Coral Beach Club and Horizons and Cottages are to be redeveloped into a 150-room five star hotel, owner Horizons Ltd. announced yesterday.

And the company also revealed that Pitts Bay Road landmark hotel Waterloo House is to close in early 2008 and will be turned into office and possibly retail and residential space.

The "gradual evolution" of the Coral Beach/Horizons property comes after owners Horizons Ltd. said it had entered into a partnership with a US private equity company and would shortly be announcing the identity of a "prestigious" new hotel operator.

Yesterday, the Opposition United Bermuda Party said it understood the hotel operator was to be the Four Seasons group, but Premier and Tourism Minister Ewart Brown said that was "wildly speculative".

George Wardman, CEO of Horizons Ltd., operators of Coral Beach, Horizons and Waterloo House, said the partnership with New York-based private equity real estate firm Brickman would enable the company to get the investment it needed to redevelop the awared-winning properties.

In a press release, he said the traditional Bermuda cottage colony will gradually evolve into a medium-sized hotel at the Coral Beach Club site complete with 150 rooms and residences on the Horizons & Cottages and Coral Beach's 50-acre plus property.

Waterloo House will close for redevelopment as an office and possibly retail and residential space. The 32-room and suite residence, along with Horizons & Cottages, had won awards from Conde Nast Traveller, The Wine Spectator and Travel + Leisure, who called the hotel one of the 'Best of the Best'.

Mr. Wardman said it was too early to say how many of the 130 Bermudian staff might lose jobs as a result of the deal, adding some employees would be taken on by the new company.

Qualifying staff would receive severance payments, he added.

On the topic of sustainable development, Mr. Wardman assured the owners will "watchdog" the open space and green trees they have nurtured for eight generations.

He explained the designers have an appreciation for Bermudian architecture and landscape.

Several important architectural buildings on the properties will not be touchd, he added.

The 130 Bermudian staff were notified of the decision yesterday morning and Mr. Wardman said he understood the impact it will have on the staff.

Brickman founder Rod O'Connor said: "We want to be a good corporate citizen and want to enjoy, here in Bermuda, the solid reputation as a fair employer that we already have established in other, quite different jurisdictions from Washington D.C., to Hawaii."

A deadline will be announced in the new year for the closing date of Waterloo House.