First Capital Bank wants speedy re-opening of Kingdom Hotel

FIRST Capital Bank, owners of the building that was exited by Kingdom Hotel in Victoria Falls, will put the facility to tender to get a new tenant to ensure speedy reopening to boost the tourism sector.

The tender process will be all-encompassing and open to interested parties – locally, regionally and internationally.
The African Sun Limited (ASL), which owned Kingdom Hotel, exited the premises on January 5 citing lease tenure disagreement with the property owner.

The hotel has 294 rooms and the Great Enclosure conference facility, making it the biggest in Victoria Falls.
First Capital Bank owns 50 percent shares of the facility with the other 50 percent owned by Barclays Bank Pension Fund.
Enquiries by Business Chronicle on the background of the property revealed that ASL ceded ownership of the property at the turn of the century.

African Sun Limited

The hotel group had used the property as collateral security while applying for a loan to refurbish the premises, and when it failed to service a loan, lost ownership of the building.

Business Chronicle understands the property was built in 1965 as Casino Hotel. It was later bought by the Southern Sun group of hotels and was named Makasa Sun Casino Hotels.

After independence, Southern Sun split to form Southern Sun South Africa and Zimbabwe Sun which later rebranded to African Sun Hotels in 2005.

ASL had 100 percent ownership of the property.
Kingdom Hotel in Victoria Falls was born around 1999 after renovations that had started a few years earlier.

First Capital Bank

When the hotel group reportedly failed to service the loan, the property was then transferred to Barclays Bank and in 2001, ASL started renting the property that was formerly theirs after losing ownership, and were given a lease.

When the lease lapsed after 20 years, First Capital Bank which had bought ownership from Barclays Bank in 2017 assumed ownership and offered ASL a two-year lease, which the hotel group turned down opting to exit as they wanted a longer lease.

ASL had not responded to questions sent to them yesterday.
In an interview in Victoria Falls, First Capital Bank managing director Mr Ciaran McSharry, could not be drawn into commenting directly about the ownership issues, but said the two partners had cordial relations and the hotel’s exit was mutual.

He said while the bank had no interest in direct hotel industry business, it was committed to making sure the facility is quickly re-opened for the benefit of tourism in general.

“The hotel was not closed but African Sun surrendered the lease. It was their decision and they will be exiting the hotel. Their operations ended just after Christmas and they are in the exit process, likely to be vacating at the end of February,” said Mr McSharry.

He maintained that the closure of the facility is temporary and the bank will be investing in its refurbishment before going to tender.

“First Capital is absolutely not going there, it’s not our business, our business is banking and so we leave the hotel to tourism experts and ours is to lease the asset to them to operate.

Mr Ciaran McSharry

“We will invest money in the upgrade of the infrastructure and while at the same time we will go to tender for local, regional and international takers with the aim of getting the right tenant into the hotel.

“We look forward to long term growth of the hotel which has a fantastic potential and we are going to make sure we maximise that potential clearly for the bank, for Victoria Falls and the country at large,” said Mr McSharry.
He said the aim is to keep the closure period as short as possible.
An expert consultant was engaged to manage the transition process.

Barclays Bank

“I may not be able to give timelines at this stage but I am glad to say our aim is to keep the closure of the hotel to a shorter time as possible. Right now we are focused on working with African Sun on the exit transition,” added Mr McSharry.
Tourism industry experts have said the exit of Kingdom Bank was a huge setback for Victoria Falls and was likely to have an impact on accommodation due to the shortage of rooms.

The country is pushing for more properties through partnerships with the private sector as it targets a US$5 billion tourism industry by 2025.

President Mnangagwa in August 2020 launched the National Tourism Growth and Recovery Strategy whose vision is to steer the sector back to a growth trajectory in the wake of the impact of Covid-19. –chronice.cl.zw