London: Sahara Group, the Indian owner of assets ranging from TV channels to real estate, bought the Grosvenor House in London's Mayfair district, its first overseas hotel acquisition.
Grosvenor House was purchased from Royal Bank of Scotland, the UK's biggest government-owned bank, for £470 million ($726 million, Dh2.67 billion), Lucknow-based Sahara said in a statement.
Sahara plans to add an Indian restaurant, a night club, spa and a swimming pool to the high-end hotel, which has 420 rooms and 74 suites.
Stephen Hester, RBS's CEO, is shrinking the Edinburgh-based bank by selling assets and cutting jobs after receiving the world's biggest taxpayer-funded bailout in 2008. Grosvenor House opened in 1929 and, according to Sahara, was valued at more than £1 billion three years ago.
Good deal
"They must have really got a good deal with the bargain prices available at this stage," Shreenath Shastry, national director of hospitality & leisure at Knight Frank (India) said.
"Most of the hotel industry in Europe and US is going through a down phase, so if one looks at hotels even as a real estate asset, its cheaper now than it was ever before, as valuations are much lower than three years ago."
The hotel, located along Park Lane, has been operated by Bethesda, Maryland-based Marriott International under the JW Marriott brand since September 2008.
Indian hotel companies are expanding overseas as they seek to build their brand to woo customers. Indian Hotels, the nation's biggest hotel operator, bought the Ritz-Carlton in Boston in 2007 for $170 million from Millennium Partners and renamed it Taj Boston, expanding its brand in the US as it reentered the New York market in 2005 after six years with the rights to manage the 201-room Pierre.
Brand recognition
"Expanding abroad is one of the most effective ways to put your flag in some of the most prominent cities," Shastry said. An entry into the overseas markets helps create an international name with immediate brand recognition, along with a ripple effect on their properties in India, he said.
"In addition to the acquisition of Grosvenor House, London will be the gateway for Sahara to introduce some of its new business ventures internationally," Sahara said.
