AMF Fastigheter, leading Swedish property investor and developer, has today unveiled the biggest hotel contract in the history of Stockholm with Petter Stordalen – owner of Nordic Choice Hotels. The contract comprises two hotels with two disparate concepts, business and boutique.

The hotels will cover an area of 30,000 sq m on a 20-year lease term. It will provide a total of 540 rooms for AMF Fastigheter's latest mixed-use 130,000 sq m development Urban Escape Stockholm.

Urban Escape Stockholm, one of the most significant urban regeneration projects currently under way in a European Capital City, will seamlessly integrate the wider business ecosystem of the Swedish Capital. Once completed, the development will comprise 62,000 sq m of central, modern, flexible office space and 38,000 sq m of retail and leisure in addition to the 30,000 sq m of hotel and conference space.

Nordic Choice Hotels was up against a line-up of over 60 different leading hotel operators to win the competitive contract. The agreement means that almost one third of the space available at Urban Escape Stockholm is now let. The hotels will include lounges, cafes, conference and co-working spaces, showrooms and permanent office space.

Mats Hederos, CEO at AMF Fastigheter, comments: "After extensive analysis, we believe this combination of hotels, services and offices, integrated with a unique retail and leisure offer, will provide our investors with the best returns. It is the largest project we have undertaken and we are certain that it will safeguard our development pipeline for the future. With an average return of seven per cent in the last five years across all of AMF Pension's investment streams, our property portfolio has produced returns of 6.6 and 7.2 per cent in the last 10 and 20 years respectively – highlighting property's effectiveness at balancing a capital portfolio.

"Petter Stordalen's experience perfectly complements our vision of creating a dynamic, multifunctioning space that fosters the creativity and efficiency of emerging domestic and international talent. These hotel concepts are critical to the success of a development that will redefine what a city can provide to the modern professional."

Petter Stordalen, owner of Nordic Choice Hotels, says: "We are proud to be part of the most important urban development project to have taken place in Stockholm since the 1960s. Our ambition is to become market leader in all major cities across Scandinavia and this deal represents our progress in achieving this."

Construction on Urban Escape Stockholm is scheduled to commence by the end of this year, with the hotels opening by early 2017. It will involve the redevelopment of a forgotten part of Central Stockholm, across the whole city block between Regeringsgatan and Brunkebergstorg. It is the next phase in Stockholm's evolution and will revitalise one of the most renowned public squares and further enhance the connectivity, attractiveness and flow of Stockholm's city centre. This will all take shape around AMF Fastigheter's Gallerian – the city's most successful shopping centre with 18.2 million visitors per annum.

About Nordic Choice Hotels:

Nordic Choice Hotels is one of Scandinavia's largest hotel operators with 171 hotels and 12,000 employees in Scandinavia and the Baltics. The Group markets well-known brands such as Comfort, Quality Hotels, Quality Resort, Clarion Collection and Clarion, as well as 10 independent hotels.

About AMF Fastigheter:

AMF Fastigheter is one of Sweden's largest property investment and development companies, focusing mainly on urban commercial premises in Stockholm and Göteborg, with its main investment focus on Stockholm city centre. The company manages approximately 560,000 sq m of commercial real estate, with an estimated value of €.73bn (Skr41bn), taking a long-term approach to developing and managing flexible and attractive commercial office and retail space. AMF Fastigheter entire profit accrues to its owner, pension company AMF Pension, which manages assets totalling approx. €8.9bn (Skr424bn) on behalf of 3.8 million savers.

About Gallerian:

Built in 1976, Gallerian is one of the most successful mall concepts in Sweden. Centrally located in the commercial heart of downtown Stockholm, the centre boasts an average daily footfall of 50,000 people (18.2 million annually). With 85 units over 31,500 sq m, Gallerian is home to a wide variety of national and international brands in a mix of flagship stores, smaller boutique units, restaurants, cafes and meeting places.

Design-wise, the mall is built with a light and airy city street feel with glazed bay windows and a large entrance. The mall is an integral part of the city as a meeting place and landmark for both locals and tourists.

About Urban Escape:

Urban Escape Stockholm will offer 130,000 sq m of mixed-use space that will champion a new approach to offices, in the heart of one of Europe's fastest growing cities. It will be anchored by two hotels with conference space and seamlessly integrate the wider business ecosystem of the Swedish Capital. Once completed the development will comprise 62,000 sq m of modern office space and 38,000 sq m of retail and leisure in addition to 29,000 sq m of hotel and conference space. Expected completion date is spring 2018.

About Stockholm:

95 per cent of AMF Fastigheter's current portfolio (office and retail) is located in Stockholm. Stockholm accounts for 70 per cent of growth in Sweden's working population and is predicted to grow six times as fast a Paris and twice as fast as Copenhagen by 2030. Stockholm holds 40 per cent of Sweden's GDP and in 2012 alone, retail sales totalled €4bn. As the consumer market is expecting an annual increase of €20m this is set to rise further.

About Sweden:

Sweden is now ranked among the world's top ten richest countries in terms of average wealth per adult, overtaking countries like the United States, China and Japan. Sweden's economic growth has been surprisingly strong since the global financial crisis. By 2020, growing consumer spend will increase retail demand in Sweden as a whole by €.1 billion, creating the potential for up to 350,000 sq m of additional retail space.