Boustead seeking bids for Royale Chulan Bukit Bintang

PETALING JAYA (Dec 8): Boustead Holdings Bhd, owner and operator of a portfolio of hotels is seeking bids for Royale Chulan Bukit Bintang in Kuala Lumpur, after having received offers to purchase it. 

According to sources cited by The Edge, Boustead has set a reserve price of about RM190 million for the four-star hospitality asset. 

The hotel is 21 years old, comprises 400 rooms and sits on a 0.77-acre site in the tourist zone of Bukit Bintang. 

"We received expressions of interest for this particular hotel and after a valuation exercise was carried out, we felt the best way to go about this was to invite bids for the hotel," a Boustead spokesman says to the publication. 

"We have sent out invitations to several interested parties to submit bids."

Marketing for the hotel has been undertaken by Boustead themselves, and real estate agents have been invited to submit offers on behalf of their clients.

Boustead operates two hotels within 2km of Kuala Lumpur, and is likely experiencing intense competition from new hotels and alternative accommodation providers.

"We currently have two Royale Chulan branded hotels in Kuala Lumpur - Royale Chulan Kuala Lumpur in Jalan Conlay and Royale Chulan Bukit Bintang in Jalan Bukit Bintang - which are in close proximity to each other, vying for virtually the same target market although one (the Bukit Bintang property) is a four-star (category hotel) and the other is a five-star," says the spokesman.

"In view of this, coupled with the fact that there are many smaller hotels in the same vicinity, it makes good business sense to just have one hotel in Kuala Lumpur. Furthermore, we have received many expressions of interest for this hotel given its prime location in the tourist belt of KL and its proximity to the MRT and shopping district."

Average occupancy last year was 54% and an average room room rate of RM191.30. This year is expected to be the same. 

Regarding renovation and refurbishment last done, the spokesman said: "The hotel is in good condition as yearly refurbishments are undertaken as a matter of policy to maintain the condition of all Royale Chulan branded hotels within the Boustead group."
The Royale Chulan Bukit Bintang is located on the same street that saw the highest per room hotel deal nationwide, (with the exception of Langkawi) as well as the highest per sq ft land deal in the country. 

The 433-room Westin Kuala Lumpur was sold at RM455 million, or RM1,027 million per room, and a land parcel next to the Grand Millennium Hotel in Bukit Bintang was purchased by Ten Sri Desmond Lim Siew Choon for RM7,209 per sq ft from Kwek Leng Beng's CDL Hotels (M) Sdn Bhd.