Company Update : Lemon Tree Hotels by JM Financial Services Ltd
Aurika set for NCR debut
Lemon Tree Hotels (through its material subsidiary, Fleur Hotels) has been declared as the successful bidder in e-auction conducted by Delhi Development Authority (“DDA”) for license rights of a prime 2.25 acre land in Nehru Place, New Delhi for development and operations of a 5-star hotel on the licensed land parcel. The subject property will be developed as Aurika and will be one of the largest hotels in New Delhi. In previous con-calls, the management had conveyed its intent to scale up the Aurika brand through a strong pipeline targeting premium markets, urban centers and high value tourist destinations. Aurika currently has 2 operational hotels (808 keys) and 7 in the pipeline (1,250 keys). Of the upcoming assets, 2 of the hotels are owned, 1 on public-private partnership and 4 on a managed/franchise basis.
* Aurika set for NCR debut: Fleur Hotels has received a Letter of Award (LOA) from Delhi Development Authority (DDA) for the license rights to a prime 2.25 acre land in Nehru Place, New Delhi for development and operations of a 5-star hotel. The company has announced that the hotel will be developed as ‘Aurika, Nehru Place’, which will mark the debut of the upper upscale brand in Delhi-NCR and will also strengthen the already strong presence of Lemon Tree in Delhi-NCR.
* Asset details: Aurika, Nehru Place will be one of Delhi’s largest hotels with 500+ keys, and will offer elegant rooms and suites, signature dining, expansive banqueting, and leisure facilities. It will be designed along the lines of Aurika, Mumbai (MIAL).
* Strengthens the asset-heavy pipeline: We view this a positive development for the company. While Lemon Tree has been rapidly expanding its asset light portfolio, the owned/leased pipeline remained modest with only two hotels (across 256 keys). The addition of this new 500+ key Aurika branded hotel significantly enhances visibility on future growth in this segment. We believe, the project will be financed through a mix of debt, internal accruals and some primary funds raised from the demerger and proposed listing of Fleur Hotels, as the dedicated PropCo for its hotel assets.
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SEBI Registration Number is INM000010361
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