In the first ruling of its kind, the German capital's administrative court said on Wednesday that it would not decide on moral or social grounds because the law authorising prostitution was not based on these considerations.
Judges visited the Salon Prestige club, just off the city's main shopping street Kurfürstendamm, and said its existence was only noticeable by an inconspicuous name plate.
Its opening hours - 11:00 am to 11:00 pm on weekdays and 2:00 pm to 8:00 pm on weekends and public holidays according to its website - should also be acceptable for neighbours, the court said. The establishment also does not serve alcohol, it emphasised.
The court looked into the matter after a local town councillor complained that brothels should not be opened in residential areas.