Dubai based Jumeirah Group raises US$1.4bn loan to fuel growth plans
Jumeirah Group, the global luxury hotel company and a member of Dubai Holding, announced today that it has successfully raised a US$1.4 billion unsecured syndicated loan priced at 2.75% above LIBOR due 2019.
The facility was lead arranged by Abu Dhabi Commercial Bank, Dubai Islamic Bank, Emirates NBD, HSBC, Mashreq and Standard Chartered. Jumeirah Group was advised by Rothschild on the transaction.
The loan will be used for expansion plans as Jumeirah continues to grow in the years ahead as well as for general corporate purposes, at the parent level, for Dubai Holding Commercial Operations Group.
Jumeirah currently has 22 hotels under management, including 10 in the Middle East, 6 in Europe and 6 in Asia. There are a further 15 under development, including properties in Jordan, China, Indonesia, Thailand and India – with further announcements expected in the coming months.
In an emailed statement to Arabian Gazette, the Jumeirah Group said that the company strategy is to focus its expansion plans in the Middle East and Asia. One of the key projects, which will be funded from part of this loan, is the construction of a 430-room luxury hotel as an expansion to the hugely successful Madinat Jumeirah in Dubai. Construction work on this project is already under way and is expected to be completed in 2015.
As for opting for a syndicated loan, Jumeirah Group said that since it has virtually no debt and represents a strong credit potential, a syndicated loan offered the most cost-effective means of raising debt and generating a more efficient balance sheet.
Gerald Lawless, President and Group Chief Executive Officer, Jumeirah Group said; “The pricing we have been able to achieve for this syndicated loan is a testament to the Company’s financial strength and future prospects. This financing will support our focus on driving profitable revenues from the existing portfolio while giving us the headroom to continue our local and international expansion. This is the first time we have raised funds through a syndicated loan and we are pleased to be supported by the highest calibre of international and local banks.”
Average occupancy has increased by 8% across Jumeirah’s international portfolio of hotels and revenue per available room, which is the industry standard for measuring hotel performance, has grown by 15% in the first nine months of 2013 compared to the same period last year. Jumeirah’s Dubai properties continue to outperform the market; but we are particularly pleased to see spectacular performance from the hotels that have opened in the past 2 years, especially Jumeirah Vittavelli and Jumeirah Dhevanafushi in the Maldives. Jumeirah Port Soller in Mallorca, Jumeirah Frankfurt in Germany, Grosvenor House Apartments by Jumeirah Living in London and Jumeirah at Etihad Towers in Abu Dhabi.
In terms of source markets, i.e. the countries that Jumeirah Group’s guests come from, the biggest growth has been recorded in business from Russia and the CIS, China and Saudi Arabia.