FOR SALE ICONIC BUSINESS HOTEL - Royal Castle Hotel - Moi Avenue, Mombasa - Knight Frank
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KnightFrank.com
FOR SALE
ICONIC BUSINESS HOTEL
Royal Castle Hotel - Moi Avenue, Mombasa
Summary
• A prime and iconic hospitality investment in an excellent location within Mombasa’s Central Business
District at the junction of Moi Avenue, Mji Pya and Customs House Roads.
• The property is popularly known as Royal Castle Hotel one of the Mombasa’s most historic hotels located
in close proximity to the famous Fort Jesus.
• The property comprises of two adjoining hotel blocks, main and new block have 5 storeys and 4 storeys
respectively totaling built up area of approximately 60,288 square feet.
• The hotel has a total of 68 hotel rooms combining standard rooms and deluxe, 7 conference facilities and
a casino. The main guest area consists of; a reception, lounge area, restaurant, bar and coffee shop.
• Situated on a substantial regular shaped plot measuring circa 1.46 Acres (0.59 ha), a large site for this
location and presently under developed.
• The property is held under a Leasehold tenure for a term of 99 years with effect from 1st January 1985
subject to payment of a revisable annual rent of a Kshs. 12,380/.
• Mains water, electricity and sewer are connected to the property. These are supplemented by 180 KVA
power backup generator, solar water heating system in the rooms and two onsite boreholes.
• For sale by informal tender subject to bid terms & conditions to be confirmed.
• Viewings strictly by appointment only.
KnightFrank.com Location Mombasa is Kenya’s second largest city after the capital Nairobi, with an estimated population of about 1.2 million people in 2016 and is situated at the south eastern end of the country adjacent to the Indian Ocean. The city serves as the main port of entry into the country via the ocean and hosts numerous export and import facilities. Mombasa port is located on the east coast of Africa approximately midway between the South African Port of Durban and major ports in the Red Sea and the Middle East. It is Kenya’s and indeed East Africa’s biggest and busiest seaport and the main gateway to East and Central Africa serving a vast hinterland of more than 120 million persons. The port is managed by the Kenya Ports Authority (KPA) and it consists of Kilindini Harbour, Port Reitz, Port Tudor, the Old Port and the whole of the tidal waters encircling Mombasa Island. The expansion of the second Mombasa port container terminal began in May 2018. This is being built on 100 acres at Kilindini harbour and will be completed in 2021 increasing the port’s capacity to handle an extra 45,000 twenty foot equivalent units (TEUS) per annum. Further, the city serves as the administrative centre for Mombasa County and is also famed for its beach resorts being East Africa’s premier seaside holiday destination. The recent and ongoing improvement of transport and communication infrastructure in the coastal region is impacting the city’s tourism activities in a positive way. Notable developments include; the completion of Dongo Kundu bypass which links the new container terminal to the airport has significantly reduced traffic congestion in Likoni area, the newly opened Nairobi Mombasa Standard Gauge Railway and the planned railway line from Lamu through Malindi, Mtwapa to Mariakani will open up the area to more tourism activities specifically focusing on local and business tourism. Situation Castle Royal Hotel is situated in an exceptional location within Mombasa’s Central Business District, at the junction of Moi Avenue, Mji Pya and Customs House Roads. It is also located 1 kilometre away from the famous Fort Jesus and approximately 12 Kilometres from the Moi International Airport which is accessed directly via Moi Avenue. Moi International Airport features regional as well as intercontinental flights offering easy connection to Mombasa from Nairobi by a 45 minute flight from Wilson Airport and Jomo Kenyatta International Airport Nairobi (JKIA). Due to the newly opened Nairobi Mombasa Standard Gauge Railway(SGR) it is also easy to travel from Nairobi to Mombasa via train on a 4 hour train journey. The hotel is located 14km from Mombasa SGR station. The hotel’s strategic location in the heart of the city offers impressive views of the coastal city as well as accessibility to other facilities and social amenities such as banks, supermarkets, the white sandy beaches and even leisurely strolls to various historic sites such as Fort Jesus. Due to its strategic location, the hotel is exposed to high traffic and excellent prominence. It enjoys strong demand for accommodation and conference facilities from corporate and international organisations to compliment the holiday guests offering a diverse client base for the hotel.
