JV To Develop, Invest in Hotels in India

NEW DELHI-Seeking to enter India’s booming hotel market, Interstate Hotels & Resorts and JHM Hotels have formed a joint venture to operate and invest in hotels in the country. The two companies have also committed to invest in an investment fund dedicated to Indian hotels.

The partnership between Interstate Hotels, based in Arlington, VA, and JHM Hotels, based in Greenville, SC, will be a 50-50 JV, known as JHM Interstate Hotels India. With an office in the Indian capital, the company will focus on securing management agreements on existing and to-be-built hotels.

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Interstate and JHM have also committed to invest in Duet India Hotels Ltd., a UK-based real estate investment fund dedicated to investment in hotels in India. To date, the fund has raised approximately $175 million in equity, with anticipated total equity contribution in excess of $200 million. The funds’ mission is to develop approximately 25 three-star and four-star hotels in India targeted at business travelers. Interstate and JHM will invest equal portions of a $12.5-million total investment to acquire an interest in Duet India Hotels. In return, the fund has committed to providing JHM Interstate Hotels with the first opportunity to manage the hotels in which the fund invests.

“We’ve been exploring entering the Indian market for some time, and the match with JHM seemed like a good fit,” Leslie Ng, CIO of Interstate, tells GlobeSt.com. Ng says that the companies are looking at major urban and suburban markets for new ventures, and that hotels will be geared toward the business traveler, with some resort properties as well. Although no projects have yet been revealed, Ng says that an announcement will be made “in the near future.”

The JV also established a strategic relationship with JNB Hotels and Resorts Private Ltd. That company is a subsidiary of JNB LLC, a real estate investment group based in Artesia, CA. It has access to a pipeline of hotel management opportunities through India.