YTL Hospitality Real Estate Investment Trust has acquired the Majestic Hotel Kuala Lumpur from parent company YTL Corp. for RM380 milllion in cash.
In a filing with Bursa Malaysia, trust manager Pintar Projek said that upon completing the deal, the property would be subleased to the vendor for 15 years with an option granted to the vendor to renew for a further 15 years. The proposed purchase was expected to be completed by the end of the third quarter of 2017.
“The sub-lease arrangement will provide YTL REIT with a steady and secure income stream and is expected to be accretive to the trust’s future distributable income and distribution per unit,” it said.
The annual rental payments would be RM26.6 million for the first five years, RM27.93 million for the following five and RM29.33 million for the 11th year to 15th year.
The 300-guestroom hotel, formerly the historic Hotel Majestic, reportedly had an occupancy rate of 60.1 percent for the financial year ended June 30, 2016.
Properties under YTL REIT include the JW Marriott Hotel Kuala Lumpur, The Ritz-Carlton Kuala Lumpur, and the Sydney Harbour, Brisbane and Melbourne Marriott hotels in Australia.