PROPOSED MIXED-USE DEVELOPMENT AT SUNBIRD CAPITAL, LILONGWE

Project description

The project entails a mix of complementary activities within a location. The business activities include a 150-room apartment hotel, which is basically a hotel with rooms that contain a living room, bedroom and kitchenette. Such hotels are particularly attractive to long stay guests. The project will also include a 500-seater conference centre and retail space targeting high-end regional retailers.

The proposed aparthotel will capitalise on the limited supply of quality, fully-furnished, and serviced apartments in Lilongwe. Its ideal location and comprehensive facilities will attract both business and leisure travellers. Additionally, the integrated retail centre will offer high-end amenities currently unavailable in the area, providing a unique shopping experience.

The project is promoted by Sunbird Tourism Plc, Malawi's leading hospitality company. Sunbird Hotels and Resorts, renowned as the country's premier hotel chain, boasts an impressive portfolio of nine properties strategically located across Malawi namely; City Hotels: Sunbird Capital, Sunbird Mount Soche, Sunbird Lilongwe, and Sunbird Mzuzu, popular beach resorts: Sunbird Waterfront, Sunbird Livingstonia, Sunbird Nkopola, and, Sunbird Chintheche, and an iconic mountain resort in the former capital city of Zomba; Sunbird Kuchawe. Sunbird Hotels & Resorts” the home of hospitality ’’ is known for offering excellent and personalised services, exquisite cuisine, and comfortable accommodations.

The site of the hotel is -13.9565405o latitude 33.8007125o longitude and is located in Area 11,a prime location within Lilongwe City. The site is an 11.0 acres land parcel that is currently partially cleared for a kitchen garden and the remainder has a forest cover. The land is gently sloping from the North to the South. There is a seasonal stream/storm drain a quarter of the way into the plot from the road. The plot is bordered by Sunbird Capital to the West. To the North and East is various residential developments. To the South, the plot faces the Presidential Way Road. Upper floors of the development would be able to see The Bingu wa Mutharika International Convention Centre (BICC) complex to the North-West and the city centre. The site is currently bordered by a stone wall on 3-sides with a tree-lined boundary separating it from Sunbird Capital.

Financial requirements

• Investment capital - The project will require an investment of between EUR 62.7 million and EUR 80.6 million (US$70 million - US$90 million).
• Working capital - The project has a working capital requirement of about EUR1.8 million and EUR3.6 million (US$2 million - US$4 million)
• Financing structure - A healthy mixture of debt and equity, with a debt-equity ratio of 60-40 proposed in the feasibility.

Project feasibility

The project feasibility assessment has yielded favorable results. Sunbird's proven track record in managing similar-scale projects establishes its technical capability. Feasibility and market studies have confirmed the project's viability. An Environmental Impact Assessment is scheduled for completion by the end of 2024, while technical designs are being outsourced with an expected completion date of December. Licenses will be obtained in 2024, following submission of technical designs. Notably, the project demonstrates financial viability with an Internal Rate of Return exceeding 8%, surpassing borrowing costs.

Proposed investment model

• Joint venture partnership - Sunbird is looking for Joint Venture partners for the Special Purpose Vehicles (SPV) that will be formed to implement the project.
• Financing – The joint venture partners will contribute capital at agreed participation levels and the joint venture will borrow funds for the project.
• Management - Sunbird will operate the property on a management contract.

Contacts

Sunbird Hotels and Resorts

P.O.Box 376

Blantyre

Malawi

• Barnet Gausi, Head of Finance & Company Secretary - barnet@sunbirdmalawi.com
• Thumbiko Kondowe, Senior Manager, Customer Experience - thumbiko@sunbirdmalawi.com