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[IMGCAP(1)]BELGRADE, SERBIA-Earmarking more than EUR 200 million [$316 million] for the plan, Delta Real Estate will start work in early 2009 on the first of two hotels for Block 20, a former state-controlled bastion in the heart of the CBD now being primed for mixed use. The build-out plan includes 40,000 sm2 [131,234 sf] of class A office and 10,000 sm2 [32,808 sf] of retail.

Dejan Racic, executive director of locally based Delta Real Estate, says a 325-key “real” InterContinental Hotel, with signature five-star underpinnings, and an office building will jump-start redevelopment of the landmark block. The hotel, which includes five levels of underground parking, will be completed in 2011. The project’s been on the drawing board since May 2007 when Delta and InterContinental Hotels Group plc inked a management pact for the new hotel.

While working the new, Racic says a plan has been firmed up for the old Hotel Continental, the city’s former torchbearer for the UK-based chain. [IMGCAP(2)]Racic tells GlobeSt.com that the 415-room hotel will be closed in July 2009, allowing the estimated EUR 35-million [$55.3-million] facelift to begin immediately after bookings clear from Universiade sporting games. If all goes as planned, the hotel will reopen in September 2010, with the first Crowne Plaza flag going up in the city.

“This hotel was built in the 1970s and it’s relatively modern,” Racic says, “but it needs a massive renovation.” The upcoming work includes mechanicals, suites and amenities to reposition and sharpen its image in the business-driven hotel market.

Delta’s real estate arm, NBGP Properties, acquired the block of existing space, including apartments, in April from Genex for EUR $149 million [$233 million]. Colliers International Serbia crafted the feasibility study for the redevelopment plan.

Racic estimates that Delta controls about 60% of the landmark block, where it also has its 20,000-sm2 [65,616-sf] headquarters in Congress Center. As Delta digs into the redevelopment, Racic says a for-sale residential component will be added, but it might take 18 months before it comes to fruition due to design, zoning and permitting. Current zoning allows for 40,000 sm2 of residential space, which Racic equates to 300 units.

“This is definitely the largest single development in this area of the city,” Racic says. The bull’s eye play is to plant a five-star hotel in the heart of the city, targeting business-travel and regional tourism to corner market share.

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