KHI acquires US$58 mln hotel in China


Kingdom Hotel Investments ("KHI"), the leading international hotel and resort investment company focused on high growth emerging markets and chaired by HRH Prince Alwaleed Bin Talal is pleased to announce the acquisition of a 100% stake in an existing hotel in Kunshan, China. KHI has agreed to purchase the property for approximately US$58 million. This is KHI's first acquisition in China and is in line with its investment and diversification strategy.

The 387-room hotel was opened in October 2005 and is the leading hotel in Kunshan, a fast growing economic and industrial hub near Shanghai, situated in the Yangtze River Delta, one of China's fastest growing regions.

The purchase raises KHI's global hotel ownership to 34 properties in 17 countries including 20 operational hotels and resorts and 14 under construction.

By expanding in Asia, KHI seeks to diversify and balance its portfolio of assets. In the last 12 months, it has expanded into Thailand, Vietnam, Malaysia and the Philippines. Listed on the Dubai and London stock exchanges, the Dubai-based hotel and resort acquisition and development company focuses on first-class and luxury markets in the Middle East, Asia, Africa and Europe.

HRH Prince Alwaleed Bin Talal, Chairman of KHI, said, "China is the world's fastest growing economy and with the number of business and leisure travelers to the Yangtze River Delta continuing to increase, we will be well positioned to capitalise on the region's economic growth."

According to a report presented to the Dubai stock market, "Softer than expected market conditions have also affected the trading performance of KHI's operating assets in the Red Sea and Mauritius."

Earnings for 2006 were "lower than previously anticipated", KHI said.

Now, Asia is a target for the company's expansion plans.

The first investments were made in 2006 in Phuket and Phangnga. These included the 100% purchase of the former Karon Beach Hotel in Phuket for $98.5 million, which was converted to Movenpick Karon Beach Resort, and the purchase of land in Phangnga where KHI plans spend US$115 million on a first class Resort and Residences. This year, three more Asean countries have attracted KHI's interest.

Last January, KHI acquired a beach site to develop a luxury Raffles resort and residences in Da Nang, Vietnam. To be built for an estimated US$65 million, the resort will be KHI's first hotel in Vietnam. In March, KHI acquired the 91-suite Four Seasons Hotel in Langkawi for US$114.2 million. The project should cost US$35 million and finish before 2009.

The latest acquisition was last March with the purchase of 7,377 square metres of prime freehold land in Manila's central business district for the development of two hotels and residences.

In early April, Prince Alwaleed visited Jakarta and Bali, and met with Indonesian President Susilo Bambang Yudhoyono to discuss further investment prospects. Alwaleed's investments in Indonesia include Citigroup, three Four Seasons hotels and two Raffles hotels.