By Megha Merani
Tower owned by Abu Dhabi-based Al Jaber Group is sold as part of multi-billion dirham debt restructure
A landmark hotel property in Dubai operated by Hong Kong’s Shangri-La Group of Hotels has sold for AED700.2 million ($190.62 million) according to results posted on an auction website.
The 42-storey tower on Sheikh Zayed Road, owned by Abu Dhabi-based family-owned conglomerate Al Jaber Group, was listed for sale earlier this month on UAE-based Emirates Auction, a company that manages public and online auctions in the Middle East for asset liquidation, real estate, automobiles, vehicle license plates, jewelry and various other items.
The luxury skyscraper received one bid at AED700.2 million according to the site’s auction result posted online. The property was listed at AED700 million with a minimum increment set at AED200,000.
The listing said the sale did not include furniture or a trade license for the residential and commercial property elements of the tower.
Commenting on the auction, a Shangri-La Group spokesperson said in a statement emailed to Arabian Business: “We wish to assure our guests and business partners that it is business as usual at Shangri-La Hotel, Dubai. A potential change in ownership doesn’t necessarily have an immediate impact on our management agreement. Guests can continue to look forward to the high quality of service excellence that the Shangri-La Group is known for. We have been operating successfully in the region since 2003 and are committed to growing our presence in the UAE and the Middle East.”
Reuters reported last week that the auction process, which was initiated by First Abu Dhabi Bank, which is the main lender for the Shangri-La hotel property in Dubai, marks a first step by creditors to recover funds after delays to a restructuring agreement for AED5.9 billion of debt last year
Bloomberg reported that sources said lenders were also seeking the sale of the Shangri-La hotel in Abu Dhabi.
Al Jaber Group, best known for its contracting business but with interests across a range of sectors, has struggled ever since the UAE's construction sector was hit by the global financial crisis in 2008 that led to a crash in property markets and froze liquidity. Tough macroeconomic conditions in the oil-dependent Gulf region after a plunge in crude prices further fazed the company's recovery efforts.
Emirates Auction did not specify the name of the winning bidder.