x Abu Dhabi, UAEThursday 27 July 2017

Dubai Group to sell New York landmark Essex House

Jumeirah Essex House hotel in New York is being put up for sale by Dubai Group.

Jumeirah Essex House had been
Jumeirah Essex House had been "an important part" of Dubai Group's property portfolio for the past seven years. Daniel Acker / Bloomberg News

Dubai Group is putting the historic Jumeirah Essex House hotel in New York up for sale.

"We constantly review our portfolio of assets and will pursue asset sales in the right market conditions," said Fadel Al Ali, the acting chief executive of Dubai Group.

"Current global investor demand for world-class hotel assets such as Essex House provides a timely opportunity to capitalise on the repositioning and operational improvements executed by our team."

He said the hotel, located on Central Park South in Manhattan, had been "an important part" of Dubai Group's property portfolio for the past seven years. The 509-room hotel first opened in 1931.

A recent report by the property consultancy Jones Lang LaSalle stated that the volume of hotel transactions in New York reached an all-time high last year, with nearly US$3.5 billion (Dh12.85bn) of assets traded.

"Based on assets in various stages of the disposition process, hotel deal volume in New York City is expected to range from $2.2bn to $2.6bn in 2012, representing approximately 15 per cent of America's total transaction volume," according to the report. "While this pace represents a softening on the record 2011 levels, New York is expected to continue to be the most liquid hotel market in the world."

The move comes as the Dubai investment firm continues to grapple with $10bn of debt.

Dubai Group is part of Dubai Holding, a conglomerate owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. It appointed a creditors' committee in November 2010 to start talks to delay debt repayments. Dubai Group stopped interest payments to creditors in August 2010 to make time to dispose of assets.

However, in November, the group said the euro-zone crisis was hampering its efforts to find buyers.

In December, Dubai Investment Group, a subsidiary of Dubai Group, appointed Silverpeak, an investment adviser, to manage its $1.1bn property portfolio.

Dubai Group owns stakes in financial services companies through various arms of its business, including EFG-Hermes and Borse Dubai, as well as shopping centres and offices in the US, Europe and Asia.

The group declined to comment on any other asset sales it might be considering. Jumeirah Group, a luxury hotel operator that is also part of Dubai Holding, hopes to retain its management of Essex House if it is sold on.

"Jumeirah Group has been informed that the owner of the Essex House has appointed advisers to explore opportunities with regard to this property in New York," said Piers Schreiber, the vice president of corporate communications for Jumeirah Group.