Emaar closes $204m deal to sell hotel

Emaar closes $204m deal to sell hotel
Emaar reported a 48 percent decline in net profit during the first nine months of 2020. (Reuters)
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Updated 06 January 2021

Emaar closes $204m deal to sell hotel

Emaar closes $204m deal to sell hotel
  • Decision to sell the hotel in line with Emaar strategy to dispose of light assets in the hospitality sector

Emirati Emaar Properties announced the sale of its subsidiary ASV, the owner of the Sky View Hotel, to Evergreen Hospitality Ltd. for AED 750 million ($204 million).

In a disclosure to the Dubai Financial Market, Emaar said that the decision to sell the hotel, which consists of 160 rooms, is in line with its strategy to dispose of light assets in the hospitality sector.

The value of the deal constitutes about 1.4 percent of Emaar’s net assets at the end of 2020, with the sale expected to raise assets by AED 50 million in the fourth quarter of 2020.

Under the deal, Emaar Properties will retain ownership of the Sky Bridge restaurant. The Hotel Management Company has entered into an agreement to manage the hotel.

Emaar said that it concluded the sale deal on Oct. 8 and received its value at the end of the year. Ownership of the subsidiary that owns the hotel has been transferred to the buyer, but the transfer of the stakes in the company that owns the hotel operations has not yet been completed and is expected to be closed on Jan. 15.

Emaar, listed on the Dubai Financial Market, had announced a 72 percent decrease in net profit by the end of the third quarter of 2020 to reach AED 429.4 million, compared with AED 1.539 billion in the same period in 2019.

The company lost about 33 percent of its revenues, which reached AED 4.341 billion, compared with AED 6.444 billion in the third quarter of last year.

Emaar revealed a 48 percent decline in net profit during the first nine months of 2020 to reach AED 2.4 billion, compared with AED 4.6 billion for the same period last year.

However, Mohamed Alabbar, CEO of Emaar, said that he is “optimistic” about the remainder of 2020 and confident that most sectors will see an improvement by the summer of 2021.


Saudi startups raise $76m in the first 3 months of 2021

Saudi startups raise $76m in the first 3 months of 2021
Updated 32 min 55 sec ago

Saudi startups raise $76m in the first 3 months of 2021

Saudi startups raise $76m in the first 3 months of 2021
  • Entrepreneurship platform Wamda says figure is a 137.5 percent increase on previous quarter
  • Nearly $400 million raised from 125 deals in the Middle East and North Africa

JEDDAH: Saudi startups raised $76 million in the first quarter of 2021, a 137.5 percent increase on the previous quarter’s fundraising total of $32 million.

Entrepreneurship platform Wamda said that $396 million was raised from 125 deals in the Middle East and North Africa in the first quarter of 2021. 

The UAE was the biggest market with 38 deals worth $256 million, while Egypt had 34 deals worth $22 million, and Saudi Arabia had 28 deals worth $76 million.

March boasted 43 deals worth $170 million, with agritech posting as the biggest sector with $50 million, followed by logistics ($37.5 million), food tech ($30.2 million), fintech ($26.5 million), mobility (10 million), and e-commerce ($8 million).

In the Kingdom, the number and value of deals increased dramatically quarter-on-quarter, rising 137 percent from the 13 deals worth $32 million reported in the fourth quarter of 2020.

Triska Hamid, editorial director of Wamda said: “The government’s push towards entrepreneurship is evident in the number of startups that have emerged in Saudi Arabia over the past few years. We are seeing more deal flow in the country and larger ticket sizes.”

Last year, Saudi Arabia recorded a 35 percent year-on-year increase in the number of investment deals in the technology startup sector. A study by data research platform Magnitt found that the Kingdom accounted for 18 percent of the 496 investment deals across the Middle East and North Africa last year.

Amal Dokhan, one of the Kingdom’s first female venture capitalists (VCs) and a partner at Californian venture capital firm 500 Startups, is confident that the Saudi market will continue to grow in 2021.

