The Government of Sri Lanka launched the Request for Expression of Interest for the sale of Hotel Developers (Lanka) Limited, the holding company of Hilton Colombo, on the 10th of October 2023. The Government of Sri Lanka via the Ministry of Finance, Economic Stabilisation and National Policies has chosen Collier’s team of hospitality experts to oversee the divestiture, acting as Transaction Advisors alongside Platinum Advisors.
Hilton Colombo is an iconic five-star hotel with a 35-year operational track record, offering an extensive selection of popular facilities and highly frequented food and beverage outlets. Its prime location in the heart of the city boasts proximity to numerous landmarks such as the Presidential Secretariat, World Trade Centre, Old Dutch Hospital Entertainment Complex, Port City Financial District, Bally’s Casino and the proposed international gaming cluster, which will house two integrated gaming resorts, , Sri Lanka Exhibition & Convention Centre and One Galle Face Mall.
Considered as the premier hospitality property in Colombo, the hotel is currently undergoing an extensive revitalisation, soon unveiling 367 rooms, 15 MICE spaces and 8 F&B facilities. The property includes 19,450 sqm of revenue-generating floor area (which includes Rooms, a Ballroom, Conference Rooms and event Halls, Bars and restaurants, an Executive Lounge, a Fitness Centre, and Main Lobby including Café and reception), with a total floor area of 41,383 sqm. One significant upside the adjacent 1.9 acres of land which is connected to the main building via an overhead bridge. This site has can be redeveloped which presents a rare opportunity to create a new landmark in a prime location.
With the hotel’s strong reputation and substantial upside from future development potential, the acquisition presents a unique opportunity to secure a prestigious asset and also enter Sri Lanka’s booming hospitality industry.
The latest World Bank projections indicate that Sri Lanka’s economy will perform better than expected for 2024, forecasting a growth of 1.7%. The growth and stability bodes well for the return of business activities and also the resumption of business travel. The country has the great potential to grow as a premier MICE destination, attracting strong demand in the high-end segment from leisure and business travellers.
The tourism sector in Sri Lanka is recovering strongly, with a surge in foreign tourist arrivals of over 261% y-o-y in August 2023. The full-year 2023 number is expected to reach 2 million based on current forecasts, with the increased connectivity and focused promotional campaigns key to this growth in arrivals. India was the largest source market (18.2%) for Sri Lanka as of July this year, with arrivals continuing to grow significantly. The other key source markets include Russia, the UK, Germany and France, accounting for 35.8% of the total arrivals.
Teo Junrong, Director of Colliers commented: “The purchase of Hilton Colombo represents a rare opportunity to capitalise on Sri Lanka’s resurgent tourism industry and strategically position oneself in the most sought-after locations in Colombo. As Sri Lanka’s popularity as a travel destination continues to soar, investing in the Hilton Colombo means becoming a part of the country’s dynamic growth story and unlocking the potential for both immediate and long-term returns on investment.” The EOI for the project closes on 9th November 2023, India Standard Time (IST).
To learn more about the divestiture, contact Junrong Teo at Junrong.teo@colliers.com
