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 Daily Independent Online.
* Monday, August 09, 2004.
Nigeria’s largest
hotel to gulp N16.6b
Ask Lagosians what
new face they’d love their city to wear, and close to the top of the list
would be the restoration of its once-vibrant nightlife. This dream is
about to come true.
Development Reporter, Ntai Bagshaw, writes that a group of
investors have splashed a whooping $120 million (N16.6 billion) for the
construction of Nigeria’s largest and finest hospitality centre in Lagos.
Even
with its sometimes-unflattering nature, it is difficult not to like Lagos
and admire the achievements of its people. Perhaps, no other African city
can boast of its accomplishments on so many fronts - commerce, industry,
sports and so on. Yet Lagos is also overwhelmed by the poor state of its
hospitality infrastructure. As the number of its fun-seeking inhabitants
burgeons, tourism practitioners and business people have continually
looked for better ways to meet their ever-expanding needs. Interestingly,
that quest is about to be fulfilled.
Thanks to plans to turn the 70
year-old Ikoyi Hotel - one the city’s several past glories - into
Nigeria’s largest and finest hospitality centre, the city now has an
opportunity to reclaim its position as Africa’s prime hospitality
destination. Beta Consortium - owned by a variety of leading business
enterprises in Nigeria including First Atlantic Asset Management and
Niger Insurance Plc - is the brain behind the project.
The investors took over the
ownership of the hotel from the Federal Government in 2002 after a
competitive bidding process organised by the Bureau of Public Enterprises
(BPE). When completed, the facility will be professionally managed by
South Africa’s Southern Sun Hotel Group, which has 34 years of experience
in serving the international business and leisure travelers. The landmark
deal between both parties will gulp a whooping $120 million (about N16.6
billion). The Southern Sun Group is a multiple brand hotel group
incorporating luxury hotels like Southern Sun Collection,
InterContinental, Southern Sun Hotels and Crowne Plaza. Southern Sun
Timeshare Resorts, Holiday Inn, Express By Holiday Inn and Formula One
hotels are also under its umbrella.
It currently operates 82 hotels in seven African countries
including South Africa, Rwanda, Zambia and Kenya. Others are Mozambique,
Tanzania and the Seychelles. With over 13,000 rooms in its portfolio,
Southern Sun is ranked in top 50 hotels worldwide.
Already christened Ikoyi Sun
Hotel, the project will incorporate the first complete modern commercial
community comprising hotels, shopping mall, movie theatres, apartments,
entertainment centres and offices. To be completed in five phases
commencing this month and ending in 2007, the entire development will be
designed and constructed to comply with both international and local life
safety standards. “The idea is to create a city within a city,” Barry Van
Wyk, a project development executive says.
The facility,
when completed, will serve to revitalise the entire Ikoyi/Victoria Island
area as well as provide relaxation and recreational destination for high
net worth individuals in the vicinity. It will re-establish Ikoyi as the
premier destination in Lagos for hotel accommodation, entertainment,
shopping, office accommodation, apartment suites and
conferences/functions. The complementary mixed use concept of this
project ensures that tenants, visitors and guests will at all times
experience a vibrant atmosphere offering a multitude of activities, all
within a secure and controlled environment.
What exactly does the project
entail? According to the manager, the first phase, to be completed late
next year, will see the refurbishment of two existing blocks - Azikiwe
and Oduduwa - within the hotel complex. This conversion involves the
development of two 250-room hotels with four-star rating, to be branded
“Holiday Inn and Southern Sun”. The second phase involves the
construction of a shopping mall and parkade. “Two floors of shopping
space will be erected in addition to two floors of parking facilities,”
Van Wyk explains. “Total shopping area of mall will be approximately
26,000 square meters with 20,000 square meters of gross leasable area,
six screen movie theatre and games arcade. The total number of parking
spaces will be about 1080 bays.”
Excited already? Here comes
the clincher: Phase four, anticipated to be completed in 2007, consists
of the construction of a further 250 hotel rooms of 5-star quality,
branded ‘Intercontinental’. During the fifth and final phase also to be
completed in 2007, a new convention center and banquet hall will be built.
Despite its impressive
statistics, many fear that this gigantic project may suffer from
perceived setbacks in poor flow of funds and material delays. But the
project managers allay such fears. Their credibility, some experts say, is
unflappable. Many say the personal involvement of astute entrepreneur,
Olorogun O’tega Emerhor, in the project, is enough guarantee to see it
through. “Beta Consortium is run by seasoned developers and businessmen.
I don’t think the project, notwithstanding its size, will be left half
way,” Michael Osuji, a seasoned estate surveyor says. “Lagosians, indeed
Nigerians, will soon witness the sort of hospitality service found only
in South Africa on the African continent. It will be everyone’s pride”
A profile of the project team
lays credence to this fact. Stauch Vorster, a Pretoria, South
Africa-based firm of architects established in 1943, leads it. Analysts
say it is perhaps the most experienced architectural practice in Africa.
Next comes the DSGN Group, a firm of seasoned interior decorators with
track record of designing over one million square meters of interiors, is
handling the interiors. The quantity surveying is being undertaken by
MLC, a firm with over 65 years experience. Altogether, these seasoned
professional are brains behind the construction of key projects in South
Africa like Sandton Square, Sun City, East Rand Mall, and the Waterfront
Cape Town.
With such huge funds splashed
on a single development project, sceptics are at a loss as to when it
will begin to yield some income. “I doubt if the investors start to see
returns on such a huge investment soon,” Dele Akinmade, a real estate
analyst says. “But I know the project will transform Nigeria’s
hospitality landscape and give Lagosians, especially Ikoyi and Victoria
Island residents value for money.”
Van Wyk allayed fears about
the immediate profitability of the project. He said: “The refurbishment
will have 250 Holiday Inn and Southern Sun branded rooms earning income
within 12 months unlike the case of a new build.” The main attraction of
the multi-purpose project, Van Wyk notes, is its unique planned use such
that it is a 24-hour earning asset. “There will be nighttime earning
capacity through hotel accommodation, day time earning capacity through
office space, shopping mall and parkade, and evening earning capacity
through shopping mall, movies theatres, entertainment complex and
parkade,” he said, adding, “Shopping mall facilities will run over the
weekend.” Speaking on the rationale behind
Southern Sun’s interests in the deal, Ron Stringfellow, the hotel group’s
chairman, identified Nigeria as a major investment destination in Africa
- one that cannot be bypassed. “There is vast opportunity in Nigeria.
Over the last four years, what we have been looking for is to identify
the right partner and site to build a world class hotel and we have found
one,” Stringfellow said. Flaunting the choice site of the multi-function
facility, he blurted: “It’s going to be the best site in Lagos. And I’m not
talking about a very good hotel, I’m talking about a world class hotel.”
Obviously very optimistic
about the viability of the project, the managers also announced plans to
list it on the stock exchange when it becomes fully operational.
According to Stringfellow, the project should generate superior returns
for investors with scope to realise the investment via a stock exchange
listing. Says Emerhor: “The type of value addition will be enormous - one
that will attract investors to join in benefiting from our growth.”
Stringfellow sees this as the
start of his group’s expansion into Nigeria, with opportunity for the
introduction of additional quality hotels in Lagos and other cities like
Port Harcourt. “Nigeria could well be the catalyst for a strong Southern
Sun presence in other oil producing countries in West Africa,” he says,”
adding, “we aim to remain Africa’s finest, most innovative and relevant
hotel group.’’
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