“What we are seeing now in 2021, the numbers will definitely increase when it comes to Saudi Arabia and the region as well. The reason is that last year, when it was not expected for things to increase, they actually turned out to be a positive year for many companies and startups, especially in fintech,” Dokhan told Arab News.

“The year has started with a positive sign for startups and VCs. Lots of international investors are looking into the Saudi market, so lots of prosperity I think is coming on this year and we are going to witness a good number of the deals as well,” she added.

In March, the Royal Commission for Jubail and Yanbu and Wa’ed, Saudi Aramco’s entrepreneurship arm, signed a memorandum of understanding to promote the growth of new startups and small and medium-sized enterprises in Saudi Arabia’s two largest industrial cities.

“The Saudi startup ecosystem remains strong in spite of — and because of — the challenges posed by COVID-19,” Wassim Basrawi, managing director of Wa’ed, told Arab News, adding: “Wa’ed announced major VC investments in the first quarter in five exciting, disruptive Saudi startups. Our Q2 pipeline is filling up quickly and we will soon be announcing new deals.”


IMF: Vaccine inequity threatens Mideast’s economic recovery

IMF: Vaccine inequity threatens Mideast’s economic recovery
Updated 11 April 2021

IMF: Vaccine inequity threatens Mideast’s economic recovery

IMF: Vaccine inequity threatens Mideast’s economic recovery
  • IMF expects economic growth to reach 4 percent for the Middle East this year
  • Outlook bleaker for developing countries says IMF

