DIAL leases out land for another hotel, gets Rs200 cr

New Delhi: The operator of New Delhi’s international airport has leased out 4.55 acres to a consortium of Aria Hotels and Hyatt for Rs200 crore to build a hotel, a top executive said.
With this, Delhi International Airport Ltd (DIAL)— owned by a consortium led by GMR Infrastructure Ltd—has mopped up about Rs900 crore in the first half of 2009 through realty transactions, Ashutosh Agarwala, chief finance officer, strategic finance, GMR Group, told Mint over the phone.
DIAL will now go slow on letting out further land at the airport till the real estate market improves, he said.
The airport operator had earmarked 45 acres that it intended to lease out to developers building hotels and conference centres. Of this, it had in March leased out five plots totalling around 17 acres to five hotel developers that included Accor Hotels, Bird Group-Dusit Thani Group and The Lemon Tree Hotel Co.
The lease agreement for these plots includes a fixed security deposit and an annual licence fee that would increase at least 5.5% every year for the lease duration of 57 years.
“We will be getting about Rs900 crore from this 21.8 acres (including 4.55 acres). From there on, continuing annual revenues would be Rs30 crore in the first year (2009-10) and (will) get escalated each year,” Agarwala said.
The hotels on the airport land were expected to be completed before New Delhi hosts the 2010 Commonwealth Games in October next year. However, one successful bidder said construction is yet to start and the firm is yet to hear from DIAL on road and electricity availability at the site. “We will start construction in two months,” he said, requesting neither he nor his firm be named. DIAL has said it is investing Rs8,975 crore to develop the airport in the first phase that ends in March, with a significant part of the funding coming from property development. But Agarwala said his firm was not in a hurry to lease out the remaining 23.2 acres; a decision on this would depend on how valuations in the realty market pickup.
09/06/09 Tarun Shukla/Livemint

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Categories: Airports Jun 2009