Chennai’s most iconic south Indian hotel, the New Woodlands, on the arterial Dr Radhakrishnan Salai, may soon be a more commercially developed complex.
The New Woodlands Hotel on Dr Radhakrishnan Salai in Chennai
Chennai:
The owners of the property are in talks to find an investor, according to several people in the know. Unlike marquee realty deals which see land parcels being bought for astronomical prices, this deal could be a joint venture or an acquisition of the hotel.
The privately-held New Woodlands Hotel, spread over 4.1 acres (76 grounds), is in the commercial business district (CBD) and its land has been valued at approximately Rs 12 crore per ground, said one of the city’s top consultants.
Part of the consideration could be used for space development, and it could be a 60:40 JV between the hotel shareholders and the new buyer.
K Murali Rao, one of the members of the family who owns New Woodlands, when contacted, said, “We have still not decided,” adding that all the family members have to be on the same page before such a decision can be taken.
In addition to Murali Rao, there are three other directors — Vasudeva Rao, Rajesh Rao (inducted in 2007 and son of his deceased brother Shankar Rao) and Lakshminarayana Rao.
However, Ministry of Corporate Affairs data shows only three directors sans Vasudeva Rao’s name, causing further speculation that one family member may have handed over his stake.
A frontrunner in the venture is Ceebros, who has already forayed into hospitality. However, when contacted, Ceebros MD C Subba Reddy denied being involved in the deal.
Interestingly, New Woodlands is a debt-free entity. A sum of less than Rs 60 lakh and Rs 50 lakh are owed by it to the Karnataka Bank and Sundaram Finance, respectively. The debts are mostly for moveable assets. Sankaran P Raghunathan, industry observer, professor, International Business, said the new FSI rules lend a different flavour to the deal in the making.
“The scale, location and a clear title are the saleable points. With foreign funds looking at commercial real estate development that is known to offer 15 per cent internal rate of return, such a marquee property will offer richer dividends for the investors. There is scope to build half-a-million sq ft and rentals could fetch Rs 50,000 per sq ft,” he said.