Dubai's Palazzo Versace hotel is back in auction - this time with the 'best' price

Dubai: One of Dubai’s most popular upscale hotels – the Palazzo Versace – is back on the auction block. And this time, the base bid price for the auction is only Dh600 million. That’s quite a drop from the Dh1.3 billion that was the bid level when the property was initially put up for a sale.  

For a year now, the 215-room hotel has at various times been entered in an auction, but without getting any sort of traction by way of bids. After the initial Dh1.3 billion, the price was lowered at various points and at one time even dropped to Dh700 million. (But in the last attempt at selling it, the price was lifted back to over Dh1 billion.)

“That the same property is now available for a bid price of Dh600 million suggests that the banks holding the related debts on their books want to sell it at the earliest,” said an industry source who has been tracking the various auctions. “It’s up to any investors out there to decide whether they are OK with the latest offer.”

The market will know what the status is in the next 11 days when the auction will be open.

As has been the case with the past Palazzo Versace auction attempts, the 169 residential units forming part of the overall development are not a part of the process.

The Palazzo Versace Dubai has quite the iconic status as one of the city’s pre-eminent destinations for luxury-tinged stays. It continues to generate significant occupancy levels during the peak phases for the local hotel sector. And it remains one of the most defining structures in the wider Al Jaddaf area through the years. (The hotel operator has repeatedly said that the noise over the auctions have not had any impact on guest demand in the recent past.)

If the latest auction process does see the property getting sold, it would represent a big win for Dubai’s legacy real estate projects that have been burdened by significant debts and where the promoters have had difficulty in paying them off.

Last week, when Union Properties announced its upbeat first quarter 2025 results, it pointed to the further cuts made to its legacy debts during the period. The Dubai developer said it had paid out Dh179 million – and will be making a further Dh159 million payment in the second quarter. These are on top of the Dh723 million settled with the banks in 2024 alone.