Corinthia land valuation far below market price, developers’ lobby laments

The benchmark used to calculate the value of land on which the Corinthia Group plans to develop a six-star luxury development does not reflect market prices, the Malta Developers Association has said

The value of the land where Corinthia is planning a multi-million euro development is based on an incorrect benchmark, the MDA said
The value of the land where Corinthia is planning a multi-million euro development is based on an incorrect benchmark, the MDA said

The Malta Developers Association (MDA) has complained that the price of the land on which the Corinthia Group is planning to multi-million Euro luxury development has been estimated to be far lower than market prices. 

The Corinthia Group - which is owned by International Hotel Investments (IHI) - is set to be given similar concessions on the price of the land as those given to the DB Group for the development of its City Centre project.

IHI is planning a €400 million six-star hotel complex with offices and residences in the St George’s Bay area.

Tourism Minister Konrad Mizzi told Parliament's National Audit Office Accounts Committee last week that the value of he land would be calculated against the benchmark already set for the bay. “Based on the benchmark there already is in the St George’s Bay area – because we need to ensure there is equity across the whole peninsula – Deloitte used the rate of €1,250 per internal square metre,” Mizzi said.

MPs will first asked to vote on a resolution allowing the waiver of a condition that binds Corinthia’s owners to only use the land under concession from the government for touristic purposes.

READ ALSO: Corinthia to get DB’s conditions for six-star luxury hotel resort

In a statement today, however, the MDA said that it had already put it on record that it “disagreed completely” with the Deloitte estimates, on the cost of the land for the DB Group, and therefore also does not agree with the valuation of the land for the Corinthia development.

“[MDA] considered that value as being far below the market prices prevalent when Deloitte carried out their valuation exercise. Since then, market prices have gone up further,” the developers’ lobby group said.

“When government sells public land to be used for residential purposes at below current market prices, it distorts the property market and abandons the concept of a level playing field for all the players in this market,” the MDA went on to highlight.

 

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