Prestige Estate Projects plans to expand its hospitality portfolio by two-fold over the next three to four years, with a total investment of Rs 1,700 crore. The firm presently manages 1849 keys of hospitality assets across the country.
The segment possesses the capacity to generate revenue of Rs 1,800 crore, considering PEPL's share, which is double the current revenue of Rs 900 crore. Separately, the company is also actively exploring new markets such as Srinagar, Ayodhya, Goa, Mumbai, and expanding its portfolio in existing markets.
“The hospitality assets are generating a consistent cash flow with an average of 70% occupancy rate across all operational assets. The branded segment shows significant potential, and we are pursuing expansion opportunities with a proactive approach to portfolio growth,” said Zaid Sadiq, executive director, hospitality, Prestige Group.
The firm is also currently evaluating to monetize its hospitality portfolio, which will lead to some value unlocking. According to various analyst reports, the move can also knock off Rs 900 crore of gross debt from its books and alleviate some of the cash flow stress associated with the Rs 1700 crore balance capex in the hospitality segment.
“After all the assets have been established and are fully operational, there are several potential avenues to explore for monetizing them. One option is to consider creating a real estate investment trust, which would allow investors to pool their resources and invest in the assets collectively. Another possibility is to pursue an initial public offering. Both of these options have their own unique advantages and considerations, and would require careful evaluation and planning before proceeding” said Sadiq.
Additionally, Prestige Estate Projects has also inked a pact with Marriott Inc. for new brands in the country. The total inventory will be 801 keys across Goa and Karnataka, which will see an investment of around Rs 1,000 crore.
The hotel properties include 177 keys Marriott Executive Apartments in UB City in Bengaluru, 130 keys Moxy Bengaluru ORR in Outer Ring Road, Bengaluru, 152 keys Bengaluru Marriott Hotel South in Kanakapura Road, Bengaluru, and 160 keys JW Marriott Sakleshpur Plantation Resort in Sakleshpur in Karnataka.
In Goa, it will develop 62-keys Tribute Portfolio Dabolim Hotel in Dabolim and 120-keys Autograph Collection in Chopdem. The autograph Collection in Goa will be the first autograph collection in South Asia.
“Sustained domestic leisure travel, meetings, incentives, conferences, and exhibitions (MICE), weddings, and business travel are expected to drive demand in the next financial year. Additionally, spiritual tourism and tier 2 cities are also expected to contribute to the industrybut the primary driver is expected to be domestic tourism," he said.
According to JLL, in 2023, a record number of hotel signings totaling to 25,176 keys and openings of 12,647 keys were witnessed with around 54% of the signing concentrated in tier-2 cities.
Going ahead investment momentum in the hospitality sector is expected to increase throughout 2024 with the pan-India premium hotel occupancy estimated to reach decade highs of 70-72% during 2024-2025 financial year, according to credit rating agency ICRA.
The segment possesses the capacity to generate revenue of Rs 1,800 crore, considering PEPL's share, which is double the current revenue of Rs 900 crore. Separately, the company is also actively exploring new markets such as Srinagar, Ayodhya, Goa, Mumbai, and expanding its portfolio in existing markets.
“The hospitality assets are generating a consistent cash flow with an average of 70% occupancy rate across all operational assets. The branded segment shows significant potential, and we are pursuing expansion opportunities with a proactive approach to portfolio growth,” said Zaid Sadiq, executive director, hospitality, Prestige Group.
The firm is also currently evaluating to monetize its hospitality portfolio, which will lead to some value unlocking. According to various analyst reports, the move can also knock off Rs 900 crore of gross debt from its books and alleviate some of the cash flow stress associated with the Rs 1700 crore balance capex in the hospitality segment.
“After all the assets have been established and are fully operational, there are several potential avenues to explore for monetizing them. One option is to consider creating a real estate investment trust, which would allow investors to pool their resources and invest in the assets collectively. Another possibility is to pursue an initial public offering. Both of these options have their own unique advantages and considerations, and would require careful evaluation and planning before proceeding” said Sadiq.
Additionally, Prestige Estate Projects has also inked a pact with Marriott Inc. for new brands in the country. The total inventory will be 801 keys across Goa and Karnataka, which will see an investment of around Rs 1,000 crore.
The hotel properties include 177 keys Marriott Executive Apartments in UB City in Bengaluru, 130 keys Moxy Bengaluru ORR in Outer Ring Road, Bengaluru, 152 keys Bengaluru Marriott Hotel South in Kanakapura Road, Bengaluru, and 160 keys JW Marriott Sakleshpur Plantation Resort in Sakleshpur in Karnataka.
In Goa, it will develop 62-keys Tribute Portfolio Dabolim Hotel in Dabolim and 120-keys Autograph Collection in Chopdem. The autograph Collection in Goa will be the first autograph collection in South Asia.
“Sustained domestic leisure travel, meetings, incentives, conferences, and exhibitions (MICE), weddings, and business travel are expected to drive demand in the next financial year. Additionally, spiritual tourism and tier 2 cities are also expected to contribute to the industrybut the primary driver is expected to be domestic tourism," he said.
According to JLL, in 2023, a record number of hotel signings totaling to 25,176 keys and openings of 12,647 keys were witnessed with around 54% of the signing concentrated in tier-2 cities.
Going ahead investment momentum in the hospitality sector is expected to increase throughout 2024 with the pan-India premium hotel occupancy estimated to reach decade highs of 70-72% during 2024-2025 financial year, according to credit rating agency ICRA.
