With an eye on the 2010 Commonwealth Games and sensing an opportunity in the shortage of hotel rooms, Jaypee Group will enter into a joint venture with Thailand’s Six Sense Spa for setting up a Rs150 crore resort at Greater Noida.
Opportunity knocks: Jaiprakash Associates’ Manoj Gaur.
“This is more of an operational JV where we will be making an investment of around Rs150 crore, while Six Sense Spa will be managing the property. It will come up before the Commonwealth Games,” said Manoj Gaur, executive chairman, Jaiprakash Associates Ltd.
Jaypee Group already owns and operates four five star deluxe hotels through Jaypee Hotels Ltd and also has a presence in engineering and construction, cement and hydro power sectors. A Six Sense Spa spokesperson did not respond to an email.
With organizers expecting at least 100,000 visitors during the Games, room shortage is likely to be in the range of 10,000-15,000 rooms. This has led to a boom in construction in the region with 70 hotels likely to be commissioned within the next three years.
Analysts say construction activity has heightened with the government offering a five-year tax break for projects in the Delhi region.
“I do not give too much importance to Commonwealth Games because we need rooms anyway. Right now, there is an under supply of hotels in India. We have one of the highest ARR (average room rate) in the world. ARR which was $125 four years back, has doubled and tripled now. The increased supply in hotels will bring down the ARR and it is good for the economy,”says Anshuman Magazine, managing director, South Asia region, CB Richard Ellis, a real estate consultant.
Greater Noida is an important destination for the Jaypee Group and it is already in talks with Madrid Barajas Airport Authority, Houston Airport System (HAS) among others, to bid for the proposed Taj International Airport in Greater Noida.
(Shabana Hussain contributed to this story.)