Mumbai: Duet India Hotels, the hospitality real estate fund of Duet Group, may acquire some of the hotel sites of Berggruen Hotels in tier-II cities. Industry sources told DNA that the land parcels being put on the block by Berggruen had been negotiated for setting up the mid-market 'Keys' brand.
"Land parcels in Jammu, Lucknow, Raipur and Nashik may get divested. Majority of the sites were bought by Berggruen and were part of the company's expansion plans. The Nashik site, however, is a lease arrangement with the land owner," the source said.
Berggruen Hotels is understood to have appointed international and domestic hospitality advisory firms, HVS International India and Mahajan & Aibara Management Consultants, to negotiate the land sale deal. "Among prospective buyers of the land parcels were hotel companies like Duet India Hotels and Accor Hospitality," the source said.
Dilip Puri, chief executive officer, Duet India Hotels, did not comment on the issue. However, in an interaction with DNA Money a month ago, he had said two land parcels in Lucknow (under an acre) and Nashik (30,000 sq ft) were being acquired for three-star 100-room mid-market hotels.
"The overall project cost is $6 million, or Rs 35 crore, each," Puri had said.A senior Accor Hospitality official said the company is not in talks with Berggruen. "The sites are not of interest to us," he said.
Sanjay Sethi, managing director of Berggruen Hotels did not comment when asked about the possibility of divesting land parcels. "We have just received commencement certificate for our Jammu, Vizag and Kovalam hotels and work should soon start on these sites," Sethi said.
However, in a interaction last week, Sethi had said that the company would eventually move to an asset-light strategy where management contracts would play a significant role in expansion plans.
"We are being frequently approached by developers for building hotels as per 'Keys' brand specifications/offerings. Similarly, there are existing standalone hotels showing keen interest to have us manage their hotels.So we may consider the available options and look to divest our land parcels in those markets thereby making additional capital available for developments and acquisitions in tier I cities, including Mumbai," Sethi had
said.
He said that the hotel company was in advanced stages of negotiating a couple of management contracts in North Mumbai. It is also in talks to acquire an existing hotel in the city.


