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The newly formed joint venture between the UAE-based Rakeen Pvt. Ltd and Chennai-based mining firm Trimex Group, Rakindo Developers Pvt. Ltd, plans to expand into the hospitality sector and is pooling resources with a UK-based private equity fund to invest in hotels in Asia, says a report in Mint. Rakeen is a joint stock company promoted by the government of Ras-Al-Khaimah (RAK), one of the seven emirates of the United Arab Emirates (UAE).
Rakindo, which is looking for multiple options in this sector, has also formed a JV with with the UK-headquartered Lotus hotel investment fund, a private equity fund, to form Lotus Rakindo Hospitality. This JV will invest in three- and four-star hotel properties in the country and Asia, a Mint report adds. Rakindo will have a 40 per cent stake in this JV with Lotus hotel investment fund holding the remaining stake.
The JV, which will have an initial investment of $100 million, will focus on setting up hotels in six main cities in South India which include the likes of Chennai, Bangalore and Hyderabad. This is also not Lotus hotel investment fund's maiden venture into India. The fund already has an existing partnership with Carlson Hotels Worldwide for developing hotels in Asia, including India.
Rakindo has also formed a JV with global hotel chain Millennium and Copthorne Hotels Plc. to build hotels in India. Here again, Rakindo will hold 40 per cent stake in the JV company called Millennium and Copthorne Rakindo Hospitality, with Millennium, and Copthorne holding the remaining stake.
All real estate developers in the country are betting big on the hospitality sector in India, which is confronted with acute shortage of quality hotel rooms even as its economy is growing at a scorching pace. Other realty players such as such as DLF Ltd, Unitech Ltd and Parsvnath Developers Ltd have in the process of developing budget and luxury hotel properties across the country.
The Economic Times adds: The Raindo JV would invest over $5 billion in India’s real estate sector over the next five years. It plans to develop over 50 million square feet of residential, commercial and office space. At present, it has land bank of over 4,000 acres and is in the process of acquiring an additional 5,000 acres. Rakindo’s first project likely to take off in February next would be a $1.5 billion, 1,000-acre project near Coimbatore in Tamil Nadu. It's also planning a residential project in Cuddalore, 70 km from Chennai, on an estuary where waterfront homes would be offered. The environment clearances are being sought for this and work may start early 2009. These homes may cost around $2-2.5 million.