Action Hotels PLC Dubai Healthcare City Development (8035E)
July 21 2016 - 2:00AM
UK Regulatory
TIDMAHCG
RNS Number : 8035E
Action Hotels PLC
21 July 2016
Action Hotels PLC
("Action Hotels", "Action", the "Group" or the "Company")
Action Hotels new four star hotel in Dubai and announcement of
joint venture for Dubai Healthcare City development
Action Hotels, the leading owner, developer and asset manager of
branded three and four-star hotels in the Middle East and
Australia, is pleased to announce that it has agreed a joint
venture for its upcoming property in Dubai Healthcare City (the
"Joint Venture" or "JV") and has partnered with AccorHotels'
Novotel brand for the development and operation of the
property.
The 220-room hotel, which will be named Novotel Dubai Creek,
will be a four star offering in a highly sought-after location in
the centre of Dubai Healthcare City. The area offers mostly luxury
to upscale accommodation, with very few economy to midscale options
available. This will be Action Hotel's first Novotel branded hotel,
which is AccorHotels' upper midscale brand, comprising of over 470
hotels in operations with nearly 90,000 keys and 116 hotels under
development that will bring in an additional 28,000 rooms across 60
countries. It will also be the Company's first property in Dubai
and the 12th collaboration with AccorHotels.
The land on which the hotel will be situated (the "Land") was
acquired directly from Dubai Healthcare City and is currently
jointly owned, on a 50/50 basis, by Action Hotels and H.E. Sheikh
Mubarak A. M. Al Sabah, with the Land previously being held as
investment land in Action's consolidated accounts.
The Joint Venture has been entered into on an equal basis with
H.E. Sheikh Mubarak A. M. Al Sabah. Each party to the JV will
contribute a 50% stake in the JV for approximately US$10.4 million,
giving a total contribution of $20.8 million. Profit, losses and
distributions will be shared equally.
The Joint Venture will acquire the Land, on a freehold basis,
for a total consideration of approximately US$16.0 million. The JV
will borrow US$35.2 million in order to fund development costs,
bringing the total project cost to US$56.0 million.
This development is an addition to the announced pipeline,
bringing the total pipeline rooms to 837 and total portfolio rooms
to 2,869. Construction is expected to begin in Q3 2016, with
completion forecast for Q4 2017. The hotel is expected to become
operational in early 2018. AccorHotels' strong presence in Dubai is
expected to drive considerable marketing and operational
efficiencies for the project.
By reason of H.E. Sheikh Mubarak A. M. Al Sabah being party to
the Joint Venture and a shareholder in Action Hotels, the
participation by Action in the Joint Venture constitutes a related
party transaction under AIM Rule 13 of the AIM Rules for Companies.
The independent directors of the Company, having consulted with the
Company's nominated adviser, Zeus Capital Limited, consider that
the terms of the Joint Venture are fair and reasonable insofar as
its shareholders are concerned.
Olivier Granet, Managing Director & Chief Operating Officer
of AccorHotels Middle East, said: "We are delighted to build upon
our strong partnership with Action Hotels for a new strategic
Novotel in Dubai. Creek Park and the wider Dubai Healthcare City
are emerging as important destinations for leisure, medical tourism
and business travel. We are certain that the Novotel brand is
ideally suited for the needs of all guests looking for reliable
upper midscale accommodation in the heart of Dubai. This marks
AccorHotels' fifth committed Novotel in the Emirate and its 31st in
the Middle East."
Alain Debare, Chief Executive Officer of Action Hotels stated,
"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."
For more information contact:
Action Hotels PLC Tel: +44 (0)20 7907 9663
------------------------------ -------------------------
Alain Debare, Chief Executive
Officer
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Katie Shelton, Director
of Corporate Affairs
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Zeus Capital Ltd (NOMAD
& Broker)
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Dan Bate/Jonny Sharp Tel: +44 (0)16 1831 1512
Adam Pollock Tel: +44 (0)20 3829 5000
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Camarco (Press enquiries) Tel: +44 (0)20 3757 4980
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Billy Clegg/ Jennifer Renwick/
Tom Huddart
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Notes to Editors
Action Hotels PLC
Action Hotels is a leading owner, developer and asset manager of
branded three and four star hotels in the Middle East and
Australia. Established in 2005, Action Hotels currently operates
eleven hotels with 2, 032 rooms in aggregate across the Middle East
and Australia, with further properties in development in both
regions.
More information is available at
http://www.actionhotels.com/
This information is provided by RNS
The company news service from the London Stock Exchange
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