Indian Hotels Co. Ltd., owner of the Taj chain of hotels, said on Wednesday it had bought W Hotel in Australia for A$36 million (US$27 million), as it looks to establish the Taj brand in key international markets.
The 100-room boutique hotel, located at the wharf at Woolloomooloo in Sydney, is operated by the Starwood group Taj hotels will take over operations in early February, said Anil Goel, vice president of finance at Indian Hotels.
"It's a profitable and popular hotel and fits into our strategic plan of investing in select properties in key markets," Goel told a news conference.
The hotel had annual revenues of about A$13 million, he said.
Indian Hotels shares rose as much as 2.6 percent on the news and were up 0.8 percent at 977.70 rupees in a flat Mumbai market.
The all-cash deal will be financed in part by a $150-million convertible bond issue that Indian Hotels raised last year, and partly by local borrowings in Australia, Goel said.
Indian Hotels had, in July, taken over a 30-year lease on the Pierre Hotel in New York and said it would spend about $35 million upgrading it.
With the Sydney acquisition, Indian Hotels has 14 hotels overseas with 2,283 rooms. It has 6,489 rooms in India, where it owns a mix of luxury and business hotels, besides the recently launched IndiOne chain of economy hotels.
The Mumbai-based firm will open new properties in Bhutan and Dubai in the coming months, besides expanding its presence in India, Goel said. The company is also actively looking for an opportunity in China, in the cities of Beijing and Shanghai.
In India, new Taj hotels are under construction in Bangalore, Mumbai, Coimbatore and Chennai, while rooms are being added in Hyderabad. "We'll continue to invest selectively in key markets," Goel said.
The firm, part of the salt-to-software Tata group, will also commission three IndiOne hotels by March 2006 and four IndiOne hotels in the following quarter.