‘Mohamed Alabbar and his Eagle Hills have outpaced the American fund Blackstone and seized the strongest hotel company on one of the most prestigious Croatian islands, Hvar, often referred to as the Capri of the Adriatic. The island is known for its luxury hotels, pristine beaches, and stone-paved streets. Thus, Eagle Hills now owns 20 hotels and more than four thousand rooms on the Croatian coast, including 80 percent of hotel rooms solely in Hvar.’
This is how the portal Arabian Business reports today on one of the largest transactions in Croatian tourism, the acquisition of the tourism company Sunčani Hvar, which has finally and officially been confirmed by the Czech CPI Property Group.
– I have been fortunate enough to be in most places in the world, but I can confidently say that this is the most beautiful coast on the planet. And the best part is that it is truly undiscovered. The beauty, value, quality of the towns – there is more to discover and admire every day, which is why Eagle Hills is so excited to be part of this story – Alabbar, an entrepreneur from the United Arab Emirates who entered the Croatian hotel business in 2021 by acquiring Sunce Hotels from Jake Andabak, stated for Arabian Business.
The amount of the latest transaction, which is in the process of finalizing paperwork, will soon be known upon announcement on the Frankfurt Stock Exchange, where the Czech fund has been listed since 2014, but sources from Lider agree that it was indeed the price that decided whether an Arab or American investor would come to Hvar. Also, the fact that Blackstone was outbid in this competition does not mean that we might not see them in some other project in Croatia soon, although it first needs to be found, say sources from Lider familiar with the case.
– This was a tense game, and whoever among these two competitors took over Sunčani Hvar, it is good news for both the company and the island, as they are serious investors who know what they are doing and have the resources to transform the product and destination and enhance competitiveness. Eagle Hills clearly liked the previous experience with the investment in Sunce Hotels, including the profitability they gain in such projects. And in Hvar, they received a project that has good growth potential, and they are expected to quickly define the direction of future development – say our interlocutors who have closely followed the entire process.
For the seller, this will be a move that will reduce the debt of CPI Property Group, and it is speculated that Sunčani Hvar was sold for around 200 million euros. They paid about one hundred million euros for Sunce Hotels, and last year and this year they invested another approximately 54 million euros in hotel renovations.
Rare Quality Investment Opportunity
What is important about this case is that it shows that Croatia, with its entry into Schengen and the Eurozone, has become equally attractive for investments as other Mediterranean countries. Therefore, it can be expected that Blackstone will seek a new opportunity there in the future. However, this brings us to the Croatian administration and the lack of projects like Sunčani Hvar, despite the great potential that lies in unused state property. An example is Kupari, a project that is still far from realization as stipulated in contracts with the state.
Consultant Sanja Čižmar emphasizes that such a quality investment opportunity in tourism is rarely offered in the Croatian market, especially considering that the former owner made significant investments in the Sunčani Hvar portfolio, thus aligning the product with market demands, and Hvar is itself a destination that is well positioned in the international tourism market.
– The share of direct foreign investments in tourism is very low in our country for the simple reason: investments in tourism come down to conquering attractive locations or portfolios. Space is the most valuable resource in tourism, and there are not many quality locations or portfolios for sale, as they are mostly owned by strong domestic tourism groups. Croatia has been globally recognized in recent years as an attractive Mediterranean tourist destination, which increases the interest of foreign investors, although the number of realized transactions is relatively small – says Čižmar.
In this specific case, although she says that this acquisition is not a surprise, Čižmar believes that in the case of Sunčani Hvar, many would have liked to see Blackstone as an investor because that would indirectly raise Croatia’s rating in the global investment market. However, it is likely that the readiness to purchase and the associated financial offer from Alabar’s investor were decisive for the realization of this transaction, concludes the consultant.
