The UK-based Dawnay Day Group plans to invest $1.2 billion to set up four-star properties in the country over the next 10 years.
KOLKATA: The UK-based Dawnay Day Group plans to invest $1.2 billion to set up four-star properties in the country over the next 10 years.
It has already committed $200 million in the Indian hospitality market.
The group, which operates its hospitality business in the country through its 100% subsidiary — Dawnay Day Hotels India — is expected to make this investment through a combination of debt and equity.
Mandeep Lamba, managing director, Dawnay Day Hotels India, told DNA Money that an initial public offer (IPO) over the next 4-5 years could not be ruled out either.
The current commitment of $200 million is being funded through internal accruals. Already, land has been acquired in Pune, Ahmedabad, Jaipur, Lucknow, Bangalore and Hyderabad. Prospective properties are likely to come up in Chennai, Bhubaneswar, Chandigarh, Coimbatore, Mumbai and Kolkata.
The company is also entering the service apartments space but only through its properties in Pune and Hyderabad and not as standalone ventures.
“We are not likely to find sufficient returns on investment in standalone service apartments since tariffs are lower in this segment and the areas occupied are larger. The market for service apartments is yet to mature in India,” said Lamba.Pune will see a 171 keys hotel with 73 service apartments while the Hyderabad property will have 200 rooms and 100 service apartments.
The company is looking to have 10 fully operational properties with 1,500 keys by 2010-end through a fund injection of Rs 1,000 crore. The average investment will be Rs 1.5 lakh per room, with the properties averaging 125-150 rooms.
Dawnay Day, which runs four-star brand Paramount in the UK, is looking to launch an India-specific brand, plans for which have not been frozen yet. The group operates about 20 properties in the UK .
The group, which follows a business model of building and managing its own hotels, is privately owned. Its three main areas of activities are property investments, fund management and financial services.
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