21st Jul 2016 09:56
LONDON (Alliance News) - Action Hotels PLC on Thursday said it is partnering with AccorHotels' Novotel brand to develop and operate its joint venture in Dubai with Founder and Non-Executive Chairman Sheikh Mubarak Al Sabah.
Action Hotels, which operates hotels in the Middle East and Australia, bought the property in Dubai Healthcare City on a 50/50 basis with Al Sabah for USD16 million, and will develop it into a 220-room four-star Novotel hotel in collaboration with AccorHotels.
The hotel will be named Novotel Dubai Creek. Dubai Healthcare City is a healthcare free economic zone in Dubai.
Action Hotels and Al Sabah each will pay USD10.4 million into the 50/50 joint venture. An additional USD35.2 million will be borrowed by the joint venture in order to fund development costs, bringing the total project cost to USD56 million.
Al Sabah owns a 66% stake in Action Hotels, meaning Action's participation in the joint venture constitutes a related party transaction under AIM market rules.
Construction is expected to begin in the third quarter of 2016, with completion forecast for the fourth quarter of 2017. The hotel will then be operational in early 2018.
"I am delighted to announce our tenth collaboration with AccorHotels in the Middle East, our first Novotel as well as our first hotel in Dubai. The hotel boasts a fantastic location, and I believe the Novotel brand is the best four-star choice for this property and the local market. We look forward to establishing our first property in Dubai and welcoming guests in the near future," Chief Executive Alain Debare said in a statement.
Shares in Action Hotels were trading up 5.0% at 56.70 pence on Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.