Fattal Hotel Group, owned by Israeli businessman David Fattal, has abandoned the acquisition of the Golden Tulip hotel in central Bucharest due to the crisis generated by COVID-19.
The company lost the down payment paid to real estate investor Atlas Estates, the company of businessman Ron Izaki.
At the end of January 2020, the Fattal hotel group signed a contract with Atlas Estates for the acquisition of the Golden Tulip hotel on Calea Victoriei in Bucharest, at a net price of EUR 7.7 million.
On April 9, 2020, the group paid an advance of EUR 300,000 of the sale price, and the transaction was to be completed by December 31, 2020.
The Fattal hotel chain is the one that introduced the all-inclusive system in Israel. Due to changes in the real estate market, in the context of the crisis generated by the coronavirus pandemic, the buyer did not complete the transaction, and the advance collected was retained by the Atlas Estates group.
Golden Tulip, a four-star hotel with 81 rooms, was closed in April and May 2020, and the occupancy rate during the year was 76% below the 2019 level. At the end of last year, the book value of the hotel decreased by 33%, to EUR 2.4 million, compared to the same period of the previous year, according to the latest financial report.
In 2020, Atlas Estates signed a series of annexes with the bank that financed Golden Tulip, based on which the loan repayments, scheduled for 2020, were suspended until December 31, 2021. In addition, the loan maturity date was extended from June 2026 to September 2026.
Frequently Asked Questions
Why did Fattal Group cancel the Golden Tulip acquisition?
The acquisition was cancelled due to the economic uncertainty and market changes caused by the COVID-19 pandemic.
What happened to the deposit paid for the hotel?
Fattal Group lost the EUR 300,000 down payment, which was retained by the seller, Atlas Estates, after the deal failed to close.
How was the Golden Tulip hotel’s performance affected in 2020?
The hotel saw a 76% drop in occupancy compared to 2019 and its book value decreased by 33% to EUR 2.4 million.