Shuaa hospitality fund eyes Saudi acquisitions

Shuaa Capital's Saudi arm hopes to raise more money for its hospitality fund through a second closing in October and to make more acquisitions this year as market conditions improve, its chief executive said.

The fund, which had its first closing in 2008, aims to raise close to 2bn riyals ($533m), said Omar al-Jaroudi, chief executive of Shuaa Capital Saudi Arabia.

"We did the first closing of 410m (riyals) and we are hoping for a second closing between now and October (to get) as much as we can up to the 2bn," he told Reuters in an interview.

Shuaa launched its private equity hospitality fund with an aim to acquire hotels to be managed by Rotana Hotel Management Corporation, Jaroudi said, but it only made one acquisition last year as market conditions were uncertain.

"In 2010 we have better clarity and we are going ahead with executing the plan that we have in mind," he said.

In March Shuaa bought a plot of land in the Red Sea port city of Jeddah for a hotel development worth more than $130m.

"We acquired one plot of land in Jeddah and are finalising another one in Jeddah as well and we are in advanced discussions on several properties in Riyadh and Khobar," he said.

Shuaa Saudi Arabia, whose parent firm is based in Dubai, is also considering launching a logistics fund in the autumn, he said.

"The size will be determined by the result of the feasibility study."