Realty developers Prestige Group and DB Realty have entered into a joint venture to develop a hospitality-led mixed use project spread over 7.7 acre land parcel in Delhi’s Aerocity. Prestige Group is planning to build India’s largest hotel and convention centre on the said land parcel.
The 50:50 joint venture will develop total 2 million sq ft project with total 932 hotel rooms, 6.45 lakh sq ft office space apart from a 2 lakh sq ft convention centre. The deal marks Bangalore-based Prestige Estates Projects’ entry into the Delhi market.
Total project cost is estimated to be around Rs 2,000 crore, which is the balance required to complete the project and Prestige will bring in Rs 355 crores for 50% equity stake in this joint venture.
“This strategic collaborative model will help us make an impactful entry into NCR region. We are committed to capitalize on our core business to drive decisive growth. We will continue to invest and leverage our expertise to build a wide range of real estate developments across key locations in India,” said Irfan Razack, chairman, Prestige Group.
According to Razack, this transaction is in line with the company’s strategy of steady, focused acquisition, and capitalising on consolidation opportunities.
Prestige Group has entered into this joint venture Prestige Hospitality Ventures Ltd (PHVL), a wholly owned subsidiary of Prestige Estates Projects and Bamboo Hotel and Global Centre (Delhi) Private Ltd.
As part of the deal, Prestige will also take over the project’s existing Yes Bank loan. The project has been stalled for 7 years now and is one of the biggest commercial developments in Delhi’s Aerocity.
The development will have a total built-up area of about 2 million sq ft in the hospitality district of Indira Gandhi International Airport, New Delhi. Both the companies have executed the agreement earlier today. The transaction was brokered by JLL India’s Executive MD, Juggy Marwaha.
Mumbai-based realty developer DB Realty had acquired the development rights on this 7.7 acre land parcel in 2009 from Delhi International Airport Limited (DIAL). The excavation work on the project land has been completed and the project is estimated to be completed by 2022.
“This transaction retains a great deal of upside potential for all the stakeholders. Once operational and stabilized, the hotel and the convention centre are expected to register NOI (Net operating Income) of Rs 300 crores and office space to register NOI of Rs 170 crores,” said Venkat K Narayana, Chief Executive Officer, Prestige Group.
According to Narayana, having recently set its feet into the National Capital Region (NCR) market with a mid-income housing project, the company is now growing with this mixed use development, which is next in line.
Currently Prestige Group has 8 operating luxury hotels with 1,262 keys and 297 keys under construction. The addition of this new asset with 932 keys will further strengthen the group’s hospitality business, making its portfolio grow to 2,491 keys.