DUBAI: Middle East economies are recovering from the coronavirus pandemic faster than anticipated, largely due to the acceleration of mass inoculation campaigns and an increase in oil prices. But the International Monetary Fund warned Sunday that an uneven vaccine distribution would derail the region’s rebound, as the prospects of rich and poor countries diverge.
In its latest report, the IMF again revised upward its 2020 economic outlook for the Mideast and North Africa, now outlining just a 3.4 percent contraction last year, with growth for the region’s oil exporters buoyed by a boom for commodities and rise in oil price, which hit $67 a barrel in March. Even with an expected dip to $57 a barrel by the end of 2021, the surge from last year’s all-time lows is boosting the oil-rich nations of the Gulf, such as the United Arab Emirates and Saudi Arabia, which also have moved swiftly toward widespread vaccination.
But elsewhere in the region, from Yemen and Sudan to Libya and Lebanon, where inflation soars, instability prevails and wars have left lasting scars, the damaging effects of the pandemic will drag on and cause economic harm, the IMF said — possibly for years to come.
“We are a year into the crisis and recovery is back, but it is a divergent recovery,” Jihad Azour, director of the Middle East and Central Asia department at the IMF, told The Associated Press. “We are at turning point. ... Vaccination policy is economic policy.”
The IMF expects economic growth to reach 4 percent for the Middle East this year. But that rosy outlook papers over the region’s deep economic divides.
For oil-rich economies, yawning deficits are expected to halve this year as revenues climb, more arms get jabbed and lockdown measures recede, said Azour. Thanks to strong government management of the virus’ successive waves and the jolt in oil prices, Saudi Arabia’s economy will expand 2.9 percent — compared to last year’s contraction of 4.1 percent. Higher oil prices come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies keep a lid on production and it seems unlikely that the US will quickly lift sanctions on Iran’s critical oil sector.
The IMF expects the UAE’s economy to grow this year by 3.2 percent, with Dubai’s World Expo, now rescheduled for October 2021, key to the nation’s recovery. Dubai hopes the massive event will draw 25 million visitors and a series of deals, heralding a bright post-pandemic future.
The UAE has launched among the world’s fastest inoculation campaigns, with over 90 doses administered per 100 residents as of this week. Still, the collapse of hospitality, tourism and retail presents challenges for Dubai, where a cascade of layoffs hit foreign workers and slashed the emirate’s population by 8.4 percent, according to ratings agency S&P Global.
The outlook is bleaker for fragile and developing economies, many with lagging vaccination campaigns, few resources for fiscal stimulus and revenues drawn heavily from sectors like tourism that have been slowest to recover from the pandemic.
Whereas rich countries plan to vaccinate most of their population in a few months, swaths of the region — from Afghanistan and Gaza to Iraq and Iran — likely won’t inoculate a significant portion of their populations until mid-2022, the IMF said.
Even that estimate may be optimistic. The region’s lowest-income countries could end up waiting until 2023 at the earliest for mass vaccination, according to the report. Meanwhile, many countries’ beleaguered health systems are straining under resurgent waves of infections, prompting authorities to impose new restrictions and inflict more economic pain.
The IMF expects a sluggish 2021 recovery for Egypt and Pakistan, oil importers reliant on tourism that saw an exodus of foreign investors last year. The fund revised down its growth estimate for Jordan, where the youth unemployment rate has skyrocketed to 55 percent. Sudan remains mired in debt and threatened by instability, but its economy could grow for the first time in years as it gains new access to international financial networks.
Lebanon, in the midst of its worst financial crisis ever, remains the only Mideast economy at risk of further contraction. The country has defaulted on its foreign debt and failed to implement economic reforms, let alone form a government. A giant explosion at the Beirut port last year wreaked havoc on the capital. Discussions with the IMF led nowhere after the Cabinet quit.
Azour declined to even offer a specific economic forecast for Lebanon this year, citing “all the uncertainties.”
In Iran, the IMF found reason to praise economic growth after years of decline, noting that the government’s resistance to virus-induced lockdowns that would have devastated its sanctions-hit economy had saved it from the worst of the pandemic’s fallout. The country’s economy is expected to grow 2.5 percent in 2021, Azour said, building on slight gains last year.
But Iran’s recovery remains far off as its vaccinations lag, inflation eliminates people’s savings and economic policies overlook the most vulnerable. The IMF continues to consider Iran’s $5 billion assistance request, which would be its first loan since 1962. Meanwhile, American sanctions remain in force as torturous discussions begin over a return to Tehran’s tattered 2015 nuclear deal with world powers.
“A removal of the recently implemented sanctions will of course allow the Iranian economy to export more, trade more, and this will have a positive impact,” said Azour, while urging the government to tame inflation and better incorporate the private sector.
Despite the worsening inequality, the pandemic has shown the fortunes of the Mideast’s richest and poorest countries to be increasingly intertwined. Surging infections and foundering inoculation anywhere in the region could spread new variants that threaten overall economic and public health, the IMF reported.
“Therefore, any regional cooperation would be welcome going forward,” said Azour.


Qatar National Bank net profit falls 7% as provisions climb

Qatar National Bank net profit falls 7% as provisions climb
Updated 11 April 2021

Qatar National Bank net profit falls 7% as provisions climb

Qatar National Bank net profit falls 7% as provisions climb
  • Total assets grow by 8%
  • Bad loans ration increases

DUBAI: Qatar National Bank (QNB) , the biggest lender in the Gulf, said on Sunday its first quarter net profit fell by 7 percent from a year earlier to 3.3 billion riyals ($906 million) as it booked 1.4 billion riyals in "precautionary" loan loss provisions.
The bank's total assets grew by 8 percent from a year earlier to 1.042 trillion riyals at the end of March, the bank said in a statement. That growth was mainly due to a 2 percent increase in loans advances to 721 billion riyals.
QNB's ratio of non-performing loans rose to 2.2 percent at the end of the quarter from 1.9 percent at the end of March 2020.
It said its loan to deposit ratio of 96.1 percent was "healthy" and complemented by conservative credit underwriting in the first quarter.
"In addition, QNB Group continued its drive for cost rationalization in addition to sustainable revenue generating sources. This helped QNB Group to improve the efficiency (cost to income) ratio to 23.4 percent, which is considered one of the best ratios among the large financial institutions in the MEA region," it said.
The cost to income ratio improved from 25.6 percent in the first quarter of 2020 and 24.3 percent in the fourth quarter.
The loan loss provisions were "a precautionary measure taking into account the long-term view of the financial impacts of the COVID-19 pandemic," said QNB, which according to its website is 50 percent owned by Qatar's sovereign wealth fund, the Qatar Investment Authority.
Provisions rose from 972.8 million riyals in the first quarter of last year.
QNB's capital adequacy ratio was at 19 percent in the first quarter from 18.4 percent a year earlier.


