SHUAA Capital Saudi Arabia has held a first close on its debut hospitality fund, SHUAA Saudi Hospitality Fund I, on SAR900 million ($240 million; €162 million).
The private equity arm of the Middle East investment bank said the fund was expected to raise a further SAR 1.1 billion in commitments from regional institutional and individual investors and was expected to close the fund on about SAR 2 billion (around $530 million) towards the end of the summer.
The Shariah compliant closed-ended fund, SHUAA Saudi Hospitality Fund I, will fund the development of 17 five-star hotels in Saudi Arabia totaling 5,000 rooms, according to a statement. The fund also will own 20 percent of a new hotel management company, Rotana Hotel Management, which will manage the hotel properties.
In July, SHUAA Partners, another private equity arm of SHUAA bank, held its first close on another hospitality fund, SHUAA Hospitality Fund I, on $165 million. That fund will target hotels, resorts and serviced apartments in the Middle East and North Africa as well as develop five- and four-star hotels, resorts, budget business hotels and serviced apartments.
Omar Al Jaroudi, chief executive officer of SHUAA Capital Saudi Arabia, said SHUAA Saudi Hospitality Fund I was the first private equity fund to be domiciled in Saudi Arabia. He said the fund was already in negotiations to acquire land in Riyadh, Jeddah, Madinah and Khobar.