Colliers India recently orchestrated the sale of a 175-room boutique hotel in Bengaluru for Rs 150 crore. The hotel was transferred to JC Flowers Asset Reconstruction Company (ARC) as part of Yes Bank’s stressed assets in 2022. Colliers engaged with the ARC, Trustee, and the Bank, and facilitated a strategic exit for promoters, meeting both buyer and seller aspirations. This move into the hospitality sector aligns with Colliers' forward-thinking approach. The sale of the hotel reflects India's booming hospitality sector. With 59 hotels signed in Q3 2023, the industry's resilience post-pandemic is evident, portraying a promising future amid increasing tourism and business travel.
Colliers India successfully drove the sale of a 175-room boutique hotel in Bengaluru, collaborating with the Asset Reconstruction Company (ARC), Trustee, and the Bank. The hotel spans over 150,000 sq.ft. The property was part of a stressed asset transfer by Yes Bank to JC Flowers Asset Reconstruction in 2022. The present deal also serves as an exit strategy for the promoters, Hansoge Enterprises Pvt Ltd, who were aiming to liquidate the asset for quite some time. The mid-scale boutique hotel is near Bengaluru airport and is still under-construction. It is set to be completed by the end-2024.
Hansoge Enterprises, part of the Ozone Group, specializes in hotel projects across Bengaluru, Coorg, Kabini, and Chikmagalur. Hansoge Enterprises executed the Rs 150 crore deal for the 175-room hotel. The effective deal rate, around Rs 10,000 per sq ft, indicates the property's value. Colliers collaboratively engaged with JC Flowers Asset Reconstruction Company, trustee, and the bank, withholding the buyer's name. The strategic role played by Colliers India is underscored, providing an exit strategy for promoters and aiding buyers in establishing a metro presence.
Colliers India, the sole advisor for this significant deal, specializes in capital markets and investment services business for strategically navigating complexities involving the asset reconstruction company, banker, seller, and buyer, showcasing in-depth understanding. Colliers ventured into hospitality, recognizing the sector's resilience post-pandemic.
Managing Director Piyush Gupta highlights the intricacies, emphasizing the promising growth trajectory of the Indian hospitality sector, accounting for 51% alternative investments in Q4 2023. Industry estimates reveal 59 hotels with 4,669 keys were signed in Q3 2023, showcasing a 15.6% rise in average daily rates, resulting in a 15.1% revenue per available room increase.
The Covid pandemic severely impacted the hospitality sector, leaving hotels empty and driving many to bankruptcy. However, the sector now experiences a strong rebound, with increased travel, making this sale timely. Gupta notes the sector's potential for exponential growth, fueled by rising tourism, business travel, and a growing appetite for a better lifestyle.
In conclusion, the successful sale of the boutique hotel sale in Bengaluru reflects the strategic collaboration with various stakeholders and the larger industry trend indicating the hospitality sector's resurgence post-pandemic. Overall, Colliers India's role in this significant transaction reinforces its position as a trusted advisor in the real estate services domain.
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