Serviced apartments are fast becoming a hot real estate avenue with as much as 12-19% annual yield on investments, against 10-12% returns in the commercial segment.

According to experts, developers, primarily from the hospitality sector, are targeting NRIs, expats and now even domestic investors in the serviced apartment space. It offers both capital value appreciation as well as rental returns to investors.

Hotel Leela, Grand Hyatt and Marriott International are among the major

hotel leela serviced apartments gurgaon

hospitality chains with serviced apartments.

Ascott, one of the largest serviced residence owner-operator, has a tie up with Ireo to offer such apartments in Gurgaon and is expanding in rest of the country as well.

There are many firms based out of Gurgaon, which offer only serviced apartments of various developers including DLF, Unitech and others, to corporates, tourists for short as well as long term stay.

Ashutosh Limaye, Head – Research and REIS, Jones Lang LaSalle India says, “Of late, domestic investors along with NRIs are more keen to invest in serviced apartments as realty segment – residential and commercial –are not offering very good returns. It is pretty much possible that the returns are as high as 12-19% in serviced apartments space.”

He said the capital appreciation in residential segment is around 5-7% while it is less than 5% in commercial space. In yields, residential offers minimal 2.5-2.75% returns to an investor, while it stands at over 12% in commercial space.

Serviced apartments are fully furnished studio or 1, 2 & 3 BHK apartments with a kitchen managed by a service operator. The construction cost for such apartments is much higher compared to other residential apartments, and is generally at par with any five star hotel in terms of amenities and other facilities such as meeting rooms, housekeeping, swimming pool, gym. Many multinational firms also have serviced apartments as their guest houses.

Even Samir Jasuja, Founder and CEO, PropEquity agreed that serviced apartments are the next best promising option for investors.

“The capital price appreciation and the rental yield offered by a serviced apartment is typically higher than commercial and residential property. This segment offers ultra-luxury lifestyle, services and great opportunity for investors who look for both regular income and additional upsides. Currently, this segment is receiving a lot of interest from NRIs and HNIs,” Jasuja says.

Serviced apartments concept is a big hit in the US, Europe and other developed markets and is now fast catching up in India as well. These are ideal for an extended stay by a tourist or for employees who are on a relocation or project assignment, an executive from a leading developer says.

Source : http://www.business-standard.com

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