The latest establishment to go under is the Nairobi UpperHill Hotel which has been put up for auction. The hotel is owned by businessman Wahome Muotia.
On Monday, Garam Investments Auctioneers listed the four-storey property in the local dailies and invited potential buyers to snap up the property. The bidding deposit is Sh10 million.
The hotel, which is located in the prime Upper Hill area, is set to be auctioned on February 11 to recover a debt owed to the National Bank of Kenya.
“Note there is structural weakness in funding Africans building hotels in Kenya because you are required to service a loan immediately after drawdown and unfortunately a hotel takes 36 months to construct. For example, from ordering to installation of a lift takes one year; plus once opened, a new hotel makes losses for five years,” Mr Muotia told Business Daily in a past interview.
According to the auctioneers, the leasehold property has a Sh5 million gross monthly income and its lease has 76 years to expiry. The annual revisable ground rent is Sh18,800.
Nairobi UpperHill Hotel now joins a growing list of fallen establishments such as Roof Garden Hotel owned by former Cabinet minister Gideon Ndambuki. The six-storey hotel in Machakos town was advertised for auctioning a fortnight ago.
Jacaranda Hotel, owned by the late Njenga Karume, is also staring at the same fate over a Sh250 million ($2.5 million) loan from GT Bank in 2014 and 2015 and is up for auction. The family of the late tycoon are currently fighting desperately to save the establishment.
Boma Hotels, which is owned by the Kenya Red Cross, also went under receivership over failure to pay loans owed to National Bank.
Last month, nine prime residential hotel apartments in Pangoni Beach Resort in Shanzu, Mombasa, were also put up for sale by auctioneers due to outstanding loan payments.
The situation is expected to even get dire as the cash-strapped Uhuruto government moves to tighten its belt and implement austerity measures by relocating training sessions to its own facilities denying privately-owned hotels much needed revenue that they had for years been relying upon to stay afloat.
