IHCL and GIC create a $600m platform to acquire hotel assets

The Indian Hotels Company Limited (IHCL), South Asia’s largest hospitality company, has announced a strategic partnership with Singapore’s sovereign wealth fund, GIC for an investment platform to the tune of US$600m over a period of three years. This platform will be used to acquire fully operational hotels in the Luxury, Upper Upscale and Upscale segments in India. The mandate iwill also include distressed or underperforming hotels that can be turned around using IHCL’s experience and capabilities. Commenting on the agreement, Puneet Chhatwal, Managing Director and Chief Executive Officer, IHCL said he was “delighted” to partner with GIC. “This collaboration is in line with our vision to scale up, create greater enterprise value and make IHCL South Asia’s most iconic and profitable hospitality company. We expect to acquire strategic and marquee assets that need new ownership, branding and positioning.” IHCL will be able to pursue acquisitions in an asset light format, with the equity contribution from IHCL at 30% and the balance 70% contributed by GIC. Each acquisition is intended to be in a separate SPV with its own funding. The hotels acquired will be managed by IHCL under its various brands and complement the company’s current growth aspirations via management contracts. Kok Sun Lee, Chief Investment Officer of GIC Real Estate, said: “GIC is pleased to partner with IHCL to build a quality hospitality portfolio in key destinations across India. As a long-term investor, we are confident in the outlook of India’s hospitality sector.” IHCL and its subsidiaries bring together a group of brands and businesses that include Taj, SeleQtions, a named collection of hotels, Vivanta, upscale hotels and Ginger. The company opened its first hotel – The Taj Mahal Palace, in Bombay in 1903 and has grown to operate 179 hotels including 30 under development globally across four continents. IHCL is South Asia’s largest Indian hospitality company by market capitalisation.