Keppel Corporation is going to sell its Sedona Hotel Yangon in Myanmar for $57.4 million. This development comes as the Myanmar’s hospitality industry is struggling to rebound from the impact of COVID-19 pandemic and the military takeover in 2021. The Singaporean conglomerate is going to sell its Myanmar hotel business holding company to Spring Blossom Ventures. Registered in Singapore, Spring Blossom’s primary business is investment holding and investment in the hospitality industry. The deal will likely be completed by the first half of 2023. Low Heng Huat, Chief Executive Officer (CEO) and among the three shareholders of Spring Blossom Ventures, confirmed the deal on Thursday, as reported by Nikkei Asia.
Spring Blossom intends to continue operating the property as a hotel, with Low Heng Huat stating that they are looking for a new hotel operator. Keppel has been increasing the liquidation of assets in an attempt to strengthen its environmental business. According to Keppel, divestment from the upscale Sedona is going to allow the company to unlock capital which can be used for new growth opportunities. The corporation booked a charge for the hotel, which had suspended operations because of the pandemic.
While talking about the business climate of Myanmar, Low Heng Huat said that the situation is getting stable and that the country needs to move forward.
Several hotels in Myanmar remain shuttered despite the weakening of Pandemic. Myanmar-based CIM Property Consultants stated in a report accessed by Nikeei, “While demand for upscale hotels has slightly improved, the entry of foreign arrivals is modest, keeping most assets to record underwhelming performances.”
The statement further said that they expect the overall demand to remain subdued in the near to medium term. The report added that the sizable improvements will only be seen if significant economic reforms are implemented.
Opened in 1996, Sedona Hotel Yangon was one of the first international hotels to open in Myanmar. In 2015, a new building was added during the high expectations for expanding democratisation, increasing the number of guest rooms to about 800.
Keppel also develops and holds high-end office properties in Yangon in a joint venture with major local conglomerate Shwe Taung Group.
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