Is heritage not the selling point anymore for Rajasthan? It seems so as heritage properties are not fetching as sky rocketing prices as before. With buyers and tourists both shying away, Rajasthan will have to invent, initiate and innovate different avenues to grab eyeballs and business, finds out Rajasthan Post
Devigarh, a sprawling and famous property near Udaipur, sold at an astonishingly low amount recently, sending jitters amongst heritage property owners.
Rajasthan’s famous boutique hotel, Devigarh was made famous by Indian tycoon Arun Nayar and British actor Elizabeth Hurley, when he proposed to her by its poolside in 2006. Hurley has talked about Devigarh quite often and said she always preferred to stay in this property when in Rajasthan.
Hurley is not the only one, who shares their love for Devigarh. The celebrity line up for the exclusive abode include Amitabh Bachchan, Saif Ali Khan and Ambani brothers.
But this exclusive hotel in Delwara, Rajsamand district, said to be worth around Rs 250-Rs 300 crore, has recently been sold for an insignificant Rs 14.98 crore, making heritage property owners worry about its shrinking markets.
The Xander group, a leading investment firm that specializes in emerging markets and which owned 66% shareholding in Boutique Hotels India, which in turn co-owned the Devigarh Palace hotel sold it to former polo player and relative of Jodhpur royals, Nikhilendra Singh for Rs 14.98 crore. The property’s registry amount of Rs 97.37 lakh was paid to the state government. Nikhilendra of the RAAS group of hotels has now renamed it as RAAS Devigarh.
According to sources, the Xander group was expecting to sell this property for at least Rs 250 to Rs 300 crore till about February 2013. The property has been up for sale for the the past two and a half years.
Xander Group, set up by Rothschild family and the owner of Getty Images, had invested nearly Rs 90 crore since 2006 to upgrade the Devigarh.
In 2006, New York Times named it as one of India’s leading luxury hotels and Frommer’s review, a travel guidebook series, while calling it the best hotel in the subcontinent, said: “Devigarh is more than beautiful, it is inspiring.”
The Conde Nast has also classified this 18th Century Fort palace as one of the best and favourite boutique hotels of India.
Lekha Poddar was its first buyer in the early 90s from Raja Sajja Singh. It was the royal residence of Delwara royals until the middle of the 20th Century. Later the raja’s family had divided and no one had been living there for the last 20-30 years.
In 2013, the Bangkok-based luxury brand Lebua Hotels and Resorts,that operates distinctive hotels and resorts, overtook Devigarh and renamed it as Devigarh by Lebua.
The hotel has been aesthetically restored into a stunning property, with an ancient exterior and luxurious interiors and 39 luxury suites. The herb and vegetable garden provides some fresh ingredients to the hotel kitchen. A four-night stay will cost anything between Rs 96000 to Rs 1,16000.
But heritage property experts say Xander agreed to take a huge undercut as heritage properties are literally not moving in the market.
Randhir Singh Mandawa, owner of Hotel Castle Mandawa, a heritage and highly popular resort and also general secretary of Indian Heritage Hotels Association(IHHA) opined: “There is no liquidity in the market. Everyone at the moment wants to hold onto whatever money they have. You may have a great property, but if you find no buyers for it, then it is of no use. It then becomes a baggage.”
About Devigarh having been underpriced considering its heritage value and its celebrity following, Mandawa said: “One can never evaluate the cost of a heritage property. They are all standalone properties and have their own uniqueness. This property did not have running water and had to arrange tankers for water supply. A huge negative for a boutique hotel. Also may be Lebua, who had overtaken it, could not manage it as well as its owners, Lekha and Anupam Poddar. They had 34% stake in the company. Lekha had turned the palace into a stunning hotel with exemplary services. Running and maintaining a heritage property needs a different kind of management from the usual business and luxury hotels. If it is not getting tourists as expected, it turns into a white elephant.”
According to Mandawa, the new owner Nikhilendra Singh is doing well with his RAAS projects in Jodhpur and another one is opening in Dharamsala, Himachal Pradesh. “May be he is into expansion mode and wanted to be associated with Devigarh for its brand value.”
Nikhilendra, however , could not be contacted.
Surendra Rajpurohit, a real estate expert said : “Although one cannot gauge the real worth of heritage but the general rules for both selling and buying of heritage properties depend on five important criterion. First and foremost its heritage value, secondly its location. If it easily accessible then, it value goes up several notches. Thirdly, the maintenance, fourthly the owners and disputes over ownership and lastly the celebrity endorsement.”
But admitted that this undercutting of prices may affect the selling of other heritage properties as well. “Overall, real estate is seeing slump and not every heritage property makes financial sense. If one is not on tourist circuit, business becomes difficult.”
On similar lines, the state government’s plan to auction off nazool properties — or those taken over from their former princely owners after 1947 — to private buyers on a lease basis, has not taken off. Mandawa said the policy were not user friendly, because of lack of legal clarity, tedious paperwork verification. Hence it found no takers.
Chief Minister Vasundhara Raje’s attempt to push the Rajasthan Heritage Conservation Bill, 2015 too failed. The bill gives power to a proposed heritage authority and a heritage council constituted under it, to take over any private property that has heritage value to maintain it properly. It was met with resistance from royalty.
What the owners say that the bill makes no distinction between the properties that are crumbling and those that are being looked after well. The strong opposition from the royals has made the government to retract for now.