Istithmar-held IHI looks into expansion in Europe

A Maltese-hotel company in which Dubai's Istithmar holds a minority stake is eyeing expansion across Europe.

International Hotel Investments (IHI) expects to enter Rome and Munich in the next few years, said Simon Naudi, the chief executive of Corinthia Hotels and executive director of IHI.

“Beyond that we are looking to gain a presence in North America and the Arabian Gulf; we are looking for the right opportunity to enter the UAE,” he said. “The UAE has forged the path in showing the world how things should be done [in the luxury hotels segment].”

It has also not ruled out a second listing, which could include one of the UAE exchanges, to raise money to develop more hotels.

“We are listed in Malta but we do recognise it is a very small market,” Mr Naudi said.

The Dubai investment company Istithmar holds 22.14 per cent stake in IHI. It is majority owned by the Corinthia Palace Hotel Company, which holds a 58.89 per cent stake.

The Libyan Foreign Investment Company holds another 11 per cent. The rest is held by the public. Istithmar Hotels invested €178 million (Dh895.6m) in IHI in 2007.

IHI owns and operates nine luxury hotels in Africa and Europe, such as those in London, Malta, Khartoum, Tripoli, Budapest, St Petersburg, Prague and Lisbon.

The properties are marketed in the luxury segment, including Corinthia London. Formerly used by the British ministry of defence, the property was restored by IHI and opened in 2011.

“The hotels in Khartoum and Libya did much better last year than the year before,” Mr Naudi said. “Practically all the guests to these hotels are business travellers.”

The IHI’s top source markets for guests include the United Kingdom, the United States, Germany, France and Russia.

In the first half of last year the group reported €59.54m in revenues, an increase of 5 per cent compared with the same period in the previous year. It experienced an increase of 21 per cent in operating profit before depreciation of €16.3m over the corresponding period the previous year.

Istithmar’s portfolio includes the Mandarin Oriental hotel in New York and the Fontainebleau Miami Beach Hotel.

ssahoo@thenational.ae

THE SPECS

Engine: 6.75-litre twin-turbocharged V12 petrol engine

Power: 420kW

Torque: 780Nm

Transmission: 8-speed automatic

Price: From Dh1,350,000

On sale: Available for preorder now

MISSION: IMPOSSIBLE – FINAL RECKONING

Director: Christopher McQuarrie

Starring: Tom Cruise, Hayley Atwell, Simon Pegg

Rating: 4/5

More on this story:

Special report: Unwed expat mothers in legal limbo hope new visa laws will help them

A mother’s plea for her children ‘illegally’ in UAE to be sent home to India

Overstay visa families told to settle cases before seeking amnesty

Skewed figures

In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.

While you're here

Gavin Esler: Coronavirus offers stinging rebuke to protectionists

Kareem Shaheen: Pandemics can save us from waging wars

Sholto Byrnes: Why the climate change clash will get nastier

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The team

Videographer: Jear Velasquez

Photography: Romeo Perez

Fashion director: Sarah Maisey

Make-up: Gulum Erzincan at Art Factory

Models: Meti and Clinton at MMG

Video assistant: Zanong Maget

Social media: Fatima Al Mahmoud

UK's plans to cut net migration

Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.

Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.

But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.

Language requirements will be increased for all immigration routes to ensure a higher level of English.

Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.

The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.

The National's picks

4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young

More on animal trafficking

Falcon demand driving region's bird smuggling trade

Custom-made smuggling vests used to smuggle ivory onto aircraft

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Part three: an affection for classic cars lives on

Read part two: how climate change drove the race for an alternative

Read part one: how cars came to the UAE