Morgans Hotel Group Co. (NASDAQ: MHGC) has announced that it has entered into a hotel management agreement for an approximately 128-room Mondrian-branded hotel to be located in the Old City area of Istanbul, Turkey. This hotel is expected to be the seventh Mondrian hotel in the expansion of the company's iconic brand.
Upon completion and opening of the hotel, Morgans will operate the hotel pursuant to a 20-year management agreement, with a 10-year extension option. The hotel is scheduled to open in 2014.
"We are very excited to announce the development of Mondrian Istanbul, our fourth management contract for a Mondrian-branded hotel in an international location that we have announced this year," said Michael Gross, Chief Executive Officer of Morgans Hotel Group.
"As an important gateway city, Istanbul serves as a bridge between Asia and Europe, where we will provide our guests with an exciting lifestyle hotel experience that only Morgans can provide, while generating an attractive return for the Company. We are looking forward to a long and successful relationship with the property's owner, Bella Group."
The future hotel will be located in an area referred to as the Old City of Istanbul, which is the oldest part of Istanbul, and the location of most of its historical attractions, such as the Topkapi Palace, the Hagia Sophia, the Sultanahmet Mosque, or Blue Mosque, the Grand Bazaar, the 1,500 year-old Basilica Cistern and numerous other attractions and local restaurants.
The hotel is expected to include a 128-room Mondrian hotel, original food and beverage options conceived by The Light Group, function space, a spa, renovated from an existing historic Turkish bath, and additional facilities and amenities indicative of a lifestyle hotel. Morgans will contribute approximately US $10 million in the form of equity and key money and will have a 20% ownership interest in the venture owning the hotel.
Already this year the company announced it has entered into hotel management agreements for Mondrian-branded hotels located in Doha in Qatar, Nassau in The Bahamas, and London in the UK.
Source: Morgans Hotel Group