Brookfield has committed over ₹1,500 crore in The Leela Palaces, Hotels and Resorts business, after the initial deal, which involved an investment of ₹4,500 crore, Ankur Gupta managing partner and head of real estate for the APAC region at Brookfield Asset Management told ET in an exclusive interview. This is the largest ever foreign investment in the Indian hospitality sector.
Gupta said the hotel chain is expected to post its best performance in the last three decades in the current year with ‘strong’ profit margins. Ebitda margins are also higher than ever in the history of the brand, he added. The Leela Palaces, Hotels and Resorts currently operates 12 hotels spanning 3,400 rooms.
“In the hospitality industry, achieving robust margins is a significant achievement, and this success can be attributed to the alignment of incentives between the business owner and the management, which is very much the case with Leela. At Leela, our objectives are two-fold: to increase both revenue and margins,” Gupta said.
“Regarding our top-line performance, we are poised to achieve significant revenue this year, reaching the four-digit mark. And most of it is from our own hotels. With the quality and appeal of our properties, there’s every reason to expect that our hotels can surpass this double-digit growth rate on a year-over-year basis. This trajectory aligns with the broader economic context of India’s growth story,” he added.
He said Brookfield is one of the largest investors globally in the real estate space and the company can easily commit more capital as required in large transactions.
“We’re looking at an addition of more than 300 rooms in CBD and other districts in Mumbai itself. We will be bringing in the Leela Palace brand to CBD Mumbai. We are also looking at managed residences as well in the core business districts in Mumbai,” he said.
In terms of international expansion, Gupta said the company has signed up a transaction in Maldives and is also considering opportunities in markets such as London and the Middle East.
“With our investment in Leela, the company became global overnight. We have investments in 30 countries. Our investors are from various parts of the world, from Asia to the US and Europe. All our reports go to those investors, so Leela truly became global under our ownership. As the Indian diaspora gains prominence on the global stage, authentic Indian brands like Leela have a promising trajectory,” he added.
“Over 35% of the portfolio is powered by renewable sources of energy which were commissioned by us.” He said chain is looking to add about 1,000 rooms in a couple of years and is also looking at more resorts.
“We are on the verge of operationalizing a property in the northeast of India. We’re actively exploring opportunities in Jammu and Kashmir, as well as within the tourism circuit of Uttar Pradesh. All these new properties will contribute to the expansion of the Leela brand. By establishing a well-connected network, we are creating a strong foundation for subsequent growth to naturally follow,” he added.