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Sentrim Royal Castle Hotel
subject property
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Description
The Royal Castle Hotel is considered as an iconic and historic hotel within Mombasa due to its impressive
architecture and appearance. The balcony area has been considered a famous meeting point within the city
for many years. Royal Castle Hotel is a 4 storey building laid out in 2 wings on a 1.46 acre plot and has a total
built up area of approximately 60,063 square feet. The hotel has a total of 68 hotel rooms combining standard
rooms and deluxe, 5 conference facilities and a casino; the main guest area consists of a reception, lounge area,
restaurant, a bar and coffee shop.
In addition, the hotel has 52 parking bays on the ground level and the property boundaries are marked by a
rendered whitewashed natural stone walling.
Mains water, electricity and sewer are connected to the property. These are supplemented by 180 KVA power
backup generator, solar water heating system in the rooms and two onsite boreholes. Other amenities include
CCTV surveillance, automated electronic card entry system, air conditioning, 2- 8 passenger lifts and fire
detectors.
The Hotel is managed by the registered owners and due to its capacity, amenities and services provided, it enjoys
good occupancy levels as it hosts a high number of local and international tourists and conferences.
Investment Considerations
The key investment characteristics that highlight the capital value of Royal Castle Hotel are:
• Exceptional location within Mombasa’s Central Business District. Due to its strategic location, the hotel is
exposed to high traffic and excellent prominence.
• Significant 0.25 acre site which is undeveloped allowing for possible future expansion.
• Strong income stream - the average revenue per annum for the hotel over the last 5 years is KES 97,407,892
and the average Gross Profit per annum over the last 5 years is KES 68,674,214.
• Good occupancy levels - in the last 1 year the hotel has enjoyed high occupancy rates at certain months of
up to 70%.
• There is a shortage of good quality business hotels on Mombasa island, there is a significant opportunity to
transform the Castle Hotel into the premier business orientated hotel within this strategic coastal city.
Some areas of the property have been leased out to 3rd party tenants on the following terms;
Current Rent Payable per
Tenant Premises Lease/License Term
month
8 years from 1st September
Playboy Casino Limited Ground Floor Kshs. 130,667
2012
2 years from 1st November
IQRA Agencies Limited Section of the Hotel Bar Ksh 18,500
2017
Section of the lobby near the 2 years from 1st November
Wilmarine Tours & Safaris Ksh 18,500
hotel reception 2017
Total Ksh 167,667
The following additional information is available on request:-
• Audited Accounts for the last 3 years
• Management Accounts for the last 5 years
• Title and Site map
• Valuation Report
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KnightFrank.com Tenure The property is held under a Leasehold tenure land reference number Mombasa/Block XXI/531for a term of 99 years with effect from 1st January 1985 subject to payment of a revisable annual rent of a Kshs. 12,380/. The resi- due unexpired is circa 66 years. Guide price: We have been instructed to seek offers in the region of Kshs 400 Million (Four Hundred Million Kenya Shillings) subject to contract exclusive of VAT. This guide price is based upon the assessment of the income earning potential of the hotel which has a respectable turnover but could be significantly improved. For more information, access to the online data room and viewing arrangements please contact the following; Contacts Anthony Havelock anthony.havelock@ke.knightfrank.com +254 [20] 423 9000 / +254 727 099 364 Judith Muange judith.muange@ke.knightfrank.com +254 [20] 423 9000 / +254 732 400 440 Kelvin Otieno kelvin.otieno@ke.knightfrank.com +254 [20] 423 9000 / +254 731 296 271 Important Notice 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank Kenya Limited in the particulars or by word of mouth or in writing (“information”) as being factually accurate about the property, its condition or its value. Neither Knight Frank Kenya Limited nor any joint agent has any authority to make any representations about the property, and accordingly any information given is entirely without responsibility on the part of the agents, seller(s) or lesson(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximate only. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other ways that these matters have been properly dealt with and that all information is correct. 4. Neither Knight Frank Kenya Limited nor the vendor of the property accepts responsibility fo any error these particulars may contain however caused. Any intending purchaser must therefore satisfy himself by inspection or otherwise as to the correctness. 5. VAT: All terms quoted are exclusive of VAT. 6. Terms and conditions for the tender apply. 7. September 2018
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