SINGAPORE'S iconic Raffles Hotel has been reportedly bought by a Qatar sovereign wealth fund for US$275 million (S$384 million).Qatari Diar - the principal real estate entity of the Qatar Investment Authority - has purchased the historic property in Beach Road from current owner Fairmont Raffles, a Toronto-based luxury hotel chain, according to an Abu Dhabi newspaper, The National.
Fairmont Raffles has about 100 hotels under the three brands of Raffles, Fairmont and Swissotel in 24 countries. The Straits Times understands that the chain owns Raffles Hotel here.
In addition to assuming ownership of Raffles, the deal sees Qatari Diar injecting US$467 million into Fairmont Raffles in exchange for a 40 per cent stake in the hotel chain. The US$275 million from the sale of Raffles Hotel, and a gain of US$105 million in promised management contracts, bring the overall deal to US$847 million.
As the deal involves Fairmont Raffles issuing new shares, Saudi Arabia's Kingdom Holding, an investment company controlled by Saudi billionaire prince Alwaleed Talal, will see its stake in the hotel group diluted to 35 per cent from its original 58 per cent. This makes it the second-largest shareholder of the company.
In 2006, Prince Alwaleed teamed up with United States-based Colony Capital to buy Fairmont Hotels and Resorts' chain of hotels in 24 countries for US$3.9 billion. The latest change in shareholding at Fairmont Raffles will result in Colony Capital's stake being reduced to 22 per cent, with the Ontario Municipal Employee Retirement System also owning an interest, Bloomberg reported.
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