Ayalas firm up deal with Saudi prince
BY JENNEE GRACE U. RUBRICO, Sub-Editor
THE AYALA GROUP yesterday firmed up a joint venture with a firm founded by a billionaire Saudi prince for a $153-million luxury hotel complex in the Makati business district.
The venture between Ayala Land, Inc. (ALI) and Dubai-based Kingdom Hotel Investments (KHI), founded and chaired by Saudi Prince Alwaleed bin Talal bin Abdulaziz Alsaud, would be the most expensive hotel project in the country.
A wire report yesterday said the prince – described as on a 10- day Asian tour – was looking at expanding in the region, and that KHI had a $1-billion war chest for investments. Quoting an interview in The Financial Times, AFP said the prince had described the United States as still obsessed with 9/11 and would not likely allow Arab investments in sensitive areas.
The prince, whose Kingdom Holdings owns big stakes in US companies including Citigroup and News Corp., said he personally has had no problem investing
and operating in the US. But he said KHI, whose portfolio is currently focused on the Middle East and Africa, is looking to expand its Asian holdings.
“There is a double impact in Asia,” the prince told the newspaper. “Countries are growing fast on their own and also benefiting from the spillover effects of China’s
growth.
“KHI has a war chest of US$1 billion and is actively looking to expand in China, South Korea and the Philippines. Asia has huge potential,” he was quoted as saying.
Prince Alwaleed flew in yesterday for what ALI officials said would be signing ceremony for the Makati project, an economic briefing and dinner with President Gloria Macapagal Arroyo.
Flight delays, however, meant a scheduled 5:30 arrival and subsequent briefing by Cabinet officials was not met. Malacañang officials confirmed that dinner
with the prince would push through, but added that a news blackout was imposed on the event for security reasons.
ALI President Jaime I. Ayala told reporters yesterday the planned complex, which would have a 300-room Fairmont Hotel, a 30-suite Raffles hotel and 189 Raffles-branded residences, would rise on a 7,377 square meter lot along Makati Avenue and Pasay Road which is currently being used by Anson’s department
store, Park Square 2, and a public transport terminal.
The project, Mr. Ayala said, was an offshoot of President Gloria Macapagal-Arroyo’s visit to Saudi Arabia last year. During the visit, Mrs. Arroyo and the King of Saudia Arabia discussed investments in the Philippines and the King had asked Prince Alwaleed to look at opportunities, Mr. Ayala said.
The prince talked with the Trade department and consequently contacted Ayala Land, he added.
Mr. Ayala said that Ayala Land was hoping to enter into other partnerships with KHI, but added that his firm does not have exclusive rights to the Dubai firm’s investments in the country.
“But certainly, we’d like to talk to them about other opportunities in other areas,” he said. “By putting something that high end [in the area], the whole
site will be upgraded,” Mr. Ayala said.
He did not detail what the hotels’ rates would be.
Mr. Ayala admitted the complex will have to compete with existing hotels in Makati, including ALI’s own Intercontinental Hotel which was just renovated. But he also said that the price points will likely be different, and added that the other hotels in the area are “old,” the most recent being Makati Shangri-La Hotel
which was built in 1993.
He also claimed that Makati is also experiencing a shortage in hotels, as local and foreign investors, as well as tourists are flocking to the city.
Data from the Tourism department show that as of January, hotels in Makati posted an occupancy rate of 78.45%, above the Metro Manila average of 75.74%.
Mr. Ayala said that the new complex will cater to both the convention and banquets and the leisure markets. The Fairmont Hotel, he said, will have ballrooms, while the Raffles Suites will be built for privacy and exclusivity. Both hotels, Ayala Land said, will also have spas.
The new hotel complex will be placed under KHI-ALI Manila Inc., the joint venture firm that will own the property on which the hotels will stand, and KHIManila
Properties, Inc., the operating company. ALI donated the land, while KHI will shoulder the hotel’s development and operations.
The new complex will form part of ALI’s portfolio of hotels and serviced residences. Besides the Intercon, ALI also owns Cebu Mariott and, until recently, the former Oakwood Premier, which was sold to the Ascott group.
KHI is an international hotel and resort acquisition company that develops first class and luxury hotels in the Middle East and Europe. It has partnerships with
Four Seasons, Movenpick and Fairmont Raffles hotels.
The wire agency AFP, meanwhile reported that Prince Alwaleed had told The Financial Times “The US is still obsessed by 9/11 and sensitivities over security.”
He was quoted as saying the US is unlikely to allow Arab investment into airports, ports and other sensitive areas for several years as a result.
US security concerns over Arab investment gained prominence last year when DP World, controlled by the Dubai government, acquired US operations through a US$6.9-billion acquisition of Peninsular and Oriental, a deal making it one of the world’s largest port operators.
Following fierce congressional opposition to the US part of the deal on security grounds, and despite the backing of President George W. Bush, the Dubai government decided to relinquish DP World’s operations at six US ports.
Mr. Alwaleed told The Financial Times the Dubai ports issue “was unique and that matter is behind us.” — with a report from AFP
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