India can expect a good number of hotel transactions this year, including some "distress deals." More than a dozen hotels are currently in the process of changing hands, and insiders told the Economic Times that 2017 could set a new record for transactions.
“The year 2017 could bring a massive quantum of deals in India’s hotels sector,” Mandeep Lamba, managing director-hotels at property consultant JLL India, told the paper. ”The ongoing trend in the hotel transactions market is in line with our belief that the Indian hospitality market today is a fertile field for strategic acquisitions.”
In December, France-based Louvre Hotels Group, owned by China's Jin Jiang International, acquired Indian hotel chain Sarovar Hotels and its 73-hotel portfolio, the majority of which are management contracts. The deal, estimated at $50 million, makes the combined entity one of the biggest hotel chains in India in terms of number of properties.
“The market is mature for buying assets but it is largely going to be distress sales,“ Ajay Bakaya, executive director of Sarovar Hotels, said. “There’s going to be greater pressure on owners who can’t meet debt obligations to restructure or sell their assets. Assets will sell at cost value or, in some cases, cost minus.”
JLL Hotels’ team expects to close about 10-12 hotel deals in the first half of 2017.