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Kuwait-based private equity fund Global Investment House has picked up a prime land in Navi Mumbai to build a five star international business hotel, reports Kuwait news website Al Bawaba. The fund has acquired a 10,377 sqm site, which will be developed as a JV in partnership with an unnamed South Indian infrastructure and development firm. Global will invest $20 million in the joint venture.
The investment has come in from Global's Asia Real Estate Fund. It had recently bought a distressed shopping mall in Shangdong Province, China, for $8.8 million. Sameer A. Al-Gharaballi, Executive Vice President at Global, said this will be “the first five star hotel of its kind in the Navi Mumbai area". (Apparently hotels in Navi Mumbai are mostly in the 2-3 star category currently). He added that the hotel investment will benefit from the proposed Navi Mumbai International airport, which is 10 Km from the hotel site, and the expansion of Jawaharlal Nehru Port into India’s largest transshipment port in 2-3 years time. The expected gross returns from the project is 25 per cent.
Rakesh Patnaik, Head of Real Estate Funds at Global, said that the fund is in the process of appointing a hotel management company to run the operations. Cushman & Wakefield Capital Asia advised the fund on the deal.
Global has been active on the Indian deal front in the last few months. It recently bought a stake in auto component company Uma Precision from Jina Ventures Private Equity Group. Uma is headed for an IPO. Global was also in the race for UTI Securities, which finally went into Standard Chartered Bank kitty.