Millennium and Copthorne Hotels enters India with Joint Venture

Millennium and Copthorne Hotels has partnered with Rakindo Developers Pvt. Ltd., to develop hospitality projects in India, marking M&C hotels' first foray into India.

Under this non-exclusive agreement, a joint venture company, M&C Rakindo Hospitality, will develop two hotels in Chennai and Bangalore. The JV partners are also looking into developing more hotels in South India. The two new hotels will be managed under a new urban brand aimed at offering affordable contemporary business hotels to the market. The JV partnership will inject equity investments of up to US$100 million. M&C Hotels owns 60% of the joint venture and Rakindo Developers owns 40%.

Rakindo Developers Pvt. Ltd, is a 50:50 joint venture between Chennai-based Trimex Group and UAE-based Rakeen Pvt. Ltd. M&C, a subsidiary of Singapore-listed property giant City Developments Limited, is one of Singapore’s largest hotel owners and operators with over 110 hotels (over 29, 000 rooms) in 18 countries.

According to the 2007 Jones Lang LaSalle Hotels India Digest, aggressive growth in RevPAR (Revenue per Available Room) has been recorded in three key Indian cities of Delhi/National Capital Region (NCR), Bangalore and Mumbai over the last five financial years. The demand-supply gap in certain cities like Delhi and Mumbai has resulted in a sellers’ market and many hotels have taken advantage of the situation and increased room rates substantially. In cities like Delhi, Mumbai and Bangalore, it is believed that there is a high degree of pent-up demand due to a lack of quality and choice of accommodation in these locations.

Chairman of Millennium and Copthorne Hotels plc, Mr. Kwek Leng Beng, said, "The group's foray into India is to take advantage of the rapid growth of the Indian economy. With very high room rates throughout India, we believe that there is demand for a well-designed product catered to the business traveller who may be unwilling to pay five-star hotel rates. There is a strong basis to believe in the long-term attractiveness of the Indian hospitality market."

The first hotel to be completed will be in Chennai's vibrant T Nagar area - a large commercial district and one of the major hubs for business, shopping and entertainment, Chennai is the hub for the textile and jewellery industry in India. The Chennai hotel will be a 120-room property.

The second hotel in the offing is the 300-room hotel in Bangalore located in Whitefield, a key IT district housing offices of major international IT giants, lending Bangalore its pride of place as the “Silicon Valley of India”. Bangalore is also the manufacturing hub of such heavy industries such as aerospace, space and defence sectors, providing an excellent base and hinterland for business travel into the cities.

The hotel in Chennai is expected to be completed in 2009 while completion of the Bangalore hotel is expected in 2010.

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