MAK Group plans to invest Rs 600cr in hotel projects

Forms JV with Malaysian infra company for 350cr township in Hyderabad.

MAK Hotels and Resorts Private Limited, part of the Hyderabad-based real estate developer MAK Group, has chalked out plans to set up three and four-star hotels across the country under its newly-launched 'Blue Lotus' brand, at an outlay of Rs 600 crore.

The hotels, which would encompass 2,000 rooms, would come up in Nagpur, Pune, Mysore, Kolkata, Chennai, Hyderabad and Bangalore. While the company had already acquired land in six cities, it is at present scouting for a prime location in Bangalore.

"Phase-I of the project requires an investment of Rs 300 crore with a debt-equity ratio of 2:1 and the entire project is expected to be completed in the next five years," Murali Krishna Reddy, chairman of MAK Group, said here on Monday.

Signing a joint venture agreement with the Rs 2,000-crore Malaysian infrastructure company, Sunway City Berhad, for developing a Rs 350-crore high-rise integrated township project in Hyderabad, Reddy said the JV would currently be considered as an SPV (special purpose vehicle) for the Hyderabad project, with an option to continue the relationship for MAK's future projects at a later stage.

"Sunway City would invest 60 per cent in the JV, including bringing in $5 million (around Rs 20 crore) foreign direct investment (FDI) into the 15-acre project," he said.

Currently at the conceptual stage, the MAK-Sunway project would comprise 1,500 condominiums and apartments, and the project would be completed in three to five years in a phased manner. The JV is looking at sizes, which would keep costs under control. Each apartment would have a built-up area of between 1,000 sft and 1,300 sft, with the price being less than Rs 50 lakh, he said.

According to Mir Nasir Ali Khan, managing director of the group's infrastructure and housing arm MAK Projects, the first phase of the company's maiden project 'Banyan Tree Retreat' in Hyderabad is expected to be completed by 2009.

The Rs 800-crore project, spread across 100 acres, would house 450 residential villas in the first phase, and office space, IT park and a hotel in the second phase.

The MAK Group, founded in 2006, currently has Rs 1,500-crore worth of projects at various stages of development.