Saadiyat Island is set to get another five-star hotel as the capital's cultural district takes shape.
Tourism Development and Investment Company (TDIC), the master-planner of Saadiyat Island, has sold a plot to the hotel owner Bin Otaiba Investment Group as the land market in the capital shows signs of recovery.
Bin Otaiba, which owns a hotels portfolio that includes the Hilton Sharjah, the Millennium Hotel Abu Dhabi, and Embassy Suites Hotel in Sharjah, plans to build a luxury hotel on the 91,000 square metre site.
Bin Otaiba said the hotel would be worth Dh800 million and that construction work would start on site before the end of the year.
The hotel, which is scheduled to open in 2015, will comprise 366 rooms and villas as well as conference facilities, restaurants, a spa and gym and a sand-bottomed swimming pool.
It will be located in the Saadiyat Beach District on the north-west coast of the island, next to the Monte Carlo Beach Club and close to Saadiyat's two existing hotels the St Regis, developed by TDIC, and the Abu Dhabi National Hotels' Park Hyatt.
In April, the Abu Dhabi-based hotel chain Rotana said that its delayed resort in the same area was back on track and was scheduled to open by 2015 when the new Louvre museum opens its doors.
"We are pleased with the high level of interest we continuously receive from reputable global and regional investors keen on becoming part of Saadiyat and its emerging success story," said Ali Al Hammadi, TDIC's deputy managing director.
"This is a promising destination and a great opportunity that suits our business model," said Khalaf bin Ahmad Al Otaiba, the chairman of Bin Otaiba.
TDIC and Bin Otaiba declined to say how much the hotel owner had paid TDIC for the land, but local property brokers speculated that prices would be much lower than in deals struck during the peak of the market in 2008.
"There has been a limited number of land sales in Abu Dhabi over the last few years," said David Dudley, the head of Jones Lang LaSalle's Abu Dhabi office. "As the market is showing initial signs of recovery, we are now starting to see investor appetite appearing again, particularly within master-developments that are government backed and where there has been solid progress on infrastructure and development activity."
According to TDIC's Saadiyat blueprints drawn up in 2007, 29 hotels are planned to be built across the 27 sq kilometre island.
Nine hotels are planned for the beach district, including a 160-room Mandarin Oriental hotel and a 208-room Shangri-La.
The new deal will come as a lift to TDIC, which in May reported that it lost Dh2.1 billion last year - almost double that of 2011. The company, established in 2006, recorded losses of Dh1.15bn in 2010, Dh551m in 2009 and Dh368.6m in 2008.
This year the company has reported a number of deals that could help stem future losses. In June, TDIC sold 285 apartments to a joint venture between the United States-based property investor Pramerica and Mubadala Development, a strategic investment company owned by the Abu Dhabi Government.
In January, it signed a joint venture with Louis Vuitton linked developer L Real Estate to develop a 168,000 sq metre mall. And in April the developer reported that it had found buyers to reserve all 33 of its luxury beachfront villas, which it is selling for between Dh6m and Dh8m.
The company also announced in April that it had released commercial land plots in the Saadiyat Marina District close to the new site of New York University Abu Dhabi.
