Dubai-based Flora Hospitality has announced Dh750 million expansion plans to build four new hotels across the city over the next two years.
The hospitality group, which currently owns and operates seven hotels and hotel apartment buildings in the emirate, said yesterday that it expected to open the new hotels in Downtown, Al Barsha, Al Garhoud and in the Baniyas district in Deira.
Flora, which aims to attract GCC travellers through its alcohol-free policy, said that the move would increase its total inventory of rooms from about 780 rooms to more than 1,700.
The company said that it would fund the expansion through its own capital from real estate rents in Dubai and profits from trading concerns in the city.
The brand is owned by Pearl Investment, a Dubai-based conglomerate that also owns Ontime Technical Services in Dubai and a general trading division, and is linked with the Kerala-based food trading group Oberon Group.
Flora said that it had started construction of a Dh400m block of serviced apartments in Burj Khalifa Master Community, which it expected to complete in the last quarter of 2016.
Work is also set to start on a Dh150m four-star 186 room hotel in Al Barsha close to Mall of the Emirates, which Flora expects to complete in 2016.
And the company is putting together plans for a Dh200m, 272-room hotel in Al Garhoud close to Dubai International Airport, which is also expected to open in 2016.
A fourth hotel, comprising 90 rooms, aimed at mid-market business travellers, is earmarked to open in the Baniyas district, close to the hotel brand’s seven existing hotels.
The company said that its existing hotel portfolio in Deira, the older part of Dubai, was currently recording occupancy rates of 87 per cent, and it expected rates to improve further following last month’s decision by the Bureau International des Expositions to award Dubai the right to host the 2020 Expo.
“Dubai’s hospitality sector has been recording a strong growth rate and promises continued expansion thanks to the decision to award the city the right to host the Expo 2020,” said V A Hassan, Flora Hospitality’s chief executive and chairman.
Flora, which was established in 2000, opened its first hotel in Kerala in 2010. However, plans announced three years ago by Pearl Investment to invest Dh500m to build 10 more hotels in the Gulf and India – including in the Saudi Arabian cities of Mecca and Medina – have so far failed to come to fruition.
According to Dubai Department of Tourism and Commerce Marketing, in the first nine months of 2013 Dubai received 7.9 million visitors – almost 10 per cent more than the same period the previous year.
It said that the average daily room rate in Dubai stood at Dh589 for hotels and Dh422 for serviced apartments over the same period, while the highest number of tourists came from Saudi Arabia, followed by India, the United Kingdom, the United States, Russia, Kuwait, Germany, Oman, China and Iran.
Dubai expects to increase its number of tourists to 20 million by the World Expo year 2020.
lbarnard@thenational.ae
In numbers: PKK’s money network in Europe
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Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
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Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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UNpaid bills:
Countries with largest unpaid bill for UN budget in 2019
USA – $1.055 billion
Brazil – $143 million
Argentina – $52 million
Mexico – $36 million
Iran – $27 million
Israel – $18 million
Venezuela – $17 million
Korea – $10 million
Countries with largest unpaid bill for UN peacekeeping operations in 2019
USA – $2.38 billion
Brazil – $287 million
Spain – $110 million
France – $103 million
Ukraine – $100 million
UAE currency: the story behind the money in your pockets