STO transfers City Hotel to HDC in USD 20 million land swap deal

State Trading Organization (STO) has officially exchanged the City Hotel in Hulhumale with the Housing Development Corporation (HDC) in a settlement valued at USD 20 million (approximately MVR 308 million). The agreement was signed on Tuesday.

As part of the settlement, STO handed over the Hulhumale land where the City Hotel was being developed, in return for a plot of land in Hulhumale Phase 2. While the original agreement mentioned land in Hulhumale Phase 3, the finalized deal involves land in Phase 2.

In May, HDC transferred the hotel's operational responsibilities to the company which was specifically created to run the hotel, "World of Business Pvt Ltd".

The hotel, which includes a designated section for government use, will house several key facilities: a media village, an e-sports-focused youth center, a heritage college, and a medical college. These government-purpose areas, which span 3.5 floors, are expected to be completed and handed over within four months.

The remaining portion of the development will feature 158 five-star hotel rooms, which are scheduled to be completed and operational within nine months.

The City Hotel project began in 2008, when STO signed an agreement with the U.S.-based Carlson Hotel Group. It was originally planned to operate under the Hilton-managed Radisson Blu brand.

However, due to ongoing delays and financial concerns, including a projected cost of around MVR 115 million, the project was never completed. This led to increased concern among shareholders, and ultimately, the hotel was sold in 2016.