Agalarov Plans Hotel Complex

Kempinski, a leading international hotel management firm, said Tuesday that it hoped to sign a deal in two to three months to manage a $500 million luxury hotel owned by billionaire Araz Agalarov's Crocus Group.

The 600-room, five-star hotel will be situated next to the Crocus City mall and expo center, on the Moscow Ring Road in northwest Moscow, and is scheduled to open in 2011, Agalarov told Bloomberg Television in an interview Tuesday.

Agalarov said he planned to also build a three-star and a four-star hotel and as much as 100,000 square meters of office space at the same location and would borrow $430 million from Sberbank to fund the projects.

A spokeswoman for Crocus Group said she had no further information.

Helen Gorbunova, Kempinski's regional PR director, said the company was "in the final stages of negotiations" with Crocus Group.

"It's a good place because it will be the biggest exhibition center in Moscow," she said. "Agalarov and Crocus City are associated with luxury products, so I think a five-star hotel here is a good location."A new metro station nearby would also help, she said.

Yevgeny Bezel, associate director of hotels at Jones Lang LaSalle, said there would be "good synergy" between a hotel and a big convention center, but expressed surprise that Kempinski would be involved in such a large hotel.