Indian Hotels Company Ltd has announced the first-ever homes to be sold under the Taj branding anywhere in the world. Taj Sky View Hotel & Residences, presently under construction in Chennai, will see IHCL join hands with city-based real estate developer, Ampa Group, to to launch 253 hotel rooms and 123 branded apartments. The project is expected to be completed early 2027, between January and March.
"We believe IHCL can have a strong presence in the business of business residences, and that we have the ability to come up with a sustainable, profitable and growth-oriented model to serve all customer points," said Puneet Chhatwal, MD and CEO, at IHCL, in a conversation with CNBC-TV18.
According to the partnership between Ampa Group and IHCL, the developer will fund the project while IHCL will run operations of the entire property for a period of 30 years, including maintenance of the 123 homes on site. The project's construction cost is estimated to be ₹800 crore, of which Ampa has already invested ₹200 crore.
"Ampa's land bank is a family heirloom, and I believe the project will be a win-win for IHCL and us," said Ampa Palaniappan, Chairman and MD of the Ampa Group, "The sale of residences will fund the operations of the hotel in what will become a cash-flow-neutral project." He added, "The idea is to have a debt-free hotel, which is apt for a debt-free company like IHCL."
According to the Ampa Group, homes at Taj Sky View will begin at ₹6.5 crore for a unit size of approximately 2,500 square feet. The largest unit will lie in the 5,900-sq-ft range, and could cost upwards of ₹19 crore. "We expect the hotel to be completed and operational first, after which the residences will be completed," Palaniappan said.
While IHCL has not confirmed other branded residential developments in the pipeline, Chhatwal hinted at more such projects seeing the light of day as Taj Sky View inches towards completion. "We are not in a hurry to sign more branded residences in other cities," said Chhatwal, "We will ink other agreements and finalize more projects as this one comes up."
'Massive opportunities in spiritual tourism' IHCL's management has recently been bullish on opportunities in the spiritual tourism segment, especially in markets like Ayodhya and Varanasi. Chhatwal said that a more Taj properties in South Indian spiritual towns may also be in the offing.
"We are looking at Rameswaram, where we don't have a property yet, and are also looking to expand our presence in Madurai," he said, "We recently opened our second property in Tirupati and will make a foray in Guruvayur." The IHCL CEO added that the strategy was simple: invest in newer markets while doubling down on investments in existing ones.
"Spirituality in business as well as personal life is a massive opportunity to be tapped," said Chhatwal, "The investment that has gone into Ayodhya and the Kashi Vishwanath Temple in Varanasi, will attract more visitors."
Given the launch pipeline of inventories in tier-2 and tier-3 cities, IHCL believes RevPAR in properties located within holy cities could see a double-digit growth rate. "RevPar in spiritual cities is consistently on the way up with certain exceptions because of a heat wave or geo-politcal situations," said Chhatwal, "But I remain optimistic — not cautiously optimistic — that RevPar in these cities will continue its upward trajectory."
He added: "I expect double-digit growth in overall RevPAR for some time before high single-digits on account of inflation." The IHCL boss also said that average daily rents (ADR) or hotel room prices could see a spike in metro cities since inventory was more skewed in favour of tier-2 towns, which would then allow hoteliers to spike prices at city properties.
