Saudi Prince inks B4.3bn resort deal

PHANG NGA: Kingdom Hotel Investments (KHI), which is chaired by Saudi Arabia’s Prince Alwaleed Bin Talal Bin Abdul Aziz Al-Saud, has signed a deal to acquire land on which it proposes to build a US$115 million (about 4.3 billion baht) “Raffles Phang Nga Resort and Residences”, comprising 150 rooms and 25 luxury villas.

The deal was made through a joint-venture company that is 80% owned by KHI and 20% by European Hotels Corporation Ltd (EHC), KHI’s joint venture partner in the Four Seasons Hotel in Marrakech.

The acquisition is KHI’s second in Thailand this year. In May, the Crowne Plaza Karon Beach Phuket resort was bought by KHI for US$98.5 million (3.7 billion baht), including US$30.5 million (1.1 billion baht) in debt.

Tim Hansing, Senior Vice President for Development, Kingdom Hotel Investments (KHI), told the Gazette, “The deal is definitely still going through. We signed the deal on the evening of the coup. We heard about it, and we took the decision to also announce it [the deal] the very next day, in line with our policy.

“We are very confident that the [government] transition process will be smooth. The tourism offer in Thailand has not changed. It still has wonderful beaches, wonderful people.

“We’ve invested into a 100-million-dollar project in the Movenpick Karon Beach Hotel earlier this year, and we are very confident about this project in Phang Nga, the Raffles Resort.

“We’re an emerging markets company. Our eyes are open. We have full confidence that tourism will continue to grow in Thailand.”

The Raffles Phang Nga Resort and Residences is proposed to start operations in 2009 on some 240,000 square meters (150 rai) of land, approximately a 35-minutes drive north of Phuket International Airport.

The project is expected to boast an 80,000sqm freshwater lake and 400 meters of beachfront.

Residential villas will be offered for sale during the development period on a long-term leasehold basis. The sales proceeds will be used to partly finance the development, of which KHI states it expects to invest US$12 million for an 80% ownership stake.

KHI will seek debt financing to fund approximately 50% of the total project.