Mercury Tower project ‘slightly delayed’ by Covid

Apart from the minor interruptions caused by the pandemic, the construction of the tower was interrupted due to some delays in the construction of the section where the tower twists on itself. However, as noted above this has been completed and the tower is now built in shell.

The following are the main features of the project:

• Tower

As noted above, the tower is now going to be spread over 31-storeys above ground level and six storeys underground, four of which are designated as parking spaces. The gross floor area of the tower (excluding parking spaces) is of 19,754 square metres.

The tower will consist of 279 branded serviced apartments (an increase of four apartments due to the redesign of the gym to other areas), the majority of which are intended for sale to third parties (267 apartments), with the remaining 12 apartments intended to be retained by the Guarantor.

As at the date of this Analysis, only 23 units are still available for sale out of the 267 apartments, with eight of these units currently put on hold for interested clients. The Group plans to convert the above mentioned 12 units into a lesser number of apartments, which will be much larger in size.

The Guarantor will predominantly retain these apartments at the uppermost level, which is intended to be used as part of the hotel accommodation pooling arrangement explained below, and levels 10 to 12 and -2 to 2 thereof, which are allocated to be used as an integral part of the hotel and its amenities.

The owners of the apartments will have the choice to either keep such apartments for their personal purposes (including rental in their personal capacity), or else to pool these as part of an extended five-star serviced accommodation for the hotel users. The latter will also be operated as part of the hotel, with these being let to the Guarantor for pre-agreed periods under a preagreed rental consideration arrangement.

As described above, the Group is the sole owner of the land on which the tower is being built. The construction, development and finishing of the apartments, as per the prospectus dated 4 March 2019, is being performed by Mercury Contracting Projects Limited, a related party to the Group. In this respect, potential owners seeking to purchase units shall initially enter into a promise of sale agreement with the Guarantor for the sale of the airspace in relation to a particular unit within the tower. The final deed of sale for the airspace will be entered into as soon as the construction of the underlying floor has been completed for units sold as airspace, following which the purchaser shall concurrently enter into a Contract of Works with MCPL for the development and finishing of the said units.

• Hotel

Another major element of the project will be a five-star branded hotel, consisting of a 52-room stand-alone building at the podium of the tower and connected and joined to such tower, and extending into levels -2 to 2 and 10 to 12 of the said tower.

Its accommodation capacity will extend by virtue of the serviced apartments whose owners sign up to the hotel accommodation pooling arrangement mentioned above. The hotel will be owned and operated by the Guarantor which has entered into a hotel management agreement dated 14 August 2018 with the internationally-renowned hotel chain Meliá, in particular with Meliá Hotels International S.A. (as Manager) and Prodigios Interactivos S.A. (as Provider), in respect of the hotel and its facilities. The Group is currently in discussions with Meliá with respect to timelines and expected dates of opening. It is expected that the serviced apartments in the tower will be finished next year. As stated above, the Group is still assessing the extent of the delay brought about by COVID-19.

• Commercial outlets

The project will also comprise a mix of retail and catering outlets, situated across the open large piazza onto which the tower and the hotel will abut. It is currently planned that the commercial outlets will consist of nine shops with a total floor area exceeding 1,120 square metres and four catering establishments with a total floor area exceeding 1,500 square metres, although such plans may change from time to time by joining or further splitting such elements or otherwise.

• Open areas and amenities

The buildings will be located around several open and landscaped areas, including piazzas, which will occupy approximately half of the total floor area. Moreover, the entire complex will sit on and be serviced by a four-storey underground car park with over 400 parking spaces, which are generally meant for use by owners and users of the various components of the project and the public. As noted earlier, the car park will be owned and operated by a company in which the Guarantor has 25% ownership.

• Phase II

Mercury Project Phase I of Mercury Project will be complemented by Phase II. Phase II will consist of a nine-storey block, linked to the existing tower via the podium. The project will consist of a re-design of the hotel which will now include 130 rooms, further commercial spaces and other units which will be sold to third parties. Permits (Permit no: PA1892/19) have been applied for and are currently undertaking the process for approval.

Additionally, should these permits be approved, the main tower will increase by an additional eight metres, which will host an amenity floor at level 32 and a bar and swimming pools at roof level.

The Group is currently discussing the financing options for this development and management will keep the market informed of any material developments, as appropriate.