With a growing working population and influx of professionals from other countries, today the demand for serviced apartments/ home has been witnessing a huge momentum across many tier-1 cities. This has attracted many developers and facility management services firm to foray into this segment of the realty market.
A serviced apartment is a fully-furnished home that comprises of a small kitchenette, a room with all the modern facilities like TV, internet, Fridge, fax, telephone, and others. These apartments are more spacious than a hotel room and an individual can also enjoy hi-end facilities like housekeeping staff and concierge service.
The trend of the serviced apartment was first initiated in 2003-04, in Mumbai which later on extended its arm to Bangalore, Delhi-NCR, Pune, Chennai, Hyderabad, etc. The demand for such homes was mostly amongst the corporates and business expatriates who mostly travel from one place to another that lasts for a few weeks or months too.
According to real estate experts, with global business expansion, today many offshore working professionals are coming to India to complete an assignment. Since their stay period is long, so it’s better to rent a serviced apartment, rather a hotel room. It is not only cost-effective but at the same time maintains privacy too.
However, the fast pace growth and rising popularity of serviced apartments, today many tier-2 cities are also entering into this segment. Also, at some places, the developers or the hospitality firms are converting a complete building into serviced apartment blocks.
To reduce the operation and other additional costs, most of the top serviced apartment brands collaborate with mainstream hotel chains or international brands. It helps developers in providing world-class facilities to the guests and corporates with a global taste.
For example, there are several serviced apartments running in Mumbai, Delhi, and Bengaluru that are being run by leading hospitality firms like Hotel Leela, Marriott International, Hilton, etc.
Today, many leading hotel chains already have their strong base in this market segment and seeing the rental yields, even the mid-size developers are also foraying into this market especially to cater the ultra-rich who are looking to rent a home in different locations. The serviced apartment rentals vary from 9-14% per annum and because of this, more and more developers are investing in such properties. For example, the rental of a normal flat is Rs 10,000 on the other hand for a serviced apartment it goes up to 30,000 per month.
Moreover, with an increasing focus on the creation of business hubs, IT parks, and MNCs, the rentals are going to see much appreciation in the coming years.