The hospitality business of Phoenix Mills will now expand beyond the luxury hotel coming up in its Mumbai property.
MUMBAI: The hospitality business of Phoenix Mills will now expand beyond the luxury hotel coming up in its Mumbai property. The group intends to grow in three verticals — luxury hotels, mid-market or economy hotels and destination resorts and spas.
Including the Shangri La Hotel, which is to become operational by 2010 in Mumbai, properties for eight four-star-and-above hotels offering 1,450 rooms, and eight mid-market or budget hotels offering 1,600 rooms, have already been acquired.
Until now, Phoenix Mills’ focus had been on developing malls and retail spaces, with hospitality emerging as a new business.
Shishir Shrivastava, chief executive officer, hospitality, Market City Resources, a wholly-owned subsidiary of Phoenix Mills, told DNA Money, “Our target is to have 25 hotels operational in the next five years. In the next 48 months we will invest Rs 2,000 crore, and another Rs 1,200 crore will be raised after that.”
Market City Resources is developing mix properties in cities such as Bangalore, Delhi and Agra involving commercial buildings, retail space and hotels.
Of the initial Rs 2,000 crore, Rs 1,200 crore will be equity while the rest will be debt. While Rs 300 crore equity is already available, the group plans to raise Rs 400 crore this year and another Rs 400 crore in the following year, said Shrivastava.
The group is also looking out for a more strategic property to buy.
The higher segment hotels will come up in Bangalore, Pune, Chennai, Agra and Mumbai while the budget hotels will be constructed in Tier II and Tier III cities.
Talks are on with many international luxury hotel groups for management contracts for these hotels but nothing has been finalised as of now, said Shrivastava.
Phoenix Mills’ first hotel will be managed by Hong Kong-based hotel group Shangri La. This hotel will have 400 rooms. It will be a 2,00,000 square feet luxury retail destination. Investments of Rs 600 crore are slated for developing this hotel, while another Rs 200 crore will be invested for the luxury mall. This luxury mall will have 55 stores spread over four floors along with upscale salons, VIP lounges and food and beverages outlets.
Atul Ruia, managing director, Phoenix Mills, said, “Our group is developing almost 100 million square feet throughout India through independent and joint ventures. We have eight luxury hotels and 25 malls under construction.”
s_tanvi@dnaindia.net
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