Dubai ruler in talks to buy some of Europe's most famous luxury hotels: Sources

The discussions involve properties including the historic Capri Palace in Italy.
The discussions involve properties including the historic Capri Palace in Italy.PHOTO: FACEBOOK/ CAPRI PALACE

ISTANBUL (BLOOMBERG) - Turkish billionaire Ferit Sahenk is in talks to sell some of Europe's most famous luxury hotels to the investment firm owned by Dubai's ruler as part of a debt restructuring, people with knowledge of the matter said.

The discussions involve properties including the historic Capri Palace in Italy, the Aldrovandi Villa Borghese in Rome and Istanbul's Grand Hyatt, the people said, asking not to be identified because the talks are private.

Dubai Holding is doing due diligence on the Capri Palace and Aldrovandi, one of the people said. The firm, one of three main state holding companies in the emirate, owns Jumeirah Group, which would likely operate the hotels, the person said.

Sahenk's Dogus Holding AS, which owns the hotels, declined to comment. A spokesman for Dubai Holding, controlled by Sheikh Mohamed bin Rashid Al Maktoum, didn't respond to requests for comment.

Sahenk, once Turkey's richest man, spent heavily on hospitality businesses at home and overseas after selling his 31 per cent stake in Turkiye Garanti Bankasi AS for almost US$5.5 billion. His company has sought buyers for its trophy hotels for several months, people familiar with its plans have previously said, amid growing concern that the plunge in the lira will make it harder for Turkish firms to secure new foreign debt.

In December, Dogus Holding struck a deal with a group of mostly local banks to restructure part of its borrowings. Those talks involved about US$2.5 billion of loans, people familiar with the plan had said in April. The process was delayed after the lenders demanded the company sell some of its assets, Moody's Investors Service said on Dec 6.

Dogus agreed in November to sell Madrid's Villa Magna hotel to Mexico's RLH Properties SAB de CV for €210 million (S$326.1 million), and earlier last year agreed to sell a 17 per cent stake in its restaurant business, which includes the Zuma and Nusr-Et chains, for US$200 million. It also sold a 25 per cent stake in D-Marinas BV, which has 10 marinas in Turkey, Greece and Croatia, to the European Bank for Reconstruction and Development for €70 million in May.

For Dubai Holding, the hotels acquisition would mark a shift back to dealmaking for an investment firm that's mostly been focused on selling assets and restructuring debt in the wake of the emirate's property-led crisis. Jumeirah Group already operates luxury hotels in London, the Maldives and Mallorca.

Dubai Holding has done business with Dogus before. In November, the firm and Meraas Holding LLC, a Dubai-based property developer, signed an agreement that will see an arm of Dogus operate marinas in the emirate.