Enshaa takes over Palazzo Versace Dubai in swap deal

Firm takes full control of luxury Dubai hotel, but loses stake in Australian property
Enshaa takes over Palazzo Versace Dubai in swap deal
The under-construction Palazzo Versace Dubai
By Shane McGinley
Mon 17 Oct 2011 11:59 AM

UAE developer Enshaa is to take full control of the
under-construction Palazzo Versace Dubai hotel in a swap deal that will see the
firm relinquish its stake in a finished Australian hotel.

Sunland Group, the firm’s Australian joint venture partner,
will take 100 percent ownership of the Palazzo Versace Gold Coast, it said in a
regulatory filing on Monday.

The company will release its 51 percent stake in the
Versace-branded Dubai hotel and its 50 percent share of the D1 residential
Tower Dubai in exchange for full control of the Australian hotel, which opened
its doors 11 years ago.

No cash will be exchanged under the terms of the transfer
agreement, Sunland said.

Enshaa subsidiary Emirates Investment Group Australia had
inked a deal with Sunland to develop up to 13 Versace-branded properties around
the globe.

Under the terms of the deal, Sunland will also transfer its
50 percent stake in the joint investment vehicle Emirates Sunland Group, but
will retain its interest in three remaining Dubai projects.   

Palazzo Versace Dubai, a AED2.3bn ($626m) hotel and residential
project, is nearing completion at a site on the banks of Dubai Creek.

Emirates Sunland Group said in February that 80 percent of
the resort’s 169 private apartments had been sold, and that construction was
more than two-thirds complete.

“[The resort] has continued its construction during a very
difficult economic time,” said managing director Soheil Abedian. The property
is 81 percent complete, he said.

Market rumours earlier this year had suggested the property
had struggled to secure project finance in the wake of the global downturn,
which saw house prices in Dubai fall more than 60 percent from their peak.

With the onset of the global financial crisis, more than
half of developments in the city were scrapped or halted as project finance
dried up and developers ran out of cash.

The Versace-branded resort will include 169 private
apartments and 217 hotel suites, decorated with furnishings from the Italian
designer’s Home range.

Enshaa and Sunland Group were not immediately available to
comment.

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.