Singapore’s sovereign wealth fund GIC and Indian Hotels Company Limited (IHCL) have teamed up to form an Indian hotel platform that will invest Rs. 4000 crores (US$600m) over three years.
The joint venture will target hotels across the luxury, upper upscale and upscale segments located in key lodging markets in India, the firms announced.
Under the JV, IHCL will make 30% equity commitment towards acquisitions with GIC funding the remaining 70%.
“This collaboration is in line with Aspiration 2022 and our vision to scale up, create greater enterprise value and make IHCL South Asia’s most iconic and profitable hospitality company,” said IHCL CEO and managing director Puneet Chhatwal.
“Through this platform, we expect to acquire strategic and marquee assets that need new ownership, branding and positioning.”
IHCL will acquire fully operational assets, including distressed or underperforming hotels, and manage the hotels under its Taj, SeleQtions, Vivanta and Ginger brands.
The JV will arrange each acquisition through separate special purpose vehicles (SPVs) with their own funding.
“GIC is pleased to partner with IHCL, a leading hotel owner and operator, to build a quality hospitality portfolio in key destinations across India,” said GIC Real Estate CIO Kok Sun Lee.
“As a long-term investor, we are confident in the outlook of India’s hospitality sector. We look forward to working closely with established partners such as IHCL to pursue attractive opportunities and capture the sector’s growth potential.”
Listed on the Bombay and India’s national stock exchanges, IHCL is South Asia’s largest hospitality company by market capitalisation.
The company owns 179 hotels, including 30 under development, across 12 countries.