Chennai: Tata-owned Indian Hotels Company (IHCL) entered a strategic partnership with Singapore’s sovereign wealth fund, GIC for an investment platform of Rs 4,000 crore or $600 million over a period of three years.
This platform will be used to acquire fully operational hotels in the luxury, upper upscale and upscale segments in India.
This platform will look at potential hotel assets primarily located in key markets in India. The mandate is to acquire fully operational hotels which will also include distressed or underperforming hotels that can be turned around banking on IHCL’s experience and capabilities.
With the new platform, IHCL will be able to pursue acquisitions in an asset light format, with the equity contribution from IHCL at 30 per cent and the balance 70 per cent contributed by GIC. Each acquisition is intended to be in a separate special purpose vehicle with its own funding. The hotels acquired will be managed by IHCL under its various brands and complement the company's current growth aspirations via Management Contracts.
Last year IHCL had outlined a development strategy "Aspiration 2022" to drive its inventory growth.
"This collaboration is in line with Aspiration 2022 and our vision to scale up, create greater enterprise value and make IHCL South Asia's most iconic and profitable hospitality company. Through this Platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning," said Puneet Chhatwal, Managing Director and Chief Executive Officer, IHCL.
Kok Sun Lee, Chief Investment Officer of GIC Real Estate said that it was confident in the outlook of India's hospitality sector....