Don't count out Dubai. The darling of the UAE, particularly pre-recession, is showing pluck with new hotel development and transactions that show the strength of the hotel market there.
Over the weekend, we learned that Commercial Bank of Dubai arranged around Dhs200 million (approximately U.S. $60 million) to finance the acquisition of the Movenpick Hotel in Jumeirah Beach Residence by a group owned by Bank Muscat. JLL advised on the transaction.
The financing was arranged for BMJBR Properties Limited, a company owned by BM GCC Property Income Fund.
"The UAE economy has been growing robustly with trade and tourism as the main engines of growth," Peter Baltussen, CEO of CBD, told Gulf Business, which reported the story. “This has made the UAE an attractive destination for regional and international investments. The acquisition of Mövenpick Hotel JBR Dubai illustrates the investors’ confidence in the UAE’s economy in general, and in the sectors with high prospects of growth in particular.”
Dubai has a purported aim to attract around 25 million tourists by 2020, and hotels are at the centerpiece.
Further news came of the announced Mall of the World (a rendering shown here), the latest addition to Dubai’s retail, hospitality and leisure offering, which, as Gulf News reports, is expected to boost visitor numbers.
Gulf News writes that the focus of activity in Dubai has shifted toward the retail and hospitality sectors as development ramps up in the lead up to the World Expo 2020, which Dubai won the bid to host last November.
The mall’s retail area will be connected to 100 hotels and service apartments offering 20,000 rooms. As such, hotel operators are chomping at the bit. Reports are that the Carlson Rezidor Hotel Group in the process of initiating discussions with Dubai Holding, which is handling the project. It reportedly is considering introducing its mid-scale brand Park Inn by Radisson, Radisson Red, Radisson Blu and Quorvus Collection, in the new development.
Other hotel operators are also keen to get in on the project. "Mall of the World is a destination which attracts our interest however the development is very new and there is nothing we can confirm in these very early stages," said a spokesperson for US-based Hilton Worldwide, in an emailed statement to Gulf News.
The Mall of the World news coincides with other Dubai hotel projects either announced or underway. Last month, Shangri-La Hotels and Resorts signed a letter of intent to work with Dubai-based developer Nakheel to manage an upcoming 290-room hotel. In April, construction company Arabtec Holding selected Viceroy Hotel Group to operate two properties it is currently developing in Dubai, with opening dates slated for 2016 and 2017. Also in April, Langham Hospitality announced its entrance into Dubai, with plans to open a 323-room resort on the Palm Jumeirah archipelago.
Development comes at a good time. A recent index compiled by Bloomberg shows the three cities host to the highest room rates in the world. The three cities that top the list are Geneva ($308 per night), Dubai ($273 per night) and Kuwait City ($253 per night).