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Saudi signings Financing moves Hospitality attractions
Jeddah Chamber of Commerce & Industry Bahrain-based Sakana Holistic Housing According to a report released by Dubai-
confirmed two onsite deals were announced Solutions has predicted that despite the based research house Proleads, more
on day one of the inaugural Cityscape Saudi current slowdown in mortgage approvals, than US$140 billion of new hotel projects
Arabia event totaling US$3.2 billion. the country’s mortgage market has the are due to be completed within the next
potential to double to around US$1.9 billion two years ahead of an expected wave of
At the same event, Omar Al Jaroudi, CEO over the next few years. demand for hotel space from 2013.
of SHUAA Capital Saudi Arabia confirmed
that that company was in the final Speaking at a recent GCC mortgage seminar, The report said that, based on an average
stages of providing financing solutions Sakana CEO R Lakshmanan, said: “Bahrain’s completion schedule of two to three
for investments worth US$533 million in current residential mortgage market is highly years, a total of 306 new hotels – offering
Saudi hospitality developments. competitive with more than a dozen players a combined total of 108,600 rooms -
both conventional and Islamic. should come online by 2011, in anticipation
Meanwhile, Jenan Properties, a local of a return to 2008 occupancy rates.
developer backed by Kuwait Finance “Based on estimates, the residential
House and, Aayan Leasing & Investment mortgage size currently stands approx- Big name hotel players such as Marriott,
Co, also revealed that it was planning to imately at five percent of GDP. However, which has both the Ritz Carlton and
invest US$1.33 billion on two residential the penetration level is low compared to a Renaissance brands as part of its
projects that would be completed by 2013. sample of countries in Europe with similar portfolio, is planning to open 130 hotels in
GDP per capita. We believe the market is the next four years, with China, India and
The company recently inked a design expected to reach BD700 million (US$1.9 the UAE accounting for over 50 percent of
agreement with a Canadian company billion) in the next few years.” new developments.
for a US$267 million mixed-use complex
with three towers in the eastern city of Dubai-based developer Emaar Properties Within the UAE, Aldar Hospitality
Khobar. The project is targeting young has also partnered up with Standard will launch its flagship Yas Hotel
mid-income Saudis and expatriates. Chartered Bank to provide two accessible this November along with six other
Its second project, a luxury 2.8 square financing options for its end users and properties operated under the Rotana,
kilometre coastal resort is currently in the investors. The Asset Back Lending (ABL) InterContinental and Rezidor brands.
investment planning stage. Product offers a loan of up to 40 percent Hilton Hotels is also looking at the UAE
of the property purchase price, and the capital for future expansion opportunities
Dubai-based research firm Proleads has Standard Mortgage Product (SMP) is a including the upcoming Saadiyat Island
reported that just one percent of projects standard loan of up to 75 percent of the project. Developers of the Dubai Pearl
in the Kingdom have been cancelled since property price. The financing options are have signed an agreement with US-
the start of the global crisis, with only three applicable on existing and all new Emaar based MGM Mirage to run three hotels
percent postponed. With projects valued in products due for delivery within the next within the development under the
excess of US$543 billion ongoing, Proleads nine months. Bellagio, MGM Grand and Skylofts brands.
said that 460 projects with a budget of
almost US$289 billion were already under Also in the UAE, Noor Islamic Bank has Saudi Arabia’s tourism chiefs have
construction in the real estate, leisure and reported a 40 to 50 percent increase in its reportedly committed US$333 million
entertainment sectors, with the remaining mortgage lending since the start of 2009, to new hotel projects in a bid to boost
812 projects in the planning, study, design or according to senior product manager religious tourism. The Elaf Group, a
bidding stages. Fahd Reaz, with another local financial subsidiary of SADEC, has announced five
institution, Dubai Islamic Bank also new hotel projects in the three holy cities.
Just 30 had been cancelled and only 25 – announcing that it would start offering 90
or three percent by value – were on hold, percent financing on UAE properties. Europe’s largest hotelier, Accor, is also
according to the research which identified looking to more than triple the number
cash flow on real estate projects in the of hotels it has in the Middle East; and
kingdom as maintaining a closer balance the Best Western chain is also adding 25
with spending on infrastructure. hotels to its regional portfolio within the
next few years.
PREVIEW Cityscape Dubai
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