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« Fresh Careers in Real Estate | Home | Kochi sees spurt in real estate activity »

Serviced Apartments Gaining Popularity

More business – more travel – more hotels. And now, more serviced apartments. With business demanding more travel, serviced apartments come closest to a home away from home.

Serviced apartments cater to the extended-stay market, which means a minimum stay of 15 days. These comprise 8 to 12% of the hospitality business in India, and are set for big time with experienced players like Ascott from Singapore and US based Oakwood Worldwide stepping in.

The extended-stay market in India is serviced by the Taj Group of Hotels, Marriott International and Hyatt presently, along with some real estate developers like the Raheja Residency in Mumbai and the Delhi Business House with 4 properties in Delhi. Industry sources have estimated a current demand of 22, 77,600 room nights annually.

Oakwood Worldwide, the world’s largest rental housing solutions company, operating in North and South America, the United Kingdom, Europe and Asia will be setting up shop in India shortly in Bangalore, Hyderabad and New Delhi. Ascott meanwhile will build 1000 apartments by 2010 at an expense of Rs.1, 000 crore. The Ascott Group is the world’s largest serviced residence operator outside the US with 18,000 functioning serviced residence units in Asia Pacific, Europe and the Gulf Region.

These short-stay homes are doing brisk business in spite of offering half the hotel rates. Marriott’s Lakeside Chalet overlooking the scenic Powai Lake in Mumbai is popular amongst expatriates on a short stint in India, and domestic corporate travellers too. Occupancy hovers around 90%, in spite of rates having escalated by 30% since 2005.

The Taj Wellington Mews in South Mumbai could set you back by Rs.5.75 lakh for a 2-bedroom apartment leased for a month, while a serviced apartment in Delhi would cost Rs.60, 000 for the same period.

Serviced apartments thrives on demand from the IT, ITes and BPO industries, and all IT hubs and IT centric cities will witness a phenomenal growth in the next couple of years in this segment of real estate.

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