SAMHI Hotels Limited, a prominent branded hotel ownership and asset management platform in India, has added a new hotel to its portfolio by signing a long-term variable lease for an upper upscale hotel of 170-175 rooms in Hyderabad.
An office building on the main arterial road of Hitec City will be converted into a hotel. Hitec City is Hyderabad’s largest office micro-market. The hotel will be surrounded by a high density of Grade A office stock. The structure is already completed with 270,000 square feet of built-up area and SAMHI will now undertake the fit-out work of the building.
Through this lease agreement, SAMHI strengthens its market share in Hyderabad, which has one of India’s largest and fastest-growing office markets. The company already owns and operates four hotels in Hyderabad across segments. This transaction will further add 170-175 rooms in the upper upscale segment which will be managed by a large international operator.
Based on FY24 financials, revenue from leased assets contributed 13% to SAMHl’s total revenue. This transaction will help it achieve the target of 20%+ revenue contribution from leased assets which are significantly more capital efficient. The hotel once completed will also increase its share of our upper upscale and upscale assets in a key market after its last acquisition in Bengaluru.
Commenting on the performance, Ashish Jakhanwala, Chairman and Managing Director of SAMHI Hotels Ltd, said, “I am delighted to announce the signing of a long-term variable lease in Hitec City, Hyderabad. This transaction aligns with our stated strategy of increasing the share of long-term leases for better capital efficiency and higher risk-adjusted returns. We are also proud to have executed one of the first office building conversions to a hotel, which opens up a new avenue for our growth. With a quick conversion of this building to an upper upscale hotel, we have secured strong growth for our portfolio.”
