KM Properties, a member of the UAE-based Al Rostamani Enterprise family conglomerate, has announced the creation of a US$2.3billion, sharia-compliant, real estate development fund.
The fund has been established to develop and own an international chain of hotels that will abide by the Islamic principles of sharia. It will also spread investment across various complementary commercial real estate assets worldwide.
Phase one of the hospitality and real estate development fund is closed to subscribers, but it is anticipated that international corporations will enter the fund in its upcoming stages, with great interest already shown for phase two. It is also likely that international teams will be involved in the fund and company management.
The new-concept hotel chain, which is in the advanced stages of development, will encompass significant elements that have not been addressed or targeted by existing hotel flags. It is a sharia-compliant business model and product proposition created as a result of extensive studies by KM Properties, and supported by retained industry veterans.
KM Properties has already committed an investment of $290m to develop a 700-room hotel and serviced apartment project in Dubai, scheduled to open for business in the summer of 2008.
This flagship property will form the blueprint for a multi-market roll-out of a ground-up development, as well as standing as a showcase for attracting investors, owners and operators to the chain’s complete product proposition.
In what is thought to be another industry first, KM Properties has also established a sharia-compliant Hospitality Operator Company.
A pool of hand-picked industry professionals - each with more than 25 years’ experience in the hospitality and leisure sectors - will be responsible for running the operating arm, which is expected to have a broad portfolio of properties before year end.
In the first instance, the Hospitality Operator Company will operate sharia-compliant properties throughout the Middle East and Asia. Saudi Arabia, Morocco, Turkey, Malaysia, and India are all earmarked as prime entry markets during the first 12 months.
To kick-start this portfolio, KM Properties has already signed three management agreements in addition to the Dubai property, with another seven in advanced stages of negotiation.
The hotels are likely to come under the banner of a new hotel brand, which is in the final stages of development. This newly-created hospitality flag may also take over the management of existing properties in the wider MENA region, and worldwide.
However, existing properties could come under the management of the Hospitality Operating Company, yet retain their current trading name and run outside the new brand.