Felda Investment Corp Sdn Bhd (FIC) may have to sell Merdeka Palace Hotel and Suites in Kuching, Sarawak at a loss, reported The Edge.
This comes as the corporation had acquired the four-star hotel at an inflated price of RM160 million or RM751,713 per room in 2014, showed documents seized by Malaysian Anti-Corruption Commission during its investigation of FIC’s investment in a London property.
While no reserve price had been set for the asset, FIC had already started inviting bids for the 21-storey hotel.
A real estate agent, however, noted that Aloft Kuala Lumpur at Kuala Lumpur Sentral and DoubleTree by Hilton Hotel near KLCC were sold for RM870,000 and RM718,518 per room, respectively.
“You can’t get these prices in Sarawak. Kuching is not a tourism hub,” said the agent.
Another real estate agent believes that the widely reported figure of RM110 million or RM516,000 per room – which is considered as more accurate price tag for the hotel – is still too expensive for Kuching.
Nonetheless, an agent specialising in hospitality sees potential in the property.
“For a decently run hotel in Kuching, the average price per room would be between RM400,000 and RM500,000. Merdeka Palace was poorly managed previously and is in need of a lot of investment to make it more competitive.”
“Overall, it is an attractive asset as it offers a great turnaround opportunity. The new professional team seems capable of making the hotel a success. So, if given time, I think the hotel will do well.”
Situated at Jalan Tun Abang Haji Openg and Jalan McDougall, the 213-room hotel has a total gross floor area of 457,623 sq ft and 834 years left on its lease. The hotel’s facilities include a café, restaurant, pub and wine section, retail shop, swimming pool, whisky and cigars section, function rooms and banquet halls.
FIC, which is owned by Felda, is the registered owner of the land, while FIC Kuching Property Sdn Bhd, a wholly owned subsidiary of FIC, has been given the business license to operate Merdeka Palace Hotel and Suites.
FIC Kuching posted a net loss of RM221,835 on the back of RM5.85 million revenue during the financial year ended 30 December 2015.
Image sourced from Agoda.com
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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