The former 206-room Crowne Plaza Hotel in Nairobi's Upper Hill will be revamped to host shared offices.
This is as its new owners target the vibrant new trend of sharing working spaces amid a slump in hospitality since the Covid-19 pandemic.
The move comes after the World Bank's private lending arm and other backers, including Proparco, a unit of France's state development agency, invested Sh7 billion into the hotel's upgrade.
A number of top hotels, some of which have since recovered, stopped operations amid the coronavirus economic fallout two years ago.
Experts say shared office spaces provide a great way for both established companies and startup businesses to work together in a collaborative environment.
They note they offer the flexibility and cost savings of traditional office space with the advantages of modern technology, such as increased collaboration and productivity.
Upper Hill has been attractive to businesses looking to avoid human and traffic congestion in the central business district, but it has in recent years also faced congestion.
Despite losing its shine, however, Upper Hill remains a prime area and hosts the World Bank country offices and headquarters of Britam, Equity Bank, Commercial Bank of Africa and the Teachers Service Commission, among others.
The hotel is now run by the sub-Saharan Africa hospitality sector-focused private equity fund Kasada Hospitality Fund LP. It has reopened under the luxury brands of Accor, Europe's largest hotel group.
"Kasada will use the financing package to refurbish, modernise, and expand the former Crowne Plaza in Nairobi's Upper Hill, a business district that hosts embassies, international organisations, and the headquarters of some of East Africa's largest corporations," said the International Finance Corp (IFC) in a statement.
The $49.5 million (Sh7 billion) financing package to Kasada includes an $11 million (Sh1.5 billion) loan from IFC, an $11 million parallel loan from development finance institution Proparco, and a $27.5 million (Sh3.8 billion) guarantee from MIGA, a member of the World Bank Group that offers political risk insurance guarantees to private sector investors and lenders.
"We look forward to bringing our multi-disciplinary expertise in creating value and impact with this hotel and aim to reposition it to attract more international travellers as well as the place to be for the local community," said Kasada Managing Partner and CEO Olivier Granet and Managing Partner and Chief Investment Officer David Damiba in a statement.
"IFC's partnership with Kasada is supporting the development of a strong and resilient hospitality sector across key markets in Africa," added IFC Regional Industry Director in Africa for Manufacturing, Agribusiness, and Services Henrik Elschner Pedersen.