Sentiments change with time. And, for the ones that do not change, circumstances induce the much-needed reversal in thought process to suit the occasion. Even Indian real-estate sector is witnessing a similar play of sentimental game.
The global recession formed a picture of a perfect gloom for the real-estate sector that went high-and-dry in terms of its funding and debt requirements. Further, to avail the stimulus measures from the RBI to support the ailing sector, the industry had to undergo a gradual grind in softening prices and shifting its focus on demand-based affordable housing projects.
However, now that the economy has recovered, realty projects catering to deep pockets with high-end housing requirements are back on the radar of developers. Moreover, even the serviced apartments (and, now, branded homes) equipped with the entire range of amenities and services at your door step, have emerged out of this concept.
This reminds me of a mail narration by a friend with regard to his experience of living in a serviced apartment which is, in fact, highly common in other countries:
When I was in Bangkok from Dec 2006 to April 2007, I stayed at one such serviced apartment. And it was not a branded one like the ones that are cropping-up these days.
One real estate company constructed 3 high rise towers (33 floors with 20 flats of 1 BHK/2BHK apartments making a total of 2000 flats in all). Each flat was sold to an individual. The individuals rented out the flats, as the property is in prime location and rents were good. The flats are not only furnished but also serviced (daily services like dish wash, floor mopping, all bed sheets and pillow covers changed every week, free laundry services for the tenants, daily removal of garbage, etc). As tenants, we simply pay rent. The company deducts fee from the rent and pays rest to the owner. I don’t remember exactly but for a 1BHK flat I used to pay USD.1000 per month. The company deducts USD.200 and pays USD.800 to the owner. For 2,000 flats, the company gets 400,000 dollars per month and approximately between 3 to 4 million dollars per annum for maintaining the property. As additional income source, they have swimming pool (paid service to tenants only), small super market, internet cafe, gym (paid service) spa cum massage parlor, a small restaurant, all of which generates additional revenue for them.
I came across a similar concept in a report which said that global hotel firms and domestic realty developers are tying up with each other to market the latest in high living in the country. It is nothing but a home defined by sophisticated furnishings, interiors, landscaping and equipped with impeccable services delivered by global hospitality giants at your door step.
In short, it is akin to outright sale of serviced residences in branded category, to you. A step closer to relishing services of five-star category from international hotel chains such as Ritz Carlton, Four Seasons, Trump, Starwood Group, etc., in association with domestic realty players such as Nitesh Estates and Oberoi Realty amongst others.
The report also points towards a couple of indicators which says that a higher number of high net-worth individuals are choosing luxury properties in cities such as Mumbai and Bangalore where the demand for high-end residences have more than doubled last year. This has led to a sudden rush to build branded residences in luxury property destinations.
My question to our readers being – Is this also a strong economy-driven sentimental uptrend, which could fizzle out with some slowdown?
Realty projects catering to deep pockets with high-end housing requirements are back on the radar of developers. Moreover, even the serviced apartments (and, now, branded homes) equipped with the entire range of amenities and services at your door step, have emerged out of this concept.
The concept of branding is universal and why residence should be an exception.
Indeed, beyond the cost price of building an apartment / or a home, what adds value is the location (which is also a type of brand). Therefore, it makes sense.
While Indian builders try to mimic the US housing development models (with cookie cutter solutions like gym, swimming pool, community party hall etc.) they miss what is required by Indian residents in India. For example, they can build housing communities with 24X7 emergency medical help or a small pharmacy unit. Earthquake-safe construction is rarely given a thought and those who claim do not conform to any standards.
In another 20 years, down towns in most major Indian cities will be like the US down towns – unsafe and shabby This also should be taken into consideration.
Overall, the article is excellent and presents valuable outlook.
Kiran,
Agreed with you.. You’ve mentioned many sensible points that could really matter in the final analysis.
Actually this kind of property is exactly suited to Indian conditions.
As there is a company taking care of maintenance (of everything) for a monthly fee, the flat owner or tenet do not have to worry about anything at all.
Is your water pipe leaking? No problem, call the company. AC not working? Call the company. Payment of bills a head ache? No problem, the company pays water bill, electricity bill, telephone bill, taxes, etc, etc what ever it takes and deduct from your rental incomes.
You just live or rent or lease or sell the flat like a commodity. In fact you dont have to look for tenents for your flat. The company rents out the flat for you and they are responsible for finding tenents also.
Altaf,
Partially agreed with you!
But, over here, when I’m speaking about branded homes, its not just about the basic amenities and homely services that is being discussed. Its a whole lot of package which includes high-end luxuries such as plush interiors, landscape gardening, duplex penthouses, independent elevators, panoramic view, valet parking, concierge services, etc.
It is going beyond the concept of serviced apartments prevalent in foreign countries to premium branded luxuries for the billionaire club individuals :)