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Wed 8 Oct 2008 04:00 AM

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Sobha to launch new hotel brand

Sobha Real Estate vice chairman Ajay Rajendran reveals the company's plans to enter the hospitality market and dicusses what the new high-end hotel brand will offer the Middle East.

Sobha Real Estate vice chairman Ajay Rajendran reveals the company's plans to enter the hospitality market and dicusses what the new high-end hotel brand will offer the Middle East.

What is the background of Sobha Real Estate and what prompted you to move into the hospitality sector?

The company started in 1976-77 in Oman. It began as a small-time interior decorator contractor but within five years, we were able to start working for the palace and for the Sultan there. The quality of work was really extraordinary; I mean the standard of carving was like some of those 16th Century French palaces - it was really detailed.

We are looking at creating a very successful brand.

In 1994-95 we moved to India, where the idea was to get into real estate development. We bought land and we thought we would get the designs done and get someone else to do the contracting. But we were not very happy with the quality of contractors that we had.

So we got into contracting and all the backward integration ourselves. Today in India we have more than 22,000 people working for us. We do architectural design, interior design, structural, MEP design, and landscape design. We also do work like laying roads for our own master-developments.

So all this helps us make sure we are fully in control of the projects that we do and we are able to deliver very high quality products on time to our clients. In India in terms of volume we are among the largest real estate developer in the south of India.

We have been partners with people in Dubai since 1991, but it is only recently, around four to five years ago that we have taken to building the business. Then we got into real estate development. We have various projects in the pipeline, most of them in construction.

There are five of them which are being launched at the moment, three in Business Bay (commercial), one in Jebel Ali Downtown (commercial) and one in Jumeirah Village (residential), and there are various other things in the pipeline. These are all real estate developments, commercial and residential. Four out of the five are under construction.

We know how to buy land, we know how to build property from the interiors very well and we feel that we have the capability of putting together a brand for the hotel business. This was the idea behind getting into the hotel business, building a chain that would run under the Sobha brand.

What is in your development pipeline?

At this point in time we have close to 2000 rooms planned across Dubai, Muscat in Oman, Zanzibar, Cochin in India, Bangalore - with two properties - Pune, and Trichur. These are developments that we own, which we have allocated for the hotel business. At least half of these are in advanced design stage and we expect to start construction within the next three to four months in at least 50% of these.

What sort of properties are you planning to develop?

We are targeting the four-star and five-star segment only.

Based on this they would be either business hotels or city centre hotels for tourism or resorts. Zanzibar is more resort oriented and also Muscat, which is on the water.

It is a big move from operating a real estate company to operating hotels - how are you going to succeed?

Most real estate developers develop the property then rent it out to chains. We felt we had the capability to look at the service part of the business also. We've already put together a couple of very senior people who will form part of the core of the hotel management company.

We have started planning now even though it will be two to two and a half years down the line. If the design is OK, you can get your marketing in place and your manpower and training manpower. It is not a short-term game - we are in it for the long-term. We are looking at creating a very successful brand and are confident that we will be able to create a very successful brand.

For what reasons did you choose the current locations?

Oman, Dubai and India were because we operate there, we know the rules and we know the people. Zanzibar was an opportunity we have been able to acquire. We have two very attractive properties there, but at this point in time we are developing only one.

In India we have land-holdings in nine cities, so we just picked up a few of them that seemed appropriate for hotels. We will be adding locations in India as we move into each city and establish our business, we will find the right plot and put up a hotel there as well.

Fast facts

First properties:Dubai and Bangalore.

Timeline:break ground January 2009, first properties expected more than two years later.

Pipeline:eight properties in Middle East, Africa and India.

Strategy:build initial pipeline of properties, then perhaps move into hotel management.

Other plans:set up hospitality training academy in India.

CSR:Sobha Real Estate has several projects including old aged homes, widow homes and schools in India.


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