Emaar to sell five luxury hotels to Abu Dhabi

Emaar Hospitality Group is to sell five of its hotels — including the iconic Address Dubai Mall and Address Boulevard — to Abu Dhabi National Hotels (ADNH), the company said on Tuesday.

The company — which is a subsidiary of the Dubai-listed real estate company Emaar Properties — has signed “definitive” documentation with ADNH, with the deal expected to be finalized this year or in early 2019, according to filings on the Dubai and Abu Dhabi stock exchanges.

Mohamed Alabbar, chairman of Emaar Properties, said in a statement, the sale was part of the company’s efforts to shift toward an “asset-light business model.”

In July, Alabbar reportedly told CNBC Arabia that the company was considering the sale of noncore assets such as its hotel portfolio and that Emaar Hospitality would focus on hotel management instead.

Under the proposed deal, ADNH will enter long-term management agreements with Emaar Hospitality Group to continue running the assets under the Address Hotels + Resorts and the Vida Hotels and Resorts brands.

The portfolio of hotels to be sold also includes Address Dubai Ma- rina, Vida Downtown and Manzil Downtown.

“This transaction will strengthen our presence in Dubai and will expand our current luxury portfolio of hospitality assets,” said Sheikh Ahmed Mohammed Sultan Suroor Al-Dhaheri, vice chairman at ADNH, in a statement.

ADNH’s luxury hotel portfolio already features the Ritz Carlton Abu Dhabi Grand Canal, The Park Hyatt in Saadiyat Island and Sofitel JBR in Dubai.

Emaar Hospitality is set to retain its Rove hotel brand — a mid-market hotel chain launched in 2015. The company’s fifth Rove hotel — Rove Dubai Marina — opened in April this year.

Analysts see the budget hotel sector as a growth market for the emirate.

“Emaar in recent years has been focusing on developing its budget hotel ‘Rove’ brand, which as a category should outperform luxury hotels in Dubai given rising number of tourists from countries like India and China,” said Ayub Ansari, senior analyst at Sico Bank in Bahrain.

While he awaits further details on the deal including the currently undisclosed sale price, Ansari expects the proceeds of the sale will fund Emaar’s ongoing retail expansion projects.

Emaar continues to expand its flagship Dubai Mall, while earlier this year it revealed plans to de-