Al Futtaim Carillion to embark on luxury hotel at Madinat Jumeirah
Al Futtaim Carillion will build a 435-room super-luxury hotel as part of the Dh2.5 billion expansion of Madinat Jumeirah.
The joint venture between the UAE private conglomerate Al Futtaim and UK-listed Carrillion signed the deal with hotel operator Jumeirah Group, the British builder said in a stock exchange filing.
The Madinat Jumeirah resort, which will be located between the existing development and the Wild Wadi waterpark, was first announced in November 2012 as part of a Dh4 billion package of new and relaunched developments in Dubai.
According to tender documents, the scheme also includes 400 parking bays, three speciality restaurants, lounges, bars, a business centre, swimming pools and a turtle lagoon. The project was designed to join together the modernist designs of Burj Al Arab and the Jumeirah Beach Hotel with the more traditional style of the Madinat Jumeirah hotel, souq and convention centre.
The Madinat project is part of £400 million (Dh2.47 billion) worth of contracts that Carillion has won in the UAE and Saudi Arabia this year.
“These latest contract successes continue to reflect the improving outlook in most of our Middle East markets,” said Richard Howson, the Carillion chief executive. “This includes Dubai, where we continue to see clear signs of recovery with more opportunities coming to market.”
The first three phases of Madinat Jumeirah were opened by Jumeirah Group, part of Dubai Holding, in 2004. They include two hotels, a convention centre and a traditional-style Arabian souq.
Jumeirah last month announced an Dh8 billion expansion drive focusing on the Gulf and China over the next three years.
In recent years Carillion has been attempting to increase contracting work from its overseas operations in the Middle East and Canada as well as its own service sector to compensate for a shrinking home construction market.
However the company faces tough competition in the UAE, especially from the Far East.
Last year it said it hoped to double revenues from its Middle Eastern operations to £1bn by 2015. However, last year the company reported revenue growth for its Middle East operations of just 2 per cent to £483.5m and a 34 per cent fall in profits to £19.2m. Overall last year, the company reported a 33 per cent fall in pre-tax profits to £110.6m off a 7 per cent revenue decline to £4.1bn.
“We believe that Carillion is in much better shape than it has been in recent years,” said Caroline de la Soujeole, an investment analyst at Cantor Fitzgerald, which last month upgraded its Carillion rating to “buy” from “hold”.
“Middle East construction can be lumpy but we remain optimistic about the long-term growth prospects.”
Carillion shares had risen 1.6 per cent or 5.7 pence to 346.1 pence in late trading in the UK yesterday.
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Published: May 22, 2014 04:00 AM