MANILA, APRIL 3, 2007 (STAR) By Mary Ann Ll. Reyes - Leading property developer Ayala Land Inc. (ALI) has entered into a joint venture arrangement with Dubai-based Kingdom Hotel Investment (KHI) to build a $153-million hotel complex that will rise in the Makati central business district.

KHI founder and chairman Prince Alwaleed bin Talal bin Abdulaziz Alsaud, a member of the Saudi royal family, arrived in the country yesterday as head of a 40-member delegation to meet with ALI executives, led by chairman Fernando Zobel de Ayala and president Jaime Ayala.

His royal highness’ five-hour stay in the Philippines was part of his Asian visit to scout for new properties for KHI. Alwaleed also paid a courtesy call on President Arroyo in Malacañang.

Prince Alwaleed owns hotel and resort properties throughout the world and has significant equity investments in leading international hotel management companies, namely Four Seasons Hotel and Resorts, Fairmont Hotels and Resorts, Raffles Hotels and Resorts, and Movenpick Hotels and Resorts, which manage hotels throughout the world.

The prince, whose Kingdom Holdings owns big stakes in US companies including Citigroup and News Corp., said he is looking to expand its Asian holdings. Alwaleed, 51, is the company’s major shareholder.

"KHI has a war chest of one billion dollars and is actively looking to expand in China, South Korea and the Philippines. Asia has huge potential," he said.

He added: "There is a double impact in Asia. Countries are growing fast on their own and also benefiting from the spillover effects of China’s growth."

The ALI-KHI project is billed as the single biggest hotel-related investment in local business history. It also marks the start of Ayala Center’s makeover into a world-class business destination as two of the world’s biggest luxury hotel brands rise in the area.

ALI and KHI will develop a 7,377 square meter property along Makati Avenue corner Arnaiz Avenue into a luxury hotel complex comprised of a 300-room Fairmont Hotel, a 30-suite Raffles Hotel, and 189 Raffles-branded private residences.

The land is currently occupied by Park Square 2, Ansons Department Store, and a bus terminal. Park Square 2 will be demolished to give way to this re-development while a new parking building between Landmark and Shangri-La Hotel is expected to be operational by the fourth quarter of 2007. ALI officials said arrangements are being made for the relocation of the tenants and options are being studied for a new terminal for public utility vehicles.

A landholding company, KHI-ALI Manila Inc., will be established to own the property. ALI will own 60 percent while KHI, through a wholly-owned subsidiary, will have 40 percent. Also, KHI-Manila Properties Inc., an operating company, will be established to manage the development, construction and operations of the hotels. ALI will own 20 percent in this other company while KHI, also through a subsidiary, will own the remaining 80 percent.

The project will begin construction early next year and is estimated to be completed within three years.

The Ayala group currently owns two hotels, namely Hotel Intercontinental also in Makati, and Marriott Hotel in Cebu City. It sold Oakwood Premier last year as part of its non-core asset disposal program.

Fairmont Hotel and Resorts is North America’s largest luxury hotel company, whose diverse portfolio includes historic icons, resorts, and modern city center properties. Raffles Hotel and Resorts, meanwhile, operates a collection of luxury hotels in key destinations around the globe, including Singapore, Beverly Hills, Beijing, Hamburg, and Montreux, Switzerland.

A leading hotel and resort investment company focused on the first class and luxury segments in the Middle East and Africa, KHI owns interests in 33 properties in 19 countries. At present, the company owns 19 operational hotels and resorts with a total of 4,269 rooms, with 14 more hotels and resorts with a combined 3,952 rooms under development.

The soon-to-rise upscale hotel and residences complex project is said to be a key component of Ayala Center’s re-development into a world-class business destination. Ayala Center’s makeover, which includes the development of business process outsourcing (BPO) office buildings and another hotel, is just one of the 33 new projects which ALI has lined up for this year.

The Saudi prince said, "Makati City continues to establish itself as the leading business destination in the Philippines and we are delighted to partner with Ayala Land, one of Asia’s most respected and established developers."

The Fairmont Makati Hotel and Raffles Suites and residences will enable KHI to generate attractive returns by combining a significant amount of branded residential development with premium hotel brands, KHI chief executive officer Sarmad Zok added.

Meanwhile, ALI president Jaime Ayala explained that ALI’s hotel business line serves a particular strategic support, so that each hotel is an anchor that primes development in business districts.

The proposed luxury hotel complex aims to prime the Glorietta I re-development based on a master plan for redeveloping Ayala Center.

ALI’s chief executive yester-day revealed that as part of the updated master plan for Ayala Center’s re-development, Glorietta I will be completely re-developed and that temporarily, tenants will be transferred to the new Glorietta 5 that will be available late next year.

He also revealed that there is still a lot of room for new hotels in the Makati CBD. "Makati is short of hotels. Our hotel (Intercon) in fact has a 99 percent plus occupancy rate. Hotels in Makati are really full. With lots of foreign investments coming in and tourism booming, this will be good for hotel development," Ayala said.

Chief News Editor: Sol Jose Vanzi

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