Singapore slings Raffles to Qatari Diar

Qatar's sovereign property developer is poised to take control of the historic Raffles hotel in Singapore.

The Raffles hotel in Singapore was declared a national monument by the city state's government in 1987.

The sale of the historic Raffles Hotel in Singapore to Qatari Diar is expected to be finalised this week for US$275 million (Dh1.01 billion).

The colonial property, famed as the home of the Singapore Sling cocktail, is being sold after an agreement last year allowing Qatar's sovereign property developer to purchase the hotel after it bought a 40 per cent shareholding in Fairmont Raffles Hotels International. That deal was worth $847m.

"I'm hoping by the end of this week that [the sale] will be announced," said Chris Cahill, the chief operating officer of Fairmont Raffles, which currently owns the property. "It's very imminent. We're very close to finalising that agreement."

When Qatari Diar bought the stake in the company last year through its affiliate Voyager Partners, a clause stipulated that the hotel company could compel Qatari Diar to buy the property one year later.

"It was in the first quarter that we exercised that. Literally this week this is all coming to a close."

In April last year, it was confirmed that if the property was sold to Qatari Diar, the price would be $275m. Mr Cahill said the property would go for that price.

"[Qatari Diar] wanted it as well, which is why it was easy to have it set up that way," said Mr Cahill. "It was a matter of 12 months later. Let's see if it's still the right decision. The leverage was with us - with the company itself to have that as an opportunity."

Kingdom Holding, the investment company of the Saudi billionaire Prince Alwaleed bin Talal bin Abdulaziz Al Saud, was the majority shareholder in Fairmont Raffles until last April.

Kingdom's stake dropped to 35 per cent from 58 per cent as more shares were issued and Qatari Diar bought into the company.

Fairmont Raffles was reportedly looking to sell the hotel two years ago for up to $450m.

The hotel's guests have included literary figures such as Rudyard Kipling, Joseph Conrad and Somerset Maugham.

It opened in 1887 with 10 rooms and underwent a multimillion dollar restoration between 1989 and 1991 to return it to its former glory. It now has 103 suites. The hotel was declared a national monument by the Singapore government in 1987.

Kingdom Holding and Colony Capital, a Los Angeles investment company, acquired Fairmont Hotels and Resorts in 2006 for $3.9bn, merging it with the Raffles Hotels Group to create a $5.5bn company.