YTL Hospitality REIT is acquiring Hotel Stripes in Kuala Lumpur for MYR138 million.

The asset is being acquired from Hotel 25 Sdn Bhd, a wholly-owned subsidiary of the REIT’s sponsor.

Hotel Stripes is a 20-storey, 184-room asset with 156 car park bays.

It is located along Jalan Kamunting within the heritage community in the heart of Kuala Lumpur, and features approximately 194,000 square feet or gross floor area.

The hotel is 69.3% occupied.

The asset’s lease agreement with the current tenant features a step-up provision of five per cent for every five years.

As such, this will contribute positively to future distributable income after taking into consideration the additional income received from the lease arrangement and estimated borrowing costs, said the REIT.

It will be funded by borrowings and the REIT’s gearing ratio is expected to increase.

Assuming the acquisition is completed on 30 June 2023, the pro forma increase in the REIT’s gearing ratio is from 40.4% to 42.0%.

YTL Hospitality REIT was last done on Bursa Malaysia at MYR1.02.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.