The developers of the planned Jumeirah luxury hotel in Glasgow have given assurances that the £50 million project will not be affected by the troubles in Dubai, despite being part of the same business empire.
With world markets plunging last week on the news that Dubai investment vehicle Dubai World is to suspend repayment of $35 billion (£21bn) of its debts for six months, the crisis has ignited fears about the future of related investments, including the Jumeirah hotel group, the QE2 and Travelodge. Like Dubai World, all of these assets are ultimately controlled by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum.
Guy Crawford, the Scots-born chief executive of Jumeirah, told the Sunday Herald that the crisis would have no impact on the plan to start building the 26-storey hotel on Argyle Street, opposite the Radisson Hotel. It will help that the company will merely operate the hotel, while ownership will remain with the London-based Progress Property Developments (PPD) and co-investors.
Crawford said: “[The problems in the Emirate] won’t have any influence on our Glasgow property, which we will still keep moving forward. We have always felt that there’s a great opportunity in Glasgow.”
Charles Price, chief executive of PPD, said that the Scottish Government had given approval for compulsory purchases of several properties that had refused to sell, and preparatory work is expected to start next June, pending potential appeals against the decision. The actual building work is scheduled to begin in 2011 and complete 18 months to two years later.
“The landowners of the compulsory purchase sites were very unwise to do what they did,” said Price. “To ask people to pay more money when the market is going down the tubes seems to me to be the misuse of a delay tactic. Whatever they could have got in 2006 or 2007, they are going to get half or even less.”
He added that he understood that there was no risk that the Dubai World problems would affect Jumeirah.
The Glasgow Jumeirah will include 160 bedrooms, a 630-seat ballroom and a rooftop cocktail lounge. It will also have a swimming pool, spa and gym, plus conference facilities. Building work will cost £50m and the final value is expected to be around £125m. Mr Price said the company had lined up investment partners but that nothing would be signed until any appeal process over compulsory purchase had concluded.
A spokeswoman for VisitScotland said: “Tourism growth is critical to the future of Scotland and that can only come from investments like these.”
