Thursday, August 28, 2008

KOP Capital buys $250m stake in European hotels chain

Original Article

Singapore-based KOP Capital, a diversified real estate investment and development company controlled by Dubai Group, announced it will buy a 50 per cent stake in the European hotel chain Stein Group for US$250 million (Dh918m).

With KOP Capital’s participation the Stein Group, which owns 15 luxury hotels in seven European countries under the Stein Hotels and Resorts brand, will expand its to Asia. “By 2010 KOP is planning to spend another US$250m to open Stein Hotels in countries such as China, Indonesia, Thailand and Singapore,” said a spokesman for KOP.

The spokesman added KOP would be looking into investing in other hotel chains in Europe but gave no further details of when this would happen. “This was the first time KOP invested in the hospitality sector, so this marks the first step for the company in that direction and there will be many more projects to come.”

KOP Group expects a boom in leisure and business travel in Asia despite a global economic slowdown, as many of these markets continue to see strong growth compared to western countries. “For the Stein Group expanding their chain to Asia is the best thing to do right now since tourism in Europe is not at its best,” added the KOP spokesman.

Ong Chih Ching, the founder and group chief executive of KOP, thinks there is a growing demand for luxury hotels in Asian countries. “We recognise the growth of global wealth and affluent individuals around the world, and coupled with our understanding of this segment, we can elevate luxury living to a new stratum by establishing the Stein brands in Asia,” he said.

The Stein Group founder David Stein, who remains as chairman and chief executive following the investment, said his group does not compete directly with large global hotel chains, but compares most closely with niche hotelier Orient Express.

“There is an increasing demand by affluent clients for a more exclusive, intimate experience that a smaller hotel can offer. And they will go for a recognised brand because many of our clients can’t afford to have a bad night’s stay.”

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