Why Hotel Leela Venture is trying to offload assets

(Hotel Leela)

Hotel Leela Venture has not had a good two years. Since founder C P Krishnan Nair died in 2014, the company has sought to grow its brand with varying degrees of success. Facing competition from global brands, the company has instead turned to selling off its assets, including land originaly planned for hospitality use.

In Hyderabad’s Banjara Hills, close to four acres of land are up for grabs now that plans for a luxury hotel on the site have been scrapped. The sale could command an estimated Rs 150 crore, which would help Leela bring down its debt burden. As of the last financial year, this burden is estimated to be Rs 4,500 crore.

A series of other projects are also under development, including a 250-room property near the Bengaluru airport, a 58-villa resort in Jaipur, a hotel-cum-branded residences project in Chandigarh and a 175-room luxury hotel in Kathmandu. The Mumbai-based company made the disclosures in a filing with the BSE on Monday. Leela has also started work on developing high-end residences next to the Leela Palace, Bengaluru, and entered into a joint development agreement with Prestige Developers for the project.

Earlier this month, Leela signed an agreement with Qatar’s Al Faisal Group to sell the 6.5 acre land near the Taj Mahal, where a 100-room Leela Palace and a 150-room Aiana Hotel are slated to open. Leela would only be managing the property which would see a combined investment of Rs 500 crore.

Hotel Leela has a total of nine operating properties with a combined 2,688 rooms. Recent sales of its properties included two in Kovalam (Kerala) and Goa in 2011 and 2015, respectively.