Top Deals in Indian RealEstate

Emaar MGF Forms JV With France's Accor For Budget Hotels; IPO In 2007

Here is a big move in the hospitality sector. Emaar MGF Land Pvt Ltd has formed a joint venture with French hospitality group Accor to build 100 hotels in India over the next ten years, reports Reuters. The joint venture with Accor - christened as Budget Hotels India Pvt Ltd - plans to invest $300 million. The JV would create a supply of at least 10,000 rooms. The brand will be called "Formule 1" hotels.
India is a key market for Emaar (Gulf's largest real estate player in value) which plans to invest $1 billion in India. The JV is also looking at an IPO next year which will dilute some 5-10 per cent of the equity. Evolvence India Fund had recently invested $41 million in Emaar MGF.
Indian hospitality sector is witnessing a lot of investment - foreign as well as domestic. In August, Warburg Pincus invested Rs 280 crore in Lemon Tree Hotels and its budget hotel division Redfox Hotels. In April, a Dubai private equity fund Istithmar joined hands with Europe's easyGroup to start a chain of budget (non-frills) hotels in India. easyGroup is the owner of Europe's leading budget airline easyJet and hotel chain easyHotel. UK private equity fund Trikona Capital and US fund Starwood Capital Group are some of the other groups planning investments in the Indian hospitality sector.

Emaar-MGF To Invest $1.5-2 Billion In Punjab Over 5 Years

Here is an interview with Shravan Gupta, managing director of Emaar-MGF, a real estate joint venture with Delhi business group MGF and Dubai's Emaar. The JV is developing a 3,000 acre township at Mohali (Punjab), which will have residential, retail and office space. They are investing $1.5-2 billion in Punjab over 5-7 years. Now they plan to move pan India. "The whole of India is our priority. We are acquiring land in many states across the country...wherever we can. Of course, the national capital region (NCR) is the best market in the country," says Gupta.

Evolvence India Invests In Six Funds And Four Companies

Evolvence India Fund, a Dubai-based fund of funds, has invested in six funds and made additional investments into four Indian companies. It has made undisclosed investments in six funds namely - UTI Ventures, New York Life Investment Management, IDFC Private Equity, IL&FS Investment Managers, India Value Fund Advisors and Baring India Private Equity. Besides, Evolvence has also directly made additional investments into Emaar-MGF Land Pvt Limited, Centurion Bank of Punjab, Consolidated Construction Consortium Limited (a leading engineering and construction contractor) and Eastern Silk Industries Limited (a silk textile manufacturer). The quantum of investments has not been disclosed. Jay Jegannathan, Managing Director of the Evolvence India Fund, said, 'We foresee exceptional growth in India, especially in the manufacturing, services, Infrastructure and real estate sectors we have targeted with this initial investment. We expect to add significant global investments to our India portfolio in the near future." The fund plans to invest an additional $150 million as growth capital into various funds and companies in India focused on manufacturing, services, infrastructure and real estate. Evolvence Capital, an alternative investment group established in year 2000 with $750 million assets under management, is the sponsor and cornerstone investor in Evolvence India Fund.

Europe's easyGroup, Dubai's Istithmar Join Hands To Launch Budget Hotels In India

Dubia private equity firm Istithmar and Europe's easyGroup have joined hands to start a chain of budget (non-frills) hotels in India. They would offer only rooms with no food and beverage outlets. easyGroup is the owner of Europe's leading budget airline easyJet and hotel chain easyHotel. The JV will establish four easyHotel properties in Delhi, Mumbai, Chennai and Kolkata by 2008. This will be followed by four more budget hotels in the following year, easyGroup founder Stelios Haji Ioannou said. The two have lined up an investment of around $100 million for India foray, said Istithmar CEO Muneef Tarmoom. Istithmar already owns an 11 per cent stake in low-cost carrier SpiceJet. [Via The Times Of India] The Dubai investment firm also recently launched Istithmar Hotels FZE --a 100 per cent subsidiary formed by Istithmar for its investments in the hospitality and leisure sector. It has appointed Joe Sita as the CEO of Istithmar Hotels.

