June 17 (Bloomberg) -- Zambia’s state pension fund will finance a $98 million urban regeneration project in the nation’s capital that will include a 148-room hotel operated by Hilton Worldwide Holdings Inc.
“It is scheduled to be completed by mid-2015,” David Chewe, investments director at Zambia’s National Pension Scheme Fund Authority, said in an e-mailed reply to questions. “This is part of the renewal of the central business district, and it is hoped that other developers and property owners would respond positively.”
The development in downtown Lusaka will include a shopping mall and office block alongside the Hilton Garden Inn, which will be managed by the hotel operator, Chewe said on June 13. Hilton, the world’s biggest hotel chain, is joining other operators, including Radisson Hotels International Inc. and InterContinental Hotels Group Plc, in establishing a presence in Zambia, Africa’s second-biggest copper producer.
Marriott International Inc., the second-largest publicly traded hotel chain, paid about $200 million in April for South Africa’s Protea Hospitality Corp., which has seven hotels in Zambia. Africa is seeing the world’s fastest pace of hotel development as investors and operators tap an expanding middle class and rising travel to compensate for slowing growth in European and U.S. markets.
Hilton is taking advantage of economic growth that the Zambian Finance Ministry forecasts will be about 6.5 percent this year, before averaging 8 percent from 2015. Tourism in Zambia is also set to grow, Hilton said in a statement last week.
The government is targeting tourism to reduce its dependence on copper, which accounts for about 70 percent of export earnings. The country shares the Victoria Falls with neighboring Zimbabwe and has 10 national parks.
Tourist arrivals grew by 6.5 percent to 914,576 last year, according to the Finance Ministry’s 2013 Annual Economic Report.
Hilton has 17 hotels in Africa, according to the website of the McLean, Virginia-based company. Its first Lusaka hotel will take on the Hilton Garden Inn brand.
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