Palazzo Versace Dubai
The Palazzo Versace has been one of Dubai's signature hotel destinations since its opening late 2015. Will the auction help land a new owner? Image Credit: Supplied

Dubai: A landmark hotel in Dubai – the Palazzo Versace – has been put on auction, with the minimum bid price set at Dh1.34 billion.

Bid submissions for the property, located in the city’s Al Jaddaf area, will be open for just over 5 days, according to the auction details.

There had been talk in banking and property circles about a possible sale of the property for some time now. At several points over recent years, there had even been talk about ‘imminent’ deals being struck with a new buyer. However, none of these – clearly – ever reached the finish line.

The trade license on the property is not part of the sale, though. The hotel spans 478,985 square feet, including the ground floor plus nine storeys, according to the details provided.

The hotel, which has 215 upscale rooms, opened in late 2015. Through the years, it has held up as a favoured choice for well-heeled visitors to the city.

Currently, booking options showrooms available from Dh800 a night and more.

According to hotel industry sources, the Palazzo Versace had been hitting some fairly decent occupancy rates in recent months, helped, of course, by Dubai continuing to exert its influence as one of the most visited destinations in the world.

How will the auction fare?

The next 5 days and some will be watched closely by stakeholders in the local real estate and hospitality sectors. Through the recent past, deals involving existing prestige hotels in Dubai, Abu Dhabi and Ras Al Khaimah have come through thick and fast even as new ones were getting launched and built.

If the Palazzo Versace auction does not generate bids that match up to the base price of Dh1.34 billion, then the auction will in all likelihood be pulled. And then could be introduced at a later date.

While Dubai's real estate market is experiencing one of its highest levels of new project activity, it's seeing heavy action when it comes to auctions. One of the most visible auctions of the recent past was the sale of the unfinished 'Pentominium' skyscraper site in Dubai Marina for $100 million. It was bought by the luxury developer, Select Group, who will now take the project to its completion as a 'Six Senses' brand.

"Palazzo Versace Dubai will be an exceptional fit into any investor's portfolio," said a hotel operator. "All that needs to be seen is what price a new buyer will get into."