Al Habtoor Group is set to demolish one of the city's oldest hotels and redevelop
the area into a tourism complex in a plan valued at $1.3bn, its chairman said Wednesday.
conglomerate, one of the UAE’s largest, said it would knock down the 34-year-old
Metropolitan Hotel and build three luxury hotels and a string of tourist
attractions including a theatre to stage Broadway-style shows.
“The economical situation is flourishing now
in the UAE and there is major improvement in the market, especially demand for
visitors to the country,” Khalaf Al Habtoor told Arabian Business.
announcement] shows that, parallel to the government of the UAE, we are working
hard to represent the country…to prove that this country is a safe haven.”
project will be funded using cash flow from the privately-owned group but the company
may tap the debt markets in the future, he added.
time being we are funding it from our own cash flow. We haven’t been approached
by any banks. If we are, definitely we will talk about it."
of the complex, which will include a shopping arcade, a tennis and sports
academy and themed restaurants, is set to begin in the first quarter and be
completed in 48 months.
Habtoor has yet to sign the hotel brands to operate the trio of properties but
said the announcement would be made soon.
are three hotels, one is luxury – six stars – and the other two are five-star,”
the chairman said.
was hit hard by the 2008-2009 global financial crisis, which saw house prices
decline by over 60 percent. But last year’s Arab Spring unrest has help bolster
tourism, a key pillar of the Gulf state's economy, after the UAE sidestepped protests.
arrivals to Dubai increased 14 percent in the first half of 2011 while hotel
occupancy rates rose over 80 percent as Gulf tourists avoided troubled
traditional destinations such as Egypt and Syria, according to data from
redevelopment of the Metropolitan Hotel will be able to take advantage of
neigbouring projects such as Downtown and Burj Khalifa areas, said Chiheb Ben Mahmoud, head of hotel advisory at real
estate consultant Jones Lang LaSalle.
“The site benefits from an advantageous
frontage and visibility and could be expected, through proper planning, to
offer a unique proposition,” he told Arabian Business.
“It illustrates the life-cycle of hotel
assets in the region and the willingness of specialized hotel investors to go
for another round.:
Habtoor in October announced
it would resume work on an AED1bn hotel project on the Palm Jumeirah. The
project is also being funded by the group.
five-star hotel, which is expected to open to guests by 2013, will include a spa,
private beach, six restaurants and a nightclub, said the group.
work on the 330-room hotel was stalled in the wake of Dubai’s debt crisis,
which saw property prices in the emirate decline by more than 60 percent from
half of all projects in the emirate were cancelled or put on hold, as bank
loans were called in and developers struggled to pay contractors.
Habtoor Group is a holding company for businesses ranging from construction,
hospitality, automotive and real estate, run by Habtoor. In 2007, Habtoor sold
a 45 percent stake to Australia’s Leighton Holding for $707m
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