Emaar lines up Rs 1,600 cr for four hotels

Emaar MGF, the Delhi-based property company, said it was planning to spend Rs 1,600 crore ($400 million) to set up four hotels in the country in the next three years. It has tied up with global hospitality leader Marriott International to manage the hotels.

The company, a joint venture between Dubai's Emaar Properties and Delhi-based MGF, has partnered with Marriott for three JW Marriott hotels in New Delhi, Hyderabad and Kolkata and one Courtyard by Marriott hotel in Amritsar. The hotels will be completed by the end of 2010, according to the company.

"Our idea is to meet the acute shortage of hotel rooms in the country with landmark hotel properties. With today's tie-up, we will build hotels of different brands and different price points across the country,'' said Shravan Gupta, vice-chairman and managing director, Emaar MGF.

Of the total 912 rooms planned, the Delhi property will have 300 rooms, the Hyderabad hotel 250 rooms, the Kolkota property will have 250 rooms and Courtyard by Marriott in Amritsar will have 112 rooms.

"We are exploring other cities and other brands of Marriott for our ventures,'' Gupta said.  Emaar MGF has lined up nearly Rs 12,000 crore to build 26,000 hotel rooms in the next six to seven years.  It has a 50:50 joint venture with Premier Inn, a unit of UK hotel major Whitbread.

Emaar plans to invest Rs 2,400 crore ($600 million) to build Premier Inn hotels.  Emaar has also tied up with Accor, another hotel company, to set up 100 Formula-1 hotels across India with an investment of Rs 1,200 crore ($300 million).

US-based Marriott International has six hotels in the country with a total of 1,528 rooms. It recently announced opening 18 new hotels by 2011, taking its total tally to 25 hotels with more than 4,500 rooms.

On Emaar MGF's re-entry into the capital market, Gupta said: "We are hoping for an opportunity in the next 12-18 months if the US markets stabilise and global investor sentiment improves. It all depends on the timing and mood of the markets."

The company pulled out its IPO in February after it failed to get full subscription for the issue. "We are a very low leveraged company and have a good capital base," Gupta said.  "We can always raise debt and look for private equity placements at the company level and project level."