Dubai's biggest property developer is said to be considering sale of some properties to Abu Dhabi National Hotels
Emaar confirms discussion over sale of hotel assets is ongoing
Emaar Properties, Dubai's biggest listed developer, is in discussions with potential investors for the sale of some of its hotels.
The company will announce relevant details should the discussions materialise in a final transaction, Emaar Properties' general counsel and board secretary Ayman Hamdy said in a note to the Dubai Financial Markets on Thursday.
Emaar’s note comes amid market speculation that Abu Dhabi National Hotels was in talks to buy assets from the Dubai developer.
Emaar was in “advanced discussions” over the past two months regarding potential acquisitions, Reuters reported on Wednesday.
The planned sale of some of Emaar’s hotel assets could help fund a Dh10 billion retail complex at Dubai Creek Harbour as the emirate's biggest developer seeks to become “asset light”, its chairman Mohamed Alabbar said in July.
Emaar Hospitality Group, a unit of the developer, plans to sell non-core assets including its hospitality portfolio except a handful of key valuable assets, to finance business growth and focus on hotel management contracts. Emaar Hospitality owns and manages a portfolio of assets including hotels, golf clubs and restaurants. Its main hotel brands are Address Hotels and Resorts, Vida Hotels and Resorts and Rove Hotels.
The main objective of an asset sale would be to help Emaar have a lighter cost base, Mr Alabbar said at the time.
“The thing is, we should not be holding assets as a hotel operator. Hotel companies don’t own assets – Four Seasons doesn’t own hotels, Hilton doesn’t own hotels, but we own everything and will continue to own the majority," he said.
Emaar, the developer behind the world’s tallest building, the Burj Khalifa, as well as other flagship properties such as the Dubai Mall, entered a strategic Dh30bn partnership with Abu Dhabi's Aldar Properties in March, as they looked to streamline operations in a lukewarm market environment.
While the details of the partnership have yet to be fine tuned, Emaar posted a year-on-year net profit increase of 2 per cent for the second quarter, while Aldar slumped by 28 per cent during the same period.
Net profit for the three months ended June 30 rose to Dh1.48bn for Emaar.