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25 June 2024

Nakheel Hotels buys stake in Palmilla for Dh1.15bn

By Staff Writer


Nakheel Hotels yesterday said it has entered into definitive agreements to acquire a 50 per cent stake of Mexican resort One&Only Palmilla in Los Cabos, based on a total enterprise value of $315 million (Dh1.15 billion).

Nakheel Hotels is acquiring its stake from certain funds affiliated with the Whitehall Street Real Estate Funds, a series of real estate opportunity funds sponsored and managed by Goldman Sachs, while existing joint venture partner Kerzner International will retain its 50 per cent stake.

The resort is a 172-room ultra-luxury ocean front resort managed by Kerzner International under the award-winning One&Only brand. It features a Jack Nicklaus 27-hole championship golf course, a 22,000-square-foot spa featuring 13 spa villas, a 7,000 sq ft executive conference centre, two oceanfront infinity swimming pools, restaurants and a wedding chapel.

One&Only Palmilla is located on the Southern tip of Mexico’s Baja Peninsula and benefits from oceanfront natural beaches, its own private peninsula and close proximity to San Jose del Cabo International Airport.

“One&Only Palmilla represents an important investment for Nakheel Hotels. We are constantly looking for opportunities to add value to our investments. Latin America is very important in the global tourism market and this deal marks our first entry into this lucrative region. We are always seeking to diversify our portfolio and add to our existing investments in North America, Asia and Europe,” said Joe Sita, Chief Executive Officer, Nakheel Hotels.

Sol Kerzner, Chairman and Chief Executive of Kerzner, said: “The resort is at the ultra-luxury end of the market and offers a favourable investment opportunity for Nakheel Hotels. One&Only Palmilla is one of the top resorts in Latin America and has won prestigious accolades, including the Top Scoring Property in the Americas 2008 in Condé Nast Traveller [US] Readers’ Choice Awards. “Kerzner International and Nakheel Hotels have already established an important relationship

“This latest agreement sees us extend our partnership into a new territory and allows us each to capitalise on the investment and management strengths which have served us so well to date.” Kerzner International is a global developer and operator of destination resorts, luxury hotels and gaming properties and owner of the One&Only brand.

The two companies have a close relationship with Nakheel Hotels owning approximately 30 per cent of Kerzner International and a number of existing joint ventures such as Atlantis, The Palm, in Dubai and One&Only, Cape Town.

One&Only Palmilla was originally built in 1956. It has been refurbished and expanded over the years, with the most recent changes made in 2003. Nakheel Hotels was launched in November 2007 as the new name for Istithmar Hotels after Dubai World consolidated its hotel business under one banner to create a fully integrated hotel investment company. The hotels business was originally formed in April 2006 as the hotel investment and asset management business of Istithmar and has, in less than two years, accumulated a global hotel property portfolio.

Nakheel Hotels will continue to pursue its strategy of acquiring luxury hotels in key gateway cities and resorts across North America, Europe and Asia, along with investing in the budget hotels sector in key growth markets, the company said in the statement.
The Dubai-based hospitality management firm also told Emirates Business that it has no immediate plans to go public but it may eventually consider establishing a shareholding fund from its collective assets, a senior executive said.

The numbers

$315m: the total enterprise value of One&Only Palmilla

30%: stake owned by Nakheel Hotels in Kerzner International developer and operator of luxury hotels and gaming properties