Steady income stream: The 300-room hotel had an occupancy rate of 60 for the financial year ended June 30, 2016.

KUALA LUMPUR: YTL Hospitality Real Estate Investment Trust (REIT) has acquired another five-star hotel, the Majestic Hotel Kuala Lumpur, from parent company YTL Corp Bhd for RM380mil in cash.

In a filing with Bursa Malaysia, Pintar Projek Sdn Bhd (the manager of the trust) said the property, on completion of the proposed acquisition, would be subleased to the vendor for 15 years with an option granted to the vendor to renew for a further 15 years.

“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 RM26.6mil in the first five years, RM27.93mil for the following five years, and RM29.33mil for the 11th year to 15th year.

Pintar Projek said the proposed purchase was expected to be completed by the end of the third quarter of 2017.

The 300-room hotel, located near KL Sentral, had an occupancy rate of 60.1% for the financial year ended June 30, 2016.

The property is the makeover and extension of the old Hotel Majestic, which is a national heritage site whose colonial structures were built in 1932.

The Majestic wing was substantially renovated, refurbished and reopened as a 300-room hotel in December 2012 with the completion of the new 15-storey tower wing.

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.

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