Leela Palaces Hotels & Resorts announced the acquisition of a newly developed, 71-villa ultra-luxury resort in Coorg, Karnataka, coinciding with its 40th anniversary. The property, set on 76 acres, will be rebranded as The Leela Coorg Forest Sanctuary. The acquisition solidifies Leela’s strategy toward nature-immersive, wellness-focused hospitality and is valued at approximately Rs 5,600 Million. The resort is expected to generate stabilized revenue of Rs 1,650M – Rs 1,750M with strong margins.
Leela Enters Immersive Luxury Segment with Coorg Acquisition
Leela Palaces, Hotels and Resorts has entered into binding agreements to acquire a recently developed and operational 71-villa ultra-luxury resort located in Coorg, Karnataka. This strategic move marks the brand’s entry into nature-led, wellness-anchored hospitality and coincides with The Leela’s 40th anniversary. The property is spread across 76 acres of lush landscape near Madikeri, surrounded by coffee and spice plantations, and will be unveiled later this year as The Leela Coorg Forest Sanctuary.
Asset Highlights and Future Vision
The resort is an IGBC Platinum-certified asset, blending contemporary architecture with local craftsmanship. Key features of the existing asset include:
- 71 Operational Villas, with 35% featuring private pools.
- Average Villa Size of approximately c.175 sqm.
- Four F&B Destinations and a 27,000 sq. ft. wellness centre comprising 25 treatment rooms, gym, sauna, and yoga deck.
- A tranquil 7-acre private lake and a private helipad.
Mr. Anuraag Bhatnagar, CEO, stated that this acquisition evolves the brand into wellness-focused hospitality and strengthens its presence in South India.
Investment Value and Expansion Potential
The acquisition represents a rare off-market opportunity to secure 100% ownership of the operating resort. The purchase consideration is approximately c.Rs 5,600M, which includes 54 acres of land available for future expansion.
The immediate value creation strategy includes a Phase I expansion involving the addition of 19 villas, increasing the total inventory to 90 villas. Post-stabilization, the resort is projected to generate revenue between Rs 1,650M – Rs 1,750M, achieving a margin profile similar to the existing Leela portfolio, exceeding 50%+.
Robust Market Fundamentals in Coorg
Coorg is identified as a key drive-to leisure destination, being within a 3-5 hour drive from Bengaluru, Mangaluru, and Mysuru. The market demonstrates strong fundamentals:
- Rising Affluence: Bengaluru, the key feeder market, saw a 120% increase in its millionaire population since 2013.
- Improved Connectivity: Passenger traffic at feeder airports has grown at a CAGR of c.8% since 2016.
- Robust Demand: Tourist arrivals in Coorg have witnessed 2x growth post-Covid.
Portfolio Growth Trajectory
With the addition of Coorg, The Leela portfolio now stands at 15 properties globally, totaling over 4,160 keys across 13 cities (7 owned, 7 managed, and 1 franchised). The brand maintains an ambitious pipeline, targeting 24 properties within the next three years in high-growth markets.
Source: BSE
