Action buys $15.7m Dubai Healthcare plot for hotel

Plans to develop a 240-room, three-star hotel to attract patients and families

Action Hotels CEO Alain Debare
Action Hotels CEO Alain Debare

Hotel owner and developer Action Hotels is to pay US $15.7 million for a freehold plot of land in Dubai’s Healthcare, where it plans to build a three-star, 240-room hotel for patients, friends and families.

The company is acquiring the land along with parent company Action Group Holdings directly from the Dubai government in the free zone, which was established in 2002 to meet the demand for heathcare in the emirate.

Action had previously intended to develop the hotel, its first in Dubai, on the plot on a leasehold basis. However, having now considered the location and projected investment value, it said it believed a freehold interest would more positively impact its net asset value and EBITDA levels whilst also giving greater control over the development of the hotel.

It will have an option to acquire the remaining 50% of the 26,312 square foot plot from Action Group Holdings.

"Our ability to source and secure this very much in-demand plot is a testament to our connections and networking within the region to develop our economy and midscale hotels growth strategy across the Middle East,” said Action Hotels CEO Alain Debare.

“This hotel fits with our strategy to provide economy and mid-market hotel rooms in key locations. Dubai Healthcare City has firmly established itself as the region's leading medical hub and drives a strong demand for accommodation.

“The strategic location is expected to drive strong demand for branded economy hotel rooms from nearby medical facilities, schools and businesses."

Explaining its plans for the plot, Action pointed out that there are currently no operating three-star hotels in Dubai's Healthcare City, meaning it would be able to attract the families and friends of medical patients and address the demand for quality affordable accommodation in the area.

The company is now finalising the financial completion of the acquisition via secured debt finance from a regional bank.

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