Palazzo Versace auction tied to owner’s finances

July 18, 2024, 9:21 AM

The nine-floor Palazzo Versace Dubai has 215 rooms and four restaurants. The auction price is $380 million, closing on July 24

Palazzo Versace auction price $380m
Listing due to owner’s finances
‘Misleading allegations’ denied

The auction of the Palazzo Versace Dubai hotel is directly tied to the property’s owner’s financial circumstances and is not a reflection of the hotel’s performance, an executive told AGBI.

The hotel itself continues to perform strongly, said Monther Darwish, managing director of Palazzo Versace Dubai and chairman and founder of Palazzo Hospitality, which oversees the hotel’s operations.

He said the auction relates solely to the real estate asset and has no impact on hotel management.

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This clarification follows the relisting of the ultra-luxurious hotel on the Emirates Auction website for nearly AED1.4 billion ($380 million), with bidding set to close on July 24. AGBI earlier reported the hotel was for sale in May.

“We are aware of the misleading allegations and deceptive publicity implying that Palazzo Versace Hotel is implicated in the financial difficulties of Emirates PVD, the building’s owner and developer, and we firmly deny these facts,” Darwish said.

“Palazzo Versace Dubai and Palazzo Hospitality Services operate independently from Emirates PVD and are in no way associated with their financial obligations or the public auction of their properties.”

The nine-floor, 215-room hotel features four restaurants and two swimming pools. Under exclusive management by Palazzo Hospitality Services, the hotel maintains operational rights until 2037 and holds beneficial rights to the building until 2028, Darwish said.

A source previously told AGBI that despite the hotel being “readvertised” since 2018 because of a lack of buyers at the desired price, the timing is now optimal for a sale given its high occupancy and strong financial performance.

The hotel had earlier attracted potential investors including Dubai’s Jumeirah Group and a Chinese investment firm. Jumeirah did not respond to requests for comment.

Dubai is enjoying a record influx of tourists, attracting more than 17 million international overnight visitors, marking almost a 20 percent year-on-year growth from the previous year.

Philip Barnes, CEO of UAE homegrown hotel brand Rotana, said in May that some of its hotels in the city are operating at 90 percent occupancy.