Unlike typical hotels, rooms at the Town Hall Square will be rented out for longer periods than typical hotel rooms and will thus be sold under the brand name Domina Luxury Apartments.
Aare Jaanus, head of Domina Management, said that the target group for these new luxury apartments are representatives of foreign companies and embassies who want to stay longer than regular hotel visitors and shorter than tenants at ordinary apartment houses.
Hindrek Leppsalu from the real estate company Ober-Haus said that it's difficult to predict the demand for the apartments, but admits that some clients have asked for rentals shorter than a year.
"Each tenant is related to a risk and the renter always wants to rent apartments out for a longer period. For some people it is an attractive alternative," said Leppsalu.
Ober-Haus is a real estate company, which is also active in hotel business in Tallinn's Old Town.
Jaanus said that the advantages of renting a room in their new residence is that it looks nice and has all the necessary services, including, security and fitness.
Jegorov's Real Estate on the Town Hall Square, which will be completed by spring 2002, will include 57 apartments on a 6,880 square meter plot. The building belongs to Vegacorp, which will renovate it. Domina Management will then start operating it.
Domina will also operate Ilmarise Residence, another luxury apartment building on Vana-Posti 13, which belongs to the foreign company Armelinda and will be completed by August 2001. This building has 68 rooms on a 3000-square-meter area, which unlike the residence on the Town Hall Square will also be used as hotel rooms for shorter periods.
Ilmarise Residence, which was opened in 1999, is the only existing project of Domina Management at present and the only residence type of hotel in Estonia. It is a two-story building in a new residential area of Ilmarise. The residence with 49 rooms made 3.5 million kroons ($0.2 million) profit and its sales totaled 8.5 million kroons in the first eight months this year.
Jaanus said that the residence worked efficiently thanks to the outsourcing of employees and the strict cost control.
"Ilmarise was our first step in the Baltics," said Luca Milani, chairman of the board at Pro Kapital Group and managing director at Domina. "The results after the one and a half years of operation are very successful, and we are looking for other opportunities."
Pro Kapital acquired Domina Management shares for 5 million kroons earlier this month to expand its activities in the hotel business. Domina Management already operates ten hotels in Italy, Egypt and Africa.
Milani said that Domina Management operates four-star hotels in prime locations in different countries.
"If the hotel is in a warm country, it must have a view over the sea and if it is in a city, it must be in the center of the town," said Milani. "Kenya is the biggest market for Italians, and Egypt is the biggest tourist destination in the world. But the Baltics are the future of tourism, I think," said Milani.
Besides its activities in Tallinn, Domina Management is also opening a new hotel in the center of Vilnius in two months and is planning to establish 2 or 3 hotels in Riga soon. The hotel in Vilnius, which is located on Didzioji Street, has 24 rooms, which will be rented under the brand name Domina Luxury Apartments.
"We are also investigating the St. Petersburg market," Milani confessed.