Dec. 06–Investment Corporation of Dubai, or ICD, Dubai government’s investment arm, said on Thursday that it had acquired Atlantis Hotel from Istithmar World, a unit of Dubai World.
“Our acquisition of an asset that is a major contributor to the domestic tourist industry is in line with our overall strategy to support long term, sustainable growth for Dubai,” Khalifa Al Daboos, deputy chief executive officer of ICD, said in the statement. ICD, the flagship holding firm of some of Dubai’s high-profile companies, did not disclose the value of acquisition of the 1539-room iconic hotel, which sits at the head of Palm Jumeirah. The hotel was set up in 2008 as a joint venture between Istithmar World and Kerzner International
Last year, Istithmar took full control of the property when it paid for $250 million for a 50 per cent stake held by Kerzner International.
Earlier this year, the hotel refinanced its debt with an $880 million loan led by Abu Dhabi Commercial Bank.
The Dubai government owned-ICD has holdings in some of the emirate’s most high profile brands, including Emirates airline, Emaar Properties and lender Emirates NBD.
The Atlantis sale is Dubai World’s second disposal this year after selling British logistics warehouse developer Gazeley in June. It is close to selling The Fontainebleau hotel in Miami Beach, Florida. The firm needs to repay $4.4 billion in May 2015 under its restructuring terms.
The sale adds to a series of disposals by Dubai World, which had promised to sell non-core assets under the debt-restructuring plan drawn up when the group fell victim to a property market crash in the emirate and the after-effects of the global financial crisis. Dubai’s hospitality industry is on the verge of yet another exponential growth with the prospects of hosting 25 million visitors during the World Expo 2020. In the next six years, hotel room units will see a tremendous growth from the current 83,000 units to over 130,000, according to experts.
The Expo 2020 also is acting a catalyst to Dubai’s all round growth. Already, Dubai has started recording a major upswing in business confidence and investor optimism across trade, tourism and real estate sectors. Economic recovery is bolstering finances of some state entities which are stepping in to reduce the debt burden. Dubai Electricity & Water Authority (DEWA), a state-owned utility, plans to buy Palm Utilities, a district cooling company owned by Dubai World, according to local media reports.
Dubai World’s restructuring plan envisaged that it would raise $1.3-$2.3 billion between 2010 and 2012, and a further $3.9-$5.3 billion in 2013-2015 through sales of holdings such as P&O Ferries and MGM Resorts International.
–issacjohn@khaleejtimes.com
