The St. Petersburg authorities intend to sell a luxury five-star hotel in the center of the city for at least 1.5 billion rubles ($48 million), a business daily reported on Tuesday, citing a city government official.
Hotel Astoria, near St. Isaac's Cathedral, has floor space of 17,000 square meters and was built in 1911-1912 by famous St. Petersburg Architect Fyodor Lidval.
The figure is a preliminary estimate since the property is encumbered by a long-term lease, Vedomosti reported, citing Oleg Lyapustin, deputy chairman of the St. Petersburg government committee for property management.
The estimate could change once the city's legislature approves the privatization of the hotel, the paper added.
The rent for Astoria is fixed at 3.45 million rubles ($111,086) a month under a lease contract signed until 2046, according to data from the St. Petersburg City Property Management Committee.
According to SPARK-Interfax data, a controlling stake in Astoria is held by the U.K. company Rocco Forte & Family. The company's press office declined to comment on plans to repurchase the building before the exact initial price and terms of the auction were announced.
Vladimir Sergunin, deputy director of the investment department at Colliers International's St.Petersburg office, told Vedomosti that a building encumbered by a long-term lease at below market prices was unlikely to attract buyers and would only be of interest to the leaseholder.
According to Zosya Zakharova, head of the department of projects and analytical research at ARIN research group, the price announced by the city authorities was not overstated and could even rise during the bidding process as the hotel had a permanent leaseholder with a stable business.
MOSCOW, June 29 (RIA Novosti)