The "House of 28 doors" is an art project in Berlin-Kreuzberg intended to show solidarity with refugees around the world and protest against the EU's asylum policies.
The installation was set aflame in the early hours of Tuesday morning, according to a Berlin police report.
Fire services tried to put out the flames, but could not save the installation. Police suspect the case to be arson because of its symbolic importance to refugees.
Police said they initially arrested a 25 year-old man at the scene, but later released him after witnesses said they did not recognize him. A criminal investigation is now in action.
The installation was originally located in Tempelhofer Park, but was then moved to Kreuzberg's Oranienplatz in August 2014 because of the square's political significance.
Oranienplatz had been the site of a camp protesting against EU refugee policy for over 18 months. The camp was the source of a lot of tension between refugees and local residents, making the area a focus for charities and organizations who help refugees and asylum seekers.
One of these is Give Something Back to Berlin (GSBTB), a charity that works on community projects aimed at "young, international ‘new Berliners", and organizes workshops, English classes and other events for refugees.
Lucy Thomas of GSBTB told The Local that the installation had already become a target of anti-refugee feeling, having been broken into and vandalized only last week.
As well as the culture of xenophobia among a minority of people; Thomas cited the heart of the problem as "the backtracking and unkept promises from the government and city council".
This means that "many [refugees] are now homeless and do not have access to basic shelter or any sort of social security", she added
She also said that tensions and resentment were fuelled by "the lack of constructive solutions to provide adequate long term perspectives for the refugees."
Thomas remains positive nonetheless, saying that "overall Berlin is still for the most part a welcoming and forward thinking city, as seen with our 3000 strong GSBTB Community which is made up of global migrants from all over the world. "
'Stuck in perpetuity'
The group of artists behind the House of 28 Doors explained its message their website:
"It is dedicated to all those people who became refugees due to the destruction of their basic existence in their home countries, environmental disasters as well as unjust economical and trade conditions."
"Many of those die at the external borders of the European Union; others reach European territory but find themselves stuck in the perpetuity of the improvised system."
The 28 doors represented each member state of the EU, and three personal stories of refugees currently living in Berlin are shown on three screens inside the building.
The EU flag that flew over the building was black as a sign of mourning for those who drowned trying to cross the Mediterranean.
This suspected arson attack comes in the context of anti-refugee feeling from certain parts of German society .
There were over 200 attacks on refugees and their accommodation in 2014, which represents a sharp increase compared to the previous year.
Last year was also the year where the number of foreigners in Germany hit a record high, while right-wing extremists have been active in recent months, whether it be threatening politicians, attacking journalists or attending anti-Islam Pegida protests.