Mumbai:
Kamat Hotels is in advanced talks to sell its 190-room VITS hotel in Mumbai for`. 190 crore, said two persons close to the development. VITS, launched in 2007, is a four-star business hotel located on the Andheri-Kurla Road in the vicinity of the Mumbai airport.
Kamat Hotels, which also owns the Orchid Hotel in Mumbai, has been trying to sell the VITS property since April last year as part of its corporate debt restructuring plan.
“Last few years have been difficult for the hotel industry which saw several mid-scale and upscale hotels slip into the red. Kamat Hotels was forced to put the property on sale to cut debt,“ said one of the persons familiar with the development. The company's consolidated debt stood at ` . 669.2 crore at the end of March this year, up from `. 655.7 crore a year earlier.
An email query sent to Kamat Hotels did not elicit any response.
Kamat Hotels was hoping for an outright sale of the property and was expecting something around ` . 275-300 crore. But the person quoted above said that buyers are willing to offer only about ` . 200 crore for it. “The property needs a fair amount of renova tion and the buyer has to put in more money for it.“
Hospitality consultants said that the valuation that the property is fetching is realistic in the current hotel market scenario in Mumbai. “The valuation that the property is fetching is a fair one as hotel assets are now being traded at the current market value and not at the expectations of buyers or sellers. It signals that values have bottomed out and people are looking at transactions at the real value,“ said Mandeep Lamba, managing director-India, hotels and hospitality group, JLL.
Kamat Hotels has also put its 48-room Lotus Beach Resort in Benaulim, Goa, on the block . 40 crore for and expects ` the property , but not many have shown much interest in it.
India's hospitality industry has been in the doldrums for the past few years due to the economic slowdown that hit both business and leisure travel. Several hotels ran into losses amid falling check-ins and declining room rates, which forced hoteliers to sell their assets to pare debt. Luxury hotel chain Hotel Leelaventure too is selling properties in Chennai and Goa to trim debt.
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