The iconic Hilton Hotel building within Nairobi city centre that is up for sale could be repurposed for retail shops and student accommodation if a suggestion by its owners goes through.
The government and Hilton International Limited, who have a joint stake in the property, said the building could be used for other activities in response to changing market conditions and occupational demand.
“The key investment characteristics that highlight the capital value of the property and the asset management opportunity presented by the former Hilton Hotel are the opportunity to configure the retail space to provide more floor area for additional retailers,” the pair jointly stated.
Currently, the retail section of the building measures 28,458 square feet and has an 82 percent occupancy rate with tenants such as Cooperative Bank of Kenya, Bata Shoe Company, Lintons Place Limited, City Walk Limited, G4S Limited, Healthy U, Baus Optical and Goodlife Pharmacy Limited.
“The current passing rents for the retail leases are paid quarterly in advance and currently generate approximately Sh91,980,914 per annum. Most leases are in the second year of their lease term with a provision for rent review in the second and the fourth year of the leases,” the teaser document added.
Other alternatives for the use of the hotel space that anchor the sales pitch include the opportunity to asset-manage the former hotel areas into alternative uses such as student hostel, affordable living, or flexible offices.
Moreover, the owners of the building state that a potential investor could choose to operate the entire hotel component as a three-star facility based on the anticipation that demand for hotel accommodation will continue to grow as the city centre sees steady trade.
The landmark property comprises 333,839 square feet of built-up area and comprises 40 basement parking spaces, retail shops on the ground floor and mezzanine level, meeting/banquet facilities, and a 20-storey hotel tower that makes up 287 rooms.
The property’s hotel section that had been operated under a lease agreement by a joint venture company has been shut since December 31, 2022.
However, the owners state that the property is still well equipped with hotel-related amenities, including food and beverage facilities, housekeeping sections, a kitchen, and a bar/restaurant all remaining on site.
Last week, the government and Hilton International Limited with stakes of 40.58 percent and 59.42 percent respectively put the hotel up for sale as they sought to chart a new path for the establishment. According to the most recent filings, the combined hotel stake was valued at Sh2.09 billion as of June 2022.
Investors interested in the property will be required to fully acquire the entire shareholding of both the government and Hilton International.
The building fronts four streets including Mama Ngina Street, Watalii Lane, City Hallway, and Simba Street.
The establishment was put up in 1969 and was operated by Hilton Nairobi Limited until its closure.