Prestige Estates pays Rs 504 crore for half of Advent Hotels

Prestige's move is notable because it targets convention infrastructure, not just hotel rooms. Convention centers generate revenue from events, exhibitions, and corporate gatherings, which are less seasonal than leisure travel. The company already owns a convention center in Bangalore, and the Advent portfolio could give it a national footprint.

The deal also comes at a time when Indian hotel occupancy rates are near decade highs. According to data from hospitality consulting firm HVS Anarock, average occupancy across major cities touched 72% in the first half of 2024, driven by domestic business travel and weddings. Room rates have risen roughly 15% year-on-year. That tailwind makes hospitality assets more attractive for developers sitting on cash.

Prestige's stock closed 1.2% higher on the National Stock Exchange on the day of the announcement, outperforming the Nifty Realty index, which fell 0.3%. The muted reaction suggests investors are still weighing the deal's impact on leverage and return on equity. Prestige's net debt-to-equity ratio stood at 0.8x as of March 2024, leaving room for additional borrowing.

The company plans to operate the acquired assets under its existing hospitality brand, Prestige Hotels & Resorts. It did not specify whether it will rebrand the Advent properties or retain their current names.

For traders tracking the real estate sector, the deal offers a concrete data point on how developers value hospitality assets. The 1.5x book value multiple is in line with recent transactions in the space. In 2023, Brookfield Asset Management bought a portfolio of Indian hotels at roughly 1.4x book value. That benchmark gives context for future deals.

Prestige Estates has scheduled its next quarterly earnings release for late October. Investors will watch for updates on the integration timeline and any changes to the company's debt profile.