Is it an office or a hotel? Investors repurpose spaces as sellers hold out

Subscribe to enjoy similar stories. Indian hotel operators have run into high valuations and a lack of quality assets as they seek to expand in a market hungry for luxury travel. They have turned creative to overcome these hurdles by acquiring properties that can be redeveloped or repurposing office buildings into hotels and even incorporating apartments into their projects.

Good assets are few and far between, according to Sanjay Sethi, managing director and chief executive officer at listed hotel ownership company Chalet Hotels Ltd. “On the M&A side, we focus on such assets with development or upside potential of expanding rooms or repositioning them to make them better." Chalet will look to build more rooms in some of its upcoming acquired hotels. Indian Hotels Company Ltd’s Taj, which is building its Bandstand Hotels (erstwhile Sea Rock Hotel), will have a section of about 85 apartments to monetize the property immediately.

Samhi Hotels Ltd plans to convert an existing office building into a hotel in Hyderabad. ITC Hotels Ltd also has an apartment complex at its Colombo, Sri Lanka property. Dusit International signed a property in Bagepalli, Karnataka--under its 'Dusit Princess' brand--with villas, a hotel for senior living, a clubhouse and some retail stores over 80 acres.

It will build hotels and villas in Raipur, too, while its Bhiwadi, Rajasthan property will offer hotel and clubhouse facilities. Hotel deals momentum is expected to persist this year. Real estate consultant JLL projects a total transaction value of $330 million (about ₹2800 crore) in 2025, similar to last year’s.