Taj group wins 33-year lease for Connaught hotel in Lutyens’ Delhi in e-auction
The property at 37, Shaheed Bhagat Singh Marg has about 85 rooms, 3 banquet halls and one swimming pool and is situated adjacent to the Connaught Place.delhi Updated: Jun 20, 2018 22:56 IST
Indian Hotels Co. Ltd, which runs the Taj chain of hotels, has won the bid for The Connaught hotel, a 85-room, four-star hotel property on Janpath lane in central Delhi.
Hospitality chains Sarovar Group and Byke Hotels and Resorts were also in the race to acquire the property.
IHCL has won a 33-year lease contract with the New Delhi Municipality Corporation (NDMC), the current owner of the property. It emerged as the highest bidder offering to share 31.8% of the annual revenue earned from the property with the civic body, said one person involved with the bidding process.
“We are extremely delighted to win the bid for The Connaught, New Delhi. The hotel is located strategically in Lutyens Delhi, the city’s most coveted address in the heart of the capital,” said an IHCL Spokesperson in an email response.
In May 2016, NDMC had sealed the hotel, after the investigations into the controversial murder of an estate officer revealed the alleged involvement of Ramesh Kakkar, the then promoter of the hotel. Kakkar had owed around Rs 140 crore as licence fee to the civic body.
“IHCL will give a new lease of life to the Connaught Hotel, which has an excellent location but had been completely run down and became inconsequential as a hotel despite its grade A location,” said Mandeep Lamba, managing director (hotels and hospitality) at property consultancy firm JLL.
The acquisition will give IHCL a significant presence in the heart of Delhi.
“We have completed the e-auctioning of the property for a period of 33 years .The successful bidder, the Taj group, will pay 31.8% of the gross turnover or Rs 5.868 crore per annum, whichever is higher to us,” said senior NDMC official.
“The deal will earn us more than double of what the council was making from the previous contractor. The licence fee out of this public property will help in boosting the revenue and financial potential of New Delhi Municipal Council, which will help in financing the public projects,” a senior NDMC official said.
First Published: Jun 20, 2018 22:56 IST