Peninsula Land, the property development arm of Ashok Piramal Group, today announced its foray into the hospitality sector with a joint venture with textile maker and real estate developer Arrow Webtex. The JV will develop business hotels across the country.
The foray comes months after the company exited its retail business, Pyramid Retail, in December 2007. The group sold Pyramid Retail to Indiabulls group for Rs 208 crore. The foray into hospitality also marks continuance of the demarcation of group's businesses among the Piramal brothers. Urvi Piramal is the chairperson of the group, while her three sons, Rajeev, Harsh and Nandan, head independent businesses.

While Rajeev Piramal heads the group's property business Peninsula Land, another brother Harsh Piramal heads the textile venture Morarjee Textiles and auto components business Miranda Tools and PMP Components.

Arrow Webtex, promoted by Jaydev M Modi, manufactures narrow woven fabrics and is into real estate consultancy and property development. Modi is also on the board of Peninsula Land. Arrow owned nearly 133,000 sq ft of property in Mumbai as of April last year.

Peninsula and Arrow Webtex will create a special purpose vehicle (SPV), where they will hold 50 per cent stake each. In the first stage, the JV will invest Rs 100 crore and build 10 hotels of 100 rooms each, aggregating 1000 rooms. The JV plans to initially build hotels in Mumbai, Pune, Nagpur, Nashik and Kolhapur in Maharashtra and subsequently develop hotels in Ahmedabad, Surat, Jamnagar, Mundra port, Goa and Kerala, Peninsula said.

The hotels coming up in Maharashtra are expected to be operational in 30 months. Peninsula Land is developing nearly 4.5 million sq ft of real estate, including residential, commercial, IT parks and special economic zones, across the country. It also has a real estate joint venture with global investor Lehman Brothers, where it holds a stake of 25 per cent.

"We have been present in the real estate business for many years and operate in residential, commercial and retail spaces. Hospitality is a right fit into our business model. Besides, the demand for rooms from business travellers compelled us to look at the hospitality business,'' Nandan Piramal said.

The JV is exploring whether to give management contracts to hotel companies to run its hotels or run them by their own, Piramal said. Banking on the acute shortage of hotel rooms in the country, real estate companies such as DLF, Unitech, Parsvanath and Emaar MGF have announced hotel projects and tie-ups with international hospitality companies.

DLF plans to invest Rs 20,000 crore to build 125 hotels in the next seven years. Another Delhi-based realty player Unitech has plans to construct 35 hotels and has already tied up with global hotel chains Marriott and Carlson Hotels to run its hotels.

Copyright © 2006- 2015 NRIRealtyNews.com

• Disclaimer
• Contact Us