TROPICANA Corp Bhd is planning to sell its W Kuala Lumpur Hotel situated on the former Bok House site in Japan Ampang, here, said sources.
Sources told Business Times the Main Market-listed company had been selling assets to trim massive borrowings since 2014 and planned to hive off another property here.
It is understood that Tropicana is looking to sell the 150-room hotel for about RM360 million.
The company plans to dispose of each room for about RM2.2 million, together with 12,917 sq ft of meeting space and a ballroom.
In 2011, Tropicana inked a deal with Starwood Hotels & Resorts Worldwide to develop the hotel for about RM300 million.
Sitting atop the hotel are 350 units of serviced apartments known as The Residences, with a gross development value (GDV) of RM800 million.
The Residences was launched last year and slightly more than half the units had been sold, according to people with knowledge of the matter.
Industry players said the hotel rooms were overpriced.
“The current market value for the rooms is between RM1.6 million and RM1.8 million each.
“Tropicana has been in talks with several parties to take over the hotel but there are no takers because of the price,” said one of the sources.
The hotel, which will occupy 10 floors, is scheduled to open on March 31 next year.
Tropicana had identified RM2 billion worth of assets to be sold between 2014 and this year to raise cash and pare down its debts.
The assets are land and investment properties in the Klang Valley and Iskandar Malaysia, Johor.
The aim is to reduce its gearing ratio of 0.616 times to 0.3 times by this year.
In March 2014, Tropicana sold 128ha near Kota Kemuning, Selangor to Eco World Development Group Bhd for RM470.67 million cash.
The land is part of the 474ha Tropicana Aman township development that Tropicana acquired from the Selangor government in April 2013.
The sale generated a net gain of about RM170 million for Tropicana.
Last year, Tropicana sold Tropicana City Mall, Tropicana City office tower and its 73 per cent stake in Tropicana Tenaga Kimia Sdn Bhd for a total of RM734.7 million.
Early this year, it sold Dijaya Plaza for RM140 million cash, gaining around RM8.9 million.
Tropicana also sold Sky Express Hotel in Jalan Bukit Bintang, here, for RM55 million cash, giving it a RM2.5 million net gain.
The developer has a landbank of more than 647.5ha nationwide with potential GDV of more than RM50 billion.
It has planned to launch more than RM1.5 billion worth of new projects in fiscal year 2016.