Rosetta invests Rs 600 crore towards leisure market push
Rosetta launched its first resort in Sakleshpur in 2021, a 126-key property set within a coffee plantation it owns. "The company is now constructing 100 self-sustained, 3 & 4-bedroom holiday homes within the same resort, which will be sold to customers, who will then have the option to lease them back to Rosetta, thereby expanding inventory without incurring additional capex. In South Goa, Rosetta owns a 75-key resort in Varca, which has been operational for a year. This property is being expanded by a further 68 1-bedroom suites at an outlay of Rs 100 crore, and is expected to be operational two years from now. On completion, there will be 143 keys here," Rosetta CMD Errol Fernandes told TNIE.
Additionally, Rosetta, part of realty major Ferns Estates, is constructing a 130-key resort at its 10-acre Ferns Forest View gated community premises in Kalyapura, Chikkaballapur, which is slated to be ready in 2.5 years. The outlay for this project is Rs 160 crore, funded by a debt of Rs 75 crore from Bajaj Housing Finance Limited.
So far, Rosetta has invested Rs 200 crore in Sakleshpur and Rs 100 crore in Goa, with another Rs 300 crore earmarked for expansion over the next four years. Of the Rs 600 crore outlay, Rs 450 crore will be funded through internal accruals, while the remaining Rs 150 crore has been raised via debt from Bajaj Housing Finance.
'Rosetta is also expanding through an asset-light model, wherein it's taking properties on lease-cum-revenue share basis, instead of the traditional operations and management model. We invest in working capital on these leased properties towards refurbishment, manpower, sales, and marketing, and pre-opex expenditure. A typical lease term for this is 20-50 years, and we pay a rental to the owner,' Rosetta JMD and CEO Jai Sreedhar explained. Accordingly, the company is eyeing resorts in Rajasthan, which have been acquired by an international private equity firm, and is under negotiation. The investment in these properties will be generated from internal accruals.
The company is also negotiating the lease of greenfield properties in Yercaud, consisting of 70 luxury suites, and another luxury 100-key resort in Mamallapuram, under the revenue-share model. Notably, the Rs 600-crore investment plan excludes leased properties, focusing solely on owned assets.
Today, Rosetta operates under two brands. 'Rosetta' for luxury properties, with room rates at around Rs 25,000 per night; and lifestyle-oriented 'Elements by Rosetta', offering stays at Rs 12,000-14,000 per night. "We have reverse-engineered the guest experience, over a 2-3-night stay, on all critical touchpoints, like arrival, sleep, shower, and culinary experiences,' Sreedhar said.
In FY2024-25, Rosetta clocked Rs 75 crore in turnover, between Goa and Sakleshpur, and is eyeing Rs 100 crore this fiscal. 'On a conservative projection, on a turnover of Rs 50 lakh per key p.a., the total turnover of all the properties four years from now will be in the region of Rs 500 crore per year, and a blended 30% GOP between the owned and leased properties," he concluded.
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