UAE, Qatar investors in race to buy Ritz Carlton

Abu Dhabi and Qatar investors are among the few who have submitted bids for Union Properties' Ritz Carlton Hotel in the Dubai International Financial Centre, but the deal has not been concluded, company Chairman told Emirates Business.

"The bids have been submitted and negotiations are on to reach the target price. There are a number of issues that need to be sorted out even as investors face funding issues," Khalid bin Kalban said in a telephone interview.

The developer has set a target price of Dh1.5 billion for the hotel.

The Ritz Carlton hotel will have 341 guestrooms, including two suites, 124 serviced apartments, a signature Thai fine-dining restaurant, a French brasserie, a steakhouse and a lobby lounge.

Asked if the handover of Index and Limestone House had been pushed forward, Kalban said that units were ready in the Index tower and investors had access to their units, while company was deciding on the opening of the Limestone House.

"We are holding internal discussions on whether to open the entire building at one go or just do a soft launch. The building is complete and it is only the operational issue that we are discussing now."

On the issue of F1-X theme park, Kalban said Ernst & Young has been mandated to search for partners and funding options for the $460 million (Dh1.68 billion) theme park.

"They have been told to find a partner for the project and even search for opportunities where the concept can be exported."

Kalban told Bloomberg that the developer plans to dispose of other assets after the company "got distracted" during the property boom and took on projects and businesses that were a poor fit.

The company "got involved in so many businesses that were not core," he said.

The developer said earlier it has sold a building in the Umm Suqeim for more than Dh140 million to supermarket operator Spinneys.

Kalban said he expects to collect about half of that amount from property buyers in 2010 and 2011 after renegotiating repayment terms with defaulters. The developer has about Dh1 billion of liabilities due this year. Earlier this month, this newspaper reported the developer had started to execute repossession orders against defaulting investors in the MotorCity project.

The $950m MotorCity development covers an area of 38 million square feet and includes five components – Dubai Autodrome, F1 Theme Park, Business Park MotorCity, Uptown MotorCity and Green Community MotorCity.

Although the company has plans to sell stake in Emirates District Cooling (Emicool) and Electro-Mechanical Contracting (Thermo), buyers haven't been able to generate funds from the market, Kalban said. "All our old assets are on the block and we are willing to sell them if we get a good price."

Kalban said the company will be able to settle around Dh600m of liabilities against halted projects. Contractors are owed no more than Dh200m, he added.

The company, which last year reported a loss of Dh498m, is counting on the tourism industry to help it weather the crisis.

Union Properties plans to create a legal entity to better manage and grow its hospitality business.

It owns five hotels in Dubai, including the Courtyard Marriot, Marriot Executive Apartments and the Renaissance Hotel.

"There is a jam in the system and money isn't circulating," the chairman told Bloomberg.

Shares of Union Properties closed up 0.55 per cent at Dh0.368 on the Dubai Financial Market yesterday. (With inputs from newswire)