The Hindu Business Line : Phoenix Mills eyes Pune, Chennai & Bangalore

Mumbai, Nov 5 Spurred by the success of its ‘High Street Phoenix’ in Mumbai, a blend of residential entertainment, leisure, commercial and hospitality segments, the promoters, Phoenix Mills Ltd (PML), is on course to replicate the model in other cities.

PML has begun work on similar projects of 2.5-4.5 million sq ft in Kurla (Mumbai), Chennai, Bangalore, Pune and Agra. While the integrated malls would cost Rs 600-1,400 crore each, 4-5 star hotel would range between Rs 100 crore and 400 crore, said Mr Shishir Shrivastava, CEO – Hospitality & New Initiatives, Market City Resources. For its upcoming luxury hotel at Lower Parel here, PML, through its subsidiary, has signed a management agreement with Hong Kong-based luxury hotel group, Shangri-La Hotels and Resorts.

Mr Shrivastava said the company would also build budget hotels in tier II cities such as Bhopal, Indore, Bhilai and Ludhiana.

Hotel projects are also on in cities such as Kolkata and Hyderabad, besides premium luxury resorts in Varanasi, Aurangabad, Goa and Kochi. The focus is on cashing in on “consumer spends,” rather than mere realty development, he said.

The company had raised Rs 980 crore by way of qualified institutional placement in August. About Rs 350 crore will go for subscription of 3 million equity shares of Atlas Hospitality Company (part of the group), representing 75 per cent of the issued and outstanding equity capital of Atlas. Atlas owns equity interests ranging from 33.3 per cent to 68.7 per cent in four hotel property developments in India, located in Kurla, Chennai, Pune and Agra with a total developable area of about 1.1 million sq.ft.

The four hotels will have over 900 rooms. The remaining proceeds will go for land acquisition and working capital.

It had also raised Rs 320 crore through preferential allotment of 19,85,756 equity shares of Rs 10 each for cash at a price of Rs 1,600 (including a premium of Rs 1,590) in June. Investors list includes DWS Invest Bric Plus – 3,20,000 shares; DB Fund Mauritius Ltd – 90,000 shares; HSBC Financial Services (Middle East) Ltd – 415,000 shares; Americorp Ventures Ltd – 3,00,000 shares; Barclays Capital Mauritius Ltd. – 1,26,756 shares; Citigroup Global Markets Mauritius Pvt. Ltd. – 4,71,500 shares and Rhodes Diversified – 2,62,500 shares.

PML strategy also revolves roping in private equity for specific projects. Though PML’s stake in the projects could vary between 25 and 51 per cent, managing and operating rights rest with the company as also the first right of refusal if any investor wanted to exit.

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