Bahrain’s Arcapita buys FedEx distribution center in Texas

Bahrain’s Arcapita buys FedEx distribution center in Texas
Updated 11 April 2021

Bahrain’s Arcapita buys FedEx distribution center in Texas

Bahrain’s Arcapita buys FedEx distribution center in Texas
  • Martin Tan, CEO of Arcapita, said the latest acquisition was part of the company’s investment in the fast-growing e-commerce sector

DUBAI: Bahrain-based investment firm Arcapita Group Holdings on Sunday announced it had bought a Texan distribution facility used by FedEx, bringing the total value of its US industrial real estate portfolio to over $200 million.

The latest acquisition of the Cedardale Distribution Center in Dallas brings to 16 the number of industrial facilities it has bought in Cleveland, Ohio and Indianapolis, Indiana.

The center was built in 2018 and is located in Dallas-Fort Worth, America’s fourth-largest metropolitan area, with a population of over 7.5 million people. It serves as a vital cog in FedEx’s distribution network in the southern US.

“The logistics sector is a key focus area for Arcapita. We have recently completed several acquisitions in the sector and as part of our broader strategy, we are focused on acquiring highly functional properties leased to investment grade tenants on a 10-15-year basis. We look forward to working with our partners to acquire additional assets in the months to come,” Brian Hebb, head of US Real Estate at Arcapita, said in a press statement.

Martin Tan, CEO of Arcapita, said the latest acquisition was part of the company’s investment in the fast-growing e-commerce sector and the necessary supply chain to service it. Arcapita has offices in Atlanta, London and Singapore and an affiliated office in Bahrain. Over the last 24 years, it has recorded over 90 investments with a total transaction value in excess of $30 billion.


Egypt’s hotels had up to 45% occupancy rate in Q1 2021

Egypt’s hotels had up to 45% occupancy rate in Q1 2021
Updated 11 April 2021

Egypt’s hotels had up to 45% occupancy rate in Q1 2021

Egypt’s hotels had up to 45% occupancy rate in Q1 2021
  • Tourism accounts for up to 15 percent of Egypt’s national output, and is a key source of foreign currency
  • The industry revenues plunged 70 percent in 2020 due to the coronavirus pandemic

CAIRO: The occupancy rate of Egypt’s hotels, which are running at half capacity due to COVID-19 regulations, was between 40 percent and 45 percent in the first quarter, an official from the tourism ministry told Reuters on Sunday.
This amounts to an occupancy rate of nearly 25 percent if hotels were running at full capacity, according to Reuters calculations.
Tourism accounts for up to 15 percent of Egypt’s national output, and is a key source of foreign currency. The industry revenues plunged 70 percent in 2020 due to the coronavirus pandemic, with numbers of visitors sinking to 3.5 million from 13.1 million in 2019.
Egypt received 500,000 tourists in the first three months of 2021 and earned tourism revenues of between $600 million and $800 million, deputy tourism minister Ghada Shalabi said earlier this month.
The country shut hotels in March 2020 as part of measures to contain the spread of COVID-19, but reopened them a few months later with a reduced capacity. Hotels currently have capacity capped at 50 percent in line with health regulations.
The hotel occupancy rate was 25 percent in January, then increased to 30 percent in February, before jumping to 45 percent in March, the tourism official told Reuters on condition of anonymity.
Egypt’s Red Sea province saw the highest hotel occupancy in Q1, followed Sharm El-Sheikh in the Southern Sinai province, the official added.