In a deal anticipated for several months, Atlantis, The Palm has been sold by Istithmar World, a subsidiary of the state-owned developer Dubai World, to the state-owned sovereign wealth fund Investment Corporation of Dubai.
Investment Corporation of Dubai is used by the emirate’s government to hold some of its highest profile investments and has stakes in the likes of Emirates Airline and Emaar.
“Our acquisition of an asset that is a major contributor to the domestic tourist industry is in line with our overall strategy to support long term growth for Dubai,” ICD’s Deputy Chief Executive Khalifa Al Daboos told Reuters.
Istithmar, which also owns the entertainment company Cirque du Soleil and the U.S. luxury retail chain Barneys, has been attempting to reduce its stake in the Atlantis over the past year amid growing pressure from creditors to sell assets.
The 1,500-room hotel, which has a water park and 18 restaurants, cost its joint developers, Istithmar and Kerzner International Holdings, US$1.5 billion to build in 2008. Istithmar bought Kerzner’s 50% stake last year for just US$250 million. Kerzner, which owns the Atlantis brand, has continued to operate the hotel.
The latest deal comes as Dubai World seeks to refinance a first package of loans worth about US$4.5 billion due in September 2015.