Assotech Realty, which recently launched its Serviced residences project christened ‘Sandal Suites’ in Shirdi, is set to expand its chain to major destinations across India. The Sandal Suites serviced residences will be coming up in three segments – business, leisure and pilgrimage, Neeraj Gulati, Managing Director, Assotech Realty told T3. “Under business segment, so far the targeted cities are Bengaluru, Mumbai, Hyderabad, Gurgaon, Noida (under construction), Lucknow and Indore. The religious segment includes Tirupati Balaji, Shirdi (Maharashtra) and Katra (Jammu). Goa and Kochi fall under the leisure segment,” he revealed.
According to Gulati, service apartments in India has been the new initiative undertaken by many hoteliers and developers catering to the foreign expatriates and business travellers, a segment that has grown by leaps and bounds in the last decade. “Proliferation in sectors such as medical tourism, BPO, ITES, and financial institutions are pulling the crowd for service apartments in India. The sector is actually at the cusp of exponential growth which has been identified recently with more and more developers foraying into this uncharted segment, and growing at a pace of 15 per cent per annum. The size of it is diminutive in comparison to the South Asian and Pacific markets where it has been acknowledged, gained popularity, and is at a stage of acceptance,” he said.
He further revealed that the strategic location of these residences assures a 20 – 30 per cent return annually, and is great for investors who desire a recurring return on investment. “The occupancy levels remain at 70-80 per cent, with an ARR of almost 12 per cent throughout the year. And this is expected to hover at around 90 per cent. In addition to the investment, the investors are given a privilege of free stay for a limited period across India along with a club membership with the company and discounts on food & beverages,” he added.
When asked whether the foray of the corporate sector into this industry has dented business, Gulati stated that the serviced residences launched by these companies are for the use of their organisation’s employees. “This will not impact the growth of serviced residences. This business model will gain popularity in the years to come as a large number of NRIs and High Net worth Individuals have started taking an interest in such investment options. Also, people looking to purchase a second home are gradually showing an interest in this sector,” he concluded.
