Yatra Capital Limited (“Yatra”) the first Euronext quoted company with a focus to invest in Indian real estate, is pleased to announce its seventh investment, following a commitment of €4.88 million in equity for a 20% holding in the joint venture, Alliance Hospitality Services Private Limited, to develop a premium star category hotel and serviced apartments in Pune, Maharashtra.
Yatra has now committed €80.5 million of the initial €100 million raised in December 2006.On the 19th October 2007 the company announced that it has successfully raised a further €120 million to be invested into Indian real estate.
The approximately 290,000 square feet (“sq ft”) hotel and serviced apartment is located on a prime site on Nagar Road, a key arterial road into Pune city, and is surrounded by mid to high end housing, as well as prominent office buildings and technology parks, housing multi-national corporations. The hotel forms part of the 1.5 million sq ft „Market City retail development where Yatra recently acquired a 24% stake. This investment underlines Yatra's stated strategy of diversifying into different asset classes where the Board believes there is opportunity to deliver shareholder value.
The property, targeted to be completed by late 2009, will be positioned as a premium star category hotel offering an estimated 319 rooms and 96 serviced apartments catering primarily at business travellers due to its location near a large number of global organisations such as Accenture, Mahindra British Telecom and IBM.
Yatra's joint venture partner, Atlas Hospitality Company Private Limited (“AHPL”), is part of the Ruia group [promoters of The Phoenix Mills Limited (“Phoenix”), a leading Indian real estate developer].
Accelerated business growth by both Indian and international companies is driving the need for additional hotel rooms in Pune, which is currently lacking high-end hotel accommodation. According to the Cris Infac Hotels Annual Business Review (2006), the average annual occupancy for hotels in Pune is 84%, and, at present only 10201 rooms are available in the luxury segment in the city. It is further estimated that only an additional 4702 rooms will be developed over the next two years falling well short of the estimated demand.
The hospitality sector in India is forecast to grow at 8.8% per annum over the next 10 years, and it is anticipated that 100,000 rooms will be required in the next five to seven years with average room rates rising by 20-25% over the next two to three years. A number of international hotel chains are working to increase their presence in India. With rapidly increasing business and leisure travel and growing disposable incomes characterising the Indian market, Yatra has identified this sector as a significant investment opportunity.
Following this investment, Yatra Capital Limited will have invested €80.5 million of the €100 million that it raised in December 2006.
Commenting on this investment, Sir Nigel Broomfield, Chairman, Yatra Capital Limited, said: “The strategic investment Phoenix continues to provide us with opportunities across a range of sectors. This marks our entry into the Indian hospitality sector and, more specifically, in the market for business travellers, which we believe is a growth market being driven by a widening gap between demand and supply. ”
Mr. Atul Ruia, Director, AHPL, added: “This investment further underlines our confidence in Yatra as a business partner and our belief in Pune as a location with solid fundamentals which will support our investment. I am sure that this will not be the last time we work together and I look forward to strengthening this partnership”.
Mr. Ajoy Veer Kapoor, Saffron Capital Advisors, also commented: “With this investment we are entering a new real estate asset class which is in line with our commitment to building a strong, diversified portfolio of quality assets. Our investments for Yatra have the potential to deliver across a variety of sectors and locations and we will continue to seek opportunities that will maximise returns to Yatra's shareholders.
No comments:
Post a Comment