Nakheel Hotels plans to launch shareholding fund

Dubai-based hospitality management firm Nakheel Hotels has no immediate plans to go public but it may eventually consider establishing a shareholding fund from its collective assets, a senior executive said.

“In terms of an IPO, there is nothing planned at the moment. What we’re likely to do is to bundle up our investments and create a shareholding fund, such as a real estate investment trust (Reit), which we will manage,” Joe Sita, Chief Executive of Nakheel Hotels (pictured above), told Emirates Business in a telephone interview today.

A Reit is a trust fund that is used to own and manage a real estate portfolio and can be listed on bourses.

Sita’s statement came a few days after Nakheel announced it will raise a Dh2.8 billion Reit. The chief executive did not provide a timetable or details about Nakheel Hotels’ Reit plan.

Nakheel Hotels, which was formed by its parent company Dubai World in November 2007 by merging the investment and management firm Istithmar Hotels with property developer Nakheel, has a portfolio of global luxury properties worth more than $3 billion (Dh11bn).

Sita said the company is continuously eyeing the acquisition and management of luxury hotel properties across the world. “With our partner Kerzner International, we’re trying to get a significant stake in high-end resorts in Asia, Africa and North America in the next few months. We’re anticipating a number of projects this year,” he said.

“North America is still the biggest consumer market in the world. As a long-term investment option, you can’t ignore it,” he said. Nakheel Hotels has four properties in North America. Sita said the firm is expecting an estimated $300 million to $350m annual revenue from the region.

The company’s projects include The Trump International Hotel and Tower, which is under development on The Palm Jumeirah, while the group has acquired several luxury hotels in the US, including Mandarin Oriental, W Union Square and Hotel Washington.

QE2 Enterprises, which has acquired the QE2, is also part of Nakheel Hotels.