Safestay (SSTY) announced on Tuesday it entered into a joint venture partnership with EOS Sicav to develop a 660 bed hostel in Venice.
Safestay told investors it will use existing cash resources to acquire 50% of the freehold site for €2.1 million, and split the cost of building the hostel on a 50:50 basis.
The site covers 6000 square meters, located on Via Fratelli Bandiera, a short walk from the main railway terminal, Mestre Station.
Safestay expects its share of the development costs to be approximately €5.0 million, and will lease the hostel from the joint venture partnership as the sole operator.
Larry Lipman, Chairman of Safestay, said: "Acquiring a site for a substantial hostel in Venice is a great opportunity for Safestay. We have been working closely with EOS Sicav plc for some time to achieve this, as the potential is clear and the number of similar opportunities are few.”
He added: “This is also our second site in Italy following the acquisition of Safestay Pisa earlier this year. Italy is a natural market for us and we are continuing to look for similar opportunities in the other popular Italian cities."
Venice attracts over 14 million visitors throughout the year and will provide year round revenues, the company said.
Construction is scheduled to begin in 2020 once final licensing is confirmed.
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