Saudi giant buys Crowne Plaza

KARON: The Crowne Plaza Karon Beach Phuket resort has been bought by Dubai-listed hotel and resort investment company Kingdom Hotel Investments (KHI), which is headed by Saudi Arabia’s Prince Alwaleed Bin Talal Bin Abdul Aziz Al-Saud.

KHI paid US$98.5 million (3.7 billion baht) for the property, including US$30.5 million (1.1 billion baht) in debt.

The Prince was listed by Forbes magazine earlier this year as the world’s eighth-richest man, with an approximate worth of US$20 billion (750 billion baht).

It is the second time the resort has changed hands in just 2½ years. Originally the Karon Villa Resort, built in 1984 by the Vanich family, it was acquired in December 2003 by LaSalle Investment Management of the US and completely refurbished at a cost of US$20 million (750 million baht).

Crowne Plaza, a subsidiary of InterContinental, was brought in to manage the hotel, which made an initial splash by hosting the Nation V event, a three-day party that attracted 2,000 gay people from all over Asia.

An industry source told the Gazette that, with the sale to KHI, the management contract will go to Movenpick.

KHI already owns six Movenpick hotels or resorts, with six more in development. It also owns five Four Seasons Hotels, with three more being developed, and five Fairmonts, with another two to come (KHI owns Fairmont).

Prince Alwaleed at one time owned The Plaza in New York, but sold half his shares in that and reinvested the money in buying the Savoy Hotel in London and the Monte Carlo Grand in Monaco.

Apart from hotels, the Prince also owns 10% of Euro Disney SCA and large investments in AOL, Apple Computer, Worldcom, Motorola, News Corp and other technology and media companies.

In a press release marking the acquisition, KHI’s first in Asia, Prince Alwaleed was quoted as saying, “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 the early reconstruction of the area.”

Sarmad Zok, CEO of KHI, said, “We are delighted by the addition of the Crowne Plaza Phuket to our hotel portfolio, which represents the first opportunity for KHI in Asia. This further demonstrates our ability to consolidate our position in attractive growth emerging markets.”

As for the sellers, Andrew Heithersay, National Director of LaSalle Investment Management, said, “We have achieved our investment objectives on behalf of our LaSalle Asia Recovery Fund and wish Kingdom Hotel Investments continued success in their future endeavors at this beautiful resort.”

Phuket-based Bill Barnett, of hotel consultancy C9 Hotelworks, which was deeply involved in the acquisition of the property by LaSalle, told the Gazette, “There has been substantial acquisition and institutional investment activity on the island in the first quarter of 2006.

“Seeing firms such as Deutsche Bank, Lehmann Brothers, LaSalle Investment Management and now Kingdom Holdings showing confidence in substantial developments on the island is a key economic indicator.

“There are a number of internationally-managed properties currently being built, including big names such as Sofitel, Hyatt and Conrad. Locations such as Bang Yao, Cape Yamu, Mai Khao and Ao Por are receiving the most interest.

“Clearly Phuket is moving forward from the negatives experienced post-tsunami – the proof is in the checkbooks of the overseas investment funds.”