THE OIL price drop has put on hold plans to convert the former NHS Shetland headquarters in Lerwick into a 125 bed hotel.
Investors behind the £9 million plan for Brevik House, on South Road, are around £550,000 short of their target to purchase the property from the NHS.
Shetland-born accounts manager Martin Watt had set up Breiwick Bay Properties Ltd (BBPL) with Aberdeen property tycoon Robert Keane to buy and develop the building.
The pair had £2 million to invest themselves, but were looking for a further £1 million from local investors before raising the rest from bank loans.
On Friday Watt said various promises had failed to come good by the January deadline, saying the drop in oil prices had knocked investor confidence.
“We had quite a few investors lined up in October, but with the oil price drop some of the pledges we had received have not materialised, so things are temporarily on hold,” Watt said.
Originally the developers had been talking to Holiday Inn Express about the deal, but now another hotel chain is interested.
Watt said that if BBPL fails to raise the shortfall within the next fortnight or so, the NHS is likely to put the building back on the market.
“The hotel chain are interested in putting a hotel into Shetland whether it is at Brevik House or anywhere else,” Watt said.
“If it goes back on the market I wouldn’t be surprised if the hotel chain didn’t just go straight in there and offer to buy it outright and that would mean none of the profits would stay in Shetland.”
Become a supporter of Shetland News
Shetland News is asking its many readers to consider start paying for their dose of the latest local news delivered straight to their PC, tablet or mobile phone.
Journalism comes at a price and because that price is not being paid in today’s rapidly changing media world, most publishers - national and local - struggle financially despite very healthy audience figures.
Most online publishers have started charging for access to their websites, others have chosen a different route. Shetland News currently has over 440 supporters who are all making small voluntary financial contributions. All funds go towards covering our cost and improving the service further.
Your contribution will ensure Shetland News can: -
- Bring you the headlines as they happen;
- Stay editorially independent;
- Give a voice to the community;
- Grow site traffic further;
- Research and publish more in-depth news, including more Shetland Lives features.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a supporter of Shetland News by either making a single payment or monthly subscription.
Support us from as little as £3 per month – it only takes a minute to sign up. Thank you.Support Shetland News