25 April 2006

Dubai: Kingdom Hotel Investments (KHI), the Dubai headquartered hotel investment company, will obtain investments of up to Dh7.3 billion ($2 billion) in the next five years, a top official said.

The company is opening an office in New Delhi this year to tap the growing tourism market in India.

"We are going to invest anywhere between $130 million to $200 million per year for the next few years," Sarmad Zok, KHI's Chief Executive, told Gulf News in a telephone interview yesterday.

"We recently raised $400 million through an initial public offering that gives us the buying power in excess of $2 billion. Our investment will be based on the opportunities that we see in the Middle East, North Africa and Asian markets.

"India and China are two of the fastest growing markets, along with the Middle East and North Africa. In this region Dubai has already made its mark as the fastest growing market and it will continue to strengthen its position in the coming years."

About eight per cent of KHI's assets are located in Dubai. "Our total asset base is more than $800 million," Zok said.

The company, partly owned by Saudi billionaire Prince Al Waleed Bin Talal, reported 41 per cent growth in gross profits to $17.9 million last year compared to $12.7 million in 2004. It recorded a 53 per cent jump in revenue to $58.8 million last year compared to $38.4 million the previous year.

Earnings before interest, tax depreciation and amortisation rose by 105 per cent to $18 million last year, up from $8.8 million.

"We are very pleased with the group's performance in 2005 and continue our focus on the selective acquisition and development of hotels and resorts where we see growth potential and the opportunity to enhance value. We see tremendous opportunity in a number of key markets and are confident of achieving our target openings for the current year," Zok said.

Revenue per available room (RevPAR) increased by 23 per cent to $81 last year, indicating a healthy trend among its hotels.

KHI, one of the fastest growing hotel investment companies in the region, signed agreements to acquire and/or develop 13 hotels adding more than 2,000 rooms in 2005, including the acquisition of a controlling interest in five hotels in Kenya, which represents a strong rebranding and repositioning opportunity, and the successful opening of the Four Seasons Hotel in Damascus last December 1.

KHI Chairman Prince Al Waleed said in a statement, "2005 was a transformational year for Kingdom Hotel Investments. KHI's performance demonstrates the strength of our strategy of acquiring underperforming assets with clear potential supported by active asset management."

Saudi firms to set up property financier
The Saudi Investment Bank said yesterday it would set up a Riyadh-based real estate financing company worth 1 billion riyals ($267 million) with a group of Saudi and UAE firms.

A statement posted on the Saudi bourse web site said the "closed shareholding company" would also comprise Emaar Properties, Amlak and Saudi firms Assir and Al Baraka for Investment and Development.

SAIB, whose shareholders include JP Morgan Chase, Japan's Mizuho Financial Group and Saudi public and private institutions and investors, said it would announce the size of its share in the unnamed company at a later date.

The new firm is awaiting licencing approval from the Saudi authorities, the statement said.

- Reuters

By Saifur Rahman

Gulf News 2006. All rights reserved.