Goldman Sachs-backed hotel investment firm SAMHI Hotels Ltd plans to spend around Rs400 crore this year on acquiring hotel assets in the country, said a top company executive.
Gurgaon-based SAMHI Hotels, which owns 30 hotel assets operated by several global brands such as Marriott and Hyatt Hotels, has made several acquisitions in the last six years.
Ashish Jakhanwala, managing director and chief executive officer, SAMHI told Mint that the company has invested around Rs2,500 crore through a mix of debt and equity in the past six years. It is looking to further expand its portfolio mostly in tier-I and tier-II cities.
“We will add another 500-600 hotel rooms through acquisitions. There are a list of opportunities which we are evaluating. Some of them are in advanced talks where we have entered into in-principle agreement on the prices (of the assets),” he said.
Last year, the company acquired British hotel chain Premier Inn’s five hotel properties in India for over Rs200 crore. These hotels are currently being rebranded as Fairfield by Marriott. In 2016, SAMHI also bought out Hyatt Regency property in Pune from RK Jatia Group-owned Ascent Hotels for around Rs350 crore.
The last few years have seen increased interest of investors in the hospitality segment. The latest to join the list of investment firms entering the hotel space is Ajay Piramal group company Piramal Finance Ltd. According to a 23 March Mint report, the Mumbai-based firm, which has so far invested mostly in residential real estate, plans to invest around Rs10,000 crore in the hospitality sector.
“The (hotel) sector has shown tremendous improvement in the last two-three years. RevPar (revenue per available room) has been growing, occupancy levels are healthy, which is the first indication of rate growth in the market,” Jakhanwala said, adding that RevPar would further accelerate as demand grows faster than new supply.
According to data compiled by hotel consultancy firm Hotelivate, while demand is seeing a robust growth of around 12%, new supply is growing by up to 6% annually.
“When I started out, it was an industry which nobody wanted to touch. Today it attracts many more eye balls. However, the real capital flow will take a year and half to come in as most of the investors are not ready to take high degree of operating risk. Most are cautious and prefer to wait for the assets to stabilise before they start putting in capital,” Jakhanwala said.
Founded in 2011 by Jakhanwala and Manav Thadani, founder chairman of Hotelivate, SAMHI’s investors include Sam Zell-led Equity International, GTI Capital Group and IFC. In 2016, the firm received Rs441 crore as equity investment from investment banking firm Goldman Sachs Group Inc.
Source: Mint