The Crown Estate, which manages properties on behalf of the British royal family, has granted Alrov Properties and Lodgings Ltd. (TASE: ALRPR) an extension for payments due on the purchase of the Cafe Royal building, known as Quadrant 1, on Regent Street in London because of Alrov's difficulty in financing the deal.
The Cafe Royal project is being handled through Alrov subsidiary Barco Investments BV.
The Crown Estate announced that the majority of the £80 million, due in March 2009 and March 2011, will be deferred to December 2013. The deferral will be subject to interest payments beginning in December 2011.
Alrov has made an additional deposit of £4 million, bringing the total deposit to £8.47 million, and further stage payments will be made during the development of the property. Beginning in September 2010, Alrov will make £500,000 payments every six months until completion of the hotel. At that point, each payment will become £1 million, and Barco will pay interest quarterly on the outstanding balance.
Alrov has taken possession of the Cafe Royal and is proceeding with the project with completion anticipated in December 2011. Alrov plans to turn the Cafe Royal block, which is part of the Crown Estate’s £750 million redevelopment of the Quadrant, into a five-star hotel with 160 bedrooms, spa and gym facilities, a restaurant, bar and 16,000 square feet of shops.
The Crown Estate said, “Alrov and The Crown Estate are committed to the completion of Quadrant 1 in 2011, ahead of the Olympics in 2012." It added that the project "should not be delayed by the economic downturn and the related difficulty of obtaining development finance."
Alrov Properties is a unit of Alrov (Israel) Ltd. (TASE: ALRO), controlled by chairman Alfred Akirov.
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2009
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