Karachi’s Regent Plaza Hotel is likely to be sold to be converted into a healthcare facility

Karachi’s Regent Plaza Hotel is likely to be sold to be converted into a healthcare facility as it has received a Rs14.5bn offer from SIUT!

The development emerged on Wednesday as the Pakistan Hotels Developers Ltd (PHDL), which owns Regent Plaza, a multistorey hotel situated at a prime location on Karachi’s main thoroughfare, told investors that a leading non-profit organization operating in the healthcare segment has offered to buy its property for Rs14.5 billion.

The SIUT is a non-profit healthcare organization that plans to convert the property owned by Pakistan Hotel Developers Limited (PHDL) into a tertiary-care general hospital, according to the news source.

However, the deal is yet to be accepted by the PHDL.

The listed firm attached the offer letter signed by Syed Shabbar Zaidi, who serves as a trustee on behalf of the Sindh Institute of Urology and Transplantation (SIUT) Trust.

On the other hand, speaking to the publication, SIUT Trustee Syed Shabbar Zaidi confirmed that they had offered to buy the hotel, saying it was a 47,000 square feet built structure, which could be converted into a healthcare facility within a span of one year.

“Karachi badly needs another tertiary-care health facility and constructing a large health facility by acquiring land would take years. In these circumstances, it is the best option to acquire a built structure in the heart of the city and convert it into a health facility,” said Zaidi.

Mr. Zaidi maintained that it was close to most of the health facilities, including the National Institute of Cardiovascular Diseases (NICVD), the National Institute of Child Health (NICH), and the Jinnah Postgraduate Medical Center (JPMC).

Back in September, the Pakistan Stock Exchange (PSX) was informed that the SIUT Trust intends to conduct due diligence on the five-star hotel in Karachi built on a plot measuring 13,200 square yards.

The total covered area of the multi-story building is 47,034 square yards. The two other pieces of real estate owned by PHDL with a collective area of about 14 acres are located in Thatta.

However, It is unclear if the proposed transaction in question also includes Thatta properties.

Karachi’s iconic Regent Plaza Hotel and Convention Centre is located on the main Shahrah-i-Faisal in an area of 13,200 square yards.

The hotel has 400 rooms with an occupancy rate of 19% for the year 2022-23, the latest data available showed

The occupancy rate was 20% and 9% in the preceding two financial years amid COVID-19.

In the first nine months of 2022-23, PHDL reported a net profit of Rs45.5 million, which was a 38.3% decrease from the previous year.

In 2022-23, PHDL posted a net profit of Rs44.1m, down 7.7% from a year ago.

The latest annual accounts show the company has valued its main real estate at Rs8.9bn. Its hotel building is valued at Rs 924.2 million.

According to Chase Securities Research Director Yousuf M. Farooq, SIUT Trust was acquiring only the property of PHDL, not the company itself. As such, the proceeds of this transaction will go to the company, which will still retain its listed status albeit without the main revenue-earning hotel property.

There’s not going to be any tender offer for about 11 percent stake currently held by minority shareholders given that the transaction doesn’t involve a change in the company’s ownership.