Aman Resorts: A Tough Sell for DLF

Amangiri – Utah, USA

Two weeks ago, there was some news that China-based conglomerate, HNA, had sent in a bid to buy Aman Resorts, a collection of unique luxury resorts in some of the most sought-after destinations in the world. Aman Resorts, which is owned by DLF, an Indian development company, represents the company’s biggest non-core asset.

To bring you up to date, DLF currently has a net debt of more than $4 billion and is looking to raise as much as $650 million to shore up its debt levels and put some cash on its balance sheet. In 2007, the company had bought a 97% stake in Aman Resorts based on a $400 million valuation, while the remaining three percent was held by Aman founder Adrian Zecha. Considering that the purchase was made right before the global financial crisis, DLF has been desperately looking for a buyer for this property.

HNA Hotels and Resorts is part of China-based HNA Group. With assets exceeding $30 billion, the group has its tentacles in airlines, hotels, airport management, real estate, retail, financial services, logistics, and tourism. Annual revenues are around $10 billion (as of Dec. 2011). The hospitality segment of the group consists of a total of 43 luxury hotels and resorts in China and Europe (40 in China and three hotel assets in Brussels and Belgium).

Reports are out that HNA is out of the bidding process for Aman Resorts, since it never received any feedback on its undisclosed bid. Reuters reports that “bids came in the $300-$315 million range”, which means that the market feels these luxury assets are overpriced. This is a huge setback for DLF considering the list of companies interested in Aman Resorts. They include:

  • Malaysian sovereign wealth fund, Khazanah
  • LVMH, and
  • Kingdom Holdings, which owns a 47.5% stake in the Four Seasons chain of luxury hotels

It’s looking bleak for DLF, but maybe some other group will step up to take over Aman.

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Adding Value – Train Rides and iPads

Train rides are very enjoyable for me because I get the chance to remain terrestrial. I’m not driving myself, nor am I on a bus going pretty much the same way I would have driven myself. Since train tracks do not always follow “car routes”, I get to take a more scenic view, stumbling upon sights that don’t come into my view on a regular basis. I also like to take trains at times they are sparsely occupied, so that I have a lot of space to myself. The combination of those components makes the ride an enjoyable one. However the real luxury experience can be summed up in one picture from my last trip on Amtrak: Continue reading

Real Estate is an Entrepreneurial Venture

I wrote another blog post about the real estate course at the Mason School of Business. It starts out like this:

As with the last 100 meters the 400-meter dash, the conclusion of the 2011 fall semester marks the beginning of the end of my time at Mason. As I race towards the finish line in May 2012, good thoughts come to mind, especially of the Real Estate CAM taught by Prof. Ben Bolger. The course exposed me to the nuances of an industry where success is not necessarily about reality, but your ability to create a perception, in which people want to participate. In the CAM, we covered cases analyzing the future of real estate at academic institutions using Harvard and W&M as examples; urban development in Brazil; and the redevelopment of the World Trade Center.

Click here to see the rest of it…

A Room With a View of Your Porsche, Ferrari, Benz, …

30-day Challenge – Day 29

In the second half of this past semester at business school, I took an immersion course in real estate – the best course I have ever taken. The course not only exposed me to the business of real estate, but also introduced me to the nuances of an industry where success is not necessarily about reality, but your ability to create a perception, in which people want to participate.

Real estate can give you a means to exercise your networking, negotiation and selling skills. At the same time, real estate allows you to be very creative in realizing your visions of developing mixed use, multi-family apartments, commercial, or industrial structures. You can literally do anything and the next lines will show that. Continue reading