VBL Group, a listed company focusing on Valletta’s real estate market, expects to see a major uplift in its earnings over the next 12 months, as a key project enters its final stages of development ahead of its handover to the tenant.

The site is set to become Valletta’s largest and first internationally branded hotel within the city's walls. The 88-room Ruby Hotel Valletta is planned to open in late 2026.

The Silver Horse Block has long been a central part of VBL’s plans. The site lies on the corner of Strait Street and St Christopher Street, and sits on a 1,008 sqm footprint. The total gross development area of the building is about 5,800 sqm.

With the structural works now complete, the building is being finished to Ruby Hotel’s specifications in line with its ‘lean luxury’ philosophy, which includes state-of-the-art technology and HVAC systems

While the partnership with Ruby involves developing a higher standard final product, which comes with higher initial capital expenditure, noted VBL CFO Julian Tzvetkov, it also comes with a long tenancy agreement of 30 years, ensures that the investment bears fruit.

In the time VBL and Ruby entered into a partnership agreement, the hotel chain has been acquired by InterContinental Hotels Group (IHG).

The completion of the project and its handover to the tenant will see another 31 per cent of VBL’s total property portfolio start to generate revenue. Currently, only 27 per cent is operational.

With revenue-generating assets effectively set to double, the company projects another significant uplift in its operational earnings, which have already registered marked increases.

Operational EBITDA – that is, without taking property revaluations into account – stood at €190,000 in the first six months of 2023, €311,000 in the same period of 2024, and €780,000 in the first half of 2025.

The Ruby Hotel project is expected to add another €2-2.25 million in annual operational earnings, effectively leading to a 10x increase between 2023 and 2027.

“This would result in significantly improved liquidity and better recurring financial indicators and increased free cashflows for the company,” VBL said.

Based on current projections, the revenue split for the hospitality operations would remain diversified, with hotels delivering approximately 41 per cent, own rented properties 32 per cent, managed assets 12 per cent, while other revenues and management fees respectively 13 per cent and 2 per cent of the total revenues at year end.

According to the current management projections, the VBL Group’s 2025 end-of-year financial outlook is in line with projected figures, including forecasted book value of investment property in the range of €90 million, total revenues at around €4.3 million, of which predominant part would be derived from rental operations.

Operational property yields are expected to reflect the improving operational results as well, projecting to be in the 7.0-7.1 per cent range for the period, while total debt remains at conservative level, at around €22 million, corresponding to an approximately 23 per cent debt to equity ratio.