“We are pleased to announce today that our company has concluded a land acquisition on behalf of the Shuaa Saudi Hospitality Fund,” Omar Al-Jaroudi, chief executive officer of Shuaa Capital Saudi Arabia, told reporters in Riyadh.
Al-Jaroudi said it is the first ever land acquisition by a hospitality fund in the Kingdom. He said the property is in a prime location on Jeddah’s Corniche.
“It boasts spectacular views of the Red Sea and offers easy access to the city center,” he said.
The land will be developed into a luxury hotel tower with affiliated serviced hotel apartments, to be managed by Rotana Hotel Management Corporation, the leading hotel management company in the region.
Al-Jaroudi said Jeddah is a strategic investment destination. It has a population of over 3.4 million people and is considered the second commercial capital of the Kingdom.
Average hotel occupancy rates in Jeddah stood at 77 percent in 2009, and the number of travelers to the city increased by 9.2 percent annually between 2004 and 2008, from 14.1 million to 17.6 million visitors.
The Jeddah airport, which serves as the entry point for pilgrims visiting the holy cities of Makkah and Madinah, will be renovated with the aim of handling 30 million passengers by the year 2012.
“The Shuaa Saudi Hospitality Fund is at the core of our private equity platform. The fund provides a unique opportunity to diversify into a Shariah-compliant hospitality and hotel investments — a sector that is otherwise not represented in Islamic investment portfolios. The Kingdom of Saudi Arabia is experiencing a sustained boom in business and leisure travel and the Shuaa Hospitality Fund is in an excellent position to benefit from that,” Al-Jaroudi stressed.
He added that the land acquisition was good news for the fund’s existing investors, for Shuaa Capital Saudi Arabia and for the city of Jeddah. “We are staunch believers in Saudi Arabia and in the prosperous future of the hospitality sector in the Kingdom. Our goal is to start developing the property at the fastest pace possible and to the highest quality standards. We are also committed to contributing to the society by creating job opportunities for Saudi nationals.”
He said the company had plans to build a similar property in Riyadh.
“As the leading regional hotel operator, we have great confidence that the first hotel to be managed by Rotana in Jeddah will be a success,” said Selim El-Zyr, president and chief executive officer of Rotana. He added that the Kingdom was already a key strategic market for Rotana.
“There is a shortage of modern hotels in the Kingdom. Demand for available hotel rooms significantly outstrips supply to the background of a booming travel and tourism industry. Our objective is to develop and manage hotel properties to the best international standards which will cater to the needs of the local and regional market, the international traveler and niche markets.”
