China State Construction Engineering Corporation (CSCEC) has bought a stake in Skai Holdings' US$1 billion Viceroy hotel on the Palm Jumeirah in Dubai.The regional unit of the Shanghai-listed construction giant has formed a special purpose vehicle with the Dubai developer Skai to invest in the scheme.
This month the Chinese builder was appointed main contractor on the 481-room hotel, which will also have 221 residences.CSCEC did not say how much money it was putting into the joint venture or how much of a stake it would have in the hotel, which is expected to open in the fourth quarter of 2016. Skai, headed by Kabir Mulchandani, last month announced that it would be selling off rooms in the hotel to investors who would then be able to collect 40 per cent of the room revenue.Skai said it had secured Dh2.1bn worth of sales to date.
The stake marks CSCEC's first investment in Middle Eastern property in its 61-year history. "This is CSCEC's first investment in a development project in the Middle East and marks a significant milestone in our growth in the region," said Yu Tao, the president and chief executive of CSCEC(Middle East).
"China has witnessed a surge in the number of individuals turning to alternative investments overseas as they look to preserve their wealth in light of its fast-changing economy. "Dubai's strategic location between Asia, Europe and Africa together with its burgeoning real estate sector is set to become a vital area of growth for Chinese investment," he added.