Friday, August 14, 2009

Foreign investors keen on Dubai hotel properties

Several foreign investors have shown interest in Dubai hotel property sector to grab benefits from opportunities following Ramadan, revealed a senior executive at CBRE Hotels.

The Vice-President at CBRE Hotels, Amine Hamdani, said that although the number of transactions in Dubai is still poor, there is considerable interest among investors in properties located in Dubai.

"Several foreign investors are looking at Dubai with interest," he said.

CBRE has identified about 12 interesting hotel properties in Dubai. Five are operational and others are newly developed. The hotels with more than 120 rooms are worth $60million or more, depending on the location.

Hamdani said investors are looking for income-generating and operational hotels in good locations. Newly developed hotels and those under development are not of much interest to foreign buyers.

There are several opportunities available for cash-rich investors. The hotel investment deals happening in the industry are comparatively very few in number as the region has been dominated by developers and not investors.

Hamdani revealed that according to earlier estimates, 65,000 new hotel rooms are required in the next seven to eight years. But owing to economic crisis, the number of extra rooms in the next five years would be just 22,000, constituting 30.8 percent of the forecast. The market has been hit by adverse conditions in the real estate market, with several mixed-use developments with hotels being stopped or delayed.

On the flip side, during the past four years, the developers have been investing in the hotel industry yields high earnings. In the next four to six years, institutionalisation of hotel industry, coupled with the growth of strong investment market will result in more foreign buyers seeking long-term opportunities. The door will remain shut to a large portion of short-term players, although few will remain, and will have a role in bringing back liquidity, he concluded.

No comments: