This article first appeared in The Edge Malaysia Weekly on July 4, 2022 - July 10, 2022

THE five-star Sheraton Imperial Kuala Lumpur Hotel — one of Kuala Lumpur’s iconic buildings on Jalan Sultan Ismail — has been sold to a company linked to Sarawak Governor Tun Abdul Taib Mahmud’s brother and long-time business associate Tan Sri Datuk Wira Onn Mahmud for about RM250 million, according to sources.

The Edge has learnt that Achi Jaya Group of Companies has acquired the 33-storey hotel.

When contacted, Sarkunan Subramaniam, managing director of Knight Frank Malaysia — the real estate firm appointed to complete the sales transaction — said it was unable to comment after signing a non-disclosure agreement.

The 398-room Sheraton Imperial KL is reportedly owned by Inter Heritage (M) Sdn Bhd, in which Indonesian billionaire Tan Sri Peter Sondakh’s Rajawali Group owns a 51% stake through Eagle High Properties Pte, with the remaining 49% owned by the world’s largest hotel chain, US-based Marriott International, via Granton International Ltd.

A back-of-the-envelope calculation suggests that at a RM250 million price tag, the deal would have fetched RM628,140 per room.

This is fairly higher than other renowned hotels sold on the market in recent years.

In 2018, The Swiss Garden Inn was sold unrefurbished for RM130 million (RM439,200 per room); and, in 2019, Boustead Holdings Bhd (BHB) sold the Royale Chulan Bukit Bintang Hotel in Kuala Lumpur unrefurbished for RM177.3 million (RM443,250 per room) cash.

In addition, Renaissance Kuala Lumpur Hotel was sold for RM765 million in 2016 by the Tan family-controlled IGB Corp Bhd, which had purchased the property for RM506.6 million in 1996.

At that price tag, the buyer — Ventura International Sdn Bhd (formerly known as Canali Logistics Sdn Bhd) — paid RM840,659 per room for the 910-room hotel.

In 2017, Hilton Kuala Lumpur in Kuala Lumpur Sentral was sold for ¥13.7 billion (RM497 million) to the owner of the hotel adjacent to it — the Le Méridien Kuala Lumpur.

It is unclear whether Sheraton Imperial KL was acquired by Achi Jaya Holdings Sdn Bhd, formerly known as Achi Corp Sdn Bhd, or Achi Jaya Plantations Sdn Bhd.

Companies Commission of Malaysia (SSM) data shows that Kuching-based Achi Jaya Holdings is owned by Onn, with his wife Halimatun Abdul Ghani holding one share in the company. Achi Jaya Holdings is engaged in management services, property and investment holding, and property letting.

The company posted a 14% decline in net profit to RM4.84 million in the financial year ended Dec 31, 2020, (FY2020) from RM5.63 million the previous year. Revenue was flat, at RM281.86 million, in FY2020.

According to SSM, oil palm planter Achi Jaya Plantations is 14%-owned by Achi Jaya Holdings, while Onn holds a 12% stake, Herolite Investment Ltd and Grand Shine Trading Ltd hold a 37% stake each, and Halimatun also holding one share in the company. The company posted a net profit of RM41.35 million on revenue of RM173.43 million in FY2020. Both Achi Jaya Holdings and Achi Jaya Plantations have yet to file their financial statements for FY2021.

News of Sheraton Imperial KL’s owners’ intention to sell the hotel surfaced as far back as May 2019, when The Edge reported that Rajawali Group and Granton International had put the property up for sale because of a combination of factors, including continued losses sustained by the property, a glut of office space in the capital, increasing competition in the hotel space from newer hotels, as well as alternative accommodation providers such as Airbnb. Quoting industry sources, the article said the hotel and the Faber Imperial office tower next door could fetch between RM450 million and RM500 million.

Sheraton Imperial KL opened its doors in 1997 and went through a multimillion-dollar facelift in 2018. In June 2020, the hotel announced in an internally circulated letter that it had decided to close its doors temporarily until Dec 31 that year. The move was made as a result of the difficult times the hotel had been going through because of the pandemic.

It has since resumed operations as usual.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.