The company informed the exchanges on Tuesday that CPP Investments has announced a ₹3,000 crore investment in Prestige Hospitality Ventures Ltd. (PHVL) and it will acquire approximately 27% stake in the hospitality arm. Majority of the capital will be supporting the platform’s continued expansion.
This is CPP Investments’ first direct investment in India’s hospitality sector and builds on its growing hospitality exposure across the Asia Pacific, including the recent investments in Japan and Korea, the company said.
PHVL owns a portfolio of luxury and premium hotels in key gateway cities across India and is well-positioned for further growth via a substantial development pipeline spanning Bengaluru, Chennai, Goa, Delhi, Mumbai and Hyderabad, the company added.
Prestige Group’s chairman and managing director Irfan Razack said hospitality is an important part of Prestige’s long-term growth strategy and it sees significant opportunity to build a scaled, high-quality portfolio across India.
“CPP Investments’ long-term investment approach complements our development capabilities and market understanding and together we look forward to creating a hospitality platform of scale while delivering distinctive experiences for our guests and long-term value for our stakeholders,” Razack said.
Hari Krishna, the head of real estate India and Mumbai office head at CPP Investments said the firm sees compelling opportunities in India’s hospitality sector, driven by rising travel and a demand for quality accommodation.
“This investment offers an opportunity to participate in the sector’s long-term growth through a well-positioned platform, while seeking to generate attractive risk-adjusted returns for CPP contributors and beneficiaries,” Krishna said.The initial announcement of this transaction was made on August 10 by Prestige Estates in an exchange filing.
The consummation of the proposed transaction is subject to receipt of necessary approvals, and completion of conditions precedent as mentioned in the transaction documents.
Prestige Estates was recently in focus after it withdrew the hospitality arm’s IPO papers, citing market conditions.
Shares of Prestige Estates Project ended the previous session 3.2% lower at ₹1,424.3 apiece. The stock has fallen 12.8% in the past month.