Plenitude buys second hotel in Seoul for RM114 mil

• The company said its first hotel in that country, Travelodge Myeongdong Euljiro, has been registering an occupancy rate of above 80% and an average daily rate of more than 90,000 won (RM320) since January.

KUALA LUMPUR (Aug 17): Plenitude Bhd, which owns 10 hospitality assets, is acquiring its second hotel in South Korea for 32 billion won (RM114.3 million), in a bid to expand its footprint there.

The company said its first hotel in that country, Travelodge Myeongdong Euljiro, has been registering an occupancy rate of above 80% and an average daily rate of more than 90,000 won (RM320) since January.

Hence, it believes the second hotel will enhance its business in South Korea and achieve economies of scale in operations, especially given that the two hotels are located just 450 metres away from each other in the Seoul metropolitan area.

“The acquisition of the hotel will be a continuation of the company’s diversification of its regional risk in its hospitality business,” said Plenitude in a filing with Bursa Malaysia on Thursday (Aug 17).

The 13-storey hotel the company is buying is currently leased to MD Hotel Co Ltd and operates as Staz Hotel MyeongDong 2.  Constructed in 1990, the 174-room midscale hotel was renovated in 2014. 

Plenitude said it is buying the hotel through its 51.6%-owned indirect subsidiary Plenitude Koi Pte Ltd (PKPL) and 70.6%-owned indirect subsidiary Bizcentre Capital Pte Ltd, from MODE Tour Real Estate Investment Trust (REIT) Incorporated.

MODE Tour REIT is engaged in the operation of real estate development and management business listed on the Korea Stock Exchange.

Plenitude noted that under the Capital Market and Financial Investment Business Act of South Korea, a real estate fund is required to have at least two beneficiary certificate (BC) holders.

Therefore, PKPL and Bizcentre will subscribe for 50% each of the BC of Capstone General Private Investment Trust No 40 (accredited) (CGPI Trust), a REIT which was established for the purpose of the acquisition.

Plenitude’s effective indirect ownership of the CGPI Trust will be 61.1%.

The company said the acquisition, which is expected to be completed by Oct 6,  will increase its gearing ratio to 0.23 times from 0.21 times, for the financial year ending June 30, 2024. 

Shares in Plenitude closed up seven sen or 7.14% at a near one-year high of RM1.05, valuing the company at RM401 million.

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