By NST Property/ Sharen Kaur - September 7, 2023
sharen@nst.com.my
KUALA LUMPUR: YTL Hospitality Real Estate Investment Trust (YTL Hospitality REIT) has added Hotel Stripes Kuala Lumpur, Autograph Collection, to its portfolio after acquiring the property for RM138 million in cash.
Stripes Kuala Lumpur, Autograph Collection, is a five-star hotel on Jalan Kamunting in Kuala Lumpur.
The property's audited net book value was RM48.7 million as of June 30, 2022.
Maybank Trustees Bhd, the REIT's trustee, signed a conditional sale and purchase agreement with the vendor, Hotel 25 Sdn Bhd, to acquire the property on September 6.
The transaction, which is slated to close in the second half of this year, is classified as a related party transaction (RPT).
Hotel 25, a hotel operator, is an indirect wholly owned entity of YTL Corp Bhd, which is an indirect main stakeholder of Pintar Projek Sdn Bhd through its majority stake in YTL Land Sdn Bhd, Pintar Projek's parent company.
YTL Corp is also a significant unitholder in the YTL Hospitality REIT, which has a market value of around RM1.7 billion. The REIT is managed by Pintar Projek.
Following the conclusion of the proposed acquisition, the hotel will be leased back to Hotel 25 for an initial term of 15 years, with an option to renew the lease for another 15 years, according to a filing with Bursa Malaysia.
YTL Hospitality REIT said this move is part of its investment strategy and portfolio expansion.
There are 15 properties across Malaysia, Japan, and Australia that make up the portfolio, which is presently valued at RM4.825 billion.
The RM138 million acquisition price is planned to be paid by borrowings or internally produced money, it said.
YTL Hospitality REIT said the acquisition is consistent with its investment objective of continuously acquiring and investing in high-quality hospitality properties in Malaysia and internationally, with the goal of providing long-term and sustainable income distribution to unitholders and achieving long-term growth in net asset value per unit.
According to the lease agreement, the REIT will receive fixed rental payments from the tenant, with a five per cent step-up provision every five years.
"As such, the proposed lease is expected to contribute positively to future distributable income and distribution per unit of the REIT after taking into consideration, among others, the additional income received from the lease arrangement and estimated borrowing costs," it said.
YTL Hospitality REIT's net profit surged to RM141.22 million in the fiscal year ended June 30, 2023 (FY2023) from RM83.87 million a year ago, as a result of better performance and a higher fair value gain.
Revenue in FY2023 increased to RM486.83 million from RM363.86 million previously, while net property income was higher at RM251.27 million versus RM214.82 million before.
Source: https://www.nst.com.my/property/2023/09/952043/ytl-hospitality-reit-acquires-hotel-stripes-kuala-lumpur-rm138-mln
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