Two of Dubai’s best-known businesses – the investment bank Shuaa Capital and hotel and leisure chain Jumeirah Group – have teamed up to exploit opportunities in Saudi Arabia’s hospitality industry.
The companies have signed a Memorandum of Understanding to form a strategic relationship in the Saudi hotels business to develop projects under the Jumeirah brand.
Shuaa has been closely involved in hotel project finance in the kingdom, helping to fund developments in Jeddah, Riyadh and Dammam, via its 535 million Saudi riyal (Dh523.9m) Sharia-compliant Saudi Hospitality Fund 1.
Jumeirah has long harboured ambitions to break into the Saudi market, and has conducted a painstaking search for the best local partners. It is believed its first project there could soon be announced.
Under the MoU Shuaa could assist Jumeirah with funding for land purchase and project development.
“Saudi Arabia is of prime importance to us and each year we are delighted to welcome so many guests from the kingdom to our existing portfolio of hotels in Dubai and worldwide,” said Gerald Lawless, president and group chief executive of Jumeirah. “We now seek expansion for our hotels, both Jumeirah ‘Stay Different’ and our new lifestyle hospitality brand Venu in Saudi Arabia and this MoU with Shuaa further enables us to explore opportunities to bring our unique brands and experiences to the kingdom.
“Shuaa has a strong performance for hospitality development in this market, and we look forward to progressing our relationship with them, and to working closely with their expert team, as we continue our expansion in the GCC region.”
Omar Al Jaroudi, chief executive of Shuaa in the kingdom, said: “Shuaa is proud to announce this strategic business relationship with Jumeirah, a leading international hospitality company with an outstanding portfolio in Europe, the Middle East and Asia.
“This relationship represents not only the affirmation of our company’s in-depth knowledge and positive outlook towards the Saudi market, but also our established record of accomplishments in hospitality-related investments in different parts of the kingdom. We are optimistic that this MoU with Jumeirah Group will lead to greater commercial opportunities for the benefit of both companies and our investors.”
Shuaa earlier this month reported a net loss of Dh28.6m for the third quarter compared with a profit of Dh26.2m last year as it increased provisions for loans given out to SMEs amid weakening economic sentiment in the UAE.
Jumeirah Group meanwhile is currently holding a roadshow in the GCC along with the Dubai Department of Tourism and Commerce Marketing. The roadshow, which ends tomorrow, started on Sunday in Jeddah, followed by Riyadh, Kuwait and Doha.
Jumeirah currently operates 23 hotels in Europe, the Middle East and Asia, and has a further 25 Jumeirah and Venu properties in the development pipeline. The portfolio comprises nearly 6,000 luxury rooms, suites and residences and its core offering is complemented by international restaurant, spa and related businesses.
With properties already under management in Abu Dhabi, Dubai, Bodrum, Istanbul, Kuwait, London, the Maldives, Rome, Shanghai, Baku and Mallorca, the group has ambitious expansion plans, with an aspiration to operate up to 100 hotels worldwide by 2020.
Jumeirah is part of the government-owned Dubai Holding conglomerate, which is also the largest shareholder in Shuaa with a 48.4 per cent stake.
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