Euro debt crisis lures Middle East hotel investors
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Kevin Wallace General Manager Hospitality Investment and Development Jebel Ali International Hotels
Arabian Hotel Investment Conference to explore opportunities beyond
Middle East - $30 billion worth of hotel deals expected globally in 2012,
latest industry figures show
Opportunities for Middle East investors in core Western European markets
will come into focus at the annual Arabian Hotel Investment Conference 2012
(AHIC), which takes place in Dubai, on 28-30 April at Madinat Jumeirah.
“Europe’s worsening debt crisis will tempt investors from oil-exporting Gulf states,
flush with petrodollars, to broaden their search for potential bargains, as Europe’s
capital markets dry up. Credit conditions are extremely tight, banks are struggling
to raise enough cash to cover their own liabilities let alone lending to others,”
commented Richard Thompson, Editor, MEED
and in the case of hotels, many offer yields that outperform other property
investments and are coming to market well below their peak market values, as
prices remain subdued,” added Thompson.
A good example of that was the recent purchase of the prestigious Carlton Hotel
in Cannes on the French Riviera, which was sold for EUR 450 million to Qatar-
based investor Ghanim Bin Saad Al Saad.
That figure was significantly lower than the EUR 634 million that Morgan Stanley
paid for the Carlton in 2006. The Qatar investor is also interested in other
properties of the InterContinental chain including those in Vienna, Frankfurt,
Budapest, Rome, Amsterdam and Madrid.
Speakers at this year’s AHIC event discussing investment opportunities outside
the Middle East include H.E. Enrique Meyer, Minister of Tourism, Argentina;
Tarik Senhaji, Chief Executive Officer, Moroccan Fund for Tourism Development
and Kevin Wallace, General Manager, Hospitality Investment and Development
Dutco Group and President and CEO, Jebel Ali International Hotels.
Other Middle Eastern investors have also made the headlines recently with a raft
of high profile hotel acquisitions in London and Paris.
In the last two months alone, Qatar National Hotels Company (QNH) snapped
up Le Royal Monceau – Raffles Paris, while late last year Middle East investors
spent some $500 million buying luxury hotels The Sanderson, St Martins Lane
and the W Hotel, in London.
Global hotel transaction volumes will hold steady in 2012 to reach upwards of US
$30 billion in deals according to recent figures released by Jones Lang LaSalle
Hotels, in line with 2011 figures, which were up 13% from 2010.
Hotel investment activity is expected to remain stable across EMEA this year
with $11 billion worth of deals expected, similar to 2011 levels, the real estate
services company said. London and Paris will remain the primary drivers for
investment activity, it added.
“The increasing focus on hotel acquisitions is the latest in a series of Gulf-wide
investments in European assets,” commented Kevin Wallace.
Outside the hospitality sector, Qatar’s investment portfolio includes luxury
department store Harrods, and stakes in Barclays and the London Stock
Exchange. Elsewhere in the Gulf, Abu Dhabi’s flagship carrier Etihad Airways
recently raised its stake in Air Berlin to nearly 30% as it continues its aggressive
expansion plan. One of Abu Dhabi’s most high profile European acquisitions
remains Manchester City Football Club.
Held under the patronage of HH Sheikh Ahmed Bin Saeed Al Maktoum,
President Dubai Civil Aviation Authority, Chairman Dubai Airports and Chairman
and Chief Executive, Emirates Airline & Group, organiser MEED Events in
partnership with Bench Events has put together a three-day programme
designed to explore the outlook for hotel investment in the Middle East’s
changing landscape.
The Middle East reported positive results in the three key occupancy
performance measurements in 2011 despite the Arab Spring, according to
industry consultants STR Global, although performances in individual countries
differed greatly.
Occupancy rose by 3% to 62.3%, revenue per available room (RevPar)
increased by 4.1% to US$125.66 while average daily rates increased 1.1% to
US$201.66.
Staying with the Arab Spring theme, AHIC will also hold sessions focusing
on individual case studies. Samih Sawiris Chairman, Orascom Development
Holding, will examine the issues facing Egypt, while other key industry figures will
address the challenges of developing and operating in the holy cities of Mecca
and Medina in Saudi Arabia.
For more information on the Arabian Hotel Investment Conference:
www.arabianconference.com
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