Nigerian Real Estate Group, UACN Properties Development Company Ltd (UPDC) has reported that it will be selling its subsidiary UPDC Hotels Ltd.
UPDC Hotels owns the Festac 77 Hotels, also known as Golden Tulip Hotels located in the Amuwo Odofin area of Lagos State.
The company stated this in its 2017 Annual Report published on Thursday on the website of the Nigerian Stock Exchange. UPDC, the property arm of UAC Nigeria, posted a loss after tax of N2.6 billion for the period ended December 2017 a back to back loss after reporting N998 million in losses for 2016.
In a disclosure made by the company, it revealed that “The Board has decided to sell its investment in UPDC Hotels (UHL)” which it expects “to be completed within a year from the reporting date.”
Mounting losses force sale
UPDC Hotel is the company’s hotel division where Golden Tulip (Festac 77 Hotels) reports its earnings. The hotel reported a revenue of N1.62 billion in 2017, a 20% rise from the N1.2 billion reported a year earlier. However, losses continued in 2017, as it reported a loss of N293.6 million compared to a loss of N552.2 million in 2016. In 2015, the hotel reported losses of N773 million compared to N160 million in 2014. UPDC Hotels has reported losses since its inception in 2010.
The book value of the hotel is reported to be N12.29 billion according to its financial statement for the period. UPDC owns about 97% of UPDC Hotels.
The company also reported that Festival Mall reported a loss after tax of N645 million for the year ended December 2017. Revenue from the mall was N717 million while it disclosed an interest expense of N1.7 billion. UPDC owns a 45% stake in Festival Mall. Festival Mall is also located within the premises of the Festac 77 Hotels and has anchor tenants such as Shoprite. The mall serves the Festac and Amuwo Odoffin communities in Lagos.