Companies

Berggruen Hotels to set up 11 properties in next two years

Our Bureau Chennai | Updated on June 09, 2011 Published on June 09, 2011

First of Rs 370-crore investment launched in Chennai





Berggruen Hotels, promoted by Mr Sanjay Sethi (formerly of Taj) and a team of hotel professionals, is planning to expand its presence in India with 11 new properties entailing an investment of Rs 370 crore in the next two years.

Berggruen Hotels, fully funded by the US-based fund house Berggruen Holdings, currently has a chain of two resorts (in Mahabaleshwar and Lonavala) and nine mid-market hotels across Thiruvananthapuram, Ludhiana, Bangalore and Mumbai. And, on Wednesday it launched its first property in Chennai.

Investment

Mr Sanjay Sethi, Managing Director and CEO of the company, told Business Line that of the Rs 370 crore, Rs 60 crore will come in as fresh equity investment from Berggruen Holdings, while the rest will be through debt. He said that so far, the US investor has pumped in Rs 220 crore as equity and the company has borrowed Rs 110 crore, all of which have already been deployed.

“Overall, we target to have at least 40 hotels and 4,200 rooms by the end of 2015. Of this, 20 will be the company-owned and the rest will be on management contract,” he said. Of the existing nine properties, five are company-owned and the remaining four are on management contract.

The company will add two properties, both in Whitefield, near Bangalore, by the end of the current year. The remaining nine projects are in various stages of development in cities such as Kochi, Visakhapatnam, Pune, Aurangabad, Goa, Lucknow, Jammu, Vadodara, Kovalam and Raipur. The company spends, on an average, Rs 35 lakh a key for hotel projects, and Rs 45 lakh a key for resorts, said Mr Sethi.

Elaborating on the new property, he said the hotel is owned by the Chennai-based real estate and granite exporting company Katti-Ma. The property – Keys Hotel, Katti-Ma – is a 30-key hotel, with an average tariff of Rs 3,500.

Published on June 09, 2011
This article is closed for comments.
Please Email the Editor