Shree Naman Group steps up hotel buys, targets 2,500 rooms in five years
Mumbai-based Shree Naman Group is targeting at least 2,500 hotel rooms over the next five years, as it looks beyond its home market to build a national hospitality portfolio through acquisitions and new developments.
The group, which owns Sofitel Mumbai BKC, has expanded its operating portfolio to around 1,000 rooms across Mumbai, Bengaluru and Pune following the acquisition of JW Marriott Bengaluru and Crowne Plaza Pune at a combined enterprise value of about ₹1,800 crore.
The two hotels add around 450 rooms to a business that had approximately 370 rooms three years ago, Harsh J. Shah, director of Shree Naman Group, told Mint.
“From being a single micro-market hotel player, we’ve expanded considerably and now have a portfolio of world-class hotel assets across the country. We hope to get from our current 1,000 to at least 2,500 keys over the next five years, maybe even sooner.”
Mint reported on 26 August that the group had won bids for JW Marriott Bengaluru and Crowne Plaza Pune at ₹1,800 crore.
The expansion marks a shift for the group, whose hotel business was largely concentrated in Mumbai for about 15 years. Its operating portfolio also includes Ibis Mumbai BKC and Lemon Tree Hotel, Kalina BKC. It now plans to expand into other business centres while still keeping a presence in leisure destinations.
The group’s development pipeline comprises around 650-700 rooms across three projects in Goa, a resort near Pavana Lake and an expansion of Sofitel Mumbai BKC. It also plans to refurbish the Bengaluru and Pune hotels over the next one to two years, Shah said.
The group has also secured a stalled five-star hotel project in Mumbai’s Kanjurmarg area through insolvency proceedings, with the National Company Law Tribunal approving a ₹730 crore resolution plan for Rajesh Business & Leisure Hotels. The project, branded The Chedi Mumbai, was planned as a 316-room property. Shah did not comment on plans for the hotel.
Golden period
Shah said the hotel sector was entering a “golden period” after 15 years of sluggish growth, driven by stronger demand and improved operating economics. However, rising construction costs, delays and cost overruns are making new hotel development more challenging, prompting the group to combine new projects with acquisitions.
The acquisitions and development plans come as real estate developers increasingly view hotels as a long-term business rather than an extension of their property portfolios. “India has about 215,000 branded rooms, and the demand for them is outpacing supply. That gives a significant headroom to grow,” Shah said.
Several real estate players have strengthened their hotel verticals. Mint reported in May that Bengaluru-based Sattva Group was building a broader hospitality pipeline across Bengaluru, Hyderabad, Visakhapatnam and Darjeeling. The company, which has co-developed JW Marriott Hotel Kolkata and Novotel Kolkata Hotel and Residences, said it planned to invest 10-20% of its turnover in hotels going forward. Similarly, the Prestige Group and the Brigade Group have also strengthened their presence in hotels and branded residences in the past few years.
For Shree Naman, acquisitions will be a way to expand more quickly than by developing properties from scratch. The group will continue to pursue greenfield projects on existing land parcels and through mixed-use developments, particularly in Mumbai, but intends to combine these with purchases of operating hotels.
“If we only rely on greenfield development, it may just keep getting delayed, and input costs are going up significantly. Hence, we have to couple greenfield growth with acquisitions to really be able to build scale in a reasonable timeframe,” Shah added.
He expects more acquisition opportunities to emerge over the next five to 10 years as several new developers enter the hotel business, which could create opportunities for consolidation.
Shree Naman is also open to institutional capital and long-term partners to co-finance its hospitality assets, although Shah did not disclose a specific funding arrangement or revenue target.
The group’s approach will be to select hotel segments and operators based on each property’s location and market, rather than follow a single-brand strategy. Its portfolio primarily focuses on luxury, upscale and two midscale hotels.
Leisure properties
Leisure is another area the group wants to develop. Its proposed resort in its real estate development near Pavana Lake in Maharashtra is aimed at travellers from Mumbai and Pune seeking weekend breaks, family holidays, weddings and celebrations. Shah sees room for more premium leisure properties within driving distance of the two cities. “We are very bullish on leisure as a segment and would like to look at doing more and more leisure,” he said.
The strategy comes against a backdrop of rising hotel development activity and investor interest. Hospitality consultancy HVS Anarock has estimated that India’s branded hotel room inventory could approach 350,000 rooms by fiscal year 2029-30, from more than 215,000 currently.
“As a country, we are severely undersupplied from a hotel-room standpoint. Beijing or Shanghai alone have more branded keys than we have in all of India,” he said.
“There is a huge opportunity for foreign tourism in India, which is currently a missed opportunity,” he said. “More foreign tourists walk through one shopping mall in Dubai than visit all of India,” Shah added.