SAMHI acquires 5-star property from Ahmedabad’s Sidhi Gujarat

MUMBAI: Investment firm SAMHI Hotels has acquired a five-star hotel from Ahmedabad-based Sidhi Gujarat Hospitality for an estimated Rs 135 crore. The 156-room hotel will be its third property in Ahmedabad, after Four Points by Sheraton and Formule 1.
The acquisition will be funded through equity, Ashish Jakhanwala, chief executive officer of SAMHI Hotels told ET without divulging the deal size. Industry experts, however, said the deal would be worth about Rs 135 crore. JLL India acted as the transaction advisor to the deal.

Opened in May 2014, the hotel is part of a mixed use development project and has been operated by the owners so far. Jakhanwala said the company will tie up with an international hotel brand to manage the new hotel.

“The hotel will be self-managed by us for sometime till we tie up with a brand,” he said, adding the company has started discussions with international brands and the new operator will be roped in over the next six to eight months.

Ahmedabad is a high-potential market for the hospitality industry, having seen significant growth due to economic activity and relatively limited supply addition, said Jakhanwala. A number of international brands have entered the city in recent years, with several pharmaceutical companies, large-scale conferences, events and weddings creating demand for branded hotels.

According to STR Global, a company that tracks demand and supply for hotels, Ahmedabad witnessed a staggering 23% growth in revenue per available room between January and October from a year ago, while occupancy increased 7% during this period.

SAMHI Hotels has partnered global hotel operators such as Marriott, Starwood Hotels, AccorHotels and Hyatt to manage its portfolio of 15 operational hotels comprising about 2,200 rooms under six brands. It has expanded its portfolio over the past few years through acquisition of hotels across key cities in India and rebranded these hotels under various international brands. Last year, the World Bank arm International Finance Corporation invested $21 million in the company by way of convertible debentures.

This year, the company acquired two hotels and opened four new properties. Jakhanwala said the company plans to have about 22 operational hotels by the end of 2016.

With softening of valuations and improvement in market conditions, deals picked up substantially in the hospitality sector this year. Most of these have been in luxury and upscale hotel segments, marking a change from the previous years.