The transaction is expected to be finalised by June 2024. Credit: SARYMSAKOV ANDREY/Shutterstock.com.

VVA Hotels is nearing the acquisition of the three-star Clarion Hotel in Chennai, Tamil Nadu, India, Economic Times (ET) has reported.

The deal is estimated to be valued at Rs1.8bn ($21.5m), people familiar with the development told the publication.

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Led by Indian hotelier Vikram Aggarwal, the 129-room hotel is located on Radhakrishnan Salai Road near the city centre and Marina Beach.

Sources indicate that the transaction is expected to be finalised by June 2024.

“The acquisition involves the purchase of a stressed asset from one of the top banks in the industry,” a person familiar with the matter told ET.

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VVA Hotels is in the process of acquiring the property, although the company has not commented on the deal’s specifics.

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The company currently manages two upscale properties in Chennai, including the Fortune Select Palms, a business hotel with 129 rooms in the city’s IT corridor; and the Radisson Blu, a five-star hotel.

Last month, Lemon Tree Hotels expanded its footprint with a new Keys Lite hotel in Coimbatore, Tamil Nadu.

This hotel will feature 40 rooms and be managed by Carnation Hotels, the management arm of Lemon Tree Hotels. It will be located about 10km from the Coimbatore International Airport and 3km from the Coimbatore Railway Station.

In the same month, Indian Hotels Company (IHCL) announced a new Taj hotel in Indore, Madhya Pradesh.

This property will include a 350-key convention facility, one of the largest in Central India, and is expected to offer various dining options.

The hotel will be opened in collaboration with Manikaran Commercials Private Limited. ET quoted from JLL Hotels & Hospitality Group’s data, which states that the hospitality industry saw hotel transactions worth Rs32.9bn last year.