IGB raises MiCasa price tag to RM250m

IGB Corp Bhd, which owns and operates the MiCasa All Suites Hotel in Kuala Lumpur, is still interested in selling the property - but the price tag is much higher now.

Its executive director Tan Boon Lee said the hotel, which reopened last month following a two-year RM85 million renovation exercise, is now valued at RM250 million.

"If the price is right, why not?" Tan said, when asked if IGB would still be keen to sell the asset, as it did two years ago.

MiCasa closed its doors at the end of 2007 and IGB was looking to either sell the property or to give it a makeover.
The renovation is the five-star property's first major refurbishment since its opening 21 years ago.

General manager James Loo, in a recent interview with Business Times, said it expects that it will take six to seven years to recoup its RM85 million investments.

Located off Jalan Tun Razak, the hotel had its soft opening on December 9 2009 with the opening of 58 rooms from a total inventory of 242 rooms.

MiCasa plans to open a floor each week. Today, it has already opened 100 rooms.

Loo said that that following the upgrade, the hotel hopes to see gross operating profit (GOP) improve to 48 per cent from 45 per cent previously.

GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (such as wages, electricity and amenities).

In the first year of operations, MiCasa is targeting an average room rate (ARR) of RM300 and an occupancy of 65 per cent. A bulk of its market will be the long-staying corporate travellers.

"MiCasa used to have a lot of diplomats, embassy and oil and gas guests at our hotel," Loo said, adding that it plans to rope in this clientele as it now has a better product.

The hotel's business-to-leisure revenue split was 85 to 15 per cent. And it plans to keep this ratio.

Prior to its closure at the end of 2007, MiCasa posted an ARR of RM270 and an occupancy of 75 per cent.

Loo said that year-on-year growth from 2011 onwards will be RM300 in ARR and 5 per cent in occupancy.

The hotel, Loo said, was stripped bare to its structure, with the entire mechanical and engineering work redone.

By Business Times (by Vasantha Ganesan)