India update: New deals confirm country's investment appeal

Conrad Pune

As the centerpiece of the BRIC nations, India is seeing a significant amount of signings, openings and sales. This week alone, Louvre Hotels Group announced plans to expand across the country, Carlson Rezidor is looking to open 16 new properties, Hotel Leelaventure put its Chennai hotel on the market—and another sale was blocked by the Bombay High Court.

Openings and Expansions
Paris-based Louvre Hotels Group is looking to open six hotels across India this year alone. The hotels will be under the Royal Tulip, Golden Tulip and Tulip Inn brands, under which it already has 24 properties across the country. The new hotels will be in Hyderabad, Gurgaon, Ahmedabad, Surat, Jodhpur and Goa, and Louvre Hotels Group managing director South Asia Vimal Singh said that the properties will mostly be under the Golden Tulip and Tulip Inn brands. 

These openings will take the total number of Louvre's hotels in India to 30 by the end of 2016. It already has hotels in destinations such as Amritsar, Bhiwadi, Bengaluru, Gurgaon, Goa, Chandigarh, Jaipur, Lucknow, Manali, New Delhi, Udaipur, Ahmedabad, Mussoorie and Mumbai. The company is also planning to open a second hotel in Dhaka during the year. 

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Louvre Hotels Group follows a management contract model for its business in India. 

Carlson Rezidor Hotel Group, meanwhile, is planning to open "a minimum" of 16 more hotels across the country by the end of next year. Currently, the company has 76 hotels in the country and is present in almost all state capitals. The upcoming hotels will be in Mumbai, Bengaluru, Srinagar, Coimbatore, Pune, Kota, Delhi NCR, Chandigarh and Jammu among others. 

India is most the important market and by far the biggest market for Carlson Rezidor in the Asia Pacific, said group president Asia Pacific Thorsten Kirschkehe. "Going forward the company will see increased development pace in India for the Park Inn by Radisson and Country Inn and Suites brands," Kirschke said. The company will also launch its Radisson Red hotel next year in Mohali. 

The price point of the company's midscale brands is "probably the best match for investors, developers alike and on the other hand disposable income of emerging and growing middle class," Kirschke said. 

At the same time, IHG opened two Holiday Inn Express Hotels in India—the Holiday Inn Express Chennai - Old Mahabalipuram Road and the Holiday Inn Express New Delhi - International Airport Terminal 3. As of the end of last year, IHG has 26 hotels open across four brands in India and 42 hotels in the development pipeline. There are currently three Holiday Inn Express hotels open across India with a further 18 in the development pipeline.

 

A photo posted by Conrad Hotels (@conradhotels) on

This, of course, does not mean that luxury and upscale development has been abandoned. Hilton, for example, recently opened its first Conrad Hotel in India, the Conrad Pune. The asset is managed by Hilton and owned by Palm Grove Beach Hotels, a subsidiary of the K. Raheja Constructions Group.

Sales
Hotel Leelaventure is planning to sell its luxury property in Chennai. The company owns the 326-room hotel as well as  the nearly five acres on which it sits, and has appointed JM Financial Institutional Securities as financial advisor. No starting price has been announced.

Another acquisition, however, was blocked by the country's courts. Blue Coast Hotels, the owner of the Park Hyatt Goa Resort & Spa, said the Bombay High Court has unraveled the recent auction of the hotel by IFCI, a government-owned development bank. 

“The Hon’ble High Court of Bombay has quashed and set aside the Order of the DRAT and Order of the (DM – South Goa) and it has also cancelled the sale certificates issued to the Auction Purchaser by the Secured Lender in respect of Hotel Property Park Hyatt Goa Resort & Spa under SARFAESI Act 2002,” the company said.

ITC Hotels, India’s second largest hotel chain, won the property at an auction in February after it bid Rs550 cr. and paid Rs 100 cr immediately afterwards. Blue Coast Hotels had protested the sale, claiming that the actual value of the property was around Rs1,250 cr.

The property was given as collateral security to IFCI to take a loan, which was used by Blue Coast to build a 450 room MGM Grand luxury hotel in New Delhi, the construction of which is expected to be completed by April 2018. Blue Coast has alleged that the loan amount was recalled prematurely by IFCI. Blue Coast has also alleged that IFCI did not submit a copy of the valuation report of the Goa property.

The court has allowed Blue Coast hotels to keep physical possession of the property and has authorized a refund of ITC's down payment. 

Sources: RTN, Business Standard, Commercial Property Executive, Economic Times

Photo courtesy Conrad Hotels

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