PROSPER Group Holdings Ltd, a company linked to low-profile Sarawak tycoon Tan Sri Yee Ming Seng, is inviting offers for the Aloft Kuala Lumpur Sentral hotel. The vendor, who bought the hospitality asset 6½ years ago, hopes to fetch as much as RM430 million.

Prosper Group purchased the 482-room hotel, managed by Marriott International Inc, in 2016 from London-listed property developer Aseana Properties Ltd. Ireka Corp Bhd has a 23% stake in Aseana Properties. The group paid RM418.7 million, or RM870,000 per room, for the asset. The purchase price included the purchase of the entire issued share capital of ASPL M3B Ltd and Iringan Flora Sdn Bhd (which owns and operates Aloft) and the assumption of certain debts, assets and liabilities of Aloft.

An industry source says the vendor hopes to sell the asset at between RM420 million and RM430 million, which is slightly above its purchase price. It is worth noting that international tourism is not back at full capacity and that the property market remains tough due to the lingering effects of the pandemic.

A two-page document — with the heading “Leading upscale Business Hotel for Sale in KL Sentral, Kuala Lumpur, Malaysia” — sighted by The Edge, reveals that real estate agency Savills Malaysia has been appointed as the exclusive marketing agent to find a buyer.

When contacted for details,  Savills deputy managing director and head of capital markets Nabeel Hussain declined to comment.

The document sent out to potential buyers states that the investment would present an “opportunity to acquire a leading upscale business hotel prominently located in the country’s primary transport hub”.

As the asset is located at Sentral Station, it provides links across Greater Kuala Lumpur through MRT, LRT, Monorail and KTM Komuter lines. It also links to KLIA (Kuala Lumpur International Airport) via the KLIA Express and the Sultan Abdul Aziz Shah Airport (Subang Airport) via the Skypark Link railway system.

“The unbeatable combination of prime location, excellent accessibility and the availability of nearly 10 million sq ft of high-grade office space has made KL Sentral the leading location of choice for both blue chip MNCs and large local corporates, which naturally then fuels strong demand for the lodging, F&B and MICE offerings within the hotel,” the document reads.

Apart from Aloft, there are three other hotels within KL Sentral — Le Meridien, St Regis and Hilton. With the exception of Hilton, the other hotels are all brands under Marriott International.

On performance, the document points out that since Aloft’s opening, the hotel has been a preferred location for corporate and leisure stays, with average occupancy rates consistently hitting above 85% (pre-pandemic) despite its large room inventory of nearly 500 keys. “With the reopening of Malaysia’s borders in 2Q2022, performance has sharply rebounded despite a rebalancing of the demand from the corporate and leisure segment and it is expected that the property should return to 2019 levels by end-2023.”

While the document does not specify which hotel is up for sale, the number of guestrooms tallies with that of Aloft. The hotel, completed in 2013, is a freehold property with a gross floor area of 43,410 sq m.

Meanwhile, a search on the Companies Commission of Malaysia website reveals that Iringan Flora is wholly owned by ASPL M3B. The directors of the company are Ming Seng, Yee Ying Ling and Adrian Wei Hua Ung. Based on the latest available financials, in the financial year ended Dec 31, 2020, the hotel saw revenue decline sharply to RM16.58 million from RM76.92 million in the previous year, due to the pandemic. The company also recorded a net loss of RM37.45 million.

Ming Seng is a low-profile businessman from Sarawak with interests in plantations, hotels and real estate. He is also behind the Promenade Hotel in Kota Kinabalu, Sabah, and is currently constructing the Sheraton Kuching in Sarawak.

When asked to comment on the sale, VPC Alliance Malaysia managing director James Wong says: “It is interesting to note that Aloft KL Sentral, a four-star hotel, is back on the market for sale, after it was purchased in 2016.

“Despite the pandemic, there are no recent sales of four- and five-star hotels in Kuala Lumpur except for the Sheraton Imperial [Kuala Lumpur] Hotel, a five-star 398-room hotel purchased by Achi Jaya Plantations Sdn Bhd for RM235 million in February 2022.”

He adds that the deal was a good buy. He also points out that currently, there are not many hotels in Kuala Lumpur available for sale.

Achi Jaya is linked to Sarawak Governor Tun Abdul Taib Mahmud’s brother and long-time business associate Tan Sri Onn Mahmud.

According to Wong, Aloft is attractive because it is located in the transport hub of Kuala Lumpur and is managed by Marriott International.

“Given that international travel is not back to pre-pandemic levels yet, we reckon the market value of the hotel will be between RM700,000 and RM750,000 per room,” he says. This means, he pegs the price of the asset at between RM337.4 million and RM361.5 million.

Siva Shanker, CEO of real estate agency at Rahim & Co, opines that it will not be tough to sell Aloft. He says that while Covid-19 had devastated the hospitality industry, we are now at the tail end of the pandemic and the market is bouncing back. He points out that his firm is negotiating to be appointed as the exclusive marketing agent for a couple of major hotels, signalling that buying and selling activities are resuming.

“Occupancy rates are surging. We are bullish about the industry. Although the hotel guests are mostly locals, foreign tourists are returning too. It will not be difficult to sell the hotel if the price and terms are reasonable. I believe a buyer will emerge,” he says.