Unitech, the country's second largest real estate firm, has sold its 200-room budget hotel -- Courtyard by Marriott -- in Gurgaon to Delhi-based Roop Madan, a high net worth individual, for around Rs 230 crore (Rs 2.3 billion). According to sources, the agreement has already been signed and a formal announcement is expected in the next couple of days.
Interestingly, Unitech has also withdrawn its proposal to raise Rs 5,000 crore (Rs 50 billion) through issues in the overseas markets. Earlier, the company had applied to the Foreign Investment Promotion Board seeking some exemption to bring in more foreign investment in the holding company.
When contacted, a Unitech spokesperson said, "We are in advance stages of negotiations with some of the HNIs and expect to close the transaction shortly." On the issue of withdrawing its application from FIPB, he refused to comment.
Roop Madan, the buyer of Courtyard by Marriott, has interests in imports, in premium liquor and in the cigarette trade, with investments in many real estate projects, sources said.
This would be the first asset sale by Unitech, which has decided to mop up funds by selling assets such as hotel, commercial real estate and institutional land. The company, which currently has a debt of Rs 8,200 crore (Rs 82 billion), is expected to raise around Rs 1,500 crore (Rs 15 billion) from the sale of hotels and commercial space.
Sources said that Unitech was also in discussion with a group of HNIs to divest 225,000 sq ft of office space in South Delhi for around Rs 500 crore (Rs 5 billion). The company is planning to sell the office space on a floor basis to HNIs. "In this market, it is difficult to sell large property to an individual buyer," sources said, and added, "The deal, to be closed in early March, is expected to fetch around Rs 500 crore (Rs 5 billion)."
The Gurgaon hotel's sale comes at a time when the hotel business has slowed down considerably, with January being one of the worst months in the recent past. Unitech invested Rs 100 crore (Rs 1 billion) on this project, including Rs 10 crore (Rs 100 million) on real estate.
The Gurgaon hotel was almost ready and could be opened soon after making marginal changes, sources said. Given the bad sentiment faced by the hospitality sector, no conventional hotelier was keen to buy the property. In fact, a recent auction by a GMR-led consortium at Delhi International Airport for hotel projects received a lukewarm response.