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Parsvnath to construct 17 hotels, scouts for management partners

Parsvnath to construct 17 hotels, scouts for management partners
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First Published: Thu, Apr 12 2007. 12 50 AM IST
Updated: Thu, Apr 12 2007. 12 50 AM IST
News Delhi: Parsvnath Developers Ltd, a real-estate company diversifying into the hospitality business, plans to construct 17 hotels across several cities including New Delhi, Ahmedabad, Hyderabad, Ujjain, Ranchi and Indore in an attempt to meet the growing demand for hotel rooms in the country.
According to Parsvnath’s chief operating officer Ashim Gandhi, these hotels will be built next to malls that the company is developing. The cost of land would be shared between the hotel and the mall, he added.
Parsvnath plans to invest Rs780 crore in the development of the hotels which will together have 2,400 rooms.
The hotels, Gandhi said, would be a mix of three-star, four-star, and five-star properties. “We are looking at developing a mix of hotels in these cities. But, as of now, we do not plan to set up budget hotels,” he added. The company hopes to have the hotels up and running by 2010.
Gandhi said the funds to develop the hotels would come from internal accruals. “We recently raised capital through an initial public offering. We plan to use this money to fund our expansion plans,” he said.
The company has completed the land acquisition process for the hotels. Parsvnath has a land bank of 135 million sq. ft and plans to use part of this to develop the hotels.
Parsvnath is already scouting for partners who will manage the hotel (they will be developed and owned by the company, though) and Gandhi said, that it was in discussions with several Indian and international hotel chains for this purpose. He declined to name the chains.
“We are not into running hotels,” he said. “We are looking at entering a franchisee agreement with these chains to manage our hotels.”
Parsvnath develops residential buildings, commercial complexes, malls, multiplexes, and integrated townships. The company recently forayed into the hotel business by announcing plans to develop three-star hotels in Shirdi and Goa and a four-star one in Mohali. These three properties are expected to be ready sometime in 2008-09.
For the nine months ended 31 December 2006, Parsvnath recorded a revenue of Rs848.7 crore and a net profit of Rs139.3 crore. The company’s stock closed at Rs263.70 on Wednesday on the Bombay Stock Exchange, 2.6% down from its previous close. The exchange’s 30-stock benchmark index, Sensex ended the day almost unchanged from its previous closing.
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First Published: Thu, Apr 12 2007. 12 50 AM IST
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