STO Hulhumale hotel relocated to phase 2 under $20M pact

The Housing Development Corporation (HDC) has signed an agreement to relocate the State Trading Organisation’s (STO) City Hotel project from Hulhumale Phase I to Phase II, valued at USD 20 million.

The agreement was signed between STO and HDC on 31 August. STO Managing Director Ibrahim Shimad had earlier confirmed during the company’s annual general meeting in May that land in Hulhumale had been allocated for the hotel.

STO stated that financial adjustments relating to the transfer will be reflected in its current year’s financial statements.

The City Hotel was originally initiated by STO 14 years ago as a five-star property in Hulhumale Phase I. However, the project stalled and previous attempts to sell the unfinished building were unsuccessful. Shareholders have repeatedly raised concerns about the project at annual general meetings.

HDC has now transferred the premises to World of Business Pvt Ltd, a company established to manage the property. The hotel will operate under the name Manhattan Grand Hotel, with 50% foreign investment. The foreign partner is Deep Seafood Company, based in the UAE.

The project will include facilities designated for government use across 3.5 floors of the property. These will house:

These government-related facilities are scheduled for completion within six months.

The remaining portion of the property will be developed into a five-star hotel with 158 rooms. Construction is set to commence within 12 months.