MBD Group divested Ludhiana complex for Rs 490 crore to speed hotel projects (interview)

In an exclusive interview with ET Hospitality World on closing day, joint managing director Sonica Malhotra Kandhari said the sale 'will give us huge amount of growth capital to further our expansion into Cat A towns and AAA locations.' MBD sold the MBD Ludhiana Complex — a nearly decade-old Grade-A mixed-use centre of about 0.3 million sq ft with a 96-key Radisson Blu hotel — to Nexus Select Trust, a REIT backed by Blackstone, for Rs 490 crore. Nexus's regulatory filing puts enterprise value at Rs 531 crore with stamp duty, closing costs and capex provisions.

The money is earmarked for projects she says will take three to three-and-a-half years: two adjoining four-acre parcels on Lake Pichola, Udaipur for a luxury hotel, a site near the Ranthambore tiger reserve in final acquisition stages, an eight-acre Whitefield plot in Bengaluru planned as 1.2 million sq ft of offices plus a 250-key hotel and branded residences, and a London branded-residences project. She says Steigenberger management contracts for Mumbai, Gurugram and Hyderabad are at an advanced stage, and MBD Express will grow on long leases, not owned property.

She framed the shift as capital discipline: the group puts its own money only in 'AAA locations', decides asset class by location, and points to the operating record of its existing hotels — number one in STR rankings in their markets with an ADR edge near 50% and top-line growth of about 20% the prior year — as the reason to keep backing premium hospitality.

Rs 490 crore of growth capital released (Rs 531 crore enterprise value); its two running hotels grew top line about 20% the prior year (self-reported in the interview).

The decade-old Ludhiana complex was a stabilized but mature asset; Udaipur and Ranthambore are, per Malhotra Kandhari, India's highest-ADR hotel markets, offering faster growth on new land.

REIT buyers pay institutional pricing for stabilized Grade-A retail assets — Rs 531 crore enterprise value monetized a decade-old development at a premium.

The group is sector-agnostic on capital and concentrates owned money in 'AAA locations', so capital freed in Ludhiana follows location quality rather than asset-class loyalty.

Mid-market expansion (MBD Express) is deliberately kept off balance sheet through long leases, concentrating owned capital on premium projects.

A stabilized, market-leading asset can be worth more to a REIT buyer than to its builder — selling it at institutional pricing converts a decade of patience into capital for higher-growth projects.

As of the May 2025 interview the redeployment was still plans and negotiations: approvals and construction were hoped for within three to three-and-a-half years, the Steigenberger contracts had not been signed, and the Ranthambore acquisition was not concluded. The article reports no results yet from the new projects; the verified outcomes at publication are the completed Rs 490-crore sale and the operating record of the two existing hotels.