India’s biggest real estate developer DLF seems to have been bitten by the hospitality bug. While its best-known hotel property is perhaps the luxury Aman Resort in Delhi, it’s now looking at a slew of purchases on the cheap, not just in the region but in North America as well where real estate values are still depressed. A year ago, it was a business that DLF was willing to shed, but now, with its cash crunch is over, the company is going the whole hog on hospitality. It’s looking at expanding this business, not just in India but overseas as well. DLF plans to launch three hotel properties in Delhi over the next couple of quarters in time for the Commonwealth Games and it is also looking to expand the high-end luxury brand Aman Resorts that it acquired in 2007.
According to sources DLF is lining up its wallet with $200 million to buy at least three super luxury hotel properties this financial year. The company is looking for properties in Laos, China and the US. DLF plans to float a special purpose vehicle to raise money for this through long-term debt. When contacted, the DLF spokesperson declined to comment. For DLF, the change in strategy comes after it was forced to sell some of its hotel properties so it could raise the much-needed funding to the tune of Rs 700 crore. But with the housing market starting to stabilise and its core business improving, it’s willing to dip its toes in the hospitality business.
Anshuman Magazine, chairman of CBRE India, said, “Real estate companies were all shying away from non-core business, because their main forte was not in shape. As far as DLF is concerned, there has been visible recovery in home sales, and as such, it is now trying to get back on expansion mode.” Now, while the real estate market is still sluggish in most western countries and Southeast Asia, DLF’s access to funds has improved, helped along by a domestic market that is limping back to life.
Ref:http://www.indianrealtynews.com/real-estate-developers/dlf-plans-big-entry-into-hospitality-sector.html
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