Singapore’s GIC, Tata Group’s IHCL to acquire top India hotels in $572 million deal [Infographic]

by | Jun 7, 2019 | Projects

The majestic Taj Mahal Palace, Mumbai – one of Tata Group’s Indian Hotels Company (IHCL) brands

Singapore’s sovereign wealth fund GIC is now working with Tata Group’s Indian Hotels Company to invest $572 million in the subcontinent’s hospitality market

Singapore’s sovereign wealth fund GIC has struck a roughly $572 million deal with Tata Group’s Indian Hotels Company (IHCL). This deal marks a massive investment in India’s hospitality sector.

According to a statement from the stakeholders, IHCL will contribute 30% equity in all such acquisitions, while the rest will come from GIC.

This deal will involve a stunning number of the increasingly popular tourism market’s upscale hotel properties.

IHCL’s vision

The new deal with Singapore’s GIC is one which will help IHCL push forward its overarching vision.

The joint platform which stems from the new partnership will likely include luxury, upper upscale, or upscale hotel assets in India. These investments will be made over the course of the next three years and add to IHCL’s current projects including hospitality brands such as Taj, Vivanta, and Ginger.

Puneet Chhatwal, IHCL’s managing director and chief executive, said, “This collaboration is in line with Aspiration 2022 and our vision to scale up, create greater enterprise value and make IHCL South Asia’s most iconic and profitable hospitality company.”

“The company expects to acquire strategic and marquee assets that need new ownership, branding and positioning through the platform,” he added.

Adopting an asset-light approach

Asset-light adaptation is an ongoing trend in the hospitality market and represents a move away from building and owning new properties.

This project will see those involved in adopting an asset-light model to pursue new acquisitions. Each acquisition is intended to be in a separate special purpose vehicle with its own funding.

The hotels acquired will be managed by IHCL under its various brands and complement the company’s current growth aspirations via management contracts.

The total inventory in the premium category (luxury, upper upscale and upscale segments) is pegged at 118,000 rooms and the segment is growing at a 3-4% a year.

Kok Sun Lee, GIC Real Estate’s chief investment officer, said, “As a long-term investor, we are confident on the outlook of India’s hospitality sector. We look forward to working closely with established partners such as IHCL to pursue attractive opportunities and capture the sector’s growth potential.”

Here is a TOPHOTELCONSTRUCTION infographic detailing India’s hotel pipeline.

 

Let’s take a look at a few other projects currently underway by The Indian Hotels Company:

Taj Exotica Resort & Spa Maldives 

Taj Arabia

The Gateway Hotel Kolhapur 

ABOUT THE CHAIN

The Indian Hotels Company (IHCL) and its subsidiaries, collectively known as Taj Hotels Resorts and Palaces, is one of Asia’s largest and finest group of hotels. Incorporated by the founder of the Tata group.

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