By BUSINESS TIMES
SAGAJUTA Sabah Sdn Bhd, the developer of Borneo’s largest mall – 1 Borneo Lifestyle Hypermall, will sell a 168-room hotel to Tune Hotels Sdn Bhd for RM14 million.
The hotel, scheduled to open in early 2008, is located at the RM1 billion 1 Borneo development in Kota Kinabalu, Sabah.
The hotel is expected to add impetus to the anticipated vibrancy the mall will create when it opens by the end of this year.
Sagajuta managing director Raymond Chan said the move to open a no-frills Tune Hotels.com will enable it to tap into a separate and wider segment of tourists.
Sagajuta has also signed with France’s Accor group for the opening of a 263-room four-star Novotel, scheduled for next year.
The 1.5 million sq ft of retail space, hotels and better transportation facilities could translate into sales of more than RM1 billion for the retailers at the mall.
“Our performance should be better than RM1 billion (we had projected earlier,” he said, at a joint press conference recently to announce the acquisition of the budget hotel in 1 Borneo Hypermall to be operated as Tune Hotels.com
“We have confirmed 70 per cent of our tenants. We expect it to be 90 per cent filled by year-end,” he added.
The confidence is despite the fact that the mall is located some seven kilometres away from the Kota Kinabalu city centre.
For the convenience of tourists, shuttle bus service will be provided linking major hotels within Kota Kinabalu and also between Kota Kinabalu city centre and 1 Borneo.
Hovercraft ferry services at low fares will also be provided to pick up tourists from Kota Kinabalu Terminal 1 and from Warisan Square in Kota Kinabalu to 1 Borneo.
Meanwhile, Tune Hotels’ director and co-founder Dennis Melka said that the hotel expects an average occupancy of between 75 per cent and 85 per cent and an average room rate of RM55 in the first year of operations.
Tune Hotels is planning to have 7,500 rooms with an estimated value of RM565 million over the next three years beginning 2008.
It is in the midst of finalising funding over US$70 million (RM238 million) this year from institutional property funds to finance the building of acquisition of hotels that will be operated under the Tune Hotels.com brand.