The Hurtigruten Group has sold off its hotel, restaurants and shops in Longyearbyen, Svalbard to commercial real estate specialist, Store Norske.
The sale, which has been on Hurtigruten’s agenda for over 12 months, includes three hotels (290 keys), Radisson Blu Polar Spitsbergen, Funken Lodge and Coal Miners’ Cabins, their respective restaurants, along with a cafe and bakery at Kulturhuset, a sports retail outlet and a snowmobile rental business.
Under the deal, Hurtigruten will remain a long-term partner of Store Norske, entering into a 30-year cooperation agreement on the development of tourism in Svalbard.
“Hurtigruten Svalbard is the largest tourism player on Svalbard, which through long-term, professional and systematic work has contributed to developing Svalbard into a very attractive travel destination. This is an exciting and commercial investment that fits in well with our existing business, and we look forward to developing Svalbard as a tourism destination together with Hurtigruten in the years to come,” said Jan Morten Ertsaas, CEO of Store Norske.
As part of the agreement, Hurtigruten Group has entered into a 30-year lease for the buildings that are now being sold.
Daniel Skjeldam, CEO of Hurtigruten Group said: “Over time, there has been great interest in our properties on Svalbard from several serious players. Svalbard is a key destination for us, and we have an eternity perspective on our investment. Therefore, it has been important for us to find a perfect partner who can contribute to the long-term development of tourism and the Svalbard community. We found that with Store Norske,” Skjeldam said.
Hurtigruten Svalbard Destination Director, Per Brochmann remarked: “As we leave the building stock to a professional real estate player, we can now focus on what we are best at: namely creating unique experiences, and not least year-round activity and several year-round jobs on Svalbard. We have a long and good collaboration with Store Norske, and we look forward to developing Svalbard as a tourist destination together.”
The transaction value is approximately NOK 690 million (approximately AU$105 million), of which NOK 105 million assumes that Hurtigruten reaches its growth and turnover targets in hotel operations.