Leela group to focus on hotel management, luxury apartments1 min read . Updated: 31 Oct 2012, 10:31 PM IST
Supertech will invest Rs450 cr in the 250-room hotel venture with Leela
New Delhi: The Leela group said Wednesday it will open its third luxury hotel in the National Capital Region (NCR) in a management contract with real estate company Supertech Ltd.
The company’s focus is now more on management contracts and Leela Residence luxury apartments, rather than building and owning hotel properties, said Vivek Nair, vice chairman and managing director of Hotel Leela Venture Ltd.
The company developed its own hotels and managed them until recently. Of its eight current properties, six are owned.
In August 2012, the company sold its luxury hotel property in Kovalam, Kerala, to Travancore Enterprises for Rs500 crore to reduce debt of around Rs3,800 crore and entered into a contract to manage it.
Supertech will invest Rs450 crore in the 250-room hotel venture in Noida, which is scheduled to be completed in four years. It will be housed in a 55-storey building, one of the five towers in Supertech’s Rs2,700 crore mixed-use development project Supernova, which will be spread over 5 million sq ft.
Leela will manage the hotel and apartments for 30 years, said R.K. Arora, chairman and managing director, Supertech.
Nair said Leela Residences “is a new concept we are introducing in India, where we will sell the luxury apartments to families, which will then be able to avail of Leela hotel services including housekeeping. It has gained popularity in the US and Europe and we expect the same response from India."
The company has three luxury residence projects in the pipeline--two in Bangalore and one in Noida, along with four upcoming luxury hotel properties in Jaipur, Agra, Ashtamudi (Kerala) and Bangalore.
The company may look at selling more properties to shift toward an asset-light strategy. “All the major international hospitality companies have done this. But we would not do it for our entire portfolio," said Nair.
Over the next three to four years, the company will add around 1,000 rooms under its management portfolio, taking the inventory to more than 3,000, which will entail investments of Rs2 crore per room, excluding land costs, from the company’s development partners, said Rajiv Kaul, president of Hotel Leela Venture.
“The company is overstretched. They may sell properties but will not build," said Sudip Bandyopadhyay, managing director and chief executive, Destimoney Securities. “It is a good move. Since they are fixed on the super luxury segment, as long as somebody else is building it, it would not burden its balance sheet."