The Majestic Hotel in heart of old Kuala Lumpur is an iconic part of the city’s historical landscape. While it may have momentarily lost its lustre in decades past, it has seen a remarkable return to grandeur under the ownership YTL Corp Bhd.
Success has also translated into positive business for the refurbished hotel, which now enjoys the same high occupancy and prominence as it did when it first opened its doors 1932.
This progress has prompted YTL Hospitality Real Estate Investment Trust (REIT) to zero-in on the opportunity and purchase the five-star hotel from parent company YTL Corp for RM380 million in cash.
According to a filing with Bursa Malaysia, trust manager Pintar Projek Sdn Bhd (PPSB) said that once the proposed acquisition is completed, the trust would sublease the property to the vendor for 15 years – with an option to renew for another 15 years following this period.
PPSB said the sub-lease arrangement will provide YTL REIT with a steady and secure income stream and it is expected to be accretive to the trust’s future distributable income and distribution per unit.
Under the proposed deal, the annual rental payments would be RM26.6 million in the first five years, RM27.93 million for the following five years, and RM29.33 million for the 11th to the 15th year.
The proposed purchase is targeted to be completed before the end of the third quarter this year.
The Majestic Hotel along Jalan Sultan Hisamuddin, enjoys proximity to Dataran Merdeka, the old KL Train Station and the modern transport hub of KL Sentral. The 300-room facility has registered an average occupancy rate of more than 60 per cent for most of 2016.
As part of the makeover and extension of the heritage building, YTL Corp substantially renovated and refurbished most of the interior and added a new 15-storey wing. However, much of the original colonial look and feel has been retained with aesthetic enhancements.
Other key hospitality properties under the YTL REIT portfolio include the JW Marriott Hotel Kuala Lumpur and The Ritz-Carlton Kuala Lumpur as well as Marriott hotels at Sydney Harbour, Brisbane and Melbourne in Australia.