Fortina Group claims €8.1 million paid for Sliema site waiver ‘significantly above fair value’

The Fortina Group has claimed that the €8.1 million it paid to the Government six years ago to lift restrictive conditions on its Sliema property was “significantly more than current fair value standards.”

The company added that, under today’s legal and valuation framework, the payment would have been €3.4 million less than what it actually paid – €4.7 million.

In a submission to the Parliamentary Committee, Fortina said that expert advisers had conducted a comprehensive analysis that challenges the methodologies used by the National Audit Office (NAO) in its earlier assessment. The company maintains that it “committed to a payment that is demonstrably excessive when measured against established valuation principles, industry standards and realistic assumptions.”

A spokesperson for the group said:

“We have privately owned this prime seafront property since the 1960s and have paid over and above the fair value for the waiver of conditions. Our comprehensive review of the NAO report, with technical expert assistance, found numerous discrepancies in all three valuations. After adjusting for these flaws, it is evident that even before taking into account the unrealistic sales price values assumed in the NAO valuation, the maximum fair value would at best range between €3.5 to €7.4 million.”

The spokesperson added that when tested against the new legal framework regulating such waivers, the payment Fortina made appears significantly inflated.

“We have also tested this for fair value against the new legal framework regulating condition waivers which yielded an astounding result – the Government bill would have been €3.4 million less than what we paid. If €4.7 million constitutes fair value under today’s transparent standards, why is €8.1 million in 2019 not considered excessive? We paid significantly more than current fair value standards. Not only did we not benefit from an advantageous valuation, but we were significantly disadvantaged.”

Flaws in methodology

The technical report identifies what it describes as “material errors and methodological flaws” in the valuations referenced in the NAO report, arguing that these led to an inflated figure for the waiver of conditions on land fully owned by Fortina.

Among the main points raised were:

• The use of 2019 prices rather than 2017 prices, which Fortina claims inflated valuations by between €2.8 million and €3.2 million.
• Failure to properly deduct the hotel’s fair market value, allegedly understating it by €13.4 million.
• The use of “airspace value” instead of actual hotel value, which Fortina says underestimated the hotel value deduction by €5.47 million.
• Omission of sales tax deductions in NAO workings, overstating compensation by €6.08 million at 2019 prices.
• Inconsistent net present value calculations that allegedly overstated compensation by over €2 million.

Compliance and legislative benchmarks

Fortina also raised questions about whether the valuations carried out by the Auditor and the NAO complied with the Government Lands Act. It noted that the NAO report itself had expressed concerns about methodological consistency and statutory compliance.

In addition, Fortina carried out a comparative analysis using the legislative framework introduced under Legal Notices 196 of 2024 and 75 of 2025, which regulate the revocation or waiver of conditions on government or church-owned property. Under these updated guidelines, which aim to ensure more transparent and standardised valuations, Fortina said it would have paid “a maximum of €4.7 million” – or €3.4 million less than the amount agreed in 2019.

While the company clarified that it was not suggesting these rules should have applied retroactively, it said the benchmarking exercise was meant “to shed light on what constitutes fair value.”

Context

The Fortina spokesperson recalled that the company had acquired the original site roughly 60 years ago and subsequently purchased three adjoining sites between 1991 and 2000. These came with conditions restricting building use and height, which the group said became “completely outdated” by 2017.

“Business requirements change over 25–30 years – conditions that made sense in 1996 became completely outdated by 2017 and led to Fortina deciding to embark on the substantial investment in a new hotel and mixed-use project,” the spokesperson explained.

“Concessions to change outdated conditions have been granted to numerous developments in Malta over both recent and distant past but nobody has paid anywhere close to the compensation paid by Fortina,” they added.

Fortina said it hopes the Parliamentary Committee will “give proper consideration” to its technical findings during any reassessment of compensation amounts.