Transnational Entrepreneurship by Mathew J. Manimala & Kishinchand Poornima Wasdani & Abhishek Vijaygopal

Author:Mathew J. Manimala & Kishinchand Poornima Wasdani & Abhishek Vijaygopal
Language: eng
Format: epub
ISBN: 9789811062988
Publisher: Springer Singapore

9.8 Other Operators in Indian Serviced Apartments Industry

Several small- to mid-size builders have started positioning Serviced Apartments as a good investment opportunity with attractive returns ranging from 9 to 14% per annum. Predominantly, investment in residential properties is preferred more for capital appreciation than rental income. The annual rental income from a residential property ranges between 3 and 4% per annum as against the capital appreciation of 10–15%.

Rents across the country for corporate clients range from Rs. 2,000 to Rs. 8,000 per room night. Medical tourists who are staying for long durations pay between Rs. 40,000 and Rs. 200,000 per month. The costs go up based on the city and the amenities offered. The high growth rate is putting a downward pressure on average room rates. Meanwhile, shrewd investors have quickly entered the model of buying residential apartments, outfitting them, and letting them out as Serviced Apartments, either by themselves or through professional agencies.

According to GSAIR 2015/16, Bengaluru has experienced the biggest annual growth in average rate, with double-digit increase in all Serviced Apartment types.

The year 2013–14 has witnessed a growth in the number of Serviced Apartments and other budget options emerging across India. There has also been retrofitting of conventional apartment building and conversion to Serviced Apartment usage—especially in Delhi–Gurgaon (Table 9.4).Table 9.4Costs involved in converting a property into a Serviced Apartment

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