The company bought the property built on 1.5-acre plot for Rs32 crore from Sri Tripurasundari Hotels Limited pursuant to share purchase agreement signed on 20, December 12, 2004.

According to chairman G V Krishna Reddy, after being refurbished the hotel will start functioning in early 2006. The additional investment to make the property into a functional 200-room star hotel will be around Rs80 crore.

"We are yet to decide on the positioning of the hotel." As another five-star hotel belonging to Taj group, Taj Connemara, is located across the road, Reddy says the company will be conducting a market and customer study before deciding on its positioning.

"There can be several five star hotels in a city. But each one has to carve out its own niche," adds Ajoy K Misra, senior vice president, sales and marketing, The Indian Hotels Company Limited, a Tata group company. Indian Hotels has partnered with the GVK group to promote the Taj GVK Hotels. According to him the proposed hotel will not cannibalise into Taj Connemara''s market.

Coincidentally, it was on the same date four years ago that the two had signed their joint venture deal.

The Chennai property is the second one in recent times to be acquired by Taj GVK Hotels. Last year, the company acquired a 152-room five-star hotel in Chandigarh and the planned investment there is around Rs70 crore. "The hotel will start functioning early next year," says Reddy.

Other than the Chennai and Chandigarh properties, Taj GVK Hotels runs three five-star hotels in Hyderabad — the Taj Krishna, Taj Residency and Taj Banjara — with a 525- room combined capacity.

According to Reddy, the company is looking at Mumbai, Delhi and Bangalore for setting up hotel operations