New JV Plans $870M Hotel Complex in Dubai
- May 01, 2017
The Dubai Government’s Tourism Vision 2020, an initiative designed to attract 20 million annual visitors to the U.A.E. city by 2020, has inspired Schon Properties and Al Hamad Group to establish a new joint venture for the development of iSuites, an $870 million project featuring a 2,550-key hotel.
The number of keys planned for iSuites may seem extravagant, but in the Dubai hotel market today, it’s all relative. Nashat Sahawneh, chairman of Al Hamad Contracting, a subsidiary of Al Hamad Group, said in a prepared statement that the project, “will help support the Dubai Government’s vision to create 140,000 hotel rooms for tourists and visitors to the emirate.” As of the close of 2016, the city’s hotel stock totaled 78,500 rooms, per a JLL report.
iSuites starts off with three key advantages: location, location, location. Schon and Al Hamad will erect the 2.6 million-square-foot development next to Al Maktoum International Airport, which, upon completion of its $30-plus billion expansion, will hold the title of the largest airport in the world. The partners’ goal is to help fill the void of 4-star accommodations in the area, but iSuites will offer more than upscale hotel apartments. Part of a mixed-use development surrounded by a man-made beach and lagoon, the 21-building complex will also feature the 125,000-square-foot Laguna Centrale Mall shopping center, as well as 52 restaurants and cafés.
Schon and Al Hamad have tapped Dubai Civil Engineering to spearhead construction of iSuites, which is on track to come online in its entirety in the second quarter of 2020, just in time for the Dubai Expo 2020. iSuites will have to share the spotlight, of course, as a bevy of developers are presently prepping hospitality projects in the city. Dubai-based holding company Meraas is a major player, having recently announced plans for Re Vera Bluewaters Resort and Vivus Bluewaters, which will provide a total of 479 guestrooms and 215 serviced apartments as part of the company’s launch of four new hotel brands. And then there’s Meraas’s 20 million-square-foot Dubai Harbour luxury waterfront development, which will feature a few lodging properties, including a luxury hotel to be housed in the 443-foot-tall Dubai Harbour Lighthouse.
Timing is everything. Presently, the Dubai hotel market may not be firing on all cylinders—new deliveries coupled with a weak Euro and British Pound resulted in a decrease in RevPAR and ADR in 2016, and caused occupancy to remain flat at 77 percent, per the JLL report—but it appears the city can be positioned to provide the requisite amount of demand to meet the planned onslaught of new supply. As noted in the report, “Key factors to drive demand growth will be an increase in leisure offering, stronger efforts of the Department of Tourism and Commerce Marketing to promote Dubai to growing markets such as eastern Asia and more new direct routes to Dubai International Airport.”
Rendering courtesy of Schon Properties