UAE’s Sobha Group to invest $1b to set up 2000-room Hotel Chain

(MENAFN – Khaleej Times) Dubai-based property developer Sobha Group said it would diversify into the hospitality sector with a $1 billion investment to build a chain of hotels offering 2,000 rooms in the first phase.

The group plans to develop at least 10 five-star properties, of which six immediately, with two hotels earmarked for Dubai, six for India, and one each in Oman and Zanzibar. The first hotel is expected to open in 2010.

Branded as Sobha Hotels, the hospitality chain expects to be benchmarked against the best resort properties and luxury hotels in the region, P.N.C Menon, Group Chairman, told Khaleej Times.

Menon, an India-born Omani national who has been ranked among Forbes global billionaires, said his group’s hands-on-experience in residential and commercial buildings had given it adequate exposure to build and operate concept of project management. “We think it is the right time to transfer our expertise to the hospitality sector to create a chain of five-star properties.”

The group’s first five-star property flagship hotel and corporate office, involving an investment of $220 million, will be built on a plot of land along Shaikh Zayed Road. Menon, who laid the foundation of his fast growing business in Oman as a contractor for interiors way back in 1970s, said as a sought-after property destination of the world, Dubai would continue to lure international investors. “Despite all the turmoil in global markets, the UAE has a wide pool of global investors, a factor underscoring the country’s market dynamism.”

Welcoming new rules that streamline the property sector, Menon said the measures would help discourage speculations and encourage serious investments.

The Sobha Group, which has Dh3.5 billion worth of projects under way in Dubai and India, also plans to unveil new projects in Dubai worth Dh5.5 billion by the end of this year. This includes a range of residential and commercial properties in premium locations in Dubai.

“We have already acquired sufficient land bank to sustain our growth for next four years.”

The $1 billion group has been recording an annual growth of 15-20 per cent.

Ajay Rajendran, Vice Chairman, Sobha Group, said Sobha Group’s fourth commercial project would come up at the new Downtown Jebel Ali development being planned by Dubai-based master developer Limitless.

“With Sobha having developments already taking shape in Business Bay and Jumeirah Village, it is important for us to have a presence in this landmark development as part of our growing Dubai portfolio,” he added.

Also in the pipeline is a global partnership for infrastructure projects in the Gulf.

Recently, the group acquired Imtac and its subsidiaries owned by Renaissance Services SAOG for approximately $41 million. In India, Sobha is making a foray into retail infrastructure development with a proposal to set up Sobha Global Mall’ in Bangalore.

The complex is to be developed jointly with Davanam Construction Pvt Ltd. The project would consist of a 192-room hotel, an ice-skating rink, a contemporary business tower and a convention centre, said Menon.

Menon said Sobha is the only fully backward integrated real estate developer in the world.

“We have the biggest wood working factory , we also build our own concrete products, tiles etc.” he said.

“The company has set up its woodworking and metal glazing factory in Bangalore. Backward integration gives the company an upper hand in quality, as it enables it to regulate raw materials and also control timely delivery of our projects,” Menon said.

In Dubai, Sobha Group launched its first two Business Bay developments in 2006-07. Sobha’s projects in India are spread across Karnataka, Kerala, Andhra Pradesh, Orissa, Tamil Nadu, Punjab, Haryana and Maharashtra.

It has so far developed large residential projects in Bangalore where it completed and delivered 40 projects with over 5.9 million sq.ft. of built-up area. Currently, 32 projects with over 13.98 million sft. of built-up space are under construction.