Dubai , Asharq Al-Awsat- Kingdom Hotel Investments (“KHI”), announce it has signed a contract to acquire the Karon Beach Hotel Phuket (currently managed by Crowne Plaza) from LaSalle Investment Management for US$98.5 million including US $ 30.5 million in debt. This is KHI’s first acquisition in Asia and offers a prime freehold location in an area of rebounding tourist demand. KHI will re-brand the Hotel as a Movenpick.
The Resort opened in 1984 as the Karon Villa Resort and was acquired by LaSalle Investment Management in December 2003. The resort was closed during 2004 and most of 2005 and was subject to a significant refurbishment program following which , the resort was re-opened in August 2005. It is now poised to benefit from the recovery of tourist arrivals and room rates in the region as well as the repositioning with the Movenpick Brand.
The hotel is located on the West Coast of Phuket, in the heart of the Karon Beach resort area, one of Thailand’s most popular beach resort destinations. The resort is spread across a lush and exceptionally well landscaped site of 82,688 sqm on Karon Beach. It comprises 352 rooms (including 186 villa-suites with private plunge pools) as well as 30 two-bedroom apartments to be sold leasehold and managed by the hotel. The hotel also holds the second largest ballroom in Phuket, which will help drive year round occupancy by adding bookings from the convention market.
This acquisition, with its large number of suites represents a unique offer in the hotel market and will enable the hotel to achieve higher average rates versus competitors. KHI plans for the new Movenpick hotel include raising additional debt and completing the sale of the 30 apartments (Ancillary real estate) within a period of two years.
HRH Prince Alwaleed Bin Talal, Chairman of KHI said: “This is a rare opportunity to purchase a fully refurbished hotel in a pristine site on Phuket’s most popular West Coast. The hotel will benefit from the recovery of tourist arrivals to the region, and through Movenpick will capture increasing levels of European demand.”
Sarmad Zok, Chief Executive Officer of KHI, said: “We are delighted by the addition of The Hotel in Phuket to our portfolio, which represents continued global diversification into the world’s Emerging Markets. This existing hotel is the first of many investment opportunities for KHI in Asia since the opening of KHI’s Asian offices in Singapore earlier on this year. ”
Andrew Heithersay, National Director of LaSalle Investment Management, said: “We have achieved our investment objective on behalf of our LaSalle Asia Recovery Fund and wish Kingdom Hotel Investments every success in their future endeavours at this beautiful resort.”