RIYADH, 24 April 2008 -- A Memorandum of Understanding (MoU) was signed here on Tuesday evening for the management and operation of the first five-star hotel to be built just outside the capital.

The signing took place between Al-Khozama Management Company (AKMC) and Durat Al-Riyadh Real Estate Development Company for the initial phases of the hotel's construction, estimated between SR350 million and SR500 million.

Attending the signing ceremony were Prince Bandar ibn Saud ibn Khaled, chairman of AKMC; Abdullah Saleh Kamel, chairman of the board of investors of Durrat Al-Riyadh; Hamza Attas, general manager of Durrat Al-Riyadh; and Musaed Al-Saeed, CEO of AKMC.

"This is not the first or the last project to be announced by AKMC. Future hotel projects by Al-Khozama will be announced in the near future in Jeddah and other cities in the Kingdom," said Prince Bandar.

"This is the first hotel project to be established in a resort. In the future, AKMC will announce projects in areas not related to real estate in a bid to diversify our business," he added.

The hotel, to be built in Durrat Al-Riyadh, consists of 25,000 square meters, including 40 villas, 150 bedrooms, swimming pools and sports arenas. Since the hotel is located 25 kms outside the boundaries of the capital, temperature in the area is 4 degrees cooler than the inner city. It would be the ideal spot for a spa experience, conferences or meetings.

AKMC announced on Tuesday that it had entered in discussions with Rosewood Hotels & Resorts, a French entity, for management and license agreements. A group of local companies are currently giving final touches to the hotel's design. The hotel is expected to be ready by 2011.

Prince Bandar said he had chosen the location of Durrat Al-Riyadh to build the company's first hotel outside of the capital's boundaries, after seeing the potential of the location.

Unlike the famous Durrat Al-Aroos located in Jeddah, the project is not a resort and neither does it require a one-hour-drive from the main city limits. It is a suburb located within a 20-minute-drive from the center of Riyadh. The idea, according to its chief engineer, is simple: to provide a closed community suburb in the capital where people could enjoy everything they need, all in one place.

Access to the housing project will only be given to house owners. Furthermore, 70 percent of the area is green with playground facilities for children, gyms, and a number of mosques.

The total area of the project covers 3.2 million square kilometers.

The project is estimated to be worth SR3 billion and located off the Riyadh-Qasim highway.

"Over 90 percent of the housing units have already been sold since last year," commented Saleh Abdullah Kamel.

Asked whether AKMC would be interested in building an all-female hotel in Riyadh, Prince Bandar ruled out the option. "I do not believe in hotels for women and other hotels for men. Hotels are for men and women," he said.

By Raid Qusti

© Arab News 2008