(Posted 29th July 2024)
The Sheraton Kampala Hotel is reportedly on the market for some Uganda Shillings 317 billion, equivalent to US Dollars 85 million.
The hotel, commissioned in 1967 by then-President Milton Obote, originally bore the name Apolo Hotel, in recognition of Apolo being the middle name of Obote.
In 2001, the government sold the property to Midroc, a company based in Saudi Arabia, after it had rebranded in 1991 as Sheraton Kampala Hotel.
Over time, Midroc Saudi Arabia has sold shares to six other investors, including its Ethiopian subsidiary, Midroc Ethiopia, and five other Arab individuals, notably Ahmed Hussein and others.
The decision to sell the hotel has been a closely guarded secret among the owners and management. Reportedly, when approached for comments, General Manager Jean-Philippe Bittencourt firmly denied any imminent transaction, stating, “That information is inaccurate.”
However documents seen in both Arabic and English, which brokers have been using to find potential buyers, reveals detailed information about the hotel, suggesting that the General Manager of the hotel has been kept in the dark or else perhaps been told not to comment on the development.
The Sheraton Hotel sits on three plots of land: the first plot, covering 2.343 hectares, is leased until 2064; the second plot, spanning 1.362 hectares, is freehold; and the third plot, comprising 0.603 hectares, is also freehold.
The document also indicates that the hotel’s approximate income for 2022 was $9,787,03.
The asking price for the hotel is set at $85 million net, excluding commissions.
The document specifies that the company owning the 250-room hotel has a contract with the company that owns the Sheraton brand for the next ten years, divided into two five-year stages.
One of the purchase conditions is that the new owner must continue the contract with the Sheraton brand for the same duration.
Insiders privy to the sale process have revealed that the Arab investors are willing to accept as little as $70 million from a serious buyer. That said will a buyer have to invest a massive amount of money into a full refurbishment of rooms and back of house areas such as electrics, plumbing and other areas important to the cost effective running of a hotel.
The rooms and bathroom are also, compared with current international standards for 4 and 5 star hotels, rather on the small side and only a conversion of turning 3 rooms into 2 could mitigate that challenge – which would however significantly reduce the number of keys, adding yet more challenges for the new owners to profitably run the hotel.
The Sheraton Hotel’s storied history dates back to its opening on October 08th, 1967, as the Apolo Hotel, attended by Prime Minister Apollo Milton Obote.
Following Obote’s overthrow by Idi Amin in 1971, the hotel was renamed Kampala International Hotel. After Amin’s overthrow by Tanzanian forces and the Uganda National Liberation Army in 1979, and Obote’s return to power in 1980, the hotel reverted to its original name.
In 1986, the National Resistance Movement government liberalized the economy, and in 1987, a group of Middle Eastern investors secured a 25-year lease from the hotel’s owners, Apolo Hotel Corporation Limited, a government-owned entity. The hotel underwent extensive refurbishment and reopened as Sheraton Kampala Hotel under the Sheraton Hotels franchise.
The hotel’s compound was merged with the neighboring Jubilee Park, renamed Sheraton Gardens which however remains as the property of the City of Kampala, given to the Sheraton for use against maintenance.
Since then has the hotel seen some renovations especially ahead of the CHOGM Summit in 2007, culminating in its sale to Midroc Saudi Arabia in 2001.
