Azeri businessmen to open hotels in Russia with IBA loan
Azerbaijani businessmen will open topnotch hotels in St.
Petersburg, Russia on account of lending provided by the
International Bank of Azerbaijan (IBA), the country’s leading
bank.
Malik Babayev, general director of the International Baltic Investment Company (IBIC), said that work has been completed on turning what was previously a culture center for food industry employees into a five-star hotel, the Russia-based Delovoy Peterburg newspaper reported.
IBIC, which owns the building, has signed a letter of intent with Fairmont Raffles Hotels International (FRHI), the hotel’s operator. An agreement on management of the facility will be signed on Friday. The hotel is due to be opened by January 1, 2011 under the Swissotel brand.
The hotel will initially include 120 suites, with 50 more suites to open later. The facility, covering an area of 12,000 square meters, has a pool, a spa center, restaurants, and an underground car park.
Investments in the project total $25 million, including $4.1 million spent on an auction held in 2005. Funds have been lent for the purpose by the IBA. Fuad Gasymov, the director of the bank’s subsidiary in the Russian city of St. Petersburg, says investing in hotels is more lucrative than placing funds in residential property, as this allows to receive operating revenue over the long term.
IBA is allocating an additional 70 million euros to IBIC for the construction of two new hotels in the center of St. Petersburg.
According to IBIC’s general director, a decision has been made to build a hotel first and then select an operator to run it. The risk has been justified, as the hotel’s owner has been approached by several major operators, including Sheraton and Hilton. However, Fairmont offered the best terms of cooperation, which the hotel owner did not elaborate upon.
FRHI currently manages over 120 luxury class hotels in 25 countries.*
Malik Babayev, general director of the International Baltic Investment Company (IBIC), said that work has been completed on turning what was previously a culture center for food industry employees into a five-star hotel, the Russia-based Delovoy Peterburg newspaper reported.
IBIC, which owns the building, has signed a letter of intent with Fairmont Raffles Hotels International (FRHI), the hotel’s operator. An agreement on management of the facility will be signed on Friday. The hotel is due to be opened by January 1, 2011 under the Swissotel brand.
The hotel will initially include 120 suites, with 50 more suites to open later. The facility, covering an area of 12,000 square meters, has a pool, a spa center, restaurants, and an underground car park.
Investments in the project total $25 million, including $4.1 million spent on an auction held in 2005. Funds have been lent for the purpose by the IBA. Fuad Gasymov, the director of the bank’s subsidiary in the Russian city of St. Petersburg, says investing in hotels is more lucrative than placing funds in residential property, as this allows to receive operating revenue over the long term.
IBA is allocating an additional 70 million euros to IBIC for the construction of two new hotels in the center of St. Petersburg.
According to IBIC’s general director, a decision has been made to build a hotel first and then select an operator to run it. The risk has been justified, as the hotel’s owner has been approached by several major operators, including Sheraton and Hilton. However, Fairmont offered the best terms of cooperation, which the hotel owner did not elaborate upon.
FRHI currently manages over 120 luxury class hotels in 25 countries.*
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