Kuala Lumpur, 15 October 2025 — AmanahRaya Real Estate Investment Trust (AmanahRaya REIT) has signed a tenancy agreement with Urban Collection Sdn. Bhd., a hospitality arm of Oriental Interest Berhad (OIB), to lease and operate the Ex-Holiday Villa Alor Setar, marking the revival of one of Kedah’s most recognisable hotel properties and reinforcing AmanahRaya REIT’s strategy of portfolio diversification and long-term income growth.
The 21-storey hospitality asset, located within the City Plaza development in Alor Setar, will be reactivated after a seven-year hiatus, underscoring the REIT’s commitment to unlocking value from underutilised assets while expanding its presence in Malaysia’s regional property markets.
The agreement was formalised through AmanahRaya REIT’s manager, AmanahRaya-Kenedix REIT Manager Sdn. Bhd. (AKRM), and Urban Collection Sdn. Bhd. (formerly Urban Inn Sdn. Bhd.), a subsidiary of OIB renowned for its expertise in hotel operations and affordable accommodation solutions.
“This signing represents the reactivation of a key hospitality asset within our portfolio,” said Datuk Mohd Iskandar Dzulkarnain Ramli, Managing Director of AKRM. “We are pleased to collaborate with Urban Collection, whose track record in hotel and service management complements our vision of enhancing asset value and ensuring long-term income stability for our unitholders.”
A New Chapter for a Familiar Landmark
The Ex-Holiday Villa Alor Setar had been vacant since 2018, following the cessation of operations under its previous operator. Once a prominent hospitality landmark in northern Malaysia, the 150,000-square-foot property’s closure left a visible gap in the city’s hotel landscape — particularly given its central location in Alor Setar’s commercial and administrative district.
Under the new agreement, Urban Collection will lease the property for a 15-year term, structured as three consecutive five-year periods, beginning March 29, 2026. Operations are expected to commence by May 1, 2026, following refurbishment and upgrading works to modernise the building and reposition it for a new generation of travellers.
The tenancy is structured as a Double Net lease, in which Urban Collection will be responsible for operating costs and maintenance, while AmanahRaya REIT retains ownership and long-term asset control. The agreement also includes a 10% rental escalation at each renewal ter, a built-in mechanism to ensure predictable income growth and inflation protection for unitholders over the duration of the lease.
Reinventing Hospitality: A Hybrid Concept for Modern Travellers
The rejuvenation plan for the property extends beyond simple refurbishment. Urban Collection intends to transform the former Holiday Villa into a multi-functional hospitality hub, blending hotel accommodation, flexible co-working spaces, and curated retail amenities.
The proposed redesign will feature modern, efficient room layouts, digitally enabled guest services, and new communal areas to meet the rising demand for hybrid travel experiences, where leisure, business, and lifestyle intersect.
“The upgraded property will integrate co-working spaces, self-service retail, and smart vending amenities, designed for mobility, convenience, and sustainability,” said a spokesperson for Urban Collection. “We see strong potential for a hybrid urban hospitality model in secondary cities like Alor Setar, where demand for flexible, value-driven accommodation is growing.”
The repositioned property will target both business and leisure segments, including corporate travellers, government visitors, and domestic tourists drawn to Kedah’s emerging tourism and economic corridors.
Strategic Fit in AmanahRaya REIT’s Portfolio
For AmanahRaya REIT, the transaction reflects a broader portfolio optimisation strategy aimed at balancing stable income-producing properties with growth-oriented assets.
The REIT’s portfolio currently spans education, hospitality, industrial, and office sectors, with properties located across key urban and secondary cities in Malaysia. The addition of the revived Alor Setar property enhances sectoral diversity while capitalising on the recovery momentum of Malaysia’s tourism and hospitality industry, which has been gaining strength following post-pandemic reopenings and renewed domestic travel demand.
“Our strategic approach has always been to preserve income stability while identifying opportunities for long-term value creation,” Datuk Mohd Iskandar added. “This partnership demonstrates how REITs can play a proactive role in regenerating regional real estate and stimulating local economic ecosystems.”
The collaboration also reinforces AmanahRaya REIT’s track record in adaptive reuse and asset rejuvenation, converting idle or underperforming assets into productive income streams.
Boosting Economic Activity in Alor Setar
The revitalisation of the Ex-Holiday Villa property is expected to generate significant economic spillover for the local community in Alor Setar. The refurbishment phase will create construction and service jobs, while the reopening is projected to contribute to hospitality, retail, and tourism-related sectors.
Industry observers note that Alor Setar, a city historically reliant on government administration and small-scale commerce, is evolving into a growing hub for business travel, meetings, and local tourism, driven by improved infrastructure and the northern expansion of Malaysia’s economic corridors.
Urban Collection’s plan to introduce a hybrid hospitality concept aligns with this trend, appealing to new market segments such as digital nomads, SMEs, and regional startups seeking affordable, flexible work-travel solutions.
A Partnership Anchored on Long-Term Growth
The collaboration between AmanahRaya REIT and Urban Collection builds on complementary strengths, the REIT’s asset management capabilities and financial discipline, and Urban Collection’s operational expertise and market adaptability.
By structuring the tenancy on a Double Net basis, the partnership ensures risk sharing and cost efficiency, while allowing AmanahRaya REIT to maintain consistent revenue visibility. The 10% step-up in rent at renewal intervals is expected to enhance distributable income to unitholders and support steady dividend growth.
Furthermore, the property’s revitalisation aligns with AmanahRaya REIT’s ESG objectives, as refurbishment works are expected to incorporate energy-efficient systems, water-saving fixtures, and sustainable materials, reflecting the REIT’s commitment to responsible investment practices.
Urban Collection’s Expansion Trajectory
For Urban Collection, this marks another milestone in its expansion into mid-tier and value hospitality assets across Malaysia. Formerly operating as Urban Inn, the company has steadily grown its footprint in key regional towns, targeting business-class and budget-conscious travellers.
The Alor Setar project will be the company’s largest-scale operation to date, showcasing its ability to reposition legacy assets and extract value through branding, design, and digital transformation.
“Our focus is on delivering efficient, guest-centric experiences that combine affordability with quality,” said a company representative. “This collaboration with AmanahRaya REIT represents a shared vision of reimagining Malaysian hospitality for the next generation.”
Strengthening REIT Confidence and Market Sentiment
Analysts note that the agreement comes at an opportune time, as Malaysian REITs continue to attract renewed investor interest amid an improving property cycle and stabilising yields. AmanahRaya REIT’s proactive asset management and emphasis on long-term leasing structures reinforce its positioning as a defensive yet growth-oriented trust.
The deal also underscores how REITs can serve as strategic enablers for urban revitalisation and regional development, particularly in secondary cities like Alor Setar.
“This transaction exemplifies the resilience and creativity of Malaysia’s REIT sector,” said a market analyst in Kuala Lumpur. “It’s not just about acquiring assets, it’s about rejuvenating them to meet evolving market needs.”
