DUBAI-KM Properties, a member of the UAE-based Al Rostamani Enterprise family conglomerate, is launching a $2.3-billion real estate development fund that will develop and own an international chain of hotels. Phase one of the hospitality and real estate development fund is closed to subscribers; phase two will be open to international corporations.

KM Properties has already committed an investment of $290 million to develop a 700-room hotel and serviced apartment project in Dubai, scheduled to open or business in the summer of 2008. The project also will act as a model for attracting investors and rolling out the company’s multi-market development plan.

The new-concept hotel chain, a brand name for which has not been established, will encompass significant elements that have not been addressed or targeted by existing hotel flags. Chief among them is that the hotels will abide by the Islamic Shari’ah principles, which address many aspects of day-to-day life; politics, economics, banking, business law, contract law, and social issues. The newly created hospitality flag may also take over the management of existing properties.

KM also has formed a Shari’ah-compliant hospitality operator company to operate hotels on behalf of the fund. The company plans to operate Shari’ah-compliant properties throughout the Middle East and Asia. During the first 12 months of the fund, the company hopes to be operating hotels in Saudi Arabia, Morocco, Turkey, Malaysia, and India. Three operating agreements have been signed and several more are in being negotiated.

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