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June 28, 2012

Berggruen Hotels to invest in new hotels in India

Mid-market business hotel chain Berggruen Hotels has announced plans to invest Rs4500m ($79m) in new hotel projects across India, operating under the brand Key Hotels.

By Paul Dennis

Mid-market business hotel chain Berggruen Hotels has announced plans to invest Rs4500m ($79m) in new hotel projects across India, operating under the brand Key Hotels.

Berggruen Hotels managing director and chief executive Sanjay Sethi said the company had 11 operational properties and 12 more in the pipeline.

"45 more properties have been signed on," he said.

From its own equity contribution, the company has invested Rs2500m ($43.86m) as capital expenditure, while it raised and invested Rs1260m ($22.1m) as debt.

“The company has invested Rs2500m as capital expenditure, while it raised and invested Rs1260m as debt.”

Accounting for an additional 1,400 rooms, 14 out of the 45 signed properties are in advanced stages of achieving financial closure.

Until now, the company has arranged Rs3760m ($66m), out of which Rs1260m ($22.1m) was through debt and it plans further funding for properties in the immediate future through debt.

The company said the added inventory would enable it to surpass the target of 30 hotels in the region by 2015-2016 by five.

Within the next 18-24 months, the US-headquartered Berggruen Hotels aims to add 2,300 rooms by opening 23 properties, of which ten would be managed by the company.

Keys Hotels currently owns and operates six hotels; it manages five and plans to open hotels in Cochin, Vishakhapatnam and Shirdi in this year.

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