Hyderabad-based JV Ventures and Terminus Group have launched Madison, a USD 200 million platform to develop 25 mid-market luxury hotels across Indian cities, including Thiruvananthapuram, Visakhapatnam, Tirupati, and Hyderabad. Over the next five years, Madison will create over 3,000 rooms, with a focus on reducing seasonal risks in the hospitality sector. The initiative aligns with the growing Indian hospitality market, which saw a 19% increase in first-time hotel investments in 2023 and an 11.4% rise in RevPAR in Q1 2024, indicating strong future growth.
Hyderabad-based investment management firm JV Ventures has partnered with real estate developer Terminus Group to create a new USD 200 million hospitality development platform called Madison. This venture aims to develop mid-market luxury hotels across major Indian cities, including Thiruvananthapuram, Visakhapatnam, Tirupati, and Hyderabad.
Both JV Ventures and Terminus Group will invest equally in the Madison platform. They plan to build 25 hotel properties, totaling over 3,000 rooms over the next five years. S P Reddy, the chairman of Terminus Group, highlighted the project's vision of reducing risks associated with the seasonality of the hospitality sector. By aligning ownership structures with those in Western countries, they aim to offer a more stable investment opportunity for stakeholders.
Jasmeet Singh Chhabra, co-founder of JV Ventures, indicated that Madison is part of a larger strategy within their thematic living space called PowerPod. This approach aims to appeal to various age groups and complements their existing platforms in the education and life sciences sectors, which have engaged substantial investments. Chhabra explained that the hospitality platform will enhance their offerings and create diverse opportunities for investors.
India's hospitality sector is experiencing significant growth, driven by a rising interest in leisure and business travel. In 2023, first-time hotel buyers represented 19% of the global hotel investment volume, indicating a surge of interest in the market. This trend reflects a broader revitalisation of the hospitality industry, with private equity firms remaining key players. Vishal Goel, another co-founder of JV Ventures, mentioned their focus on greenfield developments, which aim to introduce modern hospitality infrastructure tailored to both entry-level and luxury segments.
The positive outlook for the Indian hospitality sector is reinforced by robust data from various reports. The first quarter of 2024 recorded an impressive 11.4% increase in revenue per available room (RevPAR) driven by an increase in average daily hotel rates. This period also saw the signing of 90 branded hotel projects, contributing an additional 9,710 rooms to hotel inventories across the country.
Looking ahead, the sector is well positioned for continued growth in the second quarter, driven in part by business travel, meetings and events, and a boost in leisure travel. This opens up more opportunities for collaboration among various stakeholders, including investors, developers, and service providers.
Moreover, Terminus Group has a strong background in real estate development, with an established portfolio that spans over 5 million square feet and plans for an additional 10 million square feet of projects. With over 20 hotels developed, owned, and managed in both the US and India, Reddy's experience is expected to be a significant asset for this new initiative.
As the hospitality market evolves, innovations in ownership and management structures will likely shape the industry's future. The Madison platform seeks to capitalise on these trends and provide stable investment avenues in an ever-changing landscape. The collaboration between JV Ventures and Terminus Group not only highlights the growth potential of India's hospitality sector but also reflects the increasing interest from both domestic and foreign investors looking to tap into this thriving market.
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