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Saturday, September 10, 2011

Hero Group putting up a Rs650 crore hotel in Gurgaon

This story first appeared in DNA Money edition on Tuesday, September 6, 2011.

Hero Group, India’s largest two-wheeler maker, has added a new business vertical by acquiring a distressed hotel project at Club road in Gurgaon.

Pankaj Munjal, managing director, Hero Motors, told DNA, “This is the first step towards building a new business vertical in the group. The hotel is on a 3.9 acre plot and will have 280 rooms in addition to a host of other facilities required to position it as a destination property,” said Munjal.

Hero Motors provides integrated design, engineering, manufacturing & supply chain solutions.

The group is targeting to open the hotel by Diwali next year and is looking to set up more hotels.

The site, a cold shell, was acquired through a bidding process organised by Punjab National Bank (PNB). Industry sources said the project was on the block for over two years and it earlier belonged to Narsi Group, which is in the business of turnkey interior fit-out.

The Hero Group intends to build a landmark five-star deluxe hotel to be branded, operated and managed by one of world’s top-end hotel companies.

While Munjal did not share the acquisition cost of the project from PNB, he said the total cost, including finishing the hotel, will be around Rs650 crore. “This is an all inclusive cost and funding the development will be done through internal resources,” Munjal said.

The Hero Group has kick-started the process of identifying a hotel company to manage the property. It is considering international groups like Four Season, Conrad and JW Marriot.

“We have had initial discussions with a host of global hotel companies. We should be in a position to finalise the hotel management partner very soon after which interior work will start based on the management company’s guidelines,” said Munjal.

Munjal said the group has a healthy land bank thanks to a host of manufacturing units spread across the country. Some part of the land bank may be usedfor setting up hotels, he said.

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