The Indian Tourism Development Corporation (ITDC) is gearing up for the monetisation of The Ashok Hotel and adjoining land parcels, sources told Financial Express.
The move is expected to commence with the release of an expression of interest (EOI) shortly.
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The government, which holds an 87.03% stake in ITDC, is pushing for a swift conclusion to the leasing agreement to facilitate the redevelopment of this property in Lutyens’ Delhi.
The 7.86% stake in the hotel is held by Tata Group’s Indian Hotels Company (IHCL).
The envisaged deal is set to take the form of a public-private partnership (PPP), with the expectation that the hotel and its land parcels will be leased on a long-term basis.
An official has indicated that the Public-Private Partnership Appraisal Committee is poised to give its consent to the proposal shortly.
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By GlobalDataThe valuation of The Ashok, along with its unoccupied land, is projected to be in the region of Rs75bn ($889.53m).
This figure encompasses the investment by the PPP concessionaire and immediate lease income for ITDC.
The long-overdue regeneration of The Ashok is incorporated within the National Monetisation Pipeline, which aims to generate Rs6trn over the four years leading up to the financial year 2025.
The offering available to bidders encompasses both the hotel and the associated plots of land, which may extend across a leasehold duration of between 60 and 99 years. This will operate under a framework for management, operation, and development.
The winning bidder will be expected to invest in refurbishing the hotel.
The 11.42-acre property, which boasts 550 rooms with 160 suites, is in proximity to the Prime Minister of India’s residence and various embassies.
Furthermore, an additional plot of land spanning 1.83 acres is earmarked for the construction of a retail-cum-office space, encompassing a total built-up area of 175,000ft². This integrated building could rise to 5/6 floors.
A third plot covering 6.3 acres has been allocated for the development of serviced apartments, which will cover a built-up area of 1.1 million square feet and are anticipated to accommodate between 600 and 700 units.
