Inside plans to convert InterContinental Hotel into a Mall

Inside plans to convert Nairobi InterContinental Hotel into a Mall

Mwangi Gathanwa

July 23, 2021 10:10 AM

The five star hotel in Nairobi CBD has hosted dignitaries and heads of state.

The InterContinetal Nairobi

The proprietors of the InterContinental Hotel are thinking about leasing it out or transforming it into a mixed-use property.

A report by Business Daily said that Kenya Hotel Properties is recruiting a consultant to help the think tank convert the hotel which was shut down in August 2020 into profitable premises.

Some of the options the owners who include associates of former president Daniel arap Moi are considering include; office blocks, stalls and mini-hotels all in one building such as a mall.

The InterContinental Hotel in Nairobi Pulse Live Kenya

According to a statement from the hotel owners, the consultant will be expected to "Define the various strategic options available for the company premises and adjacent parking silo to repurpose the property to ensure maximum returns on investment”.

The government also has a 33.8 per cent stake in the five-star hotel with 389 rooms which offered accommodation to high profile guests and heads of state.

For years now the state has been looking for a buyer to offload its share to and the new plans could complicate the intended sale.

“There is little value for Sovereign to run the hotel. The land where the hotel sits is more important compared to the hotel,” an investment banker noted.

With a 19.2 percent stake, the Moi-linked Sovereign Group is the largest individual local investor in the hotel, while Development Bank of Kenya has a 12.99 percent stake.

Joshua Kulei, former President Moi’s former private secretary, Rodger Kacou and Ahmed Jibril own a combined stake of less than one percent in the firm.

The Intercontinental Hotels Corporation Group, which is listed in both the UK and the USA, has a 33.8 percent stake in the hotel group.

InterContinental Hotel closure

In the midst of the Covid-19 economic crisis, the InterContinental Hotel announced in August that it would terminate its lease agreements with KHP, the hotel's holding company, and close the facility.

As a result, Sovereign Group appeared to be the most likely candidate to acquire the 33.8 percent stake prior to its sale to outsiders.

The InterContinental Hotel has been struggling prior to the pandemic, and it was deemed insolvent after having failed to service its financial obligations amounting Sh717 million

Mwangi Gathanwa