News / Hotel plans on hold
THE OIL price drop has put on hold plans to convert the former NHS Shetland headquarters in Lerwick into a 125 bed hotel.
Investors behind the £9 million plan for Brevik House, on South Road, are around £550,000 short of their target to purchase the property from the NHS.
Shetland-born accounts manager Martin Watt had set up Breiwick Bay Properties Ltd (BBPL) with Aberdeen property tycoon Robert Keane to buy and develop the building.
The pair had £2 million to invest themselves, but were looking for a further £1 million from local investors before raising the rest from bank loans.
On Friday Watt said various promises had failed to come good by the January deadline, saying the drop in oil prices had knocked investor confidence.
“We had quite a few investors lined up in October, but with the oil price drop some of the pledges we had received have not materialised, so things are temporarily on hold,” Watt said.
Originally the developers had been talking to Holiday Inn Express about the deal, but now another hotel chain is interested.
Watt said that if BBPL fails to raise the shortfall within the next fortnight or so, the NHS is likely to put the building back on the market.
“The hotel chain are interested in putting a hotel into Shetland whether it is at Brevik House or anywhere else,” Watt said.
“If it goes back on the market I wouldn’t be surprised if the hotel chain didn’t just go straight in there and offer to buy it outright and that would mean none of the profits would stay in Shetland.”
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