An announcement by Dubai-based SKAI Holdings, a real estate investment firm, has revealed it’s plans to build a USD 1 billion hotel with more than 200 serviced apartments in Palm Jumeirah.
The new project will be operated by the Viceroy Hotel and Resorts, marking its entry into Dubai after undertaking the Yas Viceroy Abu Dhabi development. The statement points out that SKAI Holdings will own the project, while Zaya Dubai will be the developer. The construction of Viceroy Dubai Palm Jumeirah, located on the base trunk of the Palm, is already underway and is expected to be completed by the last quarter of 2016.
Upon completion, the 481-room hotel will also feature the Viceroy Residences of 221 serviced apartments. Speaking to Gulf News, Kabir Mulchandani, chief executive of Skai Holdings, commented that half of the project would be funded by equity, while debt would be raised to cover other financing requirements. While financing for the project has been obtained, further details about the arrangements would be formally announced next month.
According to William Neill, head of Cluttons in Abu Dhabi; “While the hotel market in Abu Dhabi is crowded, there continues to be a healthy demand for hotel rooms in Dubai. Hotel occupancy rates are running at approximately 85-90 percent and with Dubai International airport experiencing increasing passenger numbers and the growth of the Al Maktoum airport, we expect hotel demand to remain strong moving forward”.
Palm Jumeirah remains an attractive location to build hotels, because of the huge potential offered by Dubai tourism. In particular, the southern side of the Palm’s ‘trunk’ remains undeveloped and is expected to be allotted for residential or hotel development. With about 60,000 keys operational, Dubai has the largest supply of hotel accommodation in the region. Yet, the city was able to achieve the best average occupancy rates of 76 percent during 2012. It also recorded one of the best average daily rate (ADR) performances in the global market.