ENHANCE YOUR CAPABILITIES
SPECTRA FOAM MASTER
ENHANCE YOUR CAPABILITIES
“ We are an investor . We hate competition . That goes to our early , if not first , preference . In fact , we prefer to be the only ones [ in a market ]. We don ’ t need association , and we are comfortable with that .”
– Gary Garrabrant , CEO , Equity International
The global play At EI , Garrabrant closed Fund V last September and has committed about half of the US $ 650 million to invest on real estate companies or operating platforms in emerging markets .
“ We are sensitive to the metrics more than the concept , so the economics will drive our activity ,” Garrabrant says .
Garrabrant says EI is going to make Samhi a very big company with as many as 100 hotels in its portfolio in the 2.5- to 3.5-star range . “ We see an amazing opportunity to build a national platform where we will be brand-agnostic and yet be an institutional owner of hotels ,” he notes .
Garrabrant sees Samhi as an acquisition vehicle in India , as well . “ There are busted deals across India to give ( Samhi principals ) Ashish Jakhanwala and Manav Thadani another way to grow ,” he says . “ It is rare to find a scenario where there is a marriage between growth and value . India has spectacular growth potential but with unexpected changes ( to the economy ) there is no competition ( to acquire ), as the big private-equity players are in full retreat .”
Garrabrant says Samhi could become a company of such sufficient scale it could access public equity or will attract an institutional buyer . “ There will be a natural conclusion to the growth capital in eight to 10 years ,” he adds .
But for now , exit is not the focus . “ The hospitality opportunity hasn ’ t been obvious to us in the past five to seven years in part because there was too much capital , and we are not traders ,” Garrabrant says . “ We are an investor . We hate competition . That goes to our early , if not first , preference . In fact , we prefer to be the only ones [ in a market ]. We don ’ t need association , and we are comfortable with that .”
EI ’ s participation in the Samhi fund is its first foray into the hotel space since Fund I in 1998 . In the late 1990s with NH Hoteles , EI created a joint venture to capitalize on the shortage of quality business-class hotels in Latin America . The JV created a portfolio of hotels in five countries before EI converted its ownership interest to public shares in NH Hoteles in 2006 . It completed the sale of its interest in 2007 .
Now , EI is coming back to the hotel space in Latin America . In August , the firm invested US $ 75 million in Terranum Development , a private corporate real estate company in Bogotá , Colombia . Among Terranum ’ s projects is Connecta , which will have two hotels , one an Aloft .
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INTERGASTRA Stuttgart from 11 th to 15 th February 2012 | Hall 5 | Stand A 50
GULFOOD Dubai from 19 th to 22 nd February 2012 | Zabeel Hall | Stand Z-C2
www . hotelsmag . com January / February 2012 HOTELS 15