Corinthia’s parent company, International Hotel Investments, said on Sunday its proposed transaction in St George’s Bay was not about a sale of land but solely relative to the proposed extension of potential uses.
In a company announcement on the Stock Exchange, it said its overriding plan was to deliver a luxury holistic six-star environment for its new Corinthia hotel, matching the brand’s standards worldwide.
“This is a risk which we are prepared to take based on our strong confidence in the future of Malta, and the potential of our tourism product to attract higher-spending visitors.”
Real estate development, it said, would be complementary and supportive of that main focus, including in the overall landscaped setting of the development.
The Sunday Times of Malta reported on Sunday the Group would be paying the government just €17 million to build up to 100,000 square metres of residential and office property in St George’s Bay.
According to real estate agents, the land carries a current market price tag of at least €700 million.
IHI said in its statement that its position on valuation was grounded in a starting point where the company already enjoyed long-term exclusive rights to the land, and any further payments had to be relative solely to the removal of restrictive conditions that currently focused the use of the land for tourism related developments.
IHI had some 20,000 Maltese shareholders and bondholders, and published regular statements on its financial position, including this project.
“We are confident that Corinthia’s agreement to guarantee payments to government of circa €52 million will ultimately show up to be an equitable and fair balance in relation to potential returns from the development of a maximum of 100,000m2 of real estate, without even taking into account risks associated to the substantial investment Corinthia is contractually obliged to inject in two new luxury hotels.
“The proposed transaction is not about a sale of land, since this is already in Corinthia’s possession for several decades to come and all financial considerations should thus be solely relative to the proposed extension of potential uses.”
Plans, it said, would ultimately show that a significant portion of the peninsula would be allocated to hotel use including extensive gardens, leisure outdoor amenities and public landscaping.
Subject to Parliamentary approval, signature of the revised title deeds, and to planning approvals, the company would proceed to its first phase of the project which envisaged the redevelopment of the luxury Corinthia Hotel and its extensive landscaped gardens and amenities, as well as the development of two luxury serviced residential blocks, the highest proposed to be 15 floors on land located between the current Corinthia and the Radisson Hotels.
The serviced residential development would enjoy the same level of amenities and service as the new Corinthia Hotel.
The Marina and Radisson Hotels would remain in operation until such time that more definitive plans were made in years ahead, always within the limits being set by the Government in the revised deed, and subject to planning rules and economic viability.
Foremost in its considerations, it said, remained the continued welfare of hundreds of colleagues in Malta and the creation of hundreds of new jobs given that improved service at luxury levels would imply significantly increased staff to guest ratios.
“This is our commitment,” it said.