4 May 2008
Service Apartments For Corporate Employees
The Chennai realty market is extremely conservative for developers. While some pockets are experiencing a short term slow down, the demand-supply metrics in Chennai largely remains stable. In the last few months, there had been increasing dilemma among property investors as to whether they should go in for fresh investment or wait for the property prices to come down further. The desire to make fresh investment is generally driven by the moderate fall in certain segments of property prices coupled with the stability in interest rates. The city’s economy remains strong and is creating jobs at a fast pace. Tax benefits and saving house rent allowance are influencing the high-salaried people to invest in real estate business. Tax benefits coupled with easy bank loans is helping them buy a flat. Another factor contributing to the increasing spending in the real estate sector is the large number of working couples. While one’s salary goes for running the home, the other salary is reserved to pay the housing loans.
On rental sides, software engineers and call centre employees are ready to pay any amount of rent. The high income groups are ready to pay more rent. Unable to meet the demand of house owners, tenants who can not afford, are vacating their houses and moving to areas in the outskirts where house rents are comparatively less. But their problems are further compounded as some owners in these areas also increase rentals owing to shortage of houses for rent and the sudden influx of those seeking dwelling on rent. In such critical conditions, they have to postpone their other financial commitments and pay the rent whatever the house owner demands. In certain cases, the corporate companies themselves take an entire building on lease to provide accommodation to their employees coming from other states or from far distanced areas of the state. This is also leading to dearth of houses for rent. Whenever the govt. announces a rise in DA or arrears to its employees, the house owners immediately hike the rents. Whatever be the reasons, the middle class families are feeling the pinch of additional finance burden.
Depending upon the facilities being provided, location and road connectivity, landlords raise the rents. Nowadays, segmenting the whole building into small rooms, the landlords rent out them to corporate employees and thus earn enormous money. This kind of venture is called service apartment. There are vast differences between the commonly prevailing guest house, working women’s hostel, boarding-lodging restaurants to the new assignment service apartment. The renting out happens on corporate basis in service apartment and hence the property owners can earn higher income. Some investors make investment in developing such consortium in fragmented locations and many advertisements are coming in the print media very frequently these days showcasing the service apartments for rentals to corporate employees alone. But the corporate companies are not taking these homes constructed in remote locations since they cannot ensure safety to their employees. So, investors start to seek locations to construct the service apartments in the interior of suburb. They maintain them with focus on sprucing up the interiors. Today the ambience the owners create and the services they offer are the deciding factors of service apartments.
Gone are the days when a bed, cot and a nice table can be passed off as a service apartment. Today some of the service apartments are offering latest facilities such as gym, ample parking space, a lovely garden, play and recreation hall, T.V, phone, service maids, guards and servants. With more global investors eyeing Chennai to setup their base, more service apartments would start to emerge in near future.