Banks have hired auctioneers to dispose of the Laibon Hotel in South B and the Hotel Grace Villa and Guest House in Ngara.
Kenya Shield Auctioneers is seeking between Sh175 million and Sh190 million for the six-storey Laibon consisting of 56 rooms, a bar, restaurant and offices sitting on 0.115 acres.
“Under instructions received from our principals the chargee in exercise of their statutory powers of sale conferred upon them, we shall sell by public auction the… property together with all the improvements erected thereon,” said the auctioneer in a public notice.
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“The property is developed and operated as a modern three-star hotel providing accommodation and other recreational facilities trading in the name and style of Laibon Hotel.”
Garam Investment Auctioneers is seeking Sh112.5 million for the Hotel Grace Villa and Guest House that is located near Jamhuri High School along Limuru Road.
Grace Villa is estimated to return a monthly rent of Sh1.2 million. It has shops at the front, butchery, bar, restaurant, meeting room, 11 guest rooms, servants quarters and a proposed club fitted with sound-proof walls on the stage.
“The plot extends to 0.27 acres approximately and is developed with an Asian type house modified to a commercial block partly as a hotel or guest house,” said Garam.
Banks that have repossessed prime properties from defaulting clients and put them up for auction are facing a huge task in finding buyers amid a property slump over the last few years.
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Garam is yet to find buyers for prime hotels it put on auction months ago including the Sh400-million UpperHill Hotel and the Roof Garden Hotel in Machakos associated with former Cabinet minister Gideon Ndambuki, valued at Sh75 million.
Both have an estimated monthly rent of Sh5 million and Sh1 million respectively.
Other prime properties proving a hard sell include beach properties, a three-bedroom villa at the prestigious Great Rift Valley Lodge, a penthouse at The Mirage in Westlands and a section at the NextGen Mall.
The hospitality industry has been one of the hardest hit by the coronavirus pandemic with Kenya losing Sh80 billion so far in tourism revenue, according to government data.
This week, The InterContinental Hotel announced plans to lay off all employees and close down its Kenyan operations as a result of the Covid-19 economic havoc.
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It joins a list of of premier hotels whose mainstay – tourism, events and conferences – has dried up owing to travel restrictions and other measures meant to curb the spread of the virus.
In May, Sarova Hotels announced it had dropped two properties from its portfolio, the Sarova Taita Hills Game Lodge and Sarova Salt Lick Game Lodge.
The Government moved to help the struggling sector some months ago through a stimulus and aggressive tourism marketing abroad.
However, experts say it will take some time to recover even with the easing of travel restrictions and resumption of international flights.