Indian real estate firm Embassy Group has acquired a 73.4-percent stake in Mac Charles Hotels, owner of Bengaluru’s Le Meridien hotel, for Rs 640 crore.
The Group bought the stake on Friday from investor C.B. Pardhanani in a deal that values the firm at Rs 870 crore. The property developer is expected to make an open offer to investors this week for the rest of the shares at Rs 670 per share.
The Le Meridien hotel in Bengaluru has 197 rooms and 30 suites. “Right now, we will bring the hotel under our hospitality vertical and run it for some time,” chairman Jitu Virwani said, noting that the building could eventually be turned into private residences or office space.
This is only the latest step in Embassy Group’s hospitality growth this year. In January, the company announced plans to divest nearly a third of its stake to raise Rs 5,000 crore to fund its growth across several verticals in India, including hospitality. At the time, Embassy had lined up investments of Rs 4,500 crore in building new offices, growing its hotel business ten-fold and setting up warehouses and factories for global players and e-commerce firms.
Earlier this month, the company signed a deal with Hilton for a 586-guestroom dual-branded hotel project, which would include a Hilton hotel and a Hilton Garden Inn.
As Mint noted, last year was big for hotel deals in India, with as many as nine transactions—“the highest in a while, according to property analysts”—taking place. 2016, on the other hand, has been “quite dull in terms of hotel buyouts,” making this acquisition particularly noteworthy.
“This will be the first significant deal in a rather quiet year, though discussions have been on for other transactions. Hopefully, this should be a trigger for more deals to happen in the months to come,” said Mandeep Lamba, managing director, India, Hotels and Hospitality Group, JLL.
Embassy, which is backed by the Blackstone Group, is one of the largest commercial office developers in India. It recently applied for regulatory approval to register a real estate investment trust for its office assets.