March 18, 2019
The properties put up for sale contributed 80% of Leela’s total income of around US$108 million during fiscal 2017-18
Brookfield owns US$350 billion of assets in various sectors, including roadways, energy and and real estate assets in India
The deal comes amid booming activity in the Indian hospitality sector, driven by growing trade, R&D and cultural exchanges
Seeking foreign investments for development of hotels and resorts, Government is striving to improve ease of doing business
Hotel Leela Venture said on March 18 that it has entered into an agreement with a real estate fund led by Brookfield Asset Management to sell a chunk of its hospitality business for nearly US$580 million. The Indian luxury hotel group will transfer its assets in Bangalore, Chennai, New Delhi and Udaipur, as well as an upcoming property in Agra to the Canadian asset management company. Brookfield will also assume the operation and management of the hotels as well as the contracts with serviced apartments as part of the transaction. Entities who own the Leela brand will transfer it to Brookfield for hospitality operations.
Leela said that it would continue to operate its hotel in Mumbai, own certain land in Hyderabad and the joint development project of residential apartments with Prestige Developers in Bengaluru. Brookfield will have a right of first refusal over the Leela hotel in Mumbai, as a part of the deal. Leela said that the properties put up for sale contributed 80 per cent of its total income of around US$108 million during fiscal 2017-18. Leela runs nine properties, including those in Kerala and Goa. The deal will aid Brookfield presence in india. Brookfield globally owns and operates US$350 billion of assets across various sectors.
The deal comes amid booming activity in the Indian hospitality sector. India’s travel and tourism industry reported revenue of US$91.3 billion in 2017, which is projected to double over the next decade. Foreign spending alone made up US$26 billion. Driven by the opportunity, France’s AccorHotels said this month that it was looking to add 20 new properties across India in next three to five years. Brookfield’s growing presence in India, meanwhile, spreads across infrastructure and real estate assets, including more than 600 km of roadway, solar and wind assets, a construction business and real estate management services.