International Hotel Investments (IHI), the Malta-based parent company of Corinthia Hotels, is looking to revive plans to sell its high-rise hotel in Prague after a previous deal was derailed by the COVID-19 pandemic.
In its prospectus for its recent €30 million bond offer, currently only available to existing bondholders, IHI confirmed it is exploring market opportunities for the sale of Grand Hotel Praha, which it has owned since 1998.
“The sale of this property had almost been completed, however the deal had come to a halt due to the pandemic,” IHI wrote.
“The group has since deferred a potential sale until a lowering of interest rates translates into healthy valuations which would exceed book values.”
In 2024, it leased the hotel to major Czech hotel operator Czech Inns on a five-year deal and the building was subsequently rebranded from Corinthia Hotel Prague to Grand Hotel Praha. IHI retains the right to terminate the contract early in the event of a sale.
Earlier this year, the Prague City Council updated its Metropolitan Plan in a manner that permits the hotel’s potential conversion to residential use and allows for additional development on adjacent vacant land. IHI said that these planning changes significantly improved the redevelopment potential, and therefore the prospective value, of the hotel.
Grand Hotel Praha is currently the only hotel in IHI’s substantial portfolio that it owns but leases to third parties.
While IHI owns and manages 11 hotels – in Malta, the UK, Portugal, Belgium, Hungary, Libya and Russia – its growth strategy has shifted in recent years towards the provision of management services and the Corinthia brand to third-party hotel owners.
It leases and manages two hotels in Rome and Tuscany, and it manages 14 hotels (in Czechia, Hungary, Tunisia, Malta, Portugal, USA, Qatar, Romania, Saudi Arabia, Maldives, UAE, Italy and China).
It also plans to open Corinthia hotels in Qatar, Saudi Arabia, Maldives, Dubai, Lake Como, and Chengdu, China in the coming years.
Its real estate development subsidiary CREV is pursuing development opportunities in Turks and Caicos, Beverley Hills and Los Cabos, Mexico.
IHI said the Group is actively negotiating other management agreements with hotel owners around the world, and that the company expects to significantly accelerate its growth path in the coming years.
“Management believes that the strength of the Corinthia Brand, its reservation system and online presence, and the quality of its existing operations, place it in a good position to establish such relationships, which are expected to gather momentum in the short to medium term,” it said.
“This diversification is aimed at improving the Group’s profitability, cash generation capabilities and return on investment, was well as reducing the overall risk profile of the Issuer.”
Part of its strategic plan includes the sale of assets in secondary markets that it believes have achieved the mature stage of development.
Earlier this year, it sold a 72 per cent stake in its Corinthia Hotel Lisbon to Orion Capital Managers in a deal that saw the Maltese company earn an estimated net €90 million.
