Jumeirah’s $200m luxury Glasgow hotel in doubt

Jumeirah Group’s plans to operate a luxury hotel in Scotland have been thrown into disarray after the developer behind the $200m project went into administration.

BLN Property Developments went into administration in May, after lengthy legal battles with local shop owners over ownership of land for the planned property.

The deluxe Jumeirah Glasgow Hotel was initially scheduled to open in 2011 and was billed as the jewel in the crown in a huge rejuvenation of the Scottish city.

The $200m glass-fronted, 26 storey tower was to include 160 luxurious guest rooms, 85 serviced apartments, an infinity pool and Scotland’s largest ballroom.

Jumeirah Group, the hotelier behind Dubai’s iconic flag-shaped Burj al-Arab, had planned to manage the property, which was scheduled to open in time for Glasgow’s hosting of the Commonwealth Games and the Ryder Cup golf tournament in 2014.

Construction work at the site was delayed by a bitter legal battle as retail owners on the land opposed a compulsory purchase order on their premises.

According to The Sunday Telegraph, David Wong, owner of a Chinese restaurant, and Edward Fox, owner of a pawn shop, fought a 2008 order by Glasgow City Council to acquire their properties and make way for the redevelopment of the site.

In addition to the Jumeirah-run hotel, the site would also have formed part of Glasgow's planned waterfront International Financial Services District, where firms such as JP Morgan, Barclays Wealth and BNP Paribas have already opened offices.

BLN’s accounts were four months overdue before administrators were appointed and the firm made a loss of around $35m during the 2008/2009 financial year.

“A six-star hotel would be fantastic for Glasgow, but in the current climate it’s unlikely it’s going to happen,” Blair Nimmo, head of restructuring at administrators KPMG, told the newspaper.

The Glasgow hotel was part of Jumeirah’s plans to have 60 properties signed up or under management by the close of 2012.

A spokesperson for Jumeirah Group, a subsidiary of state-owned conglomerate Dubai Holding, said the firm would continue to monitor the situation.

“We are in regular contact with the developers and are monitoring the administration process to determine if the hotel development proceeds," the company said in a statement.