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Lead Story
Railway, textiles ride the hospitality boom
Pocket Rs 4,000 crore on land sale
Neeti Mehra - Mumbai
Looking a gift horse in the mouth, the railway and the textile
ministries are both offloading land banks in prime locations to realtors and
hospitality consortiums to build star hotels and mixed-use developments, setting
their cash registers ringing to the tune of over Rs 4,000 crore.
Vertiginous hospitality growth, coupled with land shortage,
compelled realtors and hoteliers to resort to bidding for prime land tracts
at astronomical rates. Jumping on to the bandwagon, the railways earmarked 100
plots for the budget railway project, and the textile industry has resorted
to sale of its mill lands located in the heart of Mumbai.
| Mumbai Textile Mill |
Rs 702 crore |
| Jupiter Mills |
Rs 276 crore |
| Apollo Mills |
Rs 180 crore |
| Kohinoor Mill No.3 |
Rs 421 crore |
While the Indian Railways Catering & Tourism Corporation's
(IRCTC) hospitality venture has yielded a whopping Rs 1,537 crore for a mere
seven plots of land, out of a tally of 100 for the proposed budget hotels, the
National Textile Corporation mill sale has earned the textile ministry approximately
Rs 2,532.16 crore.
| Mumbai |
Rs 903 crore |
| Jaisalmer |
Rs 223 crore |
| Tirupati |
Rs 120 crore |
| Madurai |
Rs 152 crore |
| Ooty |
Rs 93 crore |
| Bikaner |
Rs 36 crore |
| Darjeeling |
Rs 10 crore |
The latest land bank to be snapped up is a 3,900 sq metre
plot near CST in Mumbai, a part of the railway hospitality venture for an unheard
of Rs 903 crore, bid successfully by the consortium of Essel Group Company,
GL Hotels, and Pan Indian Hotels. Industry experts speaking on this precedent
have said that from a real estate perspective, astronomically high bids muddy
the investment waters and do not justify the investments in the long term.
A leading real estate consultant, on conditions of anonymity,
said, "Keeping in mind that the property will be positioned as a budget
hotel with ARRs ranging between Rs 5,000 and Rs 7,000 and approximately 350
to 400 odd rooms, it will be hard to recoup the investment in each room, considering
it will cost Rs 2 crore per room, given the land rate."
Even the textile ministry has its coffers full with the Delhi-based
DLF Group buying NTC's Mumbai Textile Mill for Rs 702 crore. The minsitry has
since off-loaded Jupiter Mills, Apollo Mills and Kohinoor Mills - all located
in prime locations in central Mumbai.
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