Via Financial Times

It is a piece of Zimbabwe’s colonial past that has fallen on hard times — but Harare’s venerable Meikles Hotel could soon be under new management after a Dubai-based buyer approached the US chain Hyatt to run it.

Albwardy Investments, which offered to buy the hotel in the heart of Zimbabwe’s capital for $20m last week, is seeking an international operator as it plans to restore one of the African nation’s most historic buildings.

The proposed deal represents a rare vote of investor confidence in Zimbabwe, which faces its worst economic crisis in a decade under President Emmerson Mnangagwa.

The hotel has faded as Zimbabwe’s economic and political turmoil has deepened, acquiring a gloomy reputation for half-empty suites, mechanical breakdowns and an outdated ambience.

The hotel’s current owner, the Harare-listed Meikles group, is selling up after failing to secure the foreign currency it needed to pay for refurbishments. Its shareholders are due to vote on the sale next month.

The Meikles was established in what was then the Southern Rhodesian capital of Salisbury in 1915 by one of the country’s first British colonisers. Scottish-born Thomas Meikle and his brothers founded a business empire that expanded to department stores and tea estates.

The hotel hosted the first parliament of the colony’s white-minority rulers in 1924, and state banquet for Zimbabwe’s independence 56 years later.

The Meikles’ lobby is still renowned as a meeting place for dignitaries and a suspected favourite of spies from Zimbabwe’s feared state security services. The city square that the Meikles looks out upon has been the scene of police beatings of protesters.

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Laurie Ward, managing director of Albwardy Investments’ hotel and hospitality portfolio, said: “We are in discussions with Hyatt, who themselves are looking for more hotel assets in Africa.”

“We as owners take all the financial risk and responsibility when venturing into any new territory,” Mr Ward said.

Albwardy, headed by the tycoon Ali Albwardy, boasts Hyatt-managed hotels in Ethiopia and Tanzania among a portfolio of other African hotel and resort assets. Hyatt declined to comment.

The late Robert Mugabe was deposed as Zimbabwe’s dictator in a military coup two years ago, but despite promises from his successor Mr Mnangagwa to liberalise the country it has descended into renewed repression and currency chaos.

The Meikles empire, once Zimbabwe’s biggest listed company, has struggled to cope with the collapse of a local currency. The economy is plagued by dire shortages of cash and basic goods and inflation is running at about 440 per cent.

As it announced the sale to Albwardy last week, Meikles said “foreign currency-denominated long-term capital, the scale of which cannot be provided by Meikles, is needed” to restore the hotel to its former glories.

“We know that it’s going to be a challenging environment,” said Mr Ward, but Mr Albwardy “looks beyond the politics and the problems”.

Albwardy is expected to invest $30m in the Meikles, beginning with the restoration of lifts and electrical systems to global five-star standards.

The takeover has been approved by Zimbabwe’s stock exchange and competition authority.