Nakheel enters hotel sector with new arm

Dubai: Nakheel has formed a new hotel and resort investment company, Nakheel Hotel and Resorts, that will invest Dh2.2 billion ($600 million) to develop eight hotels in its first year of operations, said a top official.

"Nakheel Hotel and Resorts will roll out 20 new hotels in five years," Nakheel's chief executive James Wilson told Gulf News on Wednesday.

The company's initial portfolio of projects will include The Trump Hotel and Tower Palm Jumeirah (800 unit condo-hotel development), a 150-room boutique hotel and spa with 100 private villas and beach condos on The World, a 400-room hotel and resort in Djibouti, and a 200-room hotel with 200 luxury serviced residences on The Palm Jumeirah.

Other projects under development include properties in Morocco, Oman, Africa, India, Asia and former Soviet states.

This is the third Dubai government-owned entity entering into hotel business, following Jumeirah and Emaar.

"Our first hotel will be opened in Djibouti later this year. It's a 400-room hotel to be managed by Kempinski," he said.

"We have been approached by entities in India to develop hotels and we see India as a strong growth market. Indian economy is doing extremely well," Wilson said.

"Besides, we will be aggressively looking at the Gulf region, Africa, and the CIS market, especially Moscow, for the development and acquisition of existing hotels," he added.

Wilson said Nakheel Hotel and Resorts was not looking at the US markets, where its sister concern Istithmar has already entered. "We will share information in the acquisition, nothing more. The US market is not currently our focus. We are more focussing on the high growth markets," he said.

He also did not rule out public floation of the company to raise cash in future. "That's an option that we will look into in the future. But no immediate plans," he said.

Nakheel Hotel and Resorts will focus on building a portfolio of leading hotel and resort properties and strengthening Nakheel's regional and international alliances in the hotel, resort, hospitality and tourism sectors through acquisitions.

It will finance investments through private equity and debt as well as through other partners and investors.

"The formation of Nakheel Hotel and Resorts marks an important step forward for our group," Sultan Ahmad Bin Sulayem, executive chairman of Nakheel, said in a statement.

"As a corporate centre, the new company will create a conduit of opportunities and further enhance value."