InterContinental Hotel. FILE PHOTO | NMG The owners of InterContinental Hotel, including allies of former president Daniel arap Moi, are considering leasing out the building or converting it into a mixed-used property, complicating the State’s efforts to sell its 33.8 percent stake in the five-star hotel.
Kenya Hotel Properties (KHP) is seeking a consultant to advise on change of business model for the hotel, which closed permanently in August last year, to include a mixed-use approach —signalling the hotel building could be converted to office blocks, shops and mini-hotels.
It is also open to selling or leasing the InterContinental hotel building to the government, which owns several buildings in the vicinity including Parliament, KICC and Sheria House.
The permanent closure and the decision of global chain InterContinental Hotels Group (IHG) to stop running the Nairobi hotel has downgraded its value.
“Define the various strategic options available for the company premises and adjacent parking silo to repurpose the property to ensure maximum returns on investment,” said KHP in a notice seeking consultants.
“To envision and evaluate a mixed-use approach to the premises together with the pros and cons associated therewith.”
This signals that KHP is keen on earning leasing fees from the 389-room InterContinental Hotel, whose sale of the government stake has dragged for more than a decade.
An investment banker close to the Moi-linked Sovereign Group told the Business Daily earlier that the firm had little interest in purchasing the government stake amid the slump in the travel sector and the exit of the anchor partner — the IHG.
“There is little value for Sovereign to run the hotel. The land where the hotel sits is more important compared to the hotel,” said the investment banker who requested not to be identified.
The Privatisation Commission was expected to start talks with Sovereign Group to buy the stake that the government holds in the hotel.
But the commission, which is in charge of sale of government firms, sad it had yet to receive offers from local or foreign buyers willing to acquire the stake in the hotel, which closed in August at the height of the Covid-19 crisis.Sovereign Group is the largest individual local investor in the hotel with a 19.2 percent stake while Development Bank of Kenya has a 12.99 percent stake.Joshua Kulei, former President Moi’s former private secretary, Rodger Kacou and Ahmed Jibril own a combined stake of less than one percent in the firm.The Intercontinental Hotels Corporation […]