Shangri-La eyes Phoenix Mills hotel stake
Phoenix Mills is considering to allot equity stake to Shangri-La, which has been awarded management contract to operate its five star hotel in Mumbai. A report by Lalatendu Mishra.Updated: May 16, 2008, 22:27 IST
Realty major Phoenix Mills Ltd is considering to allot equity stake to Hong Kong based hospitality conglomerate Shangri-La, which has been awarded management contract to operate its (Phoenix Mills') luxury five star hotel in central Mumbai.
"We are in discussion with the top management of Shangri-La and are open to allow them to pick up a stake in this hotel project," Atul Ruia, Managing Director, Phoenix Mills Ltd told HT. Ruia said nothing has been finalized as yet and he did not reveal the quantum of stake that he would offer to Shangri-La.
Global hospitality majors normally pick up a stake in hotel properties for stability of their brands, though many still operate through management contracts in lieu of a fixed fee or revenue sharing agreement.
Shangri-La has 55 hotel properties at several locations in the world out of which 11 are through management contract. It is fast expanding in the markets of India and West Asia, which offer maximum growth potential. "We own most of our properties and India is an important market for us. At the moment we have management contract for the Mumbai hotel,' said Lothar Nessman, vice president, the Shangri-La, Mumbai. He said another 32 Shangri-La owned or operated hotels across the world are under construction and will enter the market soon.
Shangri-La is a reputed brand and according to Nessman it is in the same grade of Four Seasons and Carlson Hotels. Its hotel in Delhi has been operating over the last one and half years and is doing fine Nessman said. Other hotels are planned in India as well.
Called Shangri-La Mumbai, this five star deluxe hotel is scheduled to be operational in March 2010 and it is Phoenix Mills' first hotel project. The company is investing Rs 800 crore in this hotel project that will also have Mumbai's first luxury mall Palladium in the four floors above the ground level.
This 50-storied 400 keys hotel is coming up on the Phoenix Mill land, adjacent to High Street Phoenix, one of Mumbai's important landmarks.