November the 22nd, 2023 – The new Sunčani Hvar owner Mohamed Alabbar has showered praise on the Croatian coast, deeming it to be the most beautiful in the entire world.
As Lucija Spiljak/Lider media writes, Mohamed Alabbar and his company Eagle Hills succeeded in overtaking the American fund Blackstone and seized the strongest hotel company on one of the most prestigious Croatian islands, Hvar, often called the Capri of the Adriatic. This central Dalmatian island is known for its luxurious hotels, pristine beaches and ancient stone-paved streets. Eagle Hills now owns 20 hotels and more than four thousand rooms along the coast of Croatia, including 80 percent of hotel rooms on the island of Hvar alone.
The above is how the Arabian Business portal is reporting today about one of the biggest transactions in Croatian tourism, the takeover of the tourist company Sunčani Hvar, which was finally and officially confirmed by the Czech CPI Property Group.
New Sunčani Hvar owner Mohamed Alabbar adores the Croatian coastline
“I’m lucky enough to have been able to visit most places in the world, but I can say with certainty that the Croatian coast is the most beautiful coast on the entire planet. The best part is that it is still truly undiscovered. The beauty, the value, the quality of the cities – every day there’s more to discover and admire, which is why Eagle Hills is so excited to be part of this story,” Mohamed Alabbar, an entrepreneur from the United Arab Emirates who entered the Croatian hotel business in 2021, told Arabian Business recently.
The amount the latest transaction came to, which is in the stage of paperwork conclusion at the moment, will be known soon after it is published on the Frankfurt Stock Exchange, where the Czech fund that has been on Hthe island of Hvar since 2014 is listed. That said, Lider’s sources agree that it was the price that decided whether it would be Arab or American investors coming to Hvar. In addition, the fact that Blackstone was outbid in this competition doesn’t mean that we might not soon see them engaged in another project somewhere in Croatia.
“This was a tense game, and whichever of these two competitors was set to take over Sunčani Hvar, it’s good news for both the company and the island, because they’re serious investors who know what they’re doing. They both have the resources to transform the product and the destination and increase competitiveness. Eagle Hills clearly had a good past experience with investing in Sunce hotels, they also enjoy the profitability they get back from engaging in these types of projects. On Hvar, too, they got their hands on a project that has excellent potential for growth, and they’re now expected to define the direction of future development very quickly,” say Lider’s interlocutors, who very actively followed the whole business process.
For the seller, this will be a move by which CPI Property Group will reduce its overall indebtedness, and it is speculated that Sunčani Hvar was sold for around 200 million euros. They paid about one hundred million euros to Sunce Hotels, and last year and this year they invested another 54 million euros into renovation.
A rare, top quality investment project
What is important about this case is that it shows by joining Schengen and the Eurozone, Croatia truly has become as interesting for investment as other Mediterranean countries are. Because of this, it can be expected that Blackstone will look for a new opportunity elsewhere in the country in the future. That’s where the Croatian administration comes in and the lack of projects like Sunčani Hvar shows itself, despite the great potential that lies in the unused state property. Another good example is Kupari, near Dubrovnik. This is a project that is still far from the realisation that was foreseen in the contracts made with the state a long time ago.
Consultant Sanja Čižmar pointed out that the Croatian market rarely offers such a high-quality investment opportunity in tourism. This is especially the case when bearing in mind that the former owner made significant investments in the portfolio of this Hvar hotel chain and thus harmonised the product with the market’s requirements. On top of that, Hvar itself is a destination that is exceptionally well positioned on the international tourist market.
“The share of direct foreign investments in tourism is very low in this country for one simple reason: investments in tourism are reduced to winning attractive locations or portfolios. Space is the most valuable resource in tourism, and there aren’t many quality locations or portfolios for sale, since they’re mostly owned by strong Croatian tourist groups. In recent years, Croatia has been much more globally recognised as an attractive Mediterranean tourist destination, so, this increases the interest of foreign investors, even though the number of realised transactions still remains relatively small,” explained Čižmar.
Čižmar also believes that in the case of Sunčani Hvar, many would be happy to see Blackstone as an investor, because this would indirectly improve Croatia’s rating on the global investment market. However, it was probably the willingness to buy and the related financial offer of Alabbar and go that was crucial for the realisation of this transaction, concluded the consultant.