- The owner of Melexis Bulgaria, Duchatelet, and his trusted football manager Catherine Mer bought the Suite hotel, located in Sofia's Studentski Grad district.
- Their company WorkNomads will test a hybrid model of remote work, accommodation and co-working.
- The seller, NIKMI, receives 10 million euro from the transaction and will focus on its five-star hotels in Sofia.
The Bulgarian construction and hotel company NIKMI sold its four-star Suite Hotel in Sofia to the Belgian company WorkNomads. The deal worth 10 million euro was finalized last October. As a result, NIKMI remains with its five-star Grand Hotel Sofia and Grand Hotel Millennium, while Suite takes a rather unusual path.
The buyer and the nomadic economy
"The Suite Hotel will become a hub for flexible accommodation and coexistence of working nomads. It will function on the basis of a hybrid model - a hotel and residences with conditions for co-working, offices and numerous opportunities for rest. In addition to the nomads hired by the company, it will also receive guests, customers and digital nomads," Catherine Mer, manager of the buyer WorkNomads, told Capital Weekly. According to her explanation, Bulgaria and the future WN Lab will be the main base of WorkNomads - a global community for remote work, living together and sharing knowledge.
WorkNomads company was registered in Bulgaria in the middle of 2021. According to the Commercial Register, it is owned by Risus Sports BV - a small Belgian company established in 2019 by Catherine Mer. She is a Belgian lawyer and former football manager whose professional biography is closely related to that of Belgian businessman Roland Duchatelet. He has been doing business in Bulgaria for 27 years and is currently the owner of the enterprise for chips and sensors for the automotive industry Melexis Bulgaria.
Duchatelet's name does not appear directly in the project, but WorkNomads is registered at the same address as all of his companies in Sofia - 2, Samokovsko Shose Blvd. In addition, Belgian company Fremach International has bought 25% of Risus Sports' capital for 6.389 million euro. Fremach is a leading European supplier of plastic components for the automotive industry with a 50-year history. It is owned by Duchatelet's company Elex. Before the pandemic, Fremach's revenues reached 35 million euro, but in 2020 they fell by half. Its assets amount to 97 million euro.
WorkNomads' concept is to unite various elements in the so-called new nomadic economy. However, there are many obstacles in the way of such freedom - mostly related to visas, residence requirements, national labour or tax regulations. While waiting for governments to respond to these needs, WorkNomads is creating a framework to overcome these obstacles by creating a nation without a state, says company founder Catherine Mer. People familiar with the deal explain that she is taking the operational decisions, while the financing comes from the Belgian multimillionaire.
A quick deal
"We started working on the sale in April last year. Our goal was to create a competitive environment and achieve optimal conditions for the seller," says Hristo Andonov, a partner in Avalant - the company that brokered the transaction on behalf of NIKMI.
The reason for the sale is believed to be the desire of the owner of Suite to focus on its main locations and direct all its operational resources to them.
"I think the main criterion for WorkNomads was that the asset fits their concept as much as possible. They want to provide a complete service to modern nomads. As far as I know, they considered buying a few smaller assets, but the hotel was more of a fit for that, which is what they were looking for," Andonov explains.
Catherine Mer confirmed that they have considered different types of accommodation and she has stayed in many of them to test them. The Suite Hotel stood out almost immediately for a variety of reasons. The average area of its rooms is 51 square meters - ideal for long-term guests. The common areas are large - 3500 sq.m., and are suitable for bleisure (business + leisure) activities. The rooms have large windows and views of the Vitosha mountain and Sofia. The hotel stands opposite a park and the surrounding neighbourhood is lively. There is also a parking lot with 99 spaces, she explains.
The deal took about six months to negotiate. According to the Property Register, the achieved price is 19.4 million levs or 9.93 million euro. In the case of hotel transactions, sometimes outside the property, additional payments are made for furniture, equipment, etc., but there is no information about that in this case.
"The price, of course, was decisive for the sellers. But in addition, they liked the concept of WorkNomads, as well as the fact that it implies a minimal reorganization of the hotel, which made it possible to close the deal quickly," explains Andonov.
According to Avalant, they managed to sell the hotel relatively quickly, especially considering the caution of many investors at the moment.
"There is investor interest in hotels, but the real one, i.e. backed by willingness to pay market prices, is moderate. Quite a few investors are looking to acquire distressed assets at a low price, but they see that the owners are not as pressured by the pandemic as they expect," says Andonov.
WorkNomads' business model
WorkNomads will hire high-quality niche experts from all over the world who prefer to work flexibly. The focus is on engineers, people working in the ICT sector, digital marketing, content creation and design. The company provides them with work under contracts with its corporate clients from all over the world who need specialists to work on projects remotely without a long-term commitment. It also provides nomads with accommodation in flexible housing (without binding long-term tenancies), work permits and visa documents. It works to create a community between them. The relief for businesses is that they are spared the hassle and expense of hiring staff, applying for visas and providing perks. This allows flexibility for both parties, explains Catherine Mer.
According to her, Bulgaria was chosen on the basis of indicators such as stability of democracy, national debt, crime rate, tax system, cost of living, quality of higher education, language skills, EU, WTO and NATO membership. It was important that Bulgaria is already one of the most vibrant start-ups and entrepreneurial ecosystems in CEE and also the R&D centre of many multinational companies. In addition, several Bulgarian cities are particularly popular among digital nomads.
WorkNomads are currently renovating the entire building of the future WN Lab. They install communal kitchens and change the decoration in the rooms and the restaurant. They design co-working areas, offices and high-tech event spaces. Next are the meeting rooms, the bar, the restaurant and roof terraces. The upgrade will be done in phases. The facility opened partially this spring and a grand party for the inauguration of the finished project will take place at the end of summer.
The twelve-floor Suite Hotel opened in 2013, and even then it also offered rooms for long-term rental. Its total built-up area is over 15,000 square meters, of which over 11,000 square meters above ground. It has 122 rooms, a conference centre of 268 sq.m., a restaurant, a bar, and a gym. NIKMI built it in partnership with another investor on the property which helped form a complex with a Lidl store, Bar & Dinner, and KFC.
During the pandemic year 2020, the hotel's revenues fell to 714,000 levs. It accumulated short-term liabilities and reported a loss of 540,000 levs. For comparison - in 2018, the income amounted to 4.6 million levs and then decreased to 3.9 million levs in 2019. The clients are diverse - from diplomats and business clients to professional athletes.