The DLF group, India's largest real estate developer, is learnt to be in talks with Hilton International for a foray into the hospitality sector. DLF had acquired a 1.24-acre hotel site for Rs 97 crore in the Rohini district centre from the Delhi Development Authority last month.

Sources close to the development told Business Standard that the talks with Hilton were centered around setting up business hotels at various locations across the country.

DLF may also foray into the luxury and budget hotel categories, but that is planned for a later stage. The sources said the talks could culminate in an agreement shortly.

When contacted, a DLF spokesperson said, "We are open to exploring new ventures in the area of speciality projects, including the hospitality sector. As of now, there is nothing in the pipeline to confirm or discuss."

Company sources confirmed the Rohini land acquisition through a group entity, Breeze Construction. DLF is permitted to have a maximum built-up area of 20,516 sq metres at the site and given the location, it is likely to be a business hotel.

Unlisted DLF, promoted by KP Singh (ranked 114th in the recent Forbes list of billionaires with a net worth of $5 billion), has construction activity spread over 100 million sq ft in a dozen cities. It has lined up development plans for over 1,000 acres every year.

The group has extended its business from building houses to building shopping malls and multiplexes. Hotels seem to be the next logical extension. The unprecedented 'boom' in inbound tourism as well as business travel has led to an acute shortage of rooms, with hotels all over the country reporting highest ever occupancy rates.

Another hint of DLF's hospitality plans comes from its recent moves on the special economic zone front. DLF has planned SEZs in Punjab, Haryana and other states for multi-purpose industries. It is obvious that SEZs will need hotels and other related facilities. That need neatly dovetails with the company's expansion into the hospitality sector

For instance, in Amritsar, DLF has plans for a 1,100-acre, multi-sector zone for textiles, food processing and engineering. In Ludhiana, it has planned a multi-product zone spanning 2,500 acres. In Gurgaon, DLF is planning projects in phases which may cover a total of 10,000 acres at a projected investment of well over Rs 1,000 crore.

At Hyderabad, it is investing Rs 662 crore for a 30-acre zone for information technology and related services. It also has plans for SEZs in Kolkata (25 acres), Pune (60 acre) and Chennai (38 acre).