Sarovar spreads out as realty prices pinch

With prices of real estate going through the roof, Sarovar Hotels is looking at acquiring land away from city centres and larger towns for Hometel, its budget brand of hotels.Working towards this end, the company has acquired land on Old Mahabalipuram Road, which is 20-30 km away from the city centre in Chennai, and in Sriperumbudur in the south. It is also looking at Bhiwadi in Rajasthan, 50 kms from Gurgaon.The one-acre plot on Old Mahabalipuram Road was acquired for Rs 4 crore and the two acres at Sriperumbudur for Rs 6 crore. “There is enough demand here but no competition,” Ajay Bakaya, executive director, Sarovar Hotels, told DNA Money.“Real estate prices have been rising by about 20% a year. International players are willing to pay a price — in the form of sky-rocketing real estate rates — for entering the booming Indian hospitality market. But domestic players need to be cautious. If they buy land at a high price, these won’t have viability if the market shows a downturn,” said a hospitality industry analyst.

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