GMR Invites Bids For Building Hotels

Entering the market in possibly the toughest time, the GMR Group has invited bids for building hotels at its proposed 45-acre hospitality district near the upcoming airport in Delhi.

The Delhi International Airport Pvt Ltd (DIAL) had planned to raise Rs 2,750 crore from this district in 2008 when the plan was first floated and then got entangled in a controversy with the government.

But by the time this plan got finally cleared and DIAL goes ahead for inviting bidders now, both the real estate and financial markets are in a crunch. These factors, combined with a deposit from successful bidders for three years and not six as earlier proposed, DIAL now expects to raise about half of the Rs 2,750 crore as security amount. The amount raised from the hospitality district will go towards financing the Rs 9,000 crore Delhi airport phase-I that has to be ready by 2010.

DIAL’s plan for the 45-acre hospitality district include having hotels of all ranges — from budget to ultra luxury. As a result, plot sizes range 1.6 acres (for budget) to a 7.7-acre plot for a huge conference hotel. “A security deposit of three times the average annual lease rental will be charged from successful bidders.

The entire infrastructure will be provided by DIAL,” a senior DIAL official said.
Though a common feature abroad, Delhi’s hospitality district will be first of its kind project in India.

One Comment

  1. Posted October 16, 2008 at 2:47 am | Permalink

    With real estate stocks being hit adversely by the market slowdown, the phenomenon is expected to have a spiralling effect on hospitality development in India. Most real estate majors with a series of hospitality developments in their portfolio are affected by this trend. This may lead to a stall or delay in the completion of projects as well as a revision of the project expenditure. Over the past few months, real estate stocks have seen a major downfall, with an average of 60 to 65 per cent drop in the share prices during 2007-‘08. “There is not only a slowdown in the market, but also an alteration in project costs with the configuration of interest rates,” says Prem Subramaniam, Head, Infrastructure Development Finance Company (IDFC). While financial market analysts expect the decline in real estate stocks to continue in coming months, they also speculate that hotel projects will be stalled due to lack of liquidity and equity funding in the markets. On the contrary, hospitality consultants feel that projects that are already secured with funds will not be affected.For more view-

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