A new hotel in the heart of Stockholm’s events district
Swedish hotel operator Scandic Hotels Group is continuing its expansion in the capital with a new property at Arenavägen 7, in the Globe district.
The hotel will be developed through the conversion of an existing office building owned by Corem Property Group AB, with opening scheduled for 2028.
Scandic has entered into a long-term lease agreement with the property owner, under which rent will be linked to revenue generated by the hotel’s operations. The announcement does not disclose the precise lease term, its financial conditions or the investment required for the conversion.
The property will benefit from its proximity to several major venues hosting concerts, sporting events and entertainment: Avicii Arena, 3Arena, Hovet and Annexet.
For Scandic, the location is intended to attract a mix of event-driven visitors, business travellers and leisure guests.
A 320-room hotel designed for families and event visitors
The future hotel will feature 320 rooms, including a substantial proportion of spacious family accommodation.
Approximately 40 larger rooms and suites will be located on the top floor, several featuring private terraces and panoramic views.
The property will also offer a restaurant, bar, meeting facilities, wellness area, fitness centre, parking and dedicated spaces for events and activities.
This configuration reflects the diversity of guests expected in the district, particularly families attending concerts or sporting events, as well as business travellers.
Söderstaden: a district undergoing major urban transformation
The project forms part of the development of Söderstaden, one of Stockholm’s principal urban regeneration initiatives.
Located near the Gullmarsplan transport hub, the future hotel will also benefit from the development of Slakthusområdet, a former industrial district gradually being transformed into a destination combining gastronomy, culture, nightlife and creative activities.
According to Scandic, the wider area is expected to accommodate approximately 3,000 new homes and 14,000 jobs.
This transformation should help diversify the district’s sources of demand, which have historically been strongly linked to the schedules of its major event venues.
The challenge for the hotel will therefore be to benefit both from demand peaks generated by events and from more consistent business associated with the area’s economic and residential development.
Selective growth driven by location potential
Jens Mathiesen, President & CEO of Scandic Hotels Group, places the project within the group’s development strategy:
“Our growth strategy focuses on strengthening our presence in attractive locations with long-term demand potential. Stockholm is an important market for Scandic, and this hotel gives us a strong position in a developing district where events, business and leisure come together.”
Mathiesen presents the project as an example of the group’s selective hotel portfolio expansion.
For his part, Jesper Engman, Chief Development Officer of Scandic Hotels Group, highlights the value of working with the property owner:
“This project illustrates how Scandic can work with property owners to unlock the potential of existing buildings in attractive locations. Together with Corem, we are developing a hotel that responds to the district’s established event-driven demand while attracting a diverse range of guests throughout the year.”
An office conversion incorporating environmental objectives
The conversion of the office building will incorporate environmental certification targets.
The building is expected to achieve BREEAM Very Good certification, while the hotel operation will aim to obtain the Nordic Swan Ecolabel.
Scandic also plans to introduce its Room Collection concept, combining design, functionality and circularity principles in material selection.
At this stage, these certifications remain stated objectives rather than accreditations already achieved.
Reusing an existing building is consistent with an adaptive reuse approach, although the announcement provides neither a quantified assessment of the project’s carbon footprint nor a comparison with new-build construction.
LTH Analysis | Revenue-based leases and adaptive reuse: two drivers of hotel development
This transaction presents two noteworthy characteristics for hotel investors and property owners.
The first concerns the conversion of a commercial office asset into a hotel in a district where potential demand is supported by several drivers: events, economic activity and residential development.
For Corem Property Group, the conversion is intended to reposition an office building for a new use, subject to the project’s economic and technical viability.
The second concerns the revenue-based lease, a mechanism linking part of the rental arrangement to the hotel’s performance. Without knowing the contractual provisions, however, it would be premature to conclude that risks are shared equally between the property owner and the operator.
The choice of the Globe district also presents a particular commercial challenge: major events can significantly support demand and average room rates on certain nights, but annual profitability will depend on the ability to generate consistent occupancy outside these periods.
For Scandic, the strategic value therefore lies less in adding 320 rooms than in combining an event-driven location, a district undergoing transformation and a property model aligned with its selective growth strategy.
At a Glance
Project: Scandic Hotels Group to open a new 320-room hotel in Stockholm’s Globe district in 2028.
Property: Conversion of an existing office building at Arenavägen 7.
Landlord: Corem Property Group AB, under a long-term revenue-based lease agreement.
Facilities: Family rooms, approximately 40 larger rooms and suites, restaurant, bar, meeting facilities, wellness, gym and event spaces.
Location: Walking distance from Avicii Arena, 3Arena, Hovet and Annexet.
Sustainability: BREEAM Very Good and Nordic Swan Ecolabel certifications targeted.
