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Brunei to add 1,000 new luxury rooms in NY and London to its portfolio?

The Sultan of Brunei, a small sovereign state in Southeast Asia, is rumoured to have bidded for the takeover of 2 luxury hotels in New York and the Grosvenor Hotel in London, according to the Wall Street Journal. Despite being recently criticized for having implemented the shariah in their home state (which led celebrities to call for a boycott of Brunei-owned hotels), Brunei officials may indeed keep purchasing new luxury hotels.

Brunei keeps hunting for new trophy hotel assets. Indeed, according to the Wall Street Journal and Times of London, two hotel properties in New York (Plaza Hotel and Dream Hotel) and the Grosvenor Hotel in London, are the Sultan's new targets. A $2 billion bid (about 1.4 billion euros) could be under process to take over these 3 hotels. They are currently owned by the Indian conglomerate Sahara Group, which has recently been facing financial troubles, so a quick deal is rather likely.

The potential buyer would be a sovereign investment fund linked to the Sultan. This buyout could take place despite an unfavourable recent context for the Brunei, as hotels it owns and operate through the Dorchester Collection recently faced a boycott call by international celebrities, due to the implementation of the shariah law in the country. This apparently would not refrain Brunei investors to add 3 new landmark properties to their hotel portfolio: Plaza Hotel New York (282 rooms), Dream Hotel New York (216 rooms) and Grosvenor Hotel London (494 rooms).

Were it to materialize, this rumoured offer would set the market value of these three hotels (totalling 992 rooms) at more than $2 million per room (€1.4 million per room).

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