Istithmar acquires controlling stake in $130m Bangkok hotel

Istithmar has acquired a majority interest in a hotel being developed in the heart of Bangkok’s commercial district in the latest investment by the firm in the Southeast Asia hospitality sector.

Istithmar, the private equity arm of government-owned Dubai World, has acquired an 80 percent stake in a $130 million luxury hotel development planned for a prime location in the heart of Bangkok’s downtown area.

The firm is partnering locally-listed Golden Land Property Development, which owns the lease on the 16,000 square meter site centred on the famous Russian Embassy complex. The 400-room luxury hotel will be part of Golden Land’s Sathorn Square project, which will also include a 70,000 square metre office tower. Construction of the hotel will start later this year and is due to open in 2010.

The investment is the second in Thailand revealed by Istithmar in the last two days. It follows yesterday’s announcement of a $20 million investment in a hotel joint venture to develop 30 budget hotels across Southeast Asia.

Joe Sita, chief executive of Istithmar Hotels, told that the firm was also interested in Vietnam as a destination for luxury hotel development. 

Istithmar is keen to increase its investment allocation to Asia from the current level of 5 percent to as much as 20 percent by 2009-2010, according to Richard Johnson, managing director of Istithmar Real Estate.