HYDERABAD: JV Ventures, a Hyderabad-based investment management firm, has announced a significant joint venture with real estate developer Terminus Group to establish a $200 million (approximately ₹1,680 crore) hospitality development platform. The venture, branded as Madison, marks a strategic expansion into India’s burgeoning hospitality sector.
The platform will see an equal investment from both JV Ventures and Terminus Group and is set to focus on the development and management of mid-market branded luxury hotels. The targeted cities for this expansion include Thiruvananthapuram, Visakhapatnam, Tirupati, and Hyderabad. Over the next five years, Madison plans to develop 25 new properties with a total of more than 3,000 hotel keys. The chairman of Terminus Group and Madison commented on the initiative, highlighting the platform’s goal of mitigating operational risks while maintaining the prestige of hotel ownership. “The hospitality sector is evolving, and our approach is to align with international standards, embracing the latest ownership structures and trends,” he stated.
The co-founder of JV Ventures noted that Madison would complement their existing thematic living space portfolio, known as PowerPod. Previous platforms under the PowerPod umbrella, such as PowerEd and PowerRx, which focus on life sciences and education, boast a combined portfolio of $500 million. The new hospitality platform is expected to enhance their overall investment offering. The Indian hospitality industry is experiencing a rapid surge, driven by increased leisure and business travel. This trend was underscored by a notable influx of new investors in 2023, with first-time hotel buyers representing 19% of global hotel investment volumes. Private equity firms, with substantial capital reserves, remain dominant in acquiring hotel assets, focusing on greenfield developments to create world-class hospitality infrastructure.
Terminus Group, which operates across residential, commercial, hospitality, and life sciences sectors, has developed over 5 million sq ft, with an additional 10 million sq ft in progress. Its portfolio includes the development, ownership, and management of over 20 hotels in the US and India. Similarly, JV Ventures has recently secured significant equity commitments for its education and life sciences platforms, including $200 million from Alta Capital and Actis, respectively. The Indian hospitality sector saw robust growth in the first quarter of 2024, marked by an 8.5% increase in average daily rates and an 11.4% rise in revenue per available room (RevPAR). The addition of 90 branded hotels, contributing 9,710 rooms, indicates a positive trend that is expected to continue, bolstered by business travel, meetings, incentives, conferences, exhibitions, weddings, and a surge in leisure travel. This new venture by JV Ventures and Terminus Group is poised to capitalise on these trends, further enhancing India’s position as a leading travel destination.
