Singapore’s sovereign wealth fund GIC has partnered The Indian Hotels Company (IHCL), South Asia’s largest hospitality company, to create an investment platform to the tune of Rs4,000 crores (US$600 million) over a period of three years.
The investment platform will be used to acquire fully operational hotels in the luxury, upper upscale and upscale segments in India, looking at potential assets primarily in key lodging markets. These will also include distressed or underperforming hotels that can be turned around.
Through the partnership, IHCL expects to be able to pursue acquisitions in an asset light format, with the equity contribution from IHCL at 30 per cent and the balance 70 per cent contributed by GIC.
Each acquisition is intended to be in a separate SPV with its own funding.
The hotels acquired will be managed by IHCL under its various brands.
Puneet Chhatwal, managing director and CEO, IHCL, said: “This collaboration is in line with Aspiration 2022 and our vision to scale up, and create greater enterprise value. Through this platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning.”
Kok Sun Lee, chief investment officer of GIC Real Estate, said: “As a long-term investor, we are confident in 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.”