star hotel will rise in Jeddah three years from now as a further indication of a healthy travel and tour business in Saudi Arabia. Under the Memorandum of Understanding (MoU) signed Monday by SHUAA Capital Saudi Arabia and Youssef Ismail Youssef, representing the landowner, the 12-story 254-room business hotel, with a built-up area of approximately 13,000 sqm, would have a total cost of around SR160 million. Situated on Madina Road going to downtown and in proximity to the Ruwais area, the construction would begin “6-8 months” from the signing of MoU pending the completion of all the necessary paper works, officials said at a press conference. Jeddah is a strategic business and leisure destination. It has a growing population of over 3.4 million people and is considered the second commercial capital of Saudi Arabia. Average hotel occupancy rates in Jeddah stood at 77 percent in 2009, and the number of travelers to Jeddah International Airport increased by 5.1 percent per annum between 2003 and 2009, from 13.1 million in 2003 to 17.8 million visitors in 2009. King Abdulaziz International Airport, which serves as the entry point for pilgrims visiting the Holy Cities of Makkah and Madina, will be renovated with the aim of handling 30 million passengers by the year 2012. Omar Al Jaroudi, chief executive officer of SHUAA Capital Saudi Arabia, said: “The SHUAA Saudi Hospitality Fund is at the core of our private equity and real estate platform. The Fund provides a unique opportunity to diversify into a Shariah-compliant hospitality and hotel investments - a sector that is otherwise not represented in Islamic investment portfolios. The Kingdom of Saudi Arabia is experiencing a sustained boom in business and leisure travel and the SHUAA Saudi Hospitality Fund is in an excellent position to benefit from that. Jeddah is at the forefront of this boom, and SHUAA Capital has demonstrated its commitment to the city through the development of two hospitality projects and the recent opening of the Jeddah branch of the company.” He added: “We are in advanced discussions with potential strategic partners envisioning to join forces with the SHUAA Saudi Hospitality Fund, and anticipate to announce strategic alliances over the coming months. These alliances will allow us to meet an accelerated rollout plan, while delivering superior-quality products for our investors and ultimately a superior experience for the hotel guests. The land acquisition is good news for the existing investors of the Fund, SHUAA Capital Saudi Arabia and the city of Jeddah. We are staunch believers in the Kingdom of Saudi Arabia and in the prosperous future of the hospitality sector in the Kingdom. Our goal is to start developing the property at the fastest pace possible and to the highest quality standards.