Trikona Capital Too Want A Slice Of Hospitality Pie

Here is another real estate fund looking at hospitality business. Trikona Capital plans to acquire mid-market hotel brands in India. The fund, co-founded by Rak Chugh and Aashish Kalra, had raised $500 million to invest in India by listing one of its funds, Trinity Capital, on London Stock Exchange earlier this year. Trikona Capital wants to focus on 3-star and 4-star hotels, essentially the budget segment. It apparently plans to build an inventory of 4,000-5,000 hotel rooms in the next 3 to 5 years. The Economic Times quotes Kalra, one of the founders: “The focus is on the 3-4 star hotels. We could acquire a brand or come up with a brand of our own. We may end the year by acquiring strategic stake in some existing hotel properties.” Trikona could set up a sub-fund for this purpose. Another related news is that Trikona has picked up a minority stake in IL&FS Transportation & Networks Ltd (ITNL) for about $10 million. Trikona has so far made a total investment of $110 million in India. The three recent ones are - an integrated township project in Thane ($20 million); residential project in Mumbai ($22 million) and about $55 million into an IT park in Greater Noida. The fund also has partnerships with HDFC and IL&FS to make investments in India. Read all Trikona Capital stories here.

Starwood Capital Plans To Enter Hospitality Business In India

Indian hospitality space will see some action with new global entrants like Starwood Capital planning an entry into the sector. The international real estate fund plans to launch in India its luxury hotel brand Hotel de Crillon, eco-friendly hotel brand ‘I’ and budget hotel chain, Campanile. The fund, which has $2.5 billion under management, will invest close to $300 million in India over the next 18 months, Barry Sternlicht, chairman & CEO, Starwood Capital, told The Economic Times. Indian hospitality space is pretty attractive with a major shortage of rooms in commercial centres like Delhi, Mumbai, Bangalore and Hyderabad. The hospitality industry has grown at 23.7 per cent in 2005-06. The all-India occupancy mark too touched the 70.8 per cent-mark for the first time, while there is a severe demand-supply imbalance in cities like Hyderabad, Jaipur and Bangalore. The room tariffs have also been on a rise. The largest increases were seen in the luxury segment, followed by the mid-market and budget segments, acording to hospitality consulting and appraisal firm HVS International.

DLF Group To Invest $800 Million In Hospitality Foray

Here are some details of DLF Group's hospitality plans. The Delhi-based realty group plans to invest $700-800 million in select hotel property over the next seven years, says a report. The details culled out from the company's draft red herring prospectus says that it has identified 21 sites for developing hotels. It has a tie-up with Lalit Suri's Bharat Hotels in acquiring a four acres in Chandigarh, which will be used to develop a five-star hotel. Earlier this year, DLF had successfully bid Rs 97 crore ($22 million) for a hotel site in Rohini, New Delhi. [Via Rediff.com]

Lemon Tree And Red Fox Hotels Announce Rs 280 Crore Investment From Warburg Pincus

Lemon Tree Hotels and newly floated group company Red Fox Hotels have announced an investment of Rs 280 crore from private equity firm Warburg Pincus. According to The Economic Times report, Warburg will pick up 27 per cent stake in Lemon Tree. Of the funding, Rs 210 crore will be invested in the Lemon Tree hotels which will have a network of 25 properties, aggergating a total of 1,300 rooms. The remaining Rs 70 crore will be invested in a new chain of limited service budget/economy hotel called Red Fox Hotels priced Rs 800-2000 per room night. It's being floated as a separate company. Lemon Tree Hotels was promoted in 2002 by ex-Taj Group manager Patu Keswani. It also has investors like Ravi Jaipuria, a Delhi-based businessman.