Lemon Tree, Warburg to invest Rs 1,400 cr on housing projects

Lemon Tree, Warburg to invest Rs 1,400 cr on housing projects

The Capital-based firm has formed a 51:49 joint venture -- Oceanus Real Estate Pvt Ltd -- with Warburg Pincus for the housing projects.

Besides diversification into housing, the hospitality chain has put in place a blueprint to expand in its core business within India and explore neighboring markets like Nepal and Sri Lanka.

"The joint venture with Warburg Pincus will develop at least three to four affordable housing projects in Gurgaon," Lemon Tree Hotels Chairman and Managing Director Patu Keswani told PTI.

Out of a total planned investment of Rs 1,400 crore by 2015, the JV will invest Rs 700 crore while Warburg Pincus alone will put another Rs 700 crore separately, he said.
Keswani said the residential apartments would be sold under the 'Lemon Tree' brand in the range of Rs 20 lakh to Rs one crore per unit.

"We have already identified a couple of sites in Gurgaon and will begin construction soon and start selling by December this year," he said.

In 2006, Warburg Pincus had invested in Lemon Tree Hotels and currently own 25.8 per cent stake.

In the hospitality segment, the company currently owns and operates 14 mid-scale Lemon Tree hotels in the country with a total capacity of 1,500 rooms.

"By mid 2013, we have a plan to own and operate total 20 hotels with 2,800 rooms and then we have a plan to go public by making an IPO," Keswani said.

The first Lemon Tree hotel was opened in 2004 and since the inception in 2000, Rs 1,600 crore has been invested in the company.

Asked about revenues, while he did not provide figures for the past fiscals, he said this financial year Lemon Tree Hotels expects the turnover to be around Rs 300 crore.

Besides, domestic expansion, Keswani is also exploring Nepal and Sri Lanka to set up Lemon Tree hotels.

"International expansion plans is at a preliminary stage at the moment," he said.
Keswani, who also runs a budget hotel chain under the Red Fox brand with three properties through a separate entity, Spank Hotels Pvt Ltd, said it is also being expanded.

"Red Fox hotels are run by separate company and we have a plan to have a total of six such hotels in the next two and a half years with 1,000 rooms," he said.

Keswani also said he is considering to set up a 250 room hotel in New York in his individual capacity in partnership with "with a friend" but not under Lemon Tree brand. He did not give details about the same.