In­dian Ho­tels looks to sell ten prop­er­ties to pare debt is­sues

HT Estates - - HTESTATES - The author is Chair­man – ANAROCK Prop­erty Con­sul­tants Bidya Sa­pam let­[email protected]­dus­tan­


Tamil Nadu and Andhra Pradesh. This geo­graphic dis­tri­bu­tion was, para­dox­i­cally, largely be­cause of out­ward mi­gra­tion.

Count­less ed­u­cated pro­fes­sion­als from these states grav­i­tated to the West for bet­ter job op­por­tu­ni­ties and pre­ferred to set­tle there if pos­si­ble. Their par­ents wereleft be­hind, which­gave rise to the con­cept of re­tire­ment homes in these states. The con­cept there­after spread to other states and cities as well, with both few big and small builders en­ter­ing this seg­ment.

Ker­ala has a par­tic­u­larly high num­ber of age­ing ci­ti­zens who will live a lot longer, thanks largely to the ex­cel­lent health­care fa­cil­i­ties and NRI-orig­i­nat­ing wealth to pay­for it. Asperthe Min­istry of Statis­tics, the per­cent­age of el­derly pop­u­la­tion in Ker­ala is nearly 12.6% of the state’s to­tal pop­u­la­tion, the high­est in the coun­try. This caused Ker­ala to be­come home to a high den­sity of se­nior liv­ing projects.

Se­nior liv­ing is also seen as a grow­ing trend in cities such as Coim­bat­ore, Puducherry, Goa and Dehradun, which have tra­di­tion­ally been re­tire­ment cities. More­over, since most cities are sat­u­rated, the pe­riph­eries of most large cities are also at­tract­ing such projects be­cause of the less clut­tered and more salu­bri­ous sur­round­ings suit­able for a re­tired life­style, as well as the avail­abil­ity of large tracts of land which can ac­com­mo­date full­stack se­nior liv­ing projects with all the bells and whis­tles.

Most of the ex­ist­ing and planned se­nior liv­ing projects are es­sen­tially lo­cated in the satel­lite towns of ma­jor met­ros like Ben­galuru, Pune, Chen­nai and Delhi, and non-met­ros in­clud­ing Kochi, Jaipur, Bhopal, Coim­bat­ore, Rishikesh and Goa.

In terms of costs, there is slight vari­a­tion in the over­all cost struc­ture, size ranges and other add-on costs from city to city. Prices largely de­pend on sev­eral pa­ram­e­ters in­clud­ing the lo­ca­tion of the project and builder type. MUM­BAI: In­dian Ho­tels Co. Ltd, which runs Taj ho­tels, plans to mon­e­tize around10 prop­er­ties in the next three years as part of a larger plan to bring down­its debt and fund its fu­ture growth, said a top ex­ec­u­tive. The Tata Group firm aims to re­duce its con­sol­i­dated debt by 30% in the next 18 months, mainly through as­set mon­e­ti­za­tion, Puneet Ch­hat­wal, man­ag­ing di­rec­tor and chief ex­ec­u­tive of­fi­cer said in an in­ter­view.

As of 30 Septem­ber, In­dian Ho­tels’s net debt stood at ₹2,082 crore. In the sec­ond quar­ter ended 30 Septem­ber, the com­pany’s net loss sig­nif­i­cantly nar­rowed to ₹5 crore from ₹59.95 crore in the year-ago pe­riod.

Its to­tal in­come saw a 13.5% growth to ₹981 crore from ₹864.18 crore in the cor­re­spond­ing quar­ter pre­vi­ous fis­cal.

Ch­hat­wal at­trib­uted the growth to its fo­cus on as­set man­age­ment and cost op­ti­miza­tion.

“At the mo­ment, we are look­ing at mon­e­tiz­ing around 10 prop­er­ties. If we can do twothree per an­num, then we are on a good track,” Ch­hat­wal said, adding that In­dian Ho­tels would aim to re­tain a few of these through man­age­ment con­tracts.

The prop­er­ties for sale would span across all brands, in­clud­ing The Gate­way, Vi­vanta and Gin­ger lo­cated pri­mar­ily in the sec­ondary and ter­tiary mar­kets. In Oc­to­ber, Ori­en­tal Ho­tels, an as­so­ci­ate of In­dian Ho­tels, sold Gate­way Ho­tel Beach at Visaka­p­at­nam to Varun Group, a diver­si­fied busi­ness en­ter­prise, for an undis­closed sum. How- ever, In­dian Ho­tels re­tained man­age­ment of the ho­tel.

Ch­hat­wal said the as­set sale is also part of the com­pany’s strat­egy to own 50% of prop­er­ties while re­tain­ing the rest through man­age­ment con­tracts with the prop­erty own­ers. At present, In­dian Ho­tels owns around 70% of the ho­tel as­sets it op­er­ates in In­dia and abroad.

“We just don’t want to sell (the ho­tel as­sets) at any price. Not just in terms of the amount you get for the prop­erty but also the con­tract you get in re­turn. It should be a long-term con­tract with the right part­ner,” he said.

The com­pany plans to in­crease its port­fo­lio of man­age­ment con­tract, but would con­tinue to look at op­por­tu­ni­ties to in­vest at the right prop­erty. For in­stance, In­dian Ho­tels is in­vest­ing around ₹80 crore to ren­o­vate The Con­naught ho­tel, an 85-room, four-star ho­tel prop­erty on Jan­path Lane in cen­tral Delhi.

The prop­erty would be in­tro­duced as part of its yet to be launched bou­tique ho­tel brand Sele­q­tion. In Septem­ber, In­dian Ho­tels fi­nally re­tained The Taj Ma­hal Ho­tel on Mans­ingh Road in New Delhi af­ter years of court bat­tle with the NewDel­hiMu­nic­i­pal Coun­cil, the owner of the as­set.

In line with its five-year strat­egy, As­pi­ra­tion 2022, IHCL signed 15 new ho­tels across brands in the last one year in both do­mes­tic and in­ter­na­tional busi­ness.

Ch­hat­wal said it will con­tinue to look for op­por­tu­ni­ties to ex­pand its busi­ness in key in­ter­na­tional mar­kets such as the US and the UK.


The se­nior liv­ing sec­tor in In­dia is still at a nascent stage

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