Corinthia wants mega millions for former public Ħal Ferħ land acquired for peanuts

Corinthia is seeking between €80 and €90 million for its Ħal Ferħ property just months after securing a government permit to turn the former public land into a luxury hotel and residential complex, The Shift is informed.

Despite obtaining Planning Authority approval for its long-promised Oasis project earlier this year, The Shift is informed that Corinthia has no intention, nor the funds, for the time being, of developing the project itself.

Instead, senior Corinthia executives have been tasked with approaching local and foreign construction and hospitality groups to explore the sale of the entire property, sources familiar with the discussions confirmed.

The brief, issued on the instructions of Corinthia chairman Alfred Pisani, is to seek between €80 and €90 million for the cleared site, together with its newly acquired development permit.

Sources said a sale at those levels would provide a significant cash injection as the debt-laden group seeks to address its liquidity requirements.

Corinthia acknowledged that potential buyers have approached the company but denied it was eager to sell.

“Ever since the planning permit was issued for the Oasis site earlier this year, we have had numerous parties showing interest to purchase or enter into a joint venture,” Corinthia told The Shift.

“However, the company is in no hurry nor has the appetite to dispose of this most valuable freehold property.”

The potential mega-million deal comes after a series of government decisions transformed the development potential, and its value, of what was originally public land earmarked exclusively for tourism.

The 83,580-square-metre Ħal Ferħ complex was transferred by the government in 2009 through a perpetual emphyteutical concession carrying an annual ground rent of just €3,000. The original deed explicitly stipulated that the property was to be used for tourism and could not be used for permanent residential occupation.

That changed progressively following talks between Corinthia and the Labour Government.

In 2018, €300,000 was paid to the government to remove a restriction preventing the property from being transferred other than as one whole complex. Two years later, the Lands Authority transferred the perpetual direct ownership of the ground rent, turning the property into freehold.

The most lucrative change came in 2021, when the government-backed the revision of the Ħal Ferħ Development Brief and opened some 30,600 square metres of the site to residential development.

The change allowed for 25 luxury detached residences with up to 9,000 square metres of residential gross floor area on land that had previously been restricted to tourism.

Government-appointed architects calculated that the change increased the property’s value by €10.336 million.

Yet Corinthia was required to pay only €1.336 million immediately for the concession.

The remaining €9 million was deferred, with €360,000 becoming payable upon the sale of each of the 25 residences. The agreement also imposes minimum payment requirements and requires the entire amount to be settled within ten years.

The Shift exposed the payment arrangement in 2021, when the deal was still awaiting conclusion.

In 2022, Corinthia flattened the old Ħal Ferħ complex using an earlier planning permit while its proposed Oasis development was still awaiting approval.

Four years later, the PA finally approved the luxury development, significantly increasing the site’s marketability.

Yet no construction of the new Oasis complex has started.

Instead, The Shift’s sources revealed that  Corinthia is now testing whether it can cash in on the former public asset for as much as €90 million.

The move also forms part of a wider drive by Corinthia and International Hotel Investments to monetise assets amid substantial debt and liquidity pressures.

Last month, The Shift reported that the group sold its former Match Factory property in Marsa for €15 million.

Sources said Ħal Ferħ is not the only Maltese asset being considered for possible disposal as the Group is also seeking divestment of other important assets which have been part and parcel of the Corinthia brand for decades.