The world’s largest construction company, China State Construction Engineering Corporation (CSCEC), announced that its Middle East division will invest in the upcoming Viceroy Dubai Palm Jumeirah project.
The Dhs3.67 billion ($1 billion) hotel and furnished residences project, being developed by Dubai-based real estate investment firm SKAI Holdings, was launched earlier this month.
CSCEC, the main contractor of the Viceroy Dubai Palm Jumeirah, has formed a special purpose vehicle, ASSAS, with SKAI Holdings to make the investment, the companies said in a statement.
The exact value of the investment was not revealed.
“This is CSCEC’s first investment in a development project in the Middle East and marks a significant milestone in our growth in the region,” said Yu Tao, president and CEO of CSCEC Middle East.
“China has witnessed a surge in the number of individuals turning to alternative investments overseas as they look to preserve their wealth in light of its fast-changing economy.
“Dubai’s strategic location between Asia, Europe and Africa together with its burgeoning real estate sector is set to become a vital area of growth for Chinese investment,” he added.
The Viceroy Dubai Palm Jumeirah will offer 481 rooms and suites and 221 residences, dining venues, a spa, a beach club, a 100 metre-long pool, entertainment and sporting activities.
Investors interested in the project can purchase hotel rooms, which are then leased back in exchange for 40 per cent of the room revenue, said the statement. The annual rate of return is estimated at 12 per cent, and the project has already secured Dhs2.1 billion worth of sales to date, it added.
The development is scheduled for completion in 2016.