Lulu group arm puts 217-key Marriott on block for ₹400 cr
An under-construction 217-room 5-star hotel property near Bengaluru airport, owned by Abu Dhabi-based Twenty Fourteen Hotels India Pvt. Ltd, is on the market for ₹2 crore per room, or an estimated ₹400 crore, at least three people aware of the matter said.
While a private equity fund has expressed interest, and is willing to pay ₹350 crore for the property, an additional ₹40-50 crore will be required to complete the construction, said two of the three people cited above. The construction is 75% complete, and the hospitality firm expects to finalize the deal within two months, they added.
Twenty14 Holdings, the hospitality investment arm of LuLu Group International, founded by Adeeb Ahamed, had earlier announced that the hotel asset, which will be operated by Marriott International, would be ready by 2019. However, Twenty 14 Holding’s mounting debt resulted in a delay, the people said.
“They have grown too fast in the last few years, and that is the reason they are in debt. To offload their debt, they are looking to sell this asset. The buyer is looking to pick up the asset for around ₹350 crore, and may have to pay a little more for the fit-outs,” said the third person, a consultant.
Last week, PE firm Blackstone had announced that it was evaluating two assets in south India for ₹300-400 crore.
Queries sent to the company did not elicit any response till press time.To be sure, the Lulu Group’s 20-year-plus lease agreement with Marriott Hotels will not be affected, even in the event of a change in ownership of the hotel property. The hotel is strategically situated in a hospitality hub near Kempegowda International Airport, alongside two other Marriott Internationaloperated establishments: Bloom and Moxy hotels.
In India, the Lulu Group owns six more properties, including a 135-room hotel in Bengaluru, and five assets in Kerala’s Kochi and in Kannur, including the Grand Hyatt Kochi Bolgatty. Additionally, construction is underway for four other hotels.
In 2014, the company had announced a $1-billion investment spread over six years. Half of this amount was earmarked for acquisitions in Europe, and the remaining was allocated across India, the Middle East, and far Eastern nations. The company is also pursuing other hotels projects in Dubai, the UK and Oman.
According to a 2022 analyst report by CareEdge, the company secured a 20-year hotel management agreement with Marriott for overseeing operations at the hotels in Kochi and the 217-room property near Bengaluru airport. One of the hotels in Kochi is part of Marriott Tribute Portfolio, India's first Tribute hotel. The company also collaborates with Hyatt to manage another hotel in Kochi. According to hospitality consultancy Horwath HTL Consultants, in 2023, a record 14,000 hotel rooms were added in India, taking the key count to 183,000 in the organized space.
The construction is 75% complete, and the hospitality firm expects to finalize the deal within two months