Future group hunts for hotels tie-up
Future Capital’s investment arm Kshitij Investment advisory Company has completed raising money for its $200 million (Rs 800 crore) hospitality fund. It is now talking to foreign majors for a tie-up to manage its proposed chain of 15 business hotels across the country.
Future Capital Holdings, the financial arm of Kishore Biyani promoted Future Group got listed in February. It has a few funds under its own umbrella as well as three under Kshitij. It is about to launch a $700 million logistic fund. Kshitij Investment has two other funds, Horizon ($350 million) and Kshitij (Rs 350 crore).
Kshitij managing director Shishir Baijal told Hindustan Times: “We are looking at tying up with a foreign hospitality major who will bring in their brand. The plan is to build 15-16 business hotels in the three to four star range.” The Indus Hospitality Fund had closed in December 2007 and Baijal said that the fund has just two investors. The fund is yet to make its first investment.
Baijal explained: “The hotels that we will invest in will be very business like and targeted at the business traveller. It will have 24-hour room service and some limited dining facilities within the hotel.”
The hotels that the Future Group plans to build are likely to be located along side other major developments by the group companies. Kshitij’s other fund called Horizon is investing in the Market City concept where a whole lot of commercial property is built at the same place along with a lot of landscaped open spaces and terraces. These Market Cities are anchored by retail and entertainment, unlike other mixed-use properties that are anchored by residences.
Baijal said, “Each one of the hotels will have its own model of development and the company is open to either buying out a new property or build from scratch through a joint venture.”
Around 70 per cent of the Horizon fund, which had raised $350 million, has been committed to different projects. Baijal said that the fund has already invested in seven “Market City” projects and is likely to invest in two more. Most of the market cities are likely to have a business hotel along with.
Baijal added: “While our plan is to build hotels in the 3-4 start vategory, in case to have a five star property we will bring in a different partner for it.”