First Sponsor and Borealis Hotel to develop 6 floors of Netherlands mall into two hotels

The two new hotels will be developed in the Poortgebouw Hoog Catharjine tower of the Hoog Catharjine Mall in the Netherlands.

Singapore's First Sponsor Group has agreed to acquire the third-through-ninth floors of the Poortgebouw Hoog Catharijne in Utrecht, the Netherlands, with Hoog Catharijne Mall of the Netherlands for about $29.43 million. As part of the conditional sale and purchase agreement, First Sponsor will develop the approximately 124,900 square-foot leasable space into two hotels, The Business Times reported. One will be under the Hampton by Hilton brand (or a hotel brand of similar standing) while the other one will be under the Crowne Plaza brand or a brand of similar standing.

First Sponsor will contribute up to approximately $13.40 million to develop the property while hotel operator Borealis Hotel Group will provide up to another $2.23 million at an interest rate of 7 percent per year if more development funds are needed.

Once the development is completed, the two hotels will have about 192 guestrooms and 128 guestrooms, respectively. First Sponsor has planned to finance the purchase price through the drawdown of its existing unsecured credit facilities. "The directors believe that this acquisition and the rental income from the leasing arrangement under the lease agreement are beneficial to the group and will help to expand its recurring income base in the Netherlands," the group told The Business Times.

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Dutch-based hotel developer, investor and management group Borealis Hotel Group focuses on the hospitality and leisure market in major capital cities. The company currently develops projects of Hilton, IHG, Accor and Marriott in Amsterdam, Antwerp, Brussels, The Hague, Paris and Utrecht. 

The vendor Hoog Catharijne Mall of the Netherlands is a wholly-owned unit of Klépierre. The company is listed on the Euronext Paris, and it maintains a substantial presence in continental Europe's retail property market with shopping centers in 57 cities and 16 countries.