Moscow’s iconic National Hotel will be auctioned later this month at a starting price of 4.5 billion rubles ($145 million).
The Moscow city government, the current owner to the hotel near Red Square, plans to auction the historic building on December 22 as part of a mass city privatization program.
Several potential buyers have already put their names forward, the most notable being a joint venture between Deutsche Bank and Sberbank, Russia’s biggest lender, Kommersant reported Monday.
Other bidders for the 1903-built hotel include Russian billionaire investor Suleiman Kerimov, French hotel management company Accor and South Korea’s Lotte. Participation applications will be accepted until December 19.
Experts previously estimated the value of the hotel at $50-60 million, but the city authorities have since included in the sale 427 antique items that once belonged to the Russian Tsars.
David Jenkins, head of hospitality at the Moscow office of Cushman and Wakefield, described the starting price as “fair.”
“This is a trophy asset. You won’t see too many more hotels coming available in Moscow literally on Red Square,” Jenkins said. “The hotel perhaps doesn’t perform as well as some of the newer hotels – it could possibly do with a review of operations but as a historical object it is extremely desirable.”
Jenkins added that the fact that the Ritz Carlton, located a stone’s throw away from the National, charges a higher price for its rooms, shows significant room for profit optimization at the National.
The previous owners of the Ritz Carlton sold it for $600 million earlier this year by Kazakh billionaire Bulat Utemuratov.
The Moscow privitization program, launched by Moscow Mayor Sergei Sobyanin when he came into office last year, aims to fix holes in the city budget by getting rid of unprofitable assets.
Other well-known assets up for sale include part of the Gostiny Dvor shopping center, 25 percent in the Intourist tour operator and the Novisky Trade Center. The Moscow authorities said last December that they also intended to sell Luzhniki Stadium (one of the venues of the 2018 World Cup) and Vnukovo Airport’s Terminal 3.
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