DLF’s Vadra-linked Saket to sell hotel

Saket Courtyard Hospitalty has put the Hilton Garden Inn Hotel, its only operational property with a Hilton association, on the block, according to reliable sources.

Saket is the controversial joint venture between the DLF Group, India’s largest real estate player, and Robert Vadra, an entrepreneur married to Priyanka Gandhi.

DLF owns the land on which the 116-room Hilton Garden Inn is built, by virtue of which it is said to have a 50% stake in Saket.

Saket has given an exclusive ‘sale’ mandate relating to the hotel, located in the vibrant shopping and entertainment district of Saket in affluent south Delhi, to an international property consulting (IPC) firm.

Built in November 2009, the mid-market (four-star) hotel boasts dining and meeting rooms, some unique amenities and state-of-the-art facilities.

A DLF spokesperson declined comment. “We do not comment on market speculation.”

But an industry source familiar with the development told DNA, “The IPC firm is currently in the process of running an Expression of Interest (EoI) process. Valuation details have not been finalised yet, but are likely after the receipt of EoIs.”

It is the first hotel in the Asia Pacific region carrying the Hilton Garden Inn brand. Over the years, it is said to have established itself well in its mid-market segment with strong average daily rate and decent occupancy levels. (Single occupancy tariff is priced Rs8,000 to Rs10,000.)

Siddharth Thaker, managing partner, Prognosis Global Consulting, a hospitality-focused advisory, said the Saket property is “a great product” with “good cash flow” and “stable operations” – factors that help it to “generate good revenues despite the overall stressed market situations”.

Should it be put up for sale, Thaker said, the Saket hotel would attract valuations upwards of Rs200 crore as the land value in the area has appreciated significantly over the past few years.

DLF has been trying to exit hospitality calling it a non-core business. In June, it sold its majority stake in Adone Hotels and Hospitality to a Kolkata-based consortium comprising Avani Projects and Square Four Housing and Infrastructure for Rs567 crore.

The realtor has also reportedly found a buyer for its holding in luxury hotel chain Aman Resorts for Rs2,500 crore.

DLF has been saying that the sale proceeds from non-core businesses are being used primarily to reduce debt on its books.

It is not clear if the sale of the Hilton hotel in south Delhi is a prelude to a potential DLF exit from  the joint venture firm. A few years back, DLF received negative press and considerable attention from opposition parties for extending unsecured loans of more than Rs3.5 crore to Saket Courtyard Hospitality. Alluding to Vadra’s links to political India’s preeminent family, such loans were labelled “sweetheart deals” and “political equity” by bloggers and Twitterati.