UAE-based investors Emirates International Holdings (EIH) and Australian developers Sunland Group are rolling out a Dh2.56 billion ($700 million) hotel, to be run by Versace the famous fashion and lifestyle brand.

The interior of the Versace hotel on Australia's gold coast.

The 215-suite Palazzo Versace Resort will be located in the Arabian Bays on the Dubai Creek, as part of an overall neighbourhood being developed by Dubai Properties. In March, EIH signed an agreement with Dubai Properties to acquire the land for the development of the resort.

It will be developed on a 130,000 square metre plot of prime land, in which an artificially-created temperature-controlled beach will serve mainly upmarket leisure travellers.

The design and development plan of Palazzo Versace is expected to be finalised in September, so that construction can begin early 2006.

To be opened in 2008, this would be the second designer-labeled hotel following Armani's announcement to penetrate the market.

"The design of the Palazzo Versace will include all the trademarks of Versace style and glamour while incorporating the needs of the local environment. Palazzo Versace will provide the ultimate destination for those wanting a taste of the 'Versace' lifestyle within a dynamic and modern environment like Dubai," said Dr. Santo Versace, president of the Versace Group.

The project will also include 220 condominiums that will be offered to selected high-profile investors on a freehold basis.

The Versace Group together with Australian Property Developer, Sunland Group Limited, who opened the first Palazzo Versace on the Gold Coast in September 2000, identified the Middle East as the next potential region for a Versace resort .

EIH and Sunland has created a 50:50 joint venture, Emirates Sunland, to develop the hotel which is part of a global roll-out that will see more Palazzo Versace Resorts coming up in major gateway cities of the world, officials said.

Earlier, EIH acquired a 50 per cent stake in Sunland's Palazzo Versace Resort in Gold Coast for $40 million.

Sharjah-based Swiss-Arabian Perfumes and Emirates Neon are some of the companies behind the EIH. Abraj Capital recently acquired a 34.5 per cent stake in the company.

EIH, with a Dh250 million capital base, is expected to raise capital further by going public.

Emirates Sunland Group will develop the Palazzo Versace Dubai hotel.

Arabian Bays is a project currently under planning stage by Dubai Properties, which will be adjacent to its Business Bay project.