Bengaluru records sale of hotel assets worth ₹485 crore in a single day

Samhi Hotels Ltd has acquired a 142-room, four-star hotel in Bengaluru’s Whitefield area ₹205 crore, a strategic move to strengthen its position in one of India’s most lucrative hospitality markets. The property, previously managed by ITC under the Fortune brand and now called Trinity Hotel, will become part of the Samhi portfolio following the acquisition of Innmar Tourism and Hotels Private Ltd.

The transaction, funded through internal accruals, is in line with Samhi’s strategy of investing efficiently by acquiring existing assets at lower replacement costs rather than building new hotels from scratch, the company said in a statement to the BSE.

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Samhi plans to expand the property further by adding 200-220 rooms in a separate building, which will change its name from upscale to high-end. Once completed, the total number of rooms will increase to 340-360 and will include additional dining, banquet and meeting facilities.

“We believe that revenue per available room (RevPAR) can be significantly improved upon renovation and addition of new offerings,” noted Ashish Jakhanwala, chairman, managing director and chief executive officer of Samhi.

While Jakhanwala did not comment on the potential investment this could attract, industry estimates suggest the cost of this redevelopment could range from ₹200-250 crore, based on typical construction costs for a higher-end hotel room.

Although Jakhanwala did not disclose the expected investment, industry estimates suggest that the redevelopment costs could be between Tk 2,000 and Tk 2,000 ₹200-250 crore based on typical expenses for building a higher end hotel room.

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Samhi’s focus on Bengaluru, a city that adds 10-12 million square feet of office space annually, is in line with its long-term growth strategy. Jakhanwala highlighted the strong demand growth in the region due to tight supply, making it one of the strongest hotel markets in India. With six existing business hotels in the city, Samhi is well-positioned to enter Bengaluru’s booming office market.

Juniper and Lulu Group Agreement

In a separate transaction, publicly traded player Juniper Hotels hedged ₹280-crore deal of sale of a 220-room, five-star hotel near Bengaluru airport to Twenty Fourteen Hotels India Pvt, part of the Lulu Group. Ltd. The hotel, currently under development, is spread over 6.5 acres and is expected to be renovated and rebranded under an international hotel brand.

This transaction he initially reported Minthighlights the growing interest in Bengaluru’s hospitality assets, which were initially sought by Lulu Group approximately ₹2 crore per room at the expected valuation ₹400 crore for assets.

Mint contacted Juniper, but questions remained unanswered.

According to JLL’s hospitality division, the Indian hospitality sector is seeing significant growth in transaction activity, with deal value expected to reach $413 million by the end of the year, up 22% year-on-year. In the first half of 2024, contracts were signed in branded hotels for 19,442 rooms, and 6,071 branded rooms were opened throughout the country.

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Samhi’s acquisition and expansion plans, along with the Juniper transaction, reflect broader dynamics in the industry as hotel operators and investors stand to benefit from growing demand in India for premium hospitality experiences.