Breeze Hotel, the hospitality arm of Chennai-based Rajathi Group, is planning to invest around Rs 500 crore in setting up hotels in tier-II cities across Tamil Nadu and Andhra Pradesh. The company would fund these projects through a mix of debt and equity.
RS Ashok, chief executive officer, Rajathi Group, said the proposed projects would be undertaken in two phases. The first phase will involve an investment of Rs 250 crore, of which Rs 150 crore will be debt and Rs 100 crore equity.
As part of this phase, the company will build hotels in Sriperumbudur (with convention centre), Coimbatore, Tirchy, Tuticorin and Madurai, said S Amarendran, chief executive officer, Breeze Hotel.
Land acquisition for the projects is already over except in Tuticorin and Madurai. The Sriperumbudur property would be built on 5 acres, while the remaining would come up on 2 acres. The minimum capacity will be 75 rooms. Construction works are expected to commence by March 2009.
Sriperumbudur, Coimbatore and Tuticorin property will commence its operations by 2011 and would come under the three-star premium business category.
In the second phase, company will foray into cities like Ooty, Kanyakumari, Kumbakonam, Yercaud, Vellore, Rameshwaram, Kodaikanal and Cuddalore in Tamil Nadu. In Andhra Pradesh, it will be Krishnapatnam and Visakhapatnam. The expansion plans will adopt a combination of greenfield projects, joint ventures, hotel management arrangements or out-right purchase of existing properties in the targeted cities, said Amarendran.
Rajathi Group’s primary interest is in agro products and it reported a turnover of Rs 500 crore last year.
