Mega realty deal dots Bangalore landscape

MUMBAI: After Mumbai, it’s Bangalore’s turn for big-ticket property deals. Amid highly competitive bidding, Nitesh Estates has won a bid to acquire over three acres of land on the Residency Road in Bangalore to construct a 5-star hotel project for over Rs 500 crore.

Two other property developers — Puravankara and the Brigade group, both from Bangalore — were the other last-round bidders for the plot. Over 18 developers from across India participated in the bidding, sources said. The bids were called by Jesuisit Organisation, which owns the land, a few months ago. Nitesh Shetty, MD of Nitesh Estates, said the project’s total cost, including the price of land and the hotel, is over Rs 500 crore.

“The hospitality sector in Bangalore is at a very critical juncture right now, with demand far exceeding the supply,” he said. As per the agreement with the land owner, Nitesh Estate will develop a 300-room luxury hotel. The construction work is expected to commence in 6 months and the project will be completed in 24 months.


The central business district in Bangalore has only few 5-star hotels such as the Oberoi, the Taj group, Leela Palace and ITC. With India’s booming hospitality industry, the average room rate (ARR) in Bangalore has increased by 50% annually due to a high demand supply mismatch.

The shortage of accommodation has stimulated investments in the hotel industry. ARR has breached $400-level in the city. This is considered as one of the largest ARRs in the world. Says Binifer Jehani of Crisil Research, “There is a huge demand-supply mis-match in Bangalore as their are just five 5 star hotels.

Bangalore continues to top both the occupancy and ARR charts.” While the average rates across the country hovered around Rs 6,500 to Rs 7,000 earlier, they are now available at Rs 14,000-16,000 per day.

In cities like Bangalore, Agra and Jaipur, the room rates have even touched Rs 19,000 per day.