Brookfield Asset Management has committed over Rs.1,500 crore to The Leela Palaces, Hotels and Resorts, following an initial Rs.4,500 crore investment, marking the largest-ever foreign investment in India's hospitality sector. The brand is experiencing its best performance in three decades, driven by strong profit margins and ambitious expansion plans, including introducing the Leela Palace brand to Mumbai's Central Business District. Brookfield's global investments are propelling The Leela into international markets, with sustainability initiatives and significant room additions on the horizon, ensuring the brand's promising trajectory.
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Brookfield Asset Management, a global leader in real estate investments, has made a substantial commitment of over Rs.1,500 crore in The Leela Palaces, Hotels and Resorts business. This significant investment comes on the heels of an initial deal that saw Brookfield investing Rs.4,500 crore, marking it as the largest foreign investment ever made in the Indian hospitality sector. In an exclusive interview, Ankur Gupta, Managing Partner, and Head of Real Estate for the Asia-Pacific (APAC) region at Brookfield, shared insights into the promising prospects of this investment and the remarkable performance of The Leela brand.
According to Gupta, The Leela Palaces, Hotels and Resorts is poised to achieve its best performance in the last three decades, showcasing robust profit margins. Notably, the Ebitda margins have reached unprecedented levels in the brand's history. The hotel chain currently operates 12 hotels with a combined offering of 3,400 rooms, and it seems that these numbers are set to grow substantially.
Gupta attributes this success to the alignment of incentives between the business owner and the management, a key factor in achieving robust margins in the competitive hospitality industry. He emphasized that The Leela's objectives revolve around increasing both revenue and margins, a strategy that has evidently borne fruit.
In terms of top-line performance, The Leela Palaces, Hotels and Resorts is on track to achieve significant revenue, reaching a four-digit mark this year, with most of it stemming from their own hotels. The quality and appeal of their properties provide a solid foundation for expectations of double-digit year-over-year growth. This trajectory aligns seamlessly with India's broader economic growth story.
Brookfield's commitment to the Indian hospitality sector extends beyond the existing investment. Gupta revealed plans for expanding The Leela brand within Mumbai, adding more than 300 rooms in the Central Business District (CBD) and other districts. The iconic Leela Palace brand is also set to make its presence felt in CBD Mumbai, marking a significant development.
International expansion is another exciting prospect for The Leela brand. Gupta confirmed that the company has already signed a transaction in the Maldives and is actively exploring opportunities in other global markets, including London and the Middle East. This move positions The Leela Palaces, Hotels and Resorts as a truly global brand.
Looking ahead, The Leela Palaces, Hotels and Resorts has ambitious growth plans, aiming to add approximately 1,000 rooms within the next couple of years. They are also considering expansion into regions like the Northeast of India, Jammu and Kashmir, and the tourism circuit of Uttar Pradesh, further cementing their footprint across the country. By establishing a well-connected network, The Leela brand is setting the stage for substantial and sustainable growth in the coming years.
In conclusion, Brookfield's significant investment in The Leela Palaces, Hotels and Resorts signals a promising chapter for the Indian hospitality sector. With strong profit margins, strategic expansion plans, and a global outlook, The Leela brand is poised for continued success in the years to come, contributing to India's growing stature on the global hospitality map.
This story was earlier published by ET Realty
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