The Hindu Business Line : Unitech looks to ‘monetise’ upcoming hotel biz

New Delhi, March 21 Realty company Unitech Ltd is looking at ‘monetising’ its upcoming hotel business within 2 to 2.5 years of operations for which it would explore options including listing, sale of assets or hotel REIT.

The company has put on hold a $1.5-billion Qualified Institutional Placement (QIP) issue that was expected in the beginning of 2008. “We had an enabling resolution for a QIP and we did consider it, but seeing the stability and the market conditions, we thought it was best to stay away and wait for stability,” Mr Sanjay Chandra, Managing Director, Unitech Ltd, said.

Unitech’s current blueprint includes 35 hotels entailing 5,800 hotel rooms. “We are looking to tap various avenues including private equity, but project-specific and not at the entity levels. Our capex for the hotel business will be about $600 million just for construction. The land is already paid for.

“We will raise debt initially but will start to monetise the hotel business either by getting equity investors or selling assets,” he said, adding that the monetisation phase would start only after 2 or 2.5 years of operations, depending on the market.

On the options available for monetisation, Mr Chandra said, “It can be done either through a hotel REIT, or a hotel company may get listed or one may sell assets individually to buyers who want an entry into that location or market.”

Business set-up

The company’s hotels are coming up in locations such as Gurgaon, Noida, Greater Noida, Kolkata, Chennai, Goa, Bangalore, Kochi, Chandigarh and Hyderabad, amongst others.

“These are not standalone hotels and will be a part of our real estate development. Also, we do not want to be in the business of managing hotels, so we will be hotel asset owners and developers and we will get someone professional to operate them for us. (We will) look to monetise our hotel business either by selling those assets individually or listing them, whichever makes sense,” he said.

The company has already tied-up with the world’s leading hotel chains, including Marriott. Unitech also has a partnership with Carlson hotels, and is eyeing one or two more tie-ups for various hotel projects.

More Stories on : Diversification | Real Estate & Construction | Hotels | Unitech Ltd

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