Bids in the auctioning off, by the Central Bank, of the Sheraton Coral Beach hotel have been flooding in, according to a government official closely involved with the process. The auction has been running for several weeks now and closes on 10 September.
The hotel was repossessed by the Central Bank as collateral when Banque al-Madina collapsed and over a billion dollars of depositors’ money disappeared. It was owned by Taha Qoleilat, a businessman who was Banque al-Madina’s biggest depositor and was implicated in the scandal. The resale is designed to provide liquidity with which Bank al-Madina depositors who have lost their money can be repaid.
One real estate consultant claimed that Starwood Hotels & Resorts, a Sheraton management branch, was considering whether or not it wanted to stay on after the sale. He estimated the hotel’s value at around $35 million. “It has a beach complex that makes two or three million dollars over two-and-a-half months a year,” he noted.
Acting Sheraton Coral Beach Manager Talal Jundi said it was up to the eventual buyers to decide if they wanted to retain Starwood Hotels & Resorts as managers of the hotel. He said he expected the hotel to fetch more than $30 million, and possibly $50 million.
“The hotel is likely to appeal to Saudis, Emirates, Kuwaitis who like hotels,” the real estate consultant said.
Asked if he thought the hotel was a good buy, The consultant answered: “I don’t see why not except that it’s a little bit limited. It’s an old design. It was refurbished about five years ago. When you do that, there are always compromises compared to when you build. It’s a seventies design so it’s not as good as say the Four Seasons. Is it a good buy if you can get it for $20 million? Yes.”
