Dubai Healthcare City Development

Action Hotels PLC

("Action Hotels", "Action", the "Group" or the "Company")

Action Hotels new four star hotel in Dubai and announcement of joint venture for Dubai Healthcare City development

Action Hotels, the leading owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia, is pleased to announce that it has agreed a joint venture for its upcoming property in Dubai Healthcare City (the "Joint Venture" or "JV") and has partnered with AccorHotels' Novotel brand for the development and operation of the property.

The 220-room hotel, which will be named Novotel Dubai Creek, will be a four star offering in a highly sought-after location in the centre of Dubai Healthcare City. The area offers mostly luxury to upscale accommodation, with very few economy to midscale options available. This will be Action Hotel's first Novotel branded hotel, which is AccorHotels' upper midscale brand, comprising of over 470 hotels in operations with nearly 90,000 keys and 116 hotels under development that will bring in an additional 28,000 rooms across 60 countries. It will also be the Company's first property in Dubai and the 12th collaboration with AccorHotels.

The land on which the hotel will be situated (the "Land") was acquired directly from Dubai Healthcare City and is currently jointly owned, on a 50/50 basis, by Action Hotels and H.E. Sheikh Mubarak A. M. Al Sabah, with the Land previously being held as investment land in Action's consolidated accounts.

The Joint Venture has been entered into on an equal basis with H.E. Sheikh Mubarak A. M. Al Sabah. Each party to the JV will contribute a 50% stake in the JV for approximately US$10.4 million, giving a total contribution of $20.8 million. Profit, losses and distributions will be shared equally.

The Joint Venture will acquire the Land, on a freehold basis, for a total consideration of approximately US$16.0 million. The JV will borrow US$35.2 million in order to fund development costs, bringing the total project cost to US$56.0 million.

This development is an addition to the announced pipeline, bringing the total pipeline rooms to 837 and total portfolio rooms to 2,869. Construction is expected to begin in Q3 2016, with completion forecast for Q4 2017. The hotel is expected to become operational in early 2018. AccorHotels' strong presence in Dubai is expected to drive considerable marketing and operational efficiencies for the project.

By reason of H.E. Sheikh Mubarak A. M. Al Sabah being party to the Joint Venture and a shareholder in Action Hotels, the participation by Action in the Joint Venture constitutes a related party transaction under AIM Rule 13 of the AIM Rules for Companies. The independent directors of the Company, having consulted with the Company's nominated adviser, Zeus Capital Limited, consider that the terms of the Joint Venture are fair and reasonable insofar as its shareholders are concerned. 

Olivier Granet, Managing Director & Chief Operating Officer of AccorHotels Middle East, said: "We are delighted to build upon our strong partnership with Action Hotels for a new strategic Novotel in Dubai. Creek Park and the wider Dubai Healthcare City are emerging as important destinations for leisure, medical tourism and business travel. We are certain that the Novotel brand is ideally suited for the needs of all guests looking for reliable upper midscale accommodation in the heart of Dubai. This marks AccorHotels' fifth committed Novotel in the Emirate and its 31st in the Middle East."

Alain Debare, Chief Executive Officer of Action Hotels stated, "I am delighted to announce our tenth collaboration with AccorHotels in the Middle East, our first Novotel as well as our first hotel in Dubai. The hotel boasts a fantastic location and I believe the Novotel brand is the best four star choice for this property and the local market. We look forward to establishing our first property in Dubai and welcoming guests in the near future."

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Notes to Editors

Action Hotels PLC

Action Hotels is a leading owner, developer and asset manager of branded three and four star hotels in the Middle East and Australia. Established in 2005, Action Hotels currently operates eleven hotels with 2, 032 rooms in aggregate across the Middle East and Australia, with further properties in development in both regions.

More information is available at http://www.actionhotels.com/