Mumbai–Indian Hotels Company Limited (IHCL), which runs the brand of Taj Hotels Resorts and Palaces, here on Wednesday announced completion of the sale of its Taj Boston hotel to a consortium comprising New England Development, Eastern Real Estate, Rockpoint Group, Lubert-Adler and Highgate for $125 million.
Taj had acquired the hotel in 2006 for $170 million before rebranding the 273-room hotel the Taj Boston. In earlier filings, Taj had said the hotel had operated at a loss in recent years, most recently generating $34.1 million in revenue in fiscal 2015/6 but notching a loss of $7.3 million.
“We are pleased to inform…the divestment of the hotel for an aggregate consideration of $125 million. The net sale proceeds will be utilised largely to retire outstanding debt,” the company said in a Bombay Stock Exchange filing.
“The sale was in line with Taj’s global business strategy. We are excited about our relationship with our new partners, who are all recognised leaders in real estate development and have deep roots and expertise in this market. We will work together to ensure that the hotel will maintain unparalleled guest service standards of Taj while celebrating Boston culture and history,” Rakesh Sarna, MD and CEO of Taj Hotels Resorts and Palaces, said.
“While this partnership will take over the ownership of the 90-year old, 273-key hotel, Taj Hotels Resorts and Palaces will retain its brand presence in Boston through a long-term management services agreement,” the company said in a statement.
As part of the transaction, New England Development, Eastern Real Estate and Highgate will serve as asset managers, working closely with the Taj Hotels Resorts and Palaces team, Rockpoint Group and Lubert Adler, the statement added.
All current bookings for hotel rooms, restaurants and banquets will be honoured, and guests can continue to book the hotel through existing channels, it said.
“We are thrilled to join with Eastern Real Estate, Rockpoint, Lubert-Adler and Highgate in acquiring this legendary hotel property – located in one of the country’s most famous shopping districts,” Stephen R. Karp, Chairman of New England Development, said.
“Taj Boston is an internationally acclaimed hotel due to its rich heritage, superb location and grand architecture,” he added.