Hotel development
Kaunas,Lithuania
Content:
1. Project
2. Location
3. Development ideas
4. Market outlook
5. Investment opportunity
1. Project
Please find ideas for the development and
completion of an unfinished hotel in Kaunas,
Lithuania.
Project consist from two phases: I’st – hotel,
II’nd - offices
For the I’st phase is planned to install:
• A wing (left) 144 room hotel
• B wing (right) up to 7 000m2 for hostel or
office, with a possibility to equip spa,
amusements, etc.
• 365 (147 on ground, 218 underground)
parking places on site; 2 400 parking places
within 200m of the building;
The building is comprised of two 10 floor wings
(26 000 m2 gross area), joined by a mid-
section.
The mid-section is planned to be demolished.
The two remaining buildings will share ground
level and underground parking.
1. Project – areal view
Hostel & Offices (I’st phase)
Hotel (I’st phase)
Offices (II’nd phase)
Offices (II’nd phase)
1. Project
• The primary purpose of this building (as a hotel) is 40% completed.
• It is situated on an 8 497 m2 land plot, leased from the state for long term
period.
• An architectural study by G.Natkevičius and Partners has been prepared.
Pre-design solutions and 3d drawings are also available.
• Kauno arka, UAB (KA) is a special purpose vehicle, which owns the
unfinished hotel building.
• The building has been bought from equity and the company has no
liabilities to the banks or other financiers.
• Kauno Verslo Rumai (KVR) is the owner of 100% KA shares. KVR was
established as a development company in 2004.
• KVR also owns two plots of land (4 398 m2 and 2 992 m2) adjacent to the
hotel. The company plans to develop in II’nd phase offices and
commercial premises.
• KVR is owned by two corporate shareholders from Lithuania and the
Netherlands with 5 other private shareholders also involved.
2. Location – Kaunas, Lithuania
Distances from Kaunas:
• Vilnius 100 km
• Klaipėda (sea port) 220 km
• Riga (Latvia) 265 km
• Warsawa (Poland) 405 km
Information about Kaunas city:
• Wikipedia http://en.wikipedia.org/wiki/Kaunas
• Kaunas city http://bit.ly/gbXH3W
• Invest in Kaunas http://www.invest-in-kaunas.lt/
2.Location – Kaunas center
Kaunas central district – satellite view Kaunas central district – closer view
An interactive map can be found at the following link: http://bit.ly/eccZuZ (Google maps) or
http://binged.it/omNFWQ (Bing maps)
Location summary:
• central district of Kaunas.
• borders to 6 lane central city street.
• Waterfront.
• distances:
o 200 meters - Main pedestrian street.
o 300 meters - Sports arena and park on the island of the river Nemunas.
o 1.0 km - City council.
o 6.5 km - Access to national motorways Vilnius - Klaipeda and Via Baltica (Warsaw - Tallin).
o 15 km - Kaunas airport → http://www.kaunasair.lt/index.php?lang=en.
2. Location - Surroundings
Medical academy www.kmu.lt
Shopping center www.akropolis.lt
Parking for 2 400 cars
“Zalgiris” arena www.zalgiris.lt
VDU - University www.vdu.lt
Pedestrian street http://goo.gl/XxGM3
K.Mindaugo str. 6 lane road
Island park
3. Development - Ideas
Main functions of the building:
• Left wing – hotel and reception.
• Right wing – student house, hotel, hostel,
office, spa, restaurants, conference hall,
reception.
• Underground and ground level parking
will serve both buildings.
• Hotel rooms and reception will be
equipped according to operator
requirements.
• Building construction is predefined for
~23 m2 rooms, which can be joined
together for bigger suites.
3. Development – Space utilization
Floor Function
Number
of rooms
Size,
m2
Net area,
m2
Gross
area, m2 Function
Number
of rooms
Size,
m2
Net area,
m2
Gross
area, m2
Number
of rooms
Net area,
m2
Gross
area, m2
10 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
9 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
8 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
7 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
6 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
5 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
4 tc tc -
3 re, off, ofc, tc 735 865 off 650 765 1 386 1 630
2 re, off, ofc, tc 735 865 off 650 765 1 386 1 630
1 rc, off, tc 735 865 off, cf, re 2 350 2 765 3 086 3 630
0 tc - sp, tc - -
Total 144 5 374 7 785 132 6 555 8 885 276 11 929 16 670
Function list:
ho Hotel cf Conference hall, ballroom
hs Hostel re Restourant, bar, amusement
sh Student house rc Reception
ofc Office - cabinet layout sp Spa
off Office - free layout tc Technical, other purpose
Right wingLeft wing Total
3. Development – Layouts
Double room solution (5-10th floors)
Single - double room solution (current situation, 5-10th floors)
3. Development – Parking
• Parking entrances will be from
two adjacent streets for easy
access from any direction.
• 365 (147 ground level and 218
underground) parking places on
site.
