L&T entering hotels business

After building hotels for the likes of Tata Group (Indian Hotels Co Ltd) and Oberoi Group (EIH Ltd) for years, infrastructure major Larsen & Toubro (L&T) is setting up its own.

The company has identified four markets for its hospitality business foray. The hotel projects, including budget, mid-market, business hotel, five-star and serviced apartments, are expected to be rolled out in cities like Navi Mumbai, Chandigarh, Bangalore and Chennai.

L&T officials refrained from making an official statement. “We are currently in a silent period as our financial results are expected to
The hotels are being developed through the special purpose vehicle (SPV) route, either directly (L&T Ltd) or through a group company (such as L&T Urban Infrastructure Ltd).

For instance, the Navi Mumbai project is under the SPV L&T Seawoods Pvt Ltd. The SPV will develop an integrated commercial complex with a modern railway station at Seawoods. The City and Industrial Development Corporation had floated this proposal in mid-2007 and the same was opened in February 2008. L&T was one of the three qualified developers and bagged this project with a bid of Rs 1,809 crore.

As per L&T’s website, the project is spread over 39.92 acres and involves 6 million square feet (msf) of commercial development comprising hotels and serviced apartments, retail, entertainment & leisure and office towers, in addition to 3 msf of car parking space and the state-of-the-art Seawoods Railway Station.

According to industry sources, the Seawoods development is expected to house a 175-room budget hotel, followed by a 250-keys mid-scale hotel with a large convention centre facility. While there is no specified timeframe, both hotel projects are expected to come up in the Phase I development plan. The serviced apartment project is likely to be undertaken in Phase II, details of which are still awaited. L&T is yet to finalise hospitality partners to manage the hotel and serviced apartment developments for this project.

In Bengaluru, a five-star airport hotel has been planned under L&T Bangalore Airport Hotel Ltd, an SPV formed by L&T and EIH Ltd. The 321-room business hotel with conference facilities is being developed at the upcoming Bengaluru International Airport at Devanahalli.

The hotel, to be developed at a cost of Rs 250 crore, was scheduled for a November 2008 launch. “The cold shell is ready for sometime but there has been no progress thereafter,” said an industry source.

The Chandigarh project is being developed under a separate SPV of L&T Urban Infrastructure Ltd, christened CSJ Infrastructure P Ltd. The mixed use development is spread across 20.16 acres with total built-up-area of 3.05 msf. The development will feature a 1.12 msf shopping mall, a 201-keys business hotel and 0.38 msf of high-end office space. L&T is understood to be scouting for a hotel management partner for this project.

Another subsidiary of LT Urban Infrastructure, L&T Arun Excello Commercial Projects Pvt Ltd, is developing Estancia Hotel and Mall in Chennai. This development is part of the Estancia integrated township project on GST Road in Chennai.

The development is spread across a 13-acre plot with a built-up-area of 1.35 msf. The mall features extensive retail space, a 6-screen multiplex, food courts, entertainment zone and a four-star business hotel to be managed by InterContinental Hotels Group.

The hotel will have 280 guestrooms in addition to extensive meetings and banquet space, food and beverage outlets, a health club, spa and a business centre, among others.