Auction of Astoria Building Canceled Due to Lack of Bids
Published: May 25, 2011 (Issue # 1657)
The deadline for the submission of bids in the auction of the Astoria Hotel building passed on Monday. The starting price for the building, which has an area of 17,000 square meters and covers 0.3 hectares, was set at 2.18 billion rubles ($77 million). The auction will not take place, however, due to a shortage of bids, two sources involved in the auction process informed Vedomosti. A decision on the fate of the building is expected in the next few days, one of them added.
The press service of the City Property Management Committee (KUGI) and the Property Fund declined to comment, stating that an official announcement would be made in the near future. According to the conditions of the sale, in the event of only one bid being made the auction is deemed invalid. The building, which has been accorded federal significance as an architectural monument, will now be reevaluated with a subsequent lowering of the price, one of the sources said.
This is the second time an attempt to sell the Astoria building has failed. The first auction was planned for November, but the Property Fund rescheduled it to May 25. A representative of the fund said at the time of the rescheduling that a prolonged sale period would raise the investment attractiveness of the site.
The building is currently rented to the Astoria Hotel Complex at a fixed rate through 2046 (from November 2009 to August 2011 the rate is set at 3.45 million rubles ($121,500) per month. The controlling stake in the company belongs to the British company Rocco Forte Family, which manages 13 luxury class European hotels. The Astoria has 210 rooms.
In November of last year, a representative of the tenant told Vedomosti that the company was interested in buying the building, but that the starting price was too high.
Representatives of Rocco Forte Family declined to comment Monday.
A site like the Astoria is interesting, but requires not only money but also the resolution of issues concerning ongoing encumbrances, said Igor Luchkov, head of the evaluation, consulting and analysis department of Becar group. It is often the case that key sites such as this don’t immediately find a buyer, he added.