DUBAI, 18 April 2006 — Kuwait-based leading regional investment bank Global Investment House, and Singapore-based Fraser Serviced Residences, a global operator of serviced residences, yesterday announced in Dubai a partnership to create a Middle Eastern hospitality holding company which intends to invest $500 million over the next five years in serviced residence properties in the region.
Under this landmark partnership, the company will have an exclusive right to develop and own Fraser Serviced Residencies in the region. The company will aim to develop seven gold standard serviced residences in key gateway cities in the Gulf region, which will then be managed by Fraser. The company intends to raise capital through a private placement to be announced in a few weeks.
The new company based in Kuwait City will focus exclusively on the serviced residence sector in the Middle East. The leading regional estate and hospitality consultancy, the Dubaibased RSP Group, will act as the hospitality adviser to the company.
Global, having established several new companies to capitalize opportunities in the regional market, has yet again, set up the company to capture a significant opportunity for luxury serviced residences in the Middle East and has joined hands with Fraser, one of the world’s leading dedicated serviced residence operators, in order to manage the company’s planned serviced residencies. In the last three years, Global has successfully established five real estate companies in Kuwait, UAE, Qatar and Bahrain, of which one is listed on Kuwait Stock Exchange. The Company will significantly benefit from Global’s expertise and experience in setting up successful operations and achieving accelerated development of seven properties.
Announcing the details at a press conference in Dubai this morning, Choe Peng Sum, Fraser’s chief operating officer, said: “The Middle East, and particularly the Gulf Cooperation Council (GCC) countries, offer tremendous potential in the branded serviced residence sector.
“There is a high level of demand for high quality, serviced residences within the region, yet supply is still severely limited, providing great potential for growth for this company.
Globally, the Serviced Residence sector is one of the fastest growing in the hospitality industry. Over the last five years the worldwide serviced apartment market has grown at an annual rate of 40 percent whereas the hotel sector achieved an annual growth rate of 10 percent.” Choe said Fraser has targeted seven properties to be developed in the next five years in the key gateway cities of Dubai, Kuwait, Abu Dhabi, Doha, Riyadh and Jeddah offering over 1,100 apartments. The first of these properties is expected to open to guests in 2008. All residences will be managed by Fraser Serviced Residences, which is renowned for its globally benchmarked quality and lifestyle offerings throughout Europe and Asia.
Omar El-Quqa, executive vice president of Global said: “The Middle East, particularly the GCC, is passing through a vibrant economic diversification process and we believe branded serviced apartments are an as yet untapped asset class for high investment returns. The entry of Fraser and our partnership with the leading serviced residence brand will create yet another investment opportunity for regional investors. Thanks to the surging economic growth fuelled by various factors including high liquidity in the market, the GCC offers one of the best opportunities worldwide in branded serviced residences. The sector represents a highly profitable investment opportunity for investors who are looking for a branded product which provides key international brand recognition, dedicated operators and strong financial results,” El- Quqa said.
Terming the entry of Fraser through the partnership as timely, Blair Hagkull, managing partner of RSP Group said: “The Middle East and specifically the GCC, remains relatively underrepresented in the serviced apartment sector.”