Accor and InterGlobe has set up an investment fund for a portfolio of Indian hotel assets in which an affiliate of Pacifica Partners will take a significant stake of up to 36% equity, subject to requisite regulatory approvals. 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 with a value of approximately $325 million on the completion of the hotels.
Accor is one of the world's leading hotel operators and market leader in Europe with presence in 90 countries with 4,100 hotels. InterGlobe Enterprises, a travel corporation, operates InterGlobe Air Transport and IndiGo.
Pacifica Partners is the asset manager for the joint venture hotel investment company established between an affiliate of GIC Real Estate Pte. Ltd., the real estate arm of the Government of Singapore Investment Corporation, and Host Hotels and Resorts, a lodging and real estate company listed on the New York Stock Exchange.
The fast growing Indian hotel industry attracted major investments in the recent past. Last week, the Swiss-based international hotel chain, Swissôtel signed management contracts for two hotels in India, the Swissôtel Gurgaon and the Swissôtel Whitefield, Bangalore with different investee companies of The Xander Group Inc., the leading international private equity firm. This month, Xander Real Estate Partners invested $110 million in the hospitality division of Pune-based Panchshil Realty Pvt. Ltd.
All seven hotels of Accor and InterGlobe fund which will be opened between 2011 and 2013 include Pullman Delhi International Airport (270 rooms), Novotel Delhi International Airport (400 rooms), Novotel Bangalore Outer Ring Road (220 rooms), Novotel Chennai SIPCOT (180 rooms), Novotel Chennai Old Mahabalipuram Road (160 rooms), Ibis hotel Bangalore Outer Ring Road (330 rooms) and Ibis hotel Chennai Old Mahabalipuram Road (190 rooms).
According to the release, the hotel developments are all in key gateway cities of India with prime locations within these markets, including at the recently opened Delhi International Airport, one of Asia’s newest and largest airports.
Gilles Pelisson, chairman and CEO of Accor said, “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.”
Rahul Bhatia, Group Managing Director, InterGlobe Enterprises said, “The establishment of this new investment fund represents our intention to expand our footprint of upper midscale and upscale hotels in India.”
Peter Meyer, Managing Director of Pacifica Partners said, “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.”
In the five years since entering India with a joint venture arrangement with InterGlobe Enterprises, Accor has opened eight hotels. 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 coming two years, said the release.