NDMC to auction Taj Mansingh Hotel; premier bids expected
Next week the Delhi administration may finalise the auction terms of the landmark Taj Mansingh Hotel.
April 03, 2013 / 09:28 IST
Next week the Delhi administration may finalise the auction terms of the landmark Taj Mansingh Hotel in New Delhi. This comes at a time when the hospitality sector worldwide has been suffering from a downturn. CNBC-TV18's Nayantara Rai reports if the auction could turn out to be a roaring success.
The iconic 34-year old Taj Mansingh Hotel is located in the heart of the prime Lutyens' Delhi. It is also very rare for a property like this to go under the hammer. Indian hotels did everything to try and renew the lease with the New Delhi Municipal Corporation (NDMC), but it was not to be.Also read: Local flavours of luxury hotels
The NDMC board is expected to meet on April 10 to finalise the terms and conditions of the auction.Experts are expecting this to be a fiercely competitive auction. Hospitality giants, more so the global players will slug it out to check into a piece of New Delhi's history.PRS Oberoi has said his Oberoi Group will bid for this landmark hotel. The Oberoi Group, one of the oldest competitors of Indian hotels, will have the financial might of Reliance Industries behind its bid. RIL holds around 18% in EIH that owns the Oberoi Group.The Sahara Group, which acquired London's iconic Grovesnor House as well as the Plaza Hotel in New York, is also expected to participate in the auction. Analysts expect several factors like the slowdown and a cash crunch to come in the way of big ticket bidding by domestic hotel companies.Global giants may see this as once-in-a-lifetime opportunity to bag a marquee Indian luxury hotel site. The bids will be based on the concept of revenue share with the NDMC, with the highest bidder getting the site on a 30-year lease.Analysts expect a few bidders to offer to share even upto 40% of revenues as against the 19% Indian Hotels currently shares with the NDMC. Experts add the real competition will be from global giants, perhaps the likes of Accor, Hilton and Marriot."We are always working on various opportunities and we do not comment on details of the opportunity before they have been made public,” Accor told CNBC-TV18.In addition, the final eligibility criteria could also be designed to keep out moneybags with no hotel experience.The good news for Tatas is that it is expected to get the right to match the highest bid. Taj Mansingh contributes nearly Rs 150 crore annually to Indian Hotels revenues. But the question is at what price will Cyrus Mistry and Indian Hotels want to check into the hotel again? Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
