High Top class and greatly priced

Hotel Leela venture will own the remaining 40% of the venture, which will come up on a 2.3-acre plot attached to Leela Palace hotel on the old airport road in the city. prestige Lakeside Habitat The move is a part of Leela ventures strategy to realign properties to raise funds as it struggles with rising debt.

The joint venture was signed on Thursday. The firm had earlier designed to expand its Bangalore property by adding a further 144 rooms, the source said.

The asking rate of the venture, which is at the drawing stage, is expected to be pegged upward of Rs 8,000 per square feet. The growth is already making waves in a city that remains a conservative and price-sensitive realty market where apartments sell for Rs 3,000-4,000 per square feet. Hotel Leela ventures share of saleable region would be about 1, 20,000 square feet.

The proceeds will be used to retire the Rs 3,800 crore debt of the firm, Vivek Nair, managing director of Hotel Leela venture had told ET recently.

Leela venture had taken a debt of Rs 3,000 crore to develop properties in Delhi, Chennai and Jaipur, in addition to purchasing land in Agra, Pune and Hyderabad. The Goa property was as well as renovated and one at Kovalam, Kerala, bought four to five years before.

In another plan announced earlier, the firm has decided to offer up to 14.95% of its enhanced capital to prospective investors by issue of fresh equity shares. After the infusion of private equity, the promoter stake will come down by 4% after the issue, to 50.6%.

Leela venture is as well as in the process of selling its IT business park, a commercial property in MRT Nagar, Chennai for Rs 250 crore, and has been in the market to raise close to Rs 1700 crore through sales of preferential shares to private equity (PE) companies and land sales to reduce its mounting debt.

In addition, the Mumbai-based hotel chain had entered into a JV with Lunkad Properties to develop a 10-acre plot in Pune. We will develop a seven-star premium property, which will be managed by Leela, said a senior official from Lunkad. The venture is expected to launch around Diwali this year.

The hotel construction has been out in the market to sell two prime land parcels in Hyderabad and Bangalore or enter into joint venture with builders to unlock value from these land parcels to bring down its debt.

There is uncertainty in business environment in Hyderabad and we do not want to proceed with venture, said Nair.

In Hyderabad, where Leela owns a three-acre at Banjara Hills, a prime location in the city, the firm had designed to set up a 300-room hotel at a cost of about Rs 500 crore, which was expected to be commissioned by early 2009. prestige Lakeside Habitat Bangalore Prestige had as well as entered into joint venture with Vijay Mallya, to develop a luxury apartment block in central Bangalore that will stand where his ancestral bungalow now does. Prestige has a 45% stake in the growth 33-storey complex, with six levels of parking, multiple tennis courts, swimming pools, and the additional benefit of the liquor baron for a neighbour. The firm has 28 million square feet of ventures across different verticals under growth & 40 million square feet at the planning stage.