RIYADH: Shuaa Capital Saudi Arabia (SCSA) announced yesterday that it had signed an agreement with Rotana Hotel Management Corporation LLC (Rotana), a leading Pan-Arab hotel management company that operates various 5-, 4- and 3-star hospitality properties, furnished apartments, and resorts throughout the Middle East and North Africa.
SCSA recently launched a SR2 billion ($533 million) Shariah compliant closed-end fund under 'Shuaa Saudi Hospitality Fund I', which aims to develop and own 17 hotel properties, furnished apartments and resorts across the Kingdom comprising 5,000 rooms. The fund is managed by SCSA. It will also own 20 percent of a new company in the Kingdom that will manage and operate the properties on an exclusive basis. Rotana will manage this new company.
Omar Al-Jaroudi, CEO of SCSA, and Selim El Zyr, president and CEO of Rotana, signed the agreement in Riyadh. Majid Saif Al-Ghurair, chairman of Shuaa Capital, Tariq Al-Mutlaq, chairman of SCSA, Nasser Al-Nowais, chairman of Rotana, Iyad Duwaji, CEO of Shuaa Capital, and other senior officers from both Shuaa and Rotana attended the signing ceremony.
Al-Jaroudi said: "We expect the Saudi economy to continue to grow at recent rates and with further liberalization, we believe that demand for modern hotel facilities by both business travelers and visitors will continue to increase. This joint venture with Rotana confirms our commitment to the Saudi market and represents a unique opportunity for investors to access the hospitality sector which otherwise is seldom part of their portfolio."
He noted: "We are delighted to be associated with Rotana, a leading hotel chain that has gained regional and international recognition during the past few years. The fund, which is supported by our Saudi shareholders, who represent leading business groups in the Kingdom, aims at developing and owning a well-diversified investment portfolio of hospitality properties. It will be managed by a team of highly experienced professionals at SCSA and supported by professionals at Shuaa Partners, the private equity arm of Shuaa Capital, in the UAE," he added.
Significant step
El Zyr said: "The latest announcement is a significant step, not only toward fulfilling our aggressive growth strategy for the region, but also for Rotana's expansion within the Saudi market. We are privileged to be partnering with SCSA in this fund and we are certain that the development of these 17 properties and Rotana's marketing strategies will complement the ongoing efforts of Saudi Arabia in increasing its focus on the development of its tourism industry. "
Diab Chidiac, director, SCSA, said the "fund has been designed to yield optimal financial returns."
© Arab News 2008
