This story first appeared in DNA Money edition on Friday, August 05, 2011.
After seeing numerous delays since 2009, the Shangri-La Hotel is finally set to debut in Mumbai by the year-end.
Phoenix Mills Ltd (PML), the asset owning company, had earlier planned to soft-launch the property at its Parel compound with 50% inventory in the second quarter of the last fiscal.
However, the company ran into problems with one of its contractors and the work suffered till a new contractor was appointed.
Work resumed towards the end of 2010 and PML is now optimistic about handing over the hotel to the management company, Shangri-La Hotel and Resorts, for a soft launch by December 2011.
Shishir Shrivastava, group CEO and joint managing director, PML, told DNA that the company will be handing over the hotel’s public areas to the management company by September.
“The hotel will be opened in a phased manner and the soft launch is likely by December. We are targeting to open with three restaurants, a little over 50% of the overall guestroom inventory and banqueting space. Work on the balance guestroom inventory will continue and is likely to be completed by April 2012,” said Shrivastava.
PML wants to hit the market in time for business season and achieve efficiency in cost of operations. It expects the average room rates during the soft launch to be above `10,000 for a night’s stay.
Shangri-La, which would be soft-launched with 250 guestrooms, would have 410 rooms and 23 serviced apartments when fully operational.
The property is being developed by Pallazzio Hotel and Leisure Ltd, a special purpose vehicle of Phoenix Mills. The hotel cost is over Rs700 crore, of which Pallazzio has already pumped in `483 crore as equity, while the balance is debt.
“We have invested close to Rs625 crore as of now and additional investment of Rs175- 200 crore will be made to complete this property. The equity part has already gone in and we are now drawing down the debt component as and when required based on the extent of work completed,” he said.
Pune-based Avinash Bhosale Group is among the investors in Pallazzio Hotel. It holds an instrument that will convert to 27% stake at the time of maturity. “The conversion is time bound and is not linked to any performance parameter. It will happen in April 2015,” Shrivastava had earlier said.
PML’s other hotel projects at Kurla (Mumbai), Chennai, Pune and Agra are also held under different special purpose vehicles with investments by Phoenix Hospitality, a PML group firm. PML has already signed management contracts with Marriott International for its Kurla and Agra hotels.
For its Pune hotel, PML has signed a letter of intent with a international hotel chain. Industry sources said the hotel is likely to be operated by Hilton under one of its upscale brands.
After seeing numerous delays since 2009, the Shangri-La Hotel is finally set to debut in Mumbai by the year-end.
Phoenix Mills Ltd (PML), the asset owning company, had earlier planned to soft-launch the property at its Parel compound with 50% inventory in the second quarter of the last fiscal.
However, the company ran into problems with one of its contractors and the work suffered till a new contractor was appointed.
Work resumed towards the end of 2010 and PML is now optimistic about handing over the hotel to the management company, Shangri-La Hotel and Resorts, for a soft launch by December 2011.
Shishir Shrivastava, group CEO and joint managing director, PML, told DNA that the company will be handing over the hotel’s public areas to the management company by September.
“The hotel will be opened in a phased manner and the soft launch is likely by December. We are targeting to open with three restaurants, a little over 50% of the overall guestroom inventory and banqueting space. Work on the balance guestroom inventory will continue and is likely to be completed by April 2012,” said Shrivastava.
PML wants to hit the market in time for business season and achieve efficiency in cost of operations. It expects the average room rates during the soft launch to be above `10,000 for a night’s stay.
Shangri-La, which would be soft-launched with 250 guestrooms, would have 410 rooms and 23 serviced apartments when fully operational.
The property is being developed by Pallazzio Hotel and Leisure Ltd, a special purpose vehicle of Phoenix Mills. The hotel cost is over Rs700 crore, of which Pallazzio has already pumped in `483 crore as equity, while the balance is debt.
“We have invested close to Rs625 crore as of now and additional investment of Rs175- 200 crore will be made to complete this property. The equity part has already gone in and we are now drawing down the debt component as and when required based on the extent of work completed,” he said.
Pune-based Avinash Bhosale Group is among the investors in Pallazzio Hotel. It holds an instrument that will convert to 27% stake at the time of maturity. “The conversion is time bound and is not linked to any performance parameter. It will happen in April 2015,” Shrivastava had earlier said.
PML’s other hotel projects at Kurla (Mumbai), Chennai, Pune and Agra are also held under different special purpose vehicles with investments by Phoenix Hospitality, a PML group firm. PML has already signed management contracts with Marriott International for its Kurla and Agra hotels.
For its Pune hotel, PML has signed a letter of intent with a international hotel chain. Industry sources said the hotel is likely to be operated by Hilton under one of its upscale brands.
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