W Hotel is up for sale
A rare opportunity to own trophy asset in KL
KUALA LUMPUR: Tropicana Corp Bhd is inviting offers for its upscale five-star W Hotel Kuala Lumpur (W Hotel), which is located in the heart of the KL city centre.
A recent advertorial in a Singapore daily revealed the prestigious hotel is “for sale by expression of interest,” with Huttons Asia Pte Ltd being the sole marketing consultants for the proposed deal.
The closing date for the deal is Oct 7. When contacted, a representative from Huttons declined to reveal if there had been any expressions of interest so far.
“The process is ongoing and we hope to complete the deal as soon as possible,” he said.
According to the advertorial, the freehold, distinctive luxury hotel is set to offer investors “a rare opportunity to own a trophy asset.”
The advertorial also said the hotel will provide long-term recurrent income and good investment return, as well as ride on the growing demand in hospitality and meetings, incentives, conferences and exhibitions events.
It stated the W Hotel is a “preferred accommodation for both business and leisure travellers.”
PPC International managing director Datuk Siders Sittampalam said he was a little surprised to see the hotel is being put up for sale.
“It’s a little surprising because hotel occupancy rates are on the rise again, though they’re still not back to pre-pandemic levels. In Kuala Lumpur, occupancy rates are hovering at between 40% and 50%, which is still quite low,” he told Starbiz.
Siders added that resort hotels have, however, been enjoying good occupancy rates.
“In Melaka, it’s around 60%, while in Penang, it’s around 80%. On weekends, it can be extremely difficult to get a room at some of the resort hotels.”
Siders believes occupancy rates may only return to pre-pandemic levels in the third quarter of next year.
“There is still a bit of uncertainty this year, especially with the upcoming elections. So it will take some time for things to settle.”
Siders said the pandemic had taught investors “how vulnerable the hotel industry can be.”
The expected returns for the hospitality industry tends to be a lot higher, compared with other classes of investments but in times of uncertainty such as an economic downturn, pandemic or even war, the hotel sector is one of the worst to be affected, he added.
With the country transitioning into the endemic phase and tourists travelling again, Siders said the W Hotel would appeal to potential investors.
“It’s also strategically located as it overlooks the KLCC Twin Towers,” he said.
Meanwhile, a property analyst said the timing of the proposed W Hotel sale is ideal.
“We’re no longer in a pandemic and life is going back to normal, if it hasn’t already. Business activities are picking up and demand for physical meeting space is on the rise,” he said.
He also said the pandemic had resulted in “pent-up demand” for international travel.
“Therefore, it would make sense to invest in a hotel or the hospitality industry right now,” he said.
Earlier this month, it was reported that Prosper Group Holdings Ltd, a company linked to Sarawak tycoon Tan Sri Yee Ming Seng, is inviting offers for the Aloft Kuala Lumpur Sentral hotel.
It was reported that Prosper Group is hoping to fetch more than Rm400mil for the fourstar hotel. Interestingly, it was reported in January 2019 that the W Hotel was up for sale.
A report, citing sources, claimed that Tropicana Corp was asking Rm360mil (or Rm2.4mil a room) for the hotel.
Following the report, Tropicana Corp immediately denied the building was for sale, claiming in a statement that the hotel “demonstrated strong occupancy rates” and it had contributed positively to the group’s property investment portfolio in 2018.
According to Tropicana Corp’s annual report, the W Hotel is located in the city centre on 1.3 acres of land and offers 66,000 sq ft hotel facilities for guests, with 150 stylishly curated guest rooms and suites.
Amenities include an outdoor pool with a view of the PETRONAS Twin Towers, a fitness centre, spa and fine dining restaurants.
The hotel is the first W Hotel in Malaysia. The building was designed by Skidmore, Owings & Merrill LLP, the same architecture firm that also designed the Burj Khalifa in Dubai.