Dubai’s Shangri-La hotel has traded hands as the United Arab Emirates’ real estate market remains on shaky ground amid ongoing conflicts in the region.
AHS Properties acquired the five-star hotel for $300 million from Mismak Asset Management, the Wall Street Journal reported. AHS’ deal will be financed by bank debt against the development as well as AHS Properties’ equity, according to the Dubai-based luxury real estate developer.
The Shangri-La rises 43 stories above Sheikh Zayed Road, one of the busiest real estate corridors in the Emirati city. The property joins AHS’ portfolio as a flagship asset among its other high-rise holdings in the area, like AHS Tower and AHS City.
For now, operations at the Shangri-La will continue unchanged, but AHS is considering some long-term plans for the property, founder Abbas Sajwani told the Journal.
Dubai’s real estate sector recorded $68.6 billion in transactions in the first quarter of this year, an annual increase bolstered by a 26 percent rise in foreign investment.
When the United States and Israel began their military campaign against Iran early this year, some industry observers worried that the hostilities would upend the emirate’s white-hot property market.
In the aftermath of the bombing in February, shares in Dubai and Abu Dhabi developers fell sharply, with shares in Aldar Properties, Abu Dhabi’s largest listed developer, and Emaar Properties, the firm behind downtown Dubai and the Burj Khalifa, both dropping 5 percent. Major developers’ bond prices also fell significantly.
“Investors are not thinking at this stage of investing in the region,” an unnamed senior real estate banker told Reuters, noting that the risk tied to U.A.E. properties has become “much higher.”
Sajwani shrugged off any concerns, reiterating AHS’ acquisition of the Shangri-La as a “statement of [AHS’] long-term confidence in Dubai.”
The AHS head said he believes tourism levels will return to normal within 30 to 60 days of the conflict coming to an end.
— Chris Malone Méndez
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