Kota Kinabalu (March 6) - A major hospitality investment is set to take place in Sabah as Magma Group Bhd moves to acquire the boutique LUMA Hotel in a deal valued at approximately RM60.9 million.
The proposed transaction will be carried out through the company’s wholly owned subsidiary, Magma Avenue Sdn Bhd. Under the plan, the subsidiary will purchase the hotel business together with four adjoining buildings located at Sutera Avenue, where the hotel currently operates.
The acquisition involves taking over 100% of the equity in HH Home Hotel Sdn Bhd, the company that owns and operates the LUMA Hotel brand. The purchase consideration for this portion of the deal is about RM12.8 million, which will be settled through a mix of cash and the issuance of approximately 27.15 million new shares in Magma.
In addition, Magma will acquire four buildings that house the hotel’s operations from several vendors. Two of these buildings will be purchased from HKT Realty and Gamwon Properties respectively for RM16 million each. Payment for these properties will be made through a combination of cash and 14.55 million Magma shares for each property.
The remaining properties will be obtained through the purchase of 100% equity in Zenith Everise Sdn Bhd and Upper Domain Sdn Bhd, for RM7.6 million and RM8.5 million respectively. These transactions will also be settled through a mix of cash and newly issued shares.
All new shares involved in the deal will be issued at 33 sen each, based on the five-day volume-weighted average price of Magma shares prior to the agreement. In total, around 91.7 million new shares are expected to be issued, representing roughly 5.5% of the company’s enlarged share capital.
The company said the proposed acquisition supports its strategy to expand its hospitality portfolio and strengthen recurring income from hotel operations. Apart from managing hotel properties, Magma is also involved in property development and operates the Chagee tea chain in Malaysia.
For Sabah, the proposed investment signals continued confidence in Kota Kinabalu as a growing tourism and hospitality destination. The acquisition of a boutique hotel and surrounding properties could contribute to further development within the Sutera Avenue area, which has become one of the city’s expanding commercial and lifestyle hubs.
Such investments may help strengthen accommodation options for visitors travelling to Sabah, supporting the state’s tourism industry. For Sabahans working in hospitality, tourism services, and related sectors, continued investment in hotels and travel infrastructure could also open up employment opportunities and business growth.
Overall, the planned acquisition highlights how Sabah’s tourism assets continue to attract investors seeking long-term growth in Malaysia’s hospitality sector.