The State Trading Organization (STO) has decided to transferred ownership of its USD 20 million Hulhumalé City Hotel to the Housing Development Corporation (HDC) in return for a land plot in the second phase of Hulhumalé.

The City Hotel project, first launched in 2011, has long been a concern for STO shareholders after repeated attempts to sell or complete the property failed. The company ultimately decided to vacate the building due to ongoing financial losses, signing an agreement with HDC on 31 August 2025 to formalise the handover.

Under the agreement, the hotel is valued at USD 20 million, with STO to receive a land plot in Hulhumalé Phase II as compensation. The financial implications of the transfer will be reflected in the company’s accounts for this year.

The Government has announced redevelopment plans for the site, which will include a media village, a youth centre dedicated to e-sports, a heritage college, and a medical college. Certain sections of the property will also be reserved for government use. According to officials, these facilities are expected to be completed and handed over within four months of work commencing.