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‘We consider each project as our tribute to the location’

Monday, January 6, 2020, 16:10 Hrs  [IST]

Twenty14 Holdings is the hospitality investment arm of the LuLu Group International and owns several prestigious properties globally. The Abu Dhabi based Indian NRI owned group was recently in the news as they transformed one of the UK's historic addresses, The Great Scotland Yard into a 153-key seven-story plush Hotel. The company also has the credit of launching South Asia's first Marriott Tribute Portfolio Collection hotel, Port Muziris in Asmita Mukherjee spoke with Adeeb Ahamed, Managing Director of Twenty14 Holdings to know more about their expansion plans in India and the company's mission to become a million-dollar company by 2025.

Q Being the hospitality investment arm of Lulu group, what are your focus areas in hospitality?
Twenty14 Holdings is the hospitality investment arm with a mission to become a billion-dollar company by 2025. Our core interest is to invest in hotel properties. The group sits on an invested capital of around USD 650 million. Our two properties are now operational in the UK. We also have one hotel coming up in Zurich and another one in Amsterdam. In the Middle East, we have our Steigenberger Hotel Business Bay in Dubai, and also the Sheraton in Muscat. In India, we have one property that is operational in Kochi. We also have two properties which are under construction in Bangalore, where one is next to the airport and the other one is next to the Infosys campus at Electronic City, and we are currently looking at a couple of more developments in India. Twenty14 Holdings creates value for each project that we undertake and we would like to be an experience curator for each of the projects. We are purely an asset owning company and we find partners to manage those assets. Our partners include Marriott, Hyatt and Hilton as of now.

Q Are you planning to open more mix-use properties in India?
For most of our projects, we look for mix-use development but we do not always find the right size, or land, or permission, and so on. We cannot always put these factors together, which is why we tend to evaluate the locations for these factors, and then decide whether to go forward with a mix-use property or not.

Our Hyderabad project near Hitech city is in the final stages of development, and there we will be attached to the LuLu Mall.

Q What are your investment plans for India?
The current size of our portfolio is INR 800 crores. This is being invested for the two under-construction developments in Bengaluru at this point of time. In India, we are evaluating other possibilities as well. The proposed hotel in Hyderabad is not part of this figure.

The Great Scotland Yard

Q Are you looking at any brownfield projects?
Both the developments in Bengaluru are brownfields. But we are looking at other greenfield projects. The three components that we are focusing on currently are - the right price, the right location and the cost of development that is involved. In India, the scale of return is very constrained at this point in time.

Room rates in India are not at par with many global countries. So,we need to be very smart while investing. Sticking to timelines is another important element for us. We also have to ensure that the projects are completed within the budgeted costs.

Q What are the challenges that you faced in India in terms of regulations and ease of process?
While in most countries, getting permissions for a project does not face hindrance, in India, it takes a lot of time to do paperwork corrections during the permissions phase, which becomes a major challenge. I think there should be certain regulations in place for the smooth functioning of this industry, which is one of the biggest employers in the country now.

Port Muziris, a Tribute Portfolio Hotel, Kochi

Q What are the plans for your retail arm Tabelz?
Tabelz is a brand retailing company, through which we mainly focus on bringing international brands to India. Currently, we have three F&B brands in our portfolio. Galitos is a brand offering South African peri peri chicken concepts, which has five outlets in India currently and is growing. Then we have the Cold Stone Creamery, which is an American ice cream brand, with close to twenty-six outlets across India. We also have a homegrown brand called Bloomsbury's, specializing in cafes, which has only two stores in Kochi and Bengaluru currently. We are extremely choosy about opening Bloomsbury's, hence we are growing it slowly.

Q As an investor, what would be your take on the prospects of business in India?
We are a strong believer of India being a growth market, but the present scenario is worrisome which needs to be addressed at the earliest. In the next decade, the way of doing business in the country will change. We will find more sustainable businesses in the country, as currently, we are all burning more than what we are making.

The hotel project in Hyderabad is not yet fully finalised, as we are still putting architectural planning and permissions in place. Once these things are done, we will announce our partnership with the hotel brand. If you consider our shopping malls, we have projects across India. Of course, Kerala, being our home base, we opened our first mall there. New malls are coming up at Trivandrum, Bengaluru, Lucknow, Chennai, and Hyderabad.

Q What are your plans for the next five years?
We are in the final stages of getting a couple of sites finalised for our hospitality projects. We are looking to add four more projects across Hyderabad, Kerala and Assam. As India is a challenging market, getting all the favourable factors together in a basket takes time. We also find a lot of distressed assets, where either the building is not right or the conversion cost for building a property is too high.For us, the projects are not just hotel projects, but rather a tribute to a particular location.

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