Magma Group Bhd has announced plans to acquire the boutique LUMA Hotel in Kota Kinabalu for RM60.9 million through a combination of cash payments and newly issued shares. The move reflects the group’s strategy to expand its hospitality footprint and strengthen recurring income from hotel operations.
In a filing with Bursa Malaysia, the company said its wholly owned subsidiary, Magma Avenue Sdn Bhd, has signed a heads of agreement covering the acquisition of the hotel business as well as four adjoining buildings where the hotel currently operates.
Structure of the acquisition
Under the proposed arrangement, Magma will first acquire 100% equity in HH Home Hotel Sdn Bhd, the company that owns both the LUMA Hotel and its brand identity. The purchase price of RM12.8 million will be settled through a combination of cash and the issuance of 27.15 million new Magma shares.
In addition, the group plans to purchase four separate buildings connected to the hotel’s operations from multiple vendors.
Two of these buildings will be acquired for RM16 million each from HKT Realty and Gamwon Properties. Payment will again involve a mix of cash and the issuance of 14.55 million new Magma shares per building.
The remaining two properties will be obtained through the purchase of companies that own them. Magma will acquire full ownership of Zenith Everise Sdn Bhd for RM7.6 million and Upper Domain Sdn Bhd for RM8.5 million. These deals will also be settled via a combination of cash and new shares issued to the vendors.
All shares involved in the transaction will be issued at 33 sen each, based on the five-day volume-weighted average price of Magma shares up to March 4.
Strengthening recurring income through hospitality assets
According to Magma, the acquisition aligns with its broader strategy of expanding hotel operations while strengthening long-term recurring revenue streams. By acquiring both the operating company and the buildings that house the hotel, the group gains direct ownership and operational control of the hospitality asset.
Currently, the company is involved in several business segments including hotel management, property development, and food and beverage operations. It manages the Impiana hotel brand and also operates the Chagee tea chain in Malaysia.
Implications for the broader property sector
While the acquisition focuses on the hospitality segment, the transaction reflects a wider trend among Malaysian property groups diversifying income streams through hospitality, commercial, and mixed-use developments.
In key economic hubs such as Kuala Lumpur and Selangor, developers are increasingly integrating hotels, offices, and industrial components within larger developments. This trend supports demand for commercial property in KL, particularly integrated projects that combine office space in Bukit Jalil with lifestyle and hospitality elements.
Similarly, the rapid expansion of logistics and manufacturing activities continues to drive interest in industrial land in Selangor, especially among companies seeking a factory in Puchong or industrial property in the Subang area to support supply chain operations.
At Thursday’s market close, Magma shares ended one sen lower, or 3.1%, at 31.5 sen, giving the company a market capitalisation of approximately RM541.9 million.
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