September 20, 2023 | Articles
Hill has had tremendous success managing the renovations of iconic hotels such as the Steigenberger Hotel refurbishment project in Cologne, Germany, the Nile Ritz Carlton in Cairo, Egypt and the St Regis Hotel in Astana, Kazakhstan to name a few. Astir Palace Resort in Athens is next in line, which it is carrying out preparatory work in anticipation of the start of main construction activities in first-quarter 2017. “Hill has a full team on the project and we are currently working on design management and procurement,” said Manolis Sigalas, Vice President of Development Management in the Athens office. “There will be 16 to 17 Hill people on site when we start the main construction work.”
With a planned overall investment of $600 million, the Astir Palace Resort redevelopment is a highly prestigious project and one that has attracted the attention of international investors.
Following an international tender process that commenced in 2013, the sale of the asset was recently completed by Jermyn Street Real Estate Fund IV, a fund that is advised by AGC Equity Partners, and includes major international investors such as sovereign wealth funds from the Middle East and Turkish business group Dogus.
Billed as the “crown jewel” resort of the Athenian coastline and, arguably the site is one of the most attractive parcels of land along the Eastern Mediterranean coast, the Astir Palace development is spread over about 300,000 square meters.
The asset comprises two owned and currently operating five-star hotels, one non-operating hotel (to be demolished), 58 owned bungalows, as well as leases to the prominent Vouliagmeni luxury yacht marina and the nearby Astir beach. The history of the resort can be traced to the late 1960s and since then Astir has hosted international jet-setters and Greek clientele alike.
Today, nearly six decades later, a masterplan for redeveloping the resort has already been completed and the plan will be to start work in phases, Sigalas said, adding that, under Phase 1, the focus will be on upgrading the existing hotels, landscapes, service units and the cabanas. “The investors’ vision is to redevelop Astir into a genuine world-class hospitality destination and an exemplary landmark for Greek tourism. The development plan has been prepared with due respect to Astir’s identity and safeguards the improvement of the natural environment” he said, noting that as part of the process an official announcement is due on the appointment of a luxury-brand operator for the hotel.
The genesis of Hill International’s involvement can be traced back to March 2014 when the company received a contract from Jermyn Real Estate Fund IV to provide project management services for redevelopment of the resort. However, work was practically suspended in Q1 of 2015 due to the non-approval by the State’s Supreme Court of the asset’s zoning, which was a fundamental condition for the closing of the sale by our client. “The deal was cautiously steered through by the investors to survive amidst complex legal and contractual circumstances and amidst Greece’s period of unprecedented turbulence in the summer of 2015,” Sigalas said. “The State’s objective to drive forward privatization projects that were mature, like Astir, was a catalyst for bringing the sale to a successful closing. Rightly so, he added, as this is a major foreign direct investment of international reference that will have several benefits for Greece’s tourism and the economy in general. Hopefully, it will blaze the trail for other foreign direct investments into Greece.
“The target now is to open the hotel’s first phase by the end of May 2018, assuming there are no setbacks in the permitting process,” he said. “There are several challenges ahead, but working together with our client and an A-team of international and Greek consultants we shall overcome these. Without a doubt, once the re-development plan is completed the entire Astir peninsula will be improved in every respect – planning, environmental and operational”.
Given Hill’s proven expertise in the hotels and leisure sectors, the company is looking forward to leave behind yet another positive imprint.
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