Arakas: we have always been interested in hotels

20.02.2013, 14:19

Commenting the recent acquisition of Hotel Palace from Scandic, Viljas Arakas, board member of Eften Kinnisvarafond, said that hotel business has been always interesting for the company, but they have not found a suitable project before Palace was put on sale.

„It’s our fund’s one of th emost emotional and valuable investment,” said the businessman, adding that Palace has a venerable history as the first special-purpose hotel building in Estonia,

„It is also located on the capital’s main square and the building’s history is impressive. We are seeing the value that the fund has been looking for – it is not a completed investment, but needs renovation.” The most recent renovation in Hotel Palace was made in 1989.

„It’s clear that, as a hotel, it will never have the same market position as it had in 1990s because the market has developed beyond recognition and there are many new modern hotels on the market,” said Arakas.

In addition to buying the hotel property that belonged to Finest Palace AS, subsidiary of Scandic, Eften also acquired the hotel operator Scandic Hotels AS.

„Today the hotel continues to operate with the current team. But we will definitely find a new solution. We negotiate with different local operators, sign a contract and build the hotel in cooperation with them,” said Arakas.

When asked whether it was likely that operating would be left to the hands of the former owner, ie Toomas Sildmäe, Arakas offered no comment.

„At present we are focused on closing the transaction which means that the hotel will continue operating under the name of Scandic for a few more months,” he said.
Scandic Hotels Eesti has already been renamed Balotel AS.