• 2 400 parking places in 200m
reach;
• Territory: 65,300 km2
• Common borders with: Latvia Belarus Poland Russia (Kaliningrad Region)
• Population: 3.4 million 84% of Lithuanians 7% Polish 6.5% Russians
• Capital and biggest cities: Vilnius (capital): 550,000 Kaunas: 320,000
• State language: Lithuanian
• State Government: Democratic Republic
• Religion: 80% of Roman Catholics, 5% Orthodox
4. Market outlook - Lithuania
More information about country could be found at http://www.investlithuania.com/
4. Market outlook Macroeconomic outlook and forecasts
In the first quarter of 2012 Lithuania’s real GDP increased by 3.9 per cent on an annual basis. Taking into mind unfavorable
economic climate in Europe, economic growth in Lithuania remained rather robust. Good export diversification and increasing
efficiency at company level were important growth factors. Meanwhile domestic demand was strong and contributed
significantly to economic development.
On the one hand, GDP growth was slower than in 2011. On the other hand, it was higher than expected, and the situation in
main economic sectors remained stable what gives ground to more optimistic expectations about the nearest future. Sectors
oriented to domestic demand demonstrated the fastest growth in the first quarter of 2012, i.e. value added in construction
increased by 10.8 per cent year-on-year, IT and communications by 6.5 per cent, real estate operations by 5.6 per cent,
manufacturing industry by 5.0 per cent, retail and wholesale trade, transport and logistics, accommodation and catering by 4.9
per cent. Other sectors grew slower than the whole economy on the average.
Despite the ongoing euro zone crisis, Lithuanian exports grew fast both to Western and Eastern markets. At the beginning of
2012, exports to European Union countries increased even faster than exports to CIS countries. Regardless lower demand in
most of euro zone countries (except Germany), Lithuanian-origin exports remain competitive in terms of prices.
Source: SEB, 2012
Hotel market in
Lithuania vs Europe
Number of places to
stay in hotels and
campsites per 1 000
inhabitants.
Lithuania <=10
Lithuania
Source: Eurostat
4. Market outlook
5 000
10 000
15 000
20 000
25 000
30 000
2005M
04
2005M
10
2006M
04
2006M
10
2007M
04
2007M
10
2008M
04
2008M
10
2009M
04
2009M
10
2010M
04
2010M
10
2011M
04
Nights in hotels - Kaunas
Nights in hotels - Kaunas 12m moving average
100 000
150 000
200 000
250 000
300 000
350 000
400 000
2006M
01
2006M
07
2007M
01
2007M
07
2008M
01
2008M
07
2009M
01
2009M
07
2010M
01
2010M
07
2011M
01
2011M
07
2012M
1
Nights in hotels - Country
Nights in hotels - Country 12m moving average
4. Market outlook - Hotels
Source: Lithuanian statistic department
+63%
-22%
+46%
30.00%
35.00%
40.00%
45.00%
50.00%
55.00%
60.00%
2003Q
1
2003Q
3
2004Q
1
2004Q
3
2005Q
1
2005Q
3
2006Q
1
2006Q
3
2007Q
1
2007Q
3
2008Q
1
2008Q
3
2009Q
1
2009Q
3
2010Q
1
2010Q
3
2011Q
1
2011Q
3
2012Q
1
Room occupation in hotels - 4q moving average
Occupancy rate of rooms - country
Occupancy rate of rooms - Kaunas
4. Market outlook - Hotels
Park In Kaunas opening
232 rooms
+25% of Kaunas market
Source: Lithuanian statistic department
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
2005M
04
2005M
07
2005M
10
2006M
01
2006M
04
2006M
07
2006M
10
2007M
01
2007M
04
2007M
07
2007M
10
2008M
01
2008M
04
2008M
07
2008M
10
2009M
01
2009M
04
2009M
07
2009M
10
2010M
01
2010M
04
2010M
07
2010M
10
2011M
01
2011M
04
2011M
07
2011M
10
2012M
1
2012M
4
Nights spent in Kaunas - country share
Nights spend - country share 12m moving average
4. Market outlook
Key facts
• Kaunas city has 355 th. inhabitants, placed in
centrum of Lithuania.
• Near Kaunas crosses two main motorways: Via
Baltica (Warsaw – Helsinki) and A1 (Vilnius –
Klaipeda)
• Total amount of keys in Kaunas hotels – 1152
• Total number of hotels - 24
• Recent developments in Kaunas:
– Kaunas City ** (44 rooms) started in August 2011
– Ibis ** class hotel (125 rooms, 3 143 m2) in March 2012
5. Investment opportunity
We would like to discuss your investment goals, therefore no firm scenario
has been defined.
Possible development scenarios:
• Development of 168 room hotel (left corpus) only
• Development of 168 room hotel and 138 room student house/hostel
• Development of 300 room hotel – Additionally some space could be installed for conference hall, office, amusement, spa
• Complex development of hotel and adjacent land plots (~0,7 ha) for hotel,
office and/or housing
Financially could be considered:
• Joint venture by share acquisition and/or equity raising
• Sale of shares or assets
• Convertible bond debt
Contacts:
Disclaimer: The information contained in this presentation is for information purposes only, and may not apply to your situation. The
author, publisher, distributor and provider provide no warranty about the content or accuracy of content enclosed.
Neither the Presenter nor Author shall be liable for any loss of profit or any other commercial damages resulting from use of this guide. All
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Vaidas Repečka
Development adviser
+370 686 46800
http://lt.linkedin.com/in/vaidasjrepecka