By Rama Gaind
A new investment fund is set to accelerate the expansion of the Accor hotel brand in India with initial assets valued at approximately US$325 million.
Accor and InterGlobe have announced the establishment of the fund for a portfolio of India hotel assets, and subject to necessary regulatory approvals, an affiliate of Pacifica Partners (Pacifica) will take a significant stake of up to 36% equity in the fund. Accor and InterGlobe will each hold 32% equity in the fund.
The fund will initially hold the assets for seven hotels in India which are currently jointly owned by Accor and InterGlobe, representing 1,750 rooms. Accor’s first property in India - Novotel Juhu Beach - opened in Mumbai in July 2009. This flagship property epitomises luxury. Spread over 2.5 acres of a scenic beachfront site, Novotel has 203 guest rooms and suites with views overlooking the Arabian Sea.
The new hotel developments are all in key gateway cities of India with prime locations including at the recently opened Delhi International Airport, one of Asia’s newest and largest airports. All seven hotels will open between 2011 and 2013. They are: 1.Pullman Delhi International Airport, 270 rooms 2.Novotel Delhi International Airport, 400 rooms 3.Novotel Bangalore Outer Ring Road, 220 rooms 4.Novotel Chennai SIPCOT, 180 rooms 5.Novotel Chennai Old Mahabalipuram Road, 160 rooms 6.Ibis hotel Bangalore Outer Ring Road, 330 rooms 7.Ibis hotel Chennai Old Mahabalipuram Road, 190 rooms.
The chairman and CEO of Accor Gilles Pelisson says, “The establishment of this fund demonstrates Accor’s ability to enter new markets through effective partnerships, creating a portfolio of high quality assets and then realising the potential of these assets”.
“The investment of Pacifica into this fund provides a platform for further growth in the strategic market of India where Accor and InterGlobe have already created an extensive development pipeline.” According to group managing Director, InterGlobe Enterprises Rahul Bhatia: “We are committed to growth in the hotel sector in India.
The establishment of this new investment fund represents our intention to expand our footprint of upper midscale and upscale hotels in India”. Managing director of Pacifica Partners Peter Meyer indicated that, “India at this time is one of the most attractive lodging growth opportunities in the world. Pacifica views this fund as an excellent vehicle to take advantage of this compelling market by teaming up with Accor and InterGlobe, who together provide international hotel brands and operations with strong domestic capabilities”.
The fund provides a new growth platform with investment focused predominantly in the upper midscale and upscale segments. New assets may be acquired into the fund in the future. In the five years since entering India with a joint venture arrangement with InterGlobe Enterprises, Accor has opened eight hotels. In India, Accor is deploying hotel brands ranging from luxury through to budget offering the most comprehensive portfolio of any international hotel operator in the country today. A further 43 hotels are committed in the country - including the portfolio of seven involved in the new investment fund.
A majority of these hotels are under construction and 25 of the hotels are scheduled for completion in the next two years. Background Accor, the world's leading hotel operator and market leader in Europe, is present in 90 countries with 4,100 hotels and close to 500,000 rooms. Accor's broad portfolio of hotel brands - Sofitel, Pullman, MGallery, Novotel, Suite Novotel, Mercure, Adagio, Ibis, All Seasons, Etap Hotel, Formule 1, hotelF1 and Motel 6, and its related activities, Thalassa Sea & Spa and Lenôtre - provide an extensive offer from luxury to budget. With 145,000 employees worldwide, the group offers to its clients and partners nearly 45 years of expertise.
Established in 1989, InterGlobe Enterprises is a travel corporation with a vision to deliver value to its stakeholders, clients and customers through dedicated business units that perform specialist roles Pacifica Partners Private Limited is the asset manager to a joint venture hotel investment company established by an affiliate of GIC Real Estate Pte. Ltd. and Host Hotels & Resorts.
