Indian Developers Venture into Hospitality Amidst Real Estate Slump
Low Margins and High Lending Rates Drive Diversification
India's real estate developers are exploring fresh avenues to bolster their revenue streams, as the industry grapples with the challenges of low margins, six-year high lending rates, and stringent financing norms. A notable trend emerging from this strategic pivot is the entry of these developers into the hospitality sector, marked by significant investments in hotel projects across the country.
Recent Investments in the Hospitality Sector:
Yatra Capital's Investment in Taj Hotel, Calcutta
- Investment Amount: Over €4 million
- Stake Acquired: 40% in Jalan Intercontinental Hotels Private Limited
- Hotel Management: Indian Hotels Limited under the Taj Gateway brand
- Property Details: 200-room hotel
Warburg Pincus-Casino Group (CGH) Partnership
- Proposed Investment: Up to ₹325 crore
- Potential Stake Divestment: Up to 20%
- Valuation: Approximately ₹1,600 crore
- Purpose: Funds for domestic and international expansion
Rakindo Developers' Hotel Expansion
- Funding Amount: ₹4,000 crore from Lotus Investment fund
- Brand Name: Millennium and Copthorne Hotels
- Locations: Hyderabad, Bangalore, Vizag, Kochi, and other south Indian cities
Other Notable Developments:
DLF's Hotel Venture
- Number of Hotels: 75
- Partnership: With Hilton Hotels
Parsvnath's Hotel Expansion
- Number of Hotels: 100
- Partnership: With Royal Orchid Hotel
Sahil Group and Carlson Hotels Worldwide-Asia Pacific's Joint Venture
- Project Location: Alibaug and Pune
- Brand: Radisson Resort and Spa
Nirmal Lifestyle and Accor Hotel's Joint Venture
- Project Locations: Mumbai and Goa
- Focus: Development of hotel properties