Kingdom Hotels to
invest $235m in Asia projects
By Shakir Husain - Gulf News
Dubai: Kingdom Hotel Investments (KHI) has signed preliminary
agreements to invest $235 million in hotels in Asia, a new focus
region for the company headed by Saudi Arabia's Prince Al Walid Bin
"We have signed five memorandums of understanding and we will be
investing $235 million in those projects," KHI chief executive
officer Sarmad Zok told Gulf News.
The final agreements will be concluded between six and 12 months
from now, he said.
Management contracts for the new hotels will be given to Movenpick,
Fairmont, Four Seasons or Raffles. Prince Walid owns stakes in the
four hotel management groups.
Zok said there is a "very strong deal in the pipeline in Asia" but
did not provide details.
KHI is targeting Asia, the Middle East, Central and Eastern Europe
and Latin America for further hotel investments.
"All the emerging markets are focus areas for us. We are very busy
in our own region (the Middle East) and in Asia," the KHI chief
executive officer said.
"In many areas we don't have properties and we are very active
getting properties in those areas.
Asia is pretty much empty for us other than two hotels in Thailand,"
KHI earlier this year acquired the Karon Beach Hotel in Phuket from
LaSalle Investment Management for $98.5 million, marking its entry
into East Asia. The hotel has been rebranded as Movenpick.
The company announced its second property in Phang Nga recently. To
be developed at a cost of $115 million, the Raffles Phang Nga Resort
and Residences will be operational in 2009.
The Middle East accounts for 52 per cent of KHI's investments and
most of its operating assets are located in the region.
"The Middle East is subject to significant growth and we are well
geared to capture that growth," Zok said.
The company has more than $1.3 billion of investments in properties
around the world. It has 30 hotels and 12 of those are under
construction, Zok said.The company announced on Wednesday it had
sold 0.5 per cent stake in Fairmont Raffles Holdings International
for $12.6 million to a Canadian pension fund.
KHI will retain a 0.37 per cent stake in Fairmont Raffles Holdings
and its representation on the board.
Prince Walid owns about 55 per cent of Fairmont.
Zok said the valuation at which the Ontario Municipal Employee
Retirement System (OMERS) was willing to buy the stake in the
company represented a gain of two and half times of KHI's original