Table 2: Indian HNI (past 5 years)
The real-estate seems to be the latest playground for the India’s wealthiest. In one of the unique deals Sahara is all set to buy the landmark Grosvenor House Hotel London. Recently Vijay Mallya bought the “best house in Cape Town" for $ 8.4 million located at the posh Nettleton Road. There are other big stories as well. The most expensive house “Antilla” built by Mukesh Ambani and a similar one by L.N Mittal in London are the other examples of Indian Flamboyance.
Sahara India Family, the Indian conglomerate run by billionaire industrialist Subrata Roy, has been tipped as a leading bidder to buy the Grosvenor House Hotel on Park Lane from Royal Bank of Scotland for about £500m ($799m). Royal Bank of Scotland took control of the property in 2001 when it paid £1.2 billion for 12 Le Meridian hotels as part of a sale-and-lease back deal.
RBS — which received bailout funds from the British government when the global financial crisis rocked Europe — has been looking to sell the hotel along with other assets to shore up its recession-ravaged balance sheet. RBS has been trying to offload the site for three years. The bank had originally hoped to get as much as £700 million from the sale, but lowered its target after two previous auctions failed. The negotiations for Grosvenor House Hotel deal between Sahara and Royal Bank of Scotland began in October. There were three bidders in the auction for Grosvenor House. Sahara bid the highest in this auction and so is likely to own the asset.
The historic Grosvenor House is run by international hotelier JW Marriott and has been frequented by royalty, celebrities and business leaders since its opening in 1929. It was built in the 18th century and became the Duke's London home in 1806. It was commandeered by the government during the First World War before being knocked down and rebuilt in 1927. It was also the official venue for the gala celebrations of India's 50th anniversary of independence in 1997 and so clearly attaches a special significance for Indian citizen.
Sahara is believed to be taking advice from consultants DTZ and Blandford Goldsmith on the real estate deal. The London property will be a game changer in the Sahara group’s property and hospitality portfolio. The group already runs the Sahara Star hotel near Mumbai airport and has another hotel in Lucknow, its headquarters. It plans to put up hotels in the 15 townships that are under construction.
Sahara India has diversified business interests that include financial services, housing finance, mutual funds, life insurance, city development, real estate activities, print and television media, film production, sports, information technology, health care, tourism, hospitality and consumer products. It owns the new IPL team “Sahara Pune Warriors” and also sponsors the Indian Cricket and Hockey teams. Recently Sahara India was in the race to buy Liverpool and MGM but the deal collapsed.
While the luxury buy out by Indian Billionaires (see table 1) is not a new story now, it is getting new dimensions with every such deal. The world has been viewing India as a country with huge poverty tags but recent opulence is far more strong to shrug off any such feeling. In recent years, India has witnessed a huge growth (see table 2) in the no. of High Net-worth Individuals (HNIs) and the buyout plan by Sahara is a real testimony to that growth.
© Copyright ETI Dynamics Ltd. 2011. You can share articles and reports using the share tools where possible. Please do not cut content from the tiCorridors.com and paste into emails for distribution purposes or on to other websites.