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KUALA LUMPUR: The proposed sale of Sagajuta (Sabah) Sdn Bhd's Novotel Hotel in Kota Kinabalu has drawn interest from neighbouring countries, said its exclusive agent.
"So far 15 companies have responded to a call for bids since bidding started on Monday (July 15), which is quite encouraging. They are mainly hotel investors based in Malaysia, Singapore and Thailand," Zerin Properties Sdn Bhd CEO Previndran Singhe told The Edge Financial Daily.
The four-star, 16-storey, 211,086 sq ft hotel has 269 rooms that are at least 32 sq m in size. The leasehold property's tenure expires at the end of 2103.
Novotel is housed within Sagajuta's 1Borneo mixed-use commercial development in Jalan Sulaman in Kota Kinabalu, which includes the well-known 1Borneo hypermall.
The hotel has an indicative price of RM79 million, and compared to its income of RM15.04 million last year, this translates into a gross yield of 19.03%.
Previndran attributed the hotel's revenue growth — it only made RM9.9 million in 2009, a year after it opened — to the state's active tourism market and its growing oil and gas industry.
Novotel is priced at a premium considering the adjoining Grand Borneo Hotel was sold at RM86 million to the Federal Land Development Authority, said a local source.
"The RM86 million was for 325 rooms compared to Novotel's 269 rooms. However, Grand Borneo Hotel has smaller guest rooms than Novotel's which are bigger and built to international standards," said the source.
The bidding will end on July 26.
This article first appeared in The Edge Financial Daily, on July 19, 2013.
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