Nr. 3 open-ended real estate special fund. The new hotel lease is intended to provide the fund with predictable long-term income while improving the overall quality and commercial prospects of the property.
The complexity of converting a historic building has also influenced the selection of the project team. Union Investment chose Ruby partly because of the hotel operator’s previous experience adapting older properties in prime urban locations. A general contractor with experience in higher-quality hotel refurbishment has also been appointed.
“The complexity of the building’s structure requires specialized expertise in the design phase,” said Thomas Stancel, technical project manager at Union Investment. He added that several hotel concepts were examined before Ruby was selected, with its experience converting historic properties contributing to the decision.
Proffa occupies a prominent corner location in central Helsinki, within walking distance of Kamppi Center and with access to the city’s public transport network. These characteristics, combined with the building’s historic architecture, supported the decision to pursue hospitality rather than continue with a predominantly office-led strategy.
The project demonstrates how the changing European office market is encouraging investors to reconsider the future of buildings that remain attractive from a location perspective but struggle to meet modern workplace requirements. In such cases, structural characteristics that restrict efficient office layouts can potentially become less problematic when a property is converted for hospitality use.
For Union Investment, the Helsinki project is therefore less about abandoning an office asset than finding a new economic purpose for a well-located but physically constrained building. By combining an €11.5 million conversion with an 84-room hotel and a 30-year operating commitment, the investor is seeking to extend the useful life of a 126-year-old property while establishing a new long-term income stream.
