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London - Success Stories
Feasibility Study and Valuation - Two proposed Intercontinental Hotel Developments, Tripoli, Libya
"The client found HVS to be one of the leading providers of feasibility studies, not just in quality but also speed of response. In addition, the geographical spread to areas where other firms are non-existent, HVS have done a tremendous job for them. Overall, the quality of work was very good, and very positive in terms of defining what they required"
Project
The proposed Al Waddan Hotel and InterContinental Tripoli (developed in a joint venture with a local developer and the Economic Social and Development Fund (ESDF), a government-backed Libyan investment fund), will become the city's second and third internationally branded hotels in 2009 and 2010, respectively.
The Al Waddan Hotel will comprise 91 bedrooms, five food and beverage facilities, a spa, a multipurpose auditorium, its renowned wedding hall and extensive outside catering facilities. During the 1950s and 1960s, the hotel was one of the most prestigious in the city accommodating the largest casino along the Mediterranean coast. It was closed down in the 1990s after being neglected for decades. The hotel is currently being completely overhauled to be restored to its former glory. It will be managed by InterContinental Hotels Group (IHG) under a management agreement but will remain unbranded.
The InterContinental Tripoli will also be run by IHG. It is currently under construction and is due to open in 2010. The hotel will have 394 rooms, including serviced apartments, six food and beverage facilities, a grand ballroom and a spa. It will be located alongside the Al Waddan Hotel overlooking Sidi Issa Street and Tripoli harbour.
This strategic partnership with IHG puts the developments in a favourable position to tap into the growing Libyan tourism market and capitalise on Tripoli's potential as a business hub.
The HVS Assignment
Having performed numerous assignments in the Middle East and Northern Africa, HVS was approached by the company behind the developments in November 2007. HVS's role was to provide a financial feasibility study and valuation for the proposed Al Waddan and InterContinental Tripoli projects. Owing to Tripoli's positive development, it is seen as the latest investment hotspot. The hotel landscape witnessed a remarkable uplift when several hotel projects became public and a number of management agreements with international brands were signed. Therefore, HVS was instructed to do an updated study in July 2008 given the changing market dynamics and environment owing to the entry of new players and the increasing promise of the local economy.
Results
From HVS's extensive experience and knowledge in valuing hotels, different valuation scenarios were prepared including the value as at the opening date; the value as at the stabilised year; the value as an encumbered (branded) property; and the value as an unencumbered (independent) operation. The results of our findings were used by the different banks involved including Europe Arab Bank to secure debt financing, and Morgan Stanley to help raise equity financing for the developments.
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