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Nakheel Hotels acquires 50 per cent stake in Mexican resort

- Relationship with Kerzner International further strengthened with deal at One&Only Palmilla -
Dubai - 23 February 2008: Dubai-based Nakheel Hotels has today announced that it has entered into definitive agreements to acquire a 50 per cent stake of Mexican resort, One&Only Palmilla in Los Cabos, based on a total enterprise value of US$315 million. Nakheel Hotels is acquiring its stake from certain funds affiliated with the Whitehall Street Real Estate Funds, a series of real estate opportunity funds sponsored and managed by Goldman Sachs & Co, while existing joint venture partner, Kerzner International, will retain its 50 per cent stake.

The resort is a 172-room ultra-luxury ocean front resort managed by Kerzner International under the award-winning One&Only brand. It features a Jack Nicklaus 27-hole championship golf course, a world class 22,000 sq ft spa featuring 13 spa villas, a 7,000 sq ft executive conference centre, two oceanfront infinity swimming pools, acclaimed restaurants and a wedding chapel. One&Only Palmilla is located on the Southern tip of Mexico's Baja Peninsula and benefits from oceanfront natural beaches, its own private peninsula and close proximity to San Jose del Cabo International Airport.

Joe Sita, Chief Executive, Nakheel Hotels , said:

"One& Only Palmilla represents an important investment for Nakheel Hotels . We are constantly looking for opportunities to add value to our investments in companies such as Kerzner and this acquisition fulfils that strategy perfectly. Latin America is very important in the global tourism market and this deal marks our first entry into this lucrative region. We are always seeking to diversify our portfolio and add to our existing investments in North America, Asia and Europe.

Sol Kerzner, Chairman and CEO, Kerzner, said:

"The resort itself is at the ultra-luxury end of the market and offers a very favourable investment opportunity for Nakheel Hotels . One&Only Palmilla is one of the top performing resorts in Latin America and has won numerous prestigious accolades including the Top Scoring Property in the Americas 2008 in Condé Nast Traveler (US) Readers' Choice Awards.

"Kerzner International and Nakheel Hotels have already established an important relationship, and in the last few years that relationship has brought significant opportunities to both partners. This latest agreement sees us extend our partnership into a new territory and allows us each to capitalise on the investment and management strengths which have served us so well to date.

"We're very excited to be joined by Nakheel Hotels in this venture. One&Only Palmilla is an exceptional resort and represents a deal of real value for both Nakheel Hotels and Kerzner."

Kerzner International, Nakheel Hotels ' joint venture partner, is a leading international developer and operator of destination resorts, luxury hotels and gaming properties and owner of the One&Only brand. The two companies already have a very close relationship with Nakheel Hotels owning approximately 30 per cent of Kerzner International and a number of existing joint ventures such as Atlantis, The Palm in Dubai and One&Only, Cape Town.

One&Only Palmilla was originally built in 1956. It has been refurbished and expanded over the years with the most recent changes made in 2003.

Nakheel Hotels was launched in November 2007 as the new name for Istithmar Hotels after Dubai World consolidated its hotel business under one banner to create a fully integrated hotel investment company. The hotels business was originally formed in April 2006 as the hotel investment and asset management business of Istithmar and has, in less than 2 years, accumulated a global hotel property portfolio. The enterprise value of investments to date is in excess of $3 billion.

Nakheel Hotels will continue to pursue its strategy of acquiring luxury hotels in key gateway cities and resorts across North America, Europe and Asia, along with investing in the budget hotels sector in key growth markets. Projects currently include The Trump International Hotel & Tower, which is under development on The Palm Jumeirah, while the group has already acquired several luxury hotels in the US, including Mandarin Oriental, W Union Square and Hotel Washington, as well as significant equity investments in Kerzner and International Hotel Investments plc, and development projects for W hotels in Thailand. QE2 Enterprises, which has acquired the QE2, is also part of Nakheel Hotels . The QE2 is to form the centerpiece of a luxury hotel, residential, retail and entertainment destination to be developed on The Palm Jumeirah.

-Ends-

About Nakheel
Nakheel is one of the world's largest privately held real estate developers, and a key player in realising the vision of Dubai for the 21st century: creating a world class destination for business and tourism.

Nakheel currently has a portfolio of developments, across a range of sectors, including The Palm trilogy, The World, Dubai Waterfront, Jumeirah Islands, Jumeirah Park and Ibn Battuta Mall. Spreading across 2 billion sq ft of land, Nakheel's projects aim to redefine the concept of property development whether residential, tourist, commercial or retail.

Further information can be found at www.nakheelmediacentre.com

About Nakheel Hotels
Nakheel Hotels is an integrated hotel development, investment and asset management business with investments under management currently in excess of $3 billion.

Nakheel Hotels goal is to deliver exceptional returns through the acquisition and active management of luxury hotels in key gateway cities and resorts around the world, together with strategic equity investments and investment in budget hotels in key growth markets. Building and leveraging relationships with key strategic partners is central to the company's investment strategy.

Investments include the Mandarin Oriental and W Union Square hotels in New York, Hotel Washington in Washington DC and significant equity stakes in Kerzner, operator of the Atlantis and One&Only brands, and International Hotel Investments plc, owner of a portfolio of hotels in Europe and North Africa operated under the Corinthia brand. Nakheel Hotels also has significant investments in the budget hotel sector, holding the master franchise rights for easyHotels.com in the MENA region with the first hotels under development in Dubai, and an investment in Tune Hotels in the ASEAN region.

About Kerzner International
KERZNER INTERNATIONAL HOLDINGS LIMITED, through its subsidiaries, is a leading international developer and operator of destination resorts, casinos and luxury hotels. Kerzner's flagship brand is Atlantis , which includes Atlantis , Paradise Island, a 3,700-room ocean-themed destination resort in The Bahamas. This unique destination features a variety of accommodations, including The Cove, a 600-room property that opened April, 2007 and its newest 497-key tower, The Reef Atlantis , which opened in December, 2008. All of these hotels are built around a 100-acre waterscape with over 20 million gallons of fresh and saltwater lagoons, pools and habitats, the world's largest open-air marine habitat and some of the most beautiful beaches in the world. Kerzner is extending its Atlantis brand globally with the development of Atlantis, The Palm , Dubai, a 1,500-room, water-themed resort expected to open in Fall 2008 on The Palm, Jumeirah. Kerzner has also commenced construction of a 600 room, destination casino resort in Morocco that will open in 2009, which will be operated by Kerzner under a new brand that it will be introducing to the market. Kerzner also manages six luxury resort hotels under the One&Only brand. The resorts, featuring some of the top-rated properties in the world, are located in The Bahamas, Mexico, Mauritius, the Maldives and Dubai. Additional One&Only properties are currently in the development stages in South Africa, Costa Rica, Zanzibar and Dubai. For more information concerning Kerzner and its operating subsidiaries, visit kerzner.com.

For more information please contact:
Four Communications
Nakheel@fourcommunications.com
Tel: +971 (0) 55 985 3377 / 3366

Nakheel
Aaron Richardson,
Media Relations Manager on +971 4 368 6946 / +971 (0)50 553 8201 aaron.richardson@nakheel.com
Kerzner International
Lauren Snyder, 212-659-5240 or mediarelations@kerzner.com

© Press Release 2008