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A conversion project, estimated at US$8 million, funded by existing cash and debt facilities.
Action Hotels, a leading owner, developer and asset manager of branded three- and four-star hotels in the Middle East and Australia, announced the addition of a three-star hotel in Saudi Arabia's capital city, Riyadh.
The 130-bedroom property is in a prime location on Olaya Street in the Olaya district, the fast-growing financial and hospitality heart of Riyadh City. The hotel will be developed by the conversion of an existing office building in just over twelve months.
According to Alain Debare, CEO, Action Hotels, there is a limited supply of quality, internationally-branded economy and midscale hotels in Saudi Arabia.
"There is great potential for Action Hotels in the Kingdom, and in Riyadh in particular. Although the Riyadh hotel market is a mature market, there is considerable demand for mid-economy branded hotels from the corporate segment, yet this segment is currently under supplied," he said.
Indeed, recent reports suggest that Riyadh has seen a sharp rise in RevPAR since 2008, achieving one of the highest Average Daily Rates in the region during 2014 (STR Global, March 2015).
The conversion project is scheduled to open in Q2 2016, at an expected project cost of approximately US$8 million. Debare indicated that this will be funded by existing cash and debt facilities available to the Group.
He went on to confirm that Action Hotels has signed a 20-year operating lease agreement, and is finalising the terms of a long-term management agreement with a leading hotel brand, with an announcement expected shortly.
The addition of this hotel in Riyadh brings the committed development pipeline from Action Hotels to a total of nine hotels with 1,514 rooms and a combined operating hotels and committed pipeline of 3,002 rooms. This is an increase of 19 per cent in rooms above the 2,516 rooms committed at the time of Action Hotels' IPO, in December 2013 (AIM:AHCG).
His Excellency, Sheikh Mubarak A. M. Al Sabah, founder and Chairman of Action Hotels stated; "We are proud to announce this primely located addition to the Action Hotels portfolio. Saudi Arabia is an attractive market for us, being the largest country in the region and having recently undertaken a widespread, long-term strategy for non-oil economic diversification driving business travel. This new hotel is a great addition to Action Hotels' portfolio and the prime location of the property is a very strong statement for our first hotel in Saudi Arabia's capital city."
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About Action Hotels
www.actionhotels.com
Action Hotels is an owner, developer and asset manager of branded three and four star economy and midscale hotels in the Middle East and Australia. The Group's objective is to become a leading owner, developer and asset manager of branded economy and midscale hotels in key Middle East markets and Australia. Action Hotels has completed six hotels, of which five are in the Middle East and one is in Australia, with a further two hotels under construction (both in the GCC), one hotel expansion and another six Pipeline projects (one in Australia and the remainder in the GCC).
The business of Action Hotels was established as a wholly owned subsidiary of Action Group Holding Company (K.S.C.C.), a private Kuwait based conglomerate which has public and private interests across a range of sectors including energy, real estate, and hotels, in the Middle East, Australia and Europe. As at 31 December 2012, AGH held assets of $968 million and produced an operating income of $50 million.
For more information contact:
Action Hotels plc
+44 (0) 20 7907 9663
Alain Debare, Chief Executive Officer
Katie Shelton, Director of Corporate Affairs
finnCap (Nominated adviser & broker)
+44 (0) 20 7220 0500
Stuart Andrews / Grant Bergman / Scott Mathieson
For media enquiries:
Susan Furness at Strategic Solutions
Tel: + 971 50 6556126 susan@strategicsolutionsonline.com
© Press Release 2015
