Deal Details

Project Hotel is a hospitality chain company. They are operators of 3 star hotels on an asset light model through a mix of lease & joint ventures. It is a South India based company. Founder has rich experience of more than 3 decades in the management functioning of the hospitality & service industry.

• They have 8 hotels with 354 keys as on date.
• The properties shortlisted are all strategically located with quick access to major IT parks, business hubs, city centres, etc.
• The revenue earned has a unique mix of corporate and individual clients which complement each other. 55% of the revenue earned is from corporate bookings, 30% from travellers and 15% from direct walk-ins.

Opportunity:

• The Company is proposing a Sale & Lease back of the 2 Hotels.
• The combined Fair Value of the hotels is ~Rs. 37 crores.
• The tenure of the lease between the Company & the Investor shall be a minimum of 15 years.
• The Incoming Investor shall be offered a monthly rental of INR 28.72 lakhs.
• The lease payment shall undergo 10% Escalation every 3 years.
• In addition to the Agreement Value, the Investor shall also be required to bear the cost of Brokerage (2%), Stamp Duty (6.67%) and Other Miscellaneous Charges.
• The Investor shall receive an Annual Rental Yield of 9% on the Net Investment Amount (inclusive of Stamp Duty, Brokerage, Other Charges and net of the Security Deposit)

Hotel 1:

• The hotel is in close proximity to many Fortune 500 companies, tech parks, metro station, high street shopping and entertainment hub of the city.
• The hotel features a total of 40 rooms, consisting of 12 Deluxe rooms and 28 Executive rooms.
• This hotel has a staff of 25, including 6 kitchen staff, 3 F&B service personnel, 3 front office staff, 8 housekeeping staff, 2 security personnel, 1 unit manager, and 2 maintenance workers.

Hotel 2:

• It is a business hotel with 40 keys.
• The hotel is in close proximity to IT companies, banks, and other commercial establishments.
• Project Hotel acquired this hotel in 2021 and started operations in Q4 of FY21.
• It has multiple dining outlets, Spa, Salon, Health Club and well equipped Meeting Facilities, 31 Deluxe rooms and 9 Executive rooms
• This hotel has a staff of 27, including 6 kitchen staff, 3 F&B service personnel, 4 front office staff, 8 housekeeping staff, 2 sales staff, 2 security personnel, and 2 maintenance workers.