July 7 (Bloomberg) -- The Queen Elizabeth II ocean liner has been transferred to a new Dubai-based entity that will fund the ship’s $90 million transformation into a 400-suite luxury hotel to be moored in Asia.
The new company, QE2 Holding, comprises local and foreign investors involved in the project’s operations, while the ship will continue to be owned by the Dubai government, Drydocks World LLC Chairman Khamis Juma Buamim told reporters in the emirate today. The project is expected to be finished in 2014 and become profitable within 10 years of completion, said Buamim, whose company is a unit of state-owned Dubai World.
“There is already a contract and they will have a share in the new company, which they will gain back from the profit margin,” Buamim said of QE2 Holding, adding that the deal is for 15 years and renewable. “It will become an iconic global ambition for the U.A.E.”
The ship is being moved to Asia to take advantage of the demand for hotel rooms in the region, Buamim said.
“If you look at the coastline of Dubai, it’s full of the most magnificent hotels you can ever dream of,” he said. “Therefore, economics works. You have to look at the return value.”
As a hotel, the ship will have suites from 60 to 150 square meters (648 to 1,1615 square feet), some of which will be available for rental or sale to long-term occupants, he said. The cost will depend on the country where the QE2 will finally be moored and will be “expensive,” he said.
The vessel is being made seaworthy before leaving Dubai Oct. 18 for the overhaul in China. Buamim declined to answer questions on where in China the refit will take place or the ship’s destination as a hotel.
Istithmar World PJSC, a government-owned company in Dubai, bought the 963-foot (294-meter) ship from Cunard for $100 million in 2007. The Scottish-built QE2 went into service in 1969. Dubai has no plans to sell the vessel, which will have maintenance costs of about $2.5 million a year after it goes into operation as a hotel, Buamim said.
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