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A joint venture between an American art collector and a Maltese property owner.
What did Hotel Solutions Partnership achieve for the client?
The feasibility study enabled the JV partners to understand the investment returns and was therefore used as a guide to inform the lease terms and lease amount for the property to be converted into a hotel.
The Client has agreed to explore the possibility of redeveloping an office building in Valletta, Malta’s capital city, into a high-end boutique hotel. The concept discussed between the parties includes a hotel with large guest suites, serviced apartments, an art gallery/ museum, restaurants, a rooftop pool terrace, gym and wellness center.
A Feasibility Study was required in order to explore the market potential, provide recommendations on the operating concept and area schedule, and forecast the likely capital expenditure, financial performance and investor returns from the hotel development.
Market Study – this involved field research and a site visit, which highlighted the limitations of the building, as well as the potential of Valletta as a boutique hotel hub. Malta’s historic tourism trends have always seen a high concentration of business in the summer months, particularly the resort hotels. A boutique hotel focusing on art will appeal to a different market and has the potential of year round demand.
Concept Study – working with AWW architects, we advised on a full service hotel with rooftop facilities, a range of food and beverage outlets, a spa/leisure facility and limited meeting space. This will appeal not only to hotel guests but also to the local businessmen working in the city.
Investment Appraisal – by projecting the hotel’s income and expenditure over the first 10 years of operation and comparing this to the development costs, we advised that the hotel would benefit from being enlarged to include the adjacent building offering views over the majestic Grand Harbour.