Dubai’s Istithmar buys into U.S. Mandarin hotel
Thursday, December 21, 2006; 6:08 AM

HONG KONG (Reuters) – Istithmar, an investment firm owned by the Dubai government, has moved further into U.S. property by buying a 73 percent stake in the Mandarin Oriental New York in a deal valuing the hotel at $340 million.

Singapore-listed Mandarin Oriental International Ltd. <MOIL.SI> said in a statement on Thursday that it had sold half of its 50 percent stake to Istithmar.

Apollo Real Estate and related companies would sell almost all of their 50 percent equity stake to the Dubai investment house in February 2007, it added.

The 248-room hotel, which opened at the end of 2003, was valued at $340 million for the purposes of the transaction, the statement said.

Mandarin Oriental International said it would receive after tax proceeds of US$29 million and post a post tax gain of US$16 million, to be recognized in 2007. But as part of the deal it would also receive repayment of its outstanding mezzanine loan to the hotel of $40 million.

Istithmar, 100 percent owned by Dubai World, which is in turn owned by the Dubai government, has been buying up U.S. property and other assets aggressively this year. It acquired retailer Loehmann’s in July, the Knickerbocker Hotel in New York in June, and office block 280 Park Avenue in April.

The firm also told Reuters in September that it was in talks to buy diversified real estate investment trust Crescent Real Estate Equities Co. <CEI.N>.


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