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Leela pays Rs 611 cr to check
into Delhi
Delhi News: Hotel Leelaventures is shelling out the
highest price ever paid for a hotel property in Delhi
and in doing so has entered the capital in a grand
style. It outbid competitors like Indian Hotels,
Emaar-MGF, Park hotel, ITC, Uppal Builders, Positive
Builders and Park for a 3-acre plot in the heart of
Delhi, offering Rs 611 crore against the reserve price
of Rs 300 crore.
At a mind-boggling price of Rs 200 crore/acre, the
Leela deal is twice the last record set by Emaar-MGF
when they bought the Jasola property.
The South Delhi plot is strategically located on
Africa Avenue and was put on the block by National
Buildings Construction Corporation (NBCC).
Incidentally, Leela has been trying to find a
strategic location in Delhi for a while. Vivek Nair,
VC and MD of Hotel LeelaVenture, said, “The group’s
long-felt desire to have a hotel in the nation’s
capital would be fulfilled.”
The company is creating an upmarket ‘trophy’ hotel
with 250 guestrooms and service apartments. With five
new hotels under construction in Gurgaon, Udaipur,
Chennai, Hyderabad and Pune, the Leela Kempinski Group
would have a pan-India presence. It is in this context
that it was necessary to be in Delhi, Mr Nair added.
Currently, the Delhi property market is witnessing a
huge demand-supply mismatch, forcing the property
developers to pay abnormal prices for land
acquisitions. Vivek Dahiya, director DTZ, an
international property consultant firm, said, compared
with the last deal in the hotel property market in
Delhi, the Hotel Leela deal has witnessed a 100%
increase in land prices.
“This is because Africa Avenue commands a high
premium,” Mr Dahiya said. The last hotel property deal
in Delhi was at Rs 100 crore per acre while Hotel
Leela deal with NCCB has been concluded at over Rs 200
crore per acre.
The mismatch in Delhi has triggered many hotel
companies to start development. According to HVS, a
hotel consultancy firm. While the existing supply in
Delhi is 7,030 rooms, proposed supply is 10,856 rooms,
an increase of 150% in the next 5 years. Most of the
development in Gurgaon and neighbouring Noida amounts
to 47 new hotels in the NCR with 10,800 rooms, much of
it owing to the Commonwealth games to be held in NCR
in 2010.
Industry analysts believe that there appears to be a
paradox in Delhi. While there is shortage of rooms in
Delhi, a lot of development is taking place eventhough
Delhi Development Authority is auctioning hotel sites
at unviable prices. Analysts are of the view that
hotel developers have made financial bids at such high
prices, making it practically impossible for these
hotels to make any money due to the high price of
land.
Further, if hotel developers are paying such huge
money for land, then it makes more sense for the five
star or a premium hotel rather than a budget hotel to
come up on these sites. |
