Delhi, India (PressExposure) August 25, 2009 -- With the C'wealth Games round the corner, major developers and hotel chains are now eyeing the keys to serviced apartments, especially in Tier I and Tier II cities, says Vandana Ramnani
Anil Gupta arrived in Delhi for his IT training last year and was put up by his company in a serviced apartment, for which his office coughed up Rs 90 lakh a month. It's now time for him to leave the city but he's made up his mind to take up a house in the same complex if he were to be transferred. Well, this one surely is a case of `serviced conversion'.
A serviced apartment is a home away from home with the frills of a luxury hotel at a fraction of the cost. It offers personalised services catering to the occupant's requirements, especially his day-today needs. Most important, it lacks the cold perfection of a hotel and enables one to relocate with just a suitcase.
It's no wonder then that several developers and hotel chains are seriously looking at this segment to cover the huge shortage of hotel rooms and apartments for business travellers, expatriates, families and tourists, especially so with the Commonwealth Games slated for 2010. Occupancy levels are usually around 90 per cent, suggesting that there is tremendous latent demand in the market.
Raheja Developers Pvt [http://www.zameen-zaidad.com/] Ltd is planning to come up with 70-80 units in Sector 31 and 100 units in Sector 78 in Gurgaon. They also have plans for their Dharuhera project. The size of the apartments will vary between 400 and 600 sq ft. Assotech Limited, already with 272 keys serviced apartments named Cabana in Indirapuram, Ghaziabad, plans to introduce 110 keys within its housing project in Bhubaneshwar. Parsvnath, too, is in the process of executing its first serviced apartment complex in Bhiwadi.
Sarovar Hotels & Resorts has signed up for a three-star apartment hotel named Sarovar Portico in Vaishali in agreement with Mahagun Hotels Pvt Ltd. It will have 100-110 keys. DLF is readying its 28 keys facility in Aman Hotel Resorts, Delhi.
IFCI Infrastructure Development Limited (IIDL) is constructing 100-170 keys green serviced apartment facility on a one-acre plot in Mayur Vihar, a stone's throw away from the Games Village. "We're optimistic that the nine-floor structure with three basement parkings will be ready by March 31. As far as operation and management is concerned, we're in the process of finalising the collaboration with a foreign partner," reveals Shivendra Tomar, CEO, IIDL.
According to Sanjay Dutt, CEO - Business, Jones Lang LaSalle Meghraj, serviced apartments are still an emerging segment, the potential growth of which was somewhat stunted by the global financial meltdown and concurrent slowdown in the domestic and global economies. "We would peg the sector at between 3-5 per cent of the overall hospitality segment in India. There has been a marginal increase of about 7 per cent in tie-ups between corporates and serviced apartment players. However, the potential for future growth is considerable in the long term. The potential for serviced apartments lies in the future, when improving economic dynamics will once again warrant longer periods of business travel," he says.
Serviced apartments can translate into 20-40 per cent savings on hospitality costs, especially with corporate discounts. Given the latent demand, most hotels too are branching out into the serviced apartments category [http://www.zameen-zaidad.com/]. "They cater to the needs of the business travellers, people who've been transferred, multinational companies, diplomatic missions and the outsourcing sector," points out Shweta Jain, head (residential) at Cushman and Wakefield, a property advisory firm.
Currently, the market offers a wide range of serviced apartments varying in facilities, space and ambience to suit the needs of the clients. The most recognised format is the stand-alone development (built as apartment complexes for purposes of being leased as servicedapartments). Another popular format is the mixed-use development, which incorporates serviced apartments in the larger commercial development including office and/or retail spaces. The concept of `Hotel-serviced-apartments' (apartments which are a part of a larger hotel development) is also on the rise.
Location is the prime factor in determining the rental values of serviced apartments. Rents also vary depending upon quality of construction, furnishing / interiors fit outs and http://www.zameen-zaidad.com/">services provided in the apartment. Typically, rental values range between Rs 35,000 to Rs 75,000 per month for budget apartments. Mid-segment apartments range between Rs 75,000 to Rs 1,25,000 per month and Rs 1,25,000 to Rs 5,40,000 per month for luxury serviced apartments.
"Rentals are a direct function of the facilities that are on offer. For a five- star serviced apartment facility the benchmark is the hotel tariff and the real estate aspect. For a long-term space requirement for a period of over six months, rentals are decided on the basis of rentals in that location with a 20-30 per cent premium due to the facilities on offer, says Jain."
Courtesy:- HT dt:- 15-08-09