Power List 2017, Mandeep Lamba, MD, JLL India
If Mandeep Lamba is to be believed, then India is gearing up for Investment Cycle 2.0 after almost a decade. “After a rush to add inventory, the supply side has slowed down and the demand supply gap is fuelling higher occupancies and ADR’s in most of the key cities. There is now reasonable evidence and belief that the hospitality industry is heading for a bull run over the next four to five years,” he said.
This, along with the economy is expected to grow at around 7% and more. And with no other global investment destination showing similar growth potential, the writing is on the wall that investors are back to once again examine the opportunities that India has to offer.
“At JLL we believe that the next 12 to 18 months are likely to see active trading of hospitality assets, a very large portion of which will be operating assets in mature markets. Institutional investors having witnessed the experiences in Investment cycle 1.0 are averse to taking any development risk and Investment Cycle 2.0 will therefore be largely about acquisition of operating assets,” Lamba added.
It is also interesting to note that as markets mature and economies grow, the investments will spread not from metro cities, but from tier-1 to tier-2 cities to accommodate the larger requirements across industries and those customers in search of cheaper destinations. According to Lamba, this is will be all the more evident once tier-1 cities begin to saturate and become increasingly expensive.
“Equally, growing economies provide better employment prospects and higher disposable incomes besides better connectivity leading to the increase in leisure travel. Smaller cities, which have good connectivity through rail, air, roads and a pool of young educated and employable people are natural extensions for investment in an economy that is growing steadily,” he added.
Besides this crystal ball gazing, Lamba has been busy working with his team at JLL India to assist key hospitality companies in managing hotel asset transactions. As on date, the company has mandates for the sale of two portfolios and some independent hotels amounting to a spread of 11 hotel with over 1600 rooms in key hotel markets of Delhi, Bangalore, Goa, Chennai, Kolkata,
Pune and Ahmedabad. “Of these, one portfolio of five hotels with about 600 rooms has been sold for Premier Inn UK to SAMHI Hotels and the others are in active stages of discussion and due diligence. We will be the largest transaction advisors in the country having more than 80% of the market share on hotel transactions,” Lamba proudly stated.
These transaction advisory and M&A opportunities that exist in the Indian hospitality industry indicate that some exciting times are coming up. Lamba remarked that JLL is well poised to assume a leadership role in this domain and he personally can’t wait to see how this scene unfolds.
By Vinita Bhatia