Emaar to sell five luxury hotels to Abu Dhabi National Hotels

Emaar's The Address Boulevard in Dubai. (Supplied)
Updated 27 November 2018
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Emaar to sell five luxury hotels to Abu Dhabi National Hotels

  • Developer to focus on 'asset light' strategy
  • Demand rises for mid-market hotels in Dubai

LONDON: 

Emaar Hospitality Group is to sell five of its hotels — including the iconic Address Dubai Mall and Address Boulevard — to Abu Dhabi National Hotels (ADNH), the company said on Tuesday.
The company — which is a subsidiary of the Dubai-listed real estate company Emaar Properties — has signed “definitive” documentation with ADNH, with the deal expected to be finalized this year or in early 2019, according to filings on the Dubai and Abu Dhabi stock exchanges.
Mohamed Alabbar, chairman of Emaar Properties, said in a statement, the sale was part of the company’s efforts to shift toward an “asset-light business model”.
In July, Alabbar reportedly told CNBC Arabia that the company was considering the sale of non-core assets such as its hotel portfolio and that Emaar Hospitality would focus on hotel management instead.
Under the proposed deal, ADNH will enter long-term management agreements with Emaar Hospitality Group to continue running the assets under the Address Hotels + Resorts and the Vida Hotels and Resorts brands.
The portfolio of hotels to be sold also includes Address Dubai Marina, Vida Downtown and Manzil Downtown.
“This transaction will strengthen our presence in Dubai and will expand our current luxury portfolio of hospitality assets,” said Sheikh Ahmed Mohammed Sultan Suroor Al-Dhaheri, vice chairman at ADNH, in a statement.
ADNH’s luxury hotel portfolio already features the Ritz Carlton Abu Dhabi Grand Canal, The Park Hyatt in Saadiyat Island and Sofitel JBR in Dubai.
Emaar Hospitality is set to retain its Rove hotel brand — a mid-market hotel chain launched in 2015. The company’s fifth Rove hotel — Rove Dubai Marina — opened in April this year.
Analysts see the budget hotel sector as a growth market for the emirate.
“Emaar in recent years has been focusing on developing its budget hotel ‘Rove’ brand which as a category should outperform luxury hotels in Dubai given rising number of tourists from countries like India and China,” said Ayub Ansari, senior analyst at Sico Bank in Bahrain.
While he awaits further details on the deal including the currently undisclosed sale price, Ansari expects the proceeds of the sale will fund Emaar’s ongoing retail expansion projects.
Emaar continues to expand its flagship Dubai Mall, while earlier this year it revealed plans to develop ‘Dubai Square’, a new mega indoor and outdoor retail space within the Dubai Creek Harbor development.
News of the hotel deal follows disappointing third-quarter results for the parent company Emaar Properties.
It posted a 29 percent drop in third-quarter profit, recording a net profit of 1.1 billion dirhams in three months ending Sept 30., compared to 1.5 billion dirhams a year earlier.
Revenue from Emaar hospitality, commercial leasing and entertainment businesses reached to 1.95 billion dirhams during the first nine months of the year, a similar level to the previous year’s results.
Emaar said ithat its hotel brands had continued to record higher occupancy than the Dubai industry average.


Germany: US calling European cars a threat is ‘frightening’

Updated 16 February 2019
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Germany: US calling European cars a threat is ‘frightening’

  • ‘If these cars ... suddenly spell a threat to US national security, then that is frightening to us’

MUNICH, Germany: German Chancellor Angela Merkel on Saturday labelled as “frightening” tough US trade rhetoric planning to declare European car imports a national security threat.

“If these cars... suddenly spell a threat to US national security, then that is frightening to us,” she said.

Merkel pointed out that the biggest car plant of German luxury brand BMW was not in Bavaria but in South Carolina, from where it exports vehicles to China.

“All I can say is it would be good if we could resume proper talks with one another,” she said at the Munich Security Conference.

“Then we will find a solution.”

A US Commerce Department report has concluded that auto imports threaten national security, setting the stage for possible tariffs by the White House, two people familiar with the matter said Thursday.

The investigation, ordered by President Donald Trump in May, is “positive” with respect to the central question of whether the imports “impair” US national security, said a European auto industry source.

“It’s going to say that auto imports are a threat to national security,” said an official with another auto company.

The report, which is expected to be delivered to the White House by a Sunday deadline, has been seen as a major risk for foreign automakers.

Trump has threatened to slap 25 percent duties on European autos, especially targeting Germany, which he says has harmed the American car industry.

After receiving the report, the US president will have 90 days to decide whether to move ahead with tariffs.

Trump in July reached a trade truce with European Commission President Jean-Claude Juncker, with the two pledging no new tariffs while the negotiations continued.

Brussels has already drawn up a list of €20 billion ($22.6 billion) in US exports for retaliatory tariffs should Washington press ahead, the commission’s Director-General for Trade Jean-Luc Demarty told the European Parliament last month.

The White House has used the national security argument — saying that undermining the American manufacturing base impairs military readiness, among other claims — to impose steep tariffs on steel and aluminum imports, drawing instant retaliation from the EU, Canada, Mexico and China.

Trading partners have sometimes reacted with outrage at the suggestion their exports posed a threat to US national security.