Page 16 - Layout 1

Profile
Sunborn looks to float and relocate
After 15 months bedding down Gibraltar’s first 5-star hotel, the publicity-shy owners of the Sunborn super yacht seem confident that the concept is sufficiently viable to warrant significant expansion – investment in the order of €750m - and a potential Stock Market float, Ray Spencer discovers.
there had been disappointing and the old- established Husa Hoteles, a family-run Spanish group, withdrew from a deal to manage the floating hotel, because – in part - it felt too many other good land-based hotels were opening locally at the time. He had to find an alternative location- fast.
Niemi has only ever worked in the multi-faceted family conglomerate that in six countries has €500m assets, including 5 land- based hotels, restaurants, catering and exhibition centres, health spas, healthcare hospitals, timeshare apartments, senior citizens homes and a private non-profit foundation focused on elderly living.
Hong Kong influence
In Hong Kong, local property consultant Jason Cruz persuaded Niemi to scope Gibraltar’s potential as a base for the new 142 metre long, seven storey super yacht hotel, rather than chose the Asian port. [Cruz has since become the Gibraltar government full-time Hong Kong representative.]
“I already knew Gibraltar well having frequently visited the Costa del Sol over the last 25 years staying at our family’s holiday home in Estepona,” Niemi revealed, “so I flew over to consider the prospect in detail and tied up the government arrangement.” At €125m, it is Sunborn Group’s largest single investment.
Peka Niemi and his wife founded the Sunborn business in 1972 initially with development of the Naantali Spa & Hotel near Turku in Finland, which became so successful, then running at 95% occupancy, that it ran out of building space. “We could really use extra capacity in the hotel, but with nowhere to expand, we came up with the yacht hotel concept, something that at the time was quite innovative,” Niemi junior observes.
His father reportedly said ‘we know how to build ships and how to run hotels, why not put them together’; but Niemi laughingly suggests it was more like – ‘how to build on your neighbour’s land and not pay for it’. Whatever the truth, the fact remains that the Naantali grew to over 420 rooms, the yacht hotel annex adding 138 of them.
Since High School, Niemi had been attracted to his future wife, Päivi, whose family then owned Finland’s largest turnkey contractor in the shipbuilding industry. Sunborn has had its own shipyard operation since 2008 and run by elder brother Jari, who now lives in Kuala Lumpur. “We rent space
Continued page 18
Now I have two government’s behind me: Hans Niemi, Sunborn executive director
When the Finnish-owned vessel sailed into Ocean Village in late 2013 there was local controversy over what amounted to a surprise £30m government loan on undisclosed terms through the previously unknown Credit Finance Company, itself financed by the State-owned Gibraltar Savings Bank (GSB).
The loan was needed as part of a wider financing arrangement to develop the purpose-built 189-bedroom luxury floating hotel, and to cover initial opening and operating costs, explains Sunborn executive director Hans Niemi, the younger of two sons now running the 45 year old, family owned Sunborn Group.
“In every jurisdiction you need a financial arrangement in that locale, whether it’s London, Barcelona or Finland”, Niemi says, “and the problem at the time was with the known planned departure of Barclays Bank, there were only a few lending entities in Gibraltar”. The only way of having the Sunborn Hotel in Gibraltar “was to get some sort of a bridge loan for the company to come in”, he emphasises.
Niemi presses home the point: “A lot of
the banks that we were working with were not able to transfer their funding to Gibraltar; there were either jurisdiction issues, or prohibitions of some kind – maybe the fact that Gibraltar was a market that they did not understand. If it had been Helsinki or Barcelona they would look at the market and say ‘OK, I understand’- but Gibraltar, no!”
The loan [an investment at, what the government called, ‘a good market rate’] “has always been on a temporary basis”. Niemi explains: “This is a development loan. Once the hotel has been up and running with a couple of years’ track record, we have other sources to refinance.”
Having studied at London University to become a banker interested in derivatives trading, the 37 year old insists: “The deal to come to Gibraltar just would not have been possible; we had only a very small window of opportunity available to us having decided whilst the ship was being built in Malaysia that we would not after all take it to Barcelona, the original destination.”
The Catalan city provided a 25 year licence from 2008 for Sunborn to be based at its new Port Forum development, but progress
16
Gibraltar International
www.gibraltarinternational.com