TUI Resorts & Hotels, a subsidiary of Europe's tourism group TUI, has started construction of the first phase of the EUR 250 mln Castelfalfi Resort in Tuscany. Phase 1 of the project will comprise a boutique hotel, country houses and apartments being built on the 11 km2 grounds.

These buildings will be near an 18-hole golf course, which was on the grounds last autumn. Two further hotels are to be built in Phase 2. The investment amounts to a total of EUR 250 mln.

'We are embarking on a new chapter in the history of TUI Hotels & Resorts. We are developing an extensive resort which will be unique for the Tuscany region. Aspects of sustainability and the preservation and restoration of this unique landscape are our top priorities,' said Michael Frenzel, CEO of TUI.

In 2007, TUI purchased an entire village in the heart of Tuscany. Tenuta di Castelfalfi is situated in a hilly, wild Tuscan landscape with olive groves, vineyards, cypresses and pinewood. The valley lies in the shadow of mount Borgo, with its 11th century citadel, a small church and a handful of abandoned houses.

The construction work on the boutique hotel has begun. The 32-room hotel is being created within the walls of an old tobacco factory and is to be opened as Castelfalfi's first hotel in the middle of 2012. The village's medieval citadel is being converted into a restaurant. The rest of the Borgo is being renovated, creating around 50 units which are to be sold off as holiday properties. All real estate will be marketed internationally, in the UK by Knight Frank, the luxury real estate agency.