Exalco’s proposed development of a 12-storey hotel on St Augustine Street in Paceville has cleared another hurdle as Transport Malta dismissed concerns about its impact on traffic in the busy area.

Malta’s transport authority was responding to concerns raised by Swieqi Local Council, which had earlier argued that the development would “clog the entrance to Swieqi Road (the tunnels entrance)” and called for projects of such magnitude to be put on hold until the road network is upgraded.

In a submission to the Planning Authority dated 27th July, Transport Malta pointed out that the number of car trips generated by the new hotel “is not considered to be significant,” finding “no objection for the proposed development from a network capacity point of view.”

The four-star hotel is being proposed in place of the existing Mayfair Business Centre, owned by Exalco Properties. Exalco also owns the Phoenix, Marina and Golden Mile business centres in Santa Venera, Ta’ Xbiex and St Julian’s, among others properties.

The proposed hotel will feature 196 beds and include a range of leisure and wellness facilities, including a spa, treatment rooms, indoor and outdoor swimming pools, a gym, a sauna and a sensory shower.

The redevelopment will require the demolition of the existing business centre. Existing tenants have already been issued termination notices and, once the building is fully vacated, works could commence by the end of the year.

According to management, discussions with prospective hotel operators are already underway, with strong interest expressed in managing the property. The company is also in talks with banks to secure financing for the project.

The redevelopment is expected to have a temporary impact on the group's financial performance. The Mayfair Business Centre currently contributes around 15% of the group's rental income, and management has warned that the loss of rental income during construction will weigh on results for the 2026 financial year. In fact, during the first half of 2026, Exalco Properties Ltd reported a decline in profit of more than €268,000, equivalent to approximately 15%, largely reflecting the anticipated impact of the redevelopment.

The project has also received a favourable response from the Superintendence of Cultural Heritage, which confirmed that it has no objections to the proposal.

If approved, the development would add another four-star hotel to the rapidly expanding hospitality sector in St Julian's, reflecting continued investor confidence in Malta's tourism industry.