Moneycontrol
Last Updated : Sep 28, 2018 07:08 PM IST | Source: Moneycontrol.com

Tata Group's Indian Hotels retains Taj Mansingh in NDMC auction, staves off competition from ITC Hotels

IHCL, which owns the Taj and Vivanta by Taj chain of luxury hotels, will run the 292-room luxury property for a lease period of 33 years.

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Tata Group-run Indian Hotels Company (IHCL) has retained the Taj Mansingh, beating rival ITC Hotels, the only other bidder in the fray.

IHCL has agreed to pay Rs 7.03 crore per month, or 32.5 percent of gross turnover of the property to NDMC as license fee, a jump of 78 percent compared to the Rs 3.94 crore IHCL paid before the auction.

The winning bid is a windfall for NDMC as it was seeking a minimum revenue share of 17.25 per cent and a minimum guarantee fee of Rs 2.96 crore per month, with a clause for escalation. The bidding started today at 11.00 am and concluded at 4.00 pm.

IHCL, which owns the Taj and Vivanta by Taj chain of luxury hotels, will run the 292-room luxury property for a lease period of 33 years.

"We are delighted that the iconic Taj Mahal, New Delhi which has been an important part of the cultural and historic fabric of the National Capital, will continue to remain a part of the IHCL family," said Puneet Chhatwal, MD & CEO, IHCL.

"We look forward to investing in the hotel and taking it to new heights of Indian hospitality. The Taj legend will continue to serve Delhi with elegance and charm," he added.

The Mumbai-based company has run the Taj Mansingh since 1976. It entered into an agreement with NDMC to run the property for 33 years whose period ended in 2011. IHCL was since given nine temporary extensions during which NDMC carried out several attempts to auction the property.

The hotel is one of four luxury properties run by IHCL in the national capital. Taj Mansingh sits on a plot area of 3.78 acres with a total built-up area of 2.45 lakh sq feet, including terrace and basement. It has 292 rooms, seven food and beverage outlets and six meeting rooms with flexible capacity.

Despite being a prime property, the property generated very low interest from industry players. Part of this was to be blamed on the terms, riders and lease conditions laid down by NDMC.

In addition, the property is over four decades old and has previous generation design and architecture, offering little scope for structural modification necessary to suit the preferences of luxury brands of today.

The civic body had issued an annulment notice in June when it had to abort e-auction plans as only IHCL emerged as the bidder. ITC’s bid was rejected as it was submitted off-line. The minimum number of bidders required to trigger the auction process was three at that time.

NDMC had to reduce the minimum requirement number to two players earlier this month to avoid another failed attempt. Prior to this the auction was put off twice due to poor participation from the industry.
First Published on Sep 28, 2018 05:35 pm
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