EIH Limited sold Darjeeling land property to B.M. Garg

Hospitality major EIH Limited, which runs hotels under the Oberoi and Trident brands, has sold its land and property in Darjeeling to a group of local businessmen led by B.M. Garg.

In its first-quarter results, EIH said it had earned Rs 11 crore from the sale and mentioned it as exceptional item. The sale helped the company to clock an over two-fold growth in profit after tax at Rs 19.86 crore against Rs 6.41 crore a year ago.

"In Darjeeling, what we have sold is primarily land and an old structure," EIH executive vice-chairman S.S. Mukherji said. The Oberoi group held around 5 acres in Darjeeling along with the property. The group had bought the hotel and land in the early 1950s, but it remained idle for over three decades after being damaged by fire. The Oberoi group either had to renovate the property or consider selling it off. Subdued demand in the hospitality sector led to the group choosing the latter option.

"Despite the recent positive aspects designed to stimulate demand, the Indian hotel industry has been facing increased supply of rooms in almost all locations across the country," executive chairman P.R.S. Oberoi told shareholders at the company's annual general meeting today.

B.M. Garg, who owns a multiplex in Darjeeling, said, "No decision has been taken yet. But, the long-term plan is to consider a hospitality project on the land."

Managed properties

P.R.S. Oberoi said the group would focus more on managing properties rather than owning them.

"At the moment, 80 per cent of the properties are owned by us," he said, adding that the ratio could change dramatically in the future.

Meanwhile, the proposed Navi Mumbai hospitality project, which is coming up on the land owned by the Reliance group, a strategic investor in EIH, is stalled on account of environment clearance. "We will start construction once the environmental clearances are in place," EIH managing director and CEO Vikram Oberoi said.

EIH is expanding its presence in the UAE and in Marrakech and Casablanca in Morocco.(TT)