Shelters

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There has been a sharp surge in business travel over the last few years with India becoming more integrated with the global economy. Executives from India and abroad frequently travel to business hubs and spend weeks and months working from different locations.

Staying at hotels for such long periods is costly. Serviced apartments offer an alternative. For house owners, they serve as an alternative to giving their premises on rent.

TEMPORARY HOMES

A serviced apartment is a furnished accommodation with a small kitchen and rooms generally more spacious than in a hotel. It also has modern communication facilities such as telephone, fax and an Internet connection. Some also offer conference rooms, besides housekeeping staff and a concierge service.

The main client base is the corporate sector. The demand is primarily driven by executives of multinational companies (MNCs) and expatriates who come to India on deputation for periods ranging from weeks to months. There is a huge demand for high-end serviced apartments

Like any property investment, location is important in this case too. Proximity to business centres and good connectivity will lead to higher rental income and capital appreciation. As the quality of service also decides the rental yield, it is important that the facility is managed by a reputed service provider.
If you want to invest in real estate, it may be a good idea to diversify your exposure to serviced apartments for a higher annuity income than what residential apartments can give. Don't forget to undertake a due diligence of the project before sealing the deal.

It's the people that make a house a home. We feel privileged helping our clients find theirs.

Buy real estate in areas where the path exists and buy more real estate where there is no path, but you can create your own.” ~David Waronker American real estate investor

Experts and developers are predicting a robust growth momentum for Pune's realty market in 2016. Listing achievements of Pune's realty market in the year gone by, Surajit Chanda, regional head (Pune), Sobha Ltd, says, "Pune's economy has witnessed a significant boost due to various MNCs consolidating their presence in the city, allowing the residential real estate market to grow. With increasing disposable incomes and influx of foreign labels in the market, there is always a demand for luxury housing here."

"Announcement of the Pune Metropolitan Regional Development Authority (PMRDA) had propelled the realty growth. Inclusion of Pune in the centre's Smart City project is expected to make a prominent impact in the coming years. The latest amendment introduced to increase the floor space index (FSI) in the Development Control (DC) rules, would prove beneficial in the long run for development of the old city. Housing for all is expected to boost the buyer sentiment and purchasing activity in future," he adds.

A prime office space purchased for self-use is arguably the soundest business decision any firm can make. Apart from the fact that such a property is extremely convenient to commute to, a commercial office in a prime location increases a firm's visibility and reputation. It is a visible demonstration of your firm's commercial worth to your clients, partners and other businesses. Also, the capital appreciation of a prime office property reflects very favourably on a company's balance sheet.

Prime locations

Both in terms of business potential and returns on investment, the highest value lies in prime office spaces. Invariably, the 'prime' value in commercial real estate is vested in the location, which leads to the question how does one define a 'prime location'?

The factors that make a location prime are a function of its overall accessibility within the city, the quality of infrastructure that supports it, the saturation of high-profile companies represented there and the overall quality of buildings in the submarket. To determine if a location is prime, investors need to examine the following parameters: Can the office property be reached easily via all modes of transport?

Is the office property close to major commercial hubs? What is the demand-supply gap?

What is the tenant profile of the location? Which industries prefer it and what are their growth potential?

Does the location have good social infrastructure such as restaurants, malls, shopping centres etc.?

Is the location well-planned (e.g.Bandra Kurla Complex in Mumbai or has it grown with increased requirements) (e.g. Nariman Point, which was reclaimed from the sea?)

Are there a lot of commercial space transactions happening in this location?

Do the buildings have a modern look and feel (e.g. glass façades)?

If the answers to most of these questions are positive, then the location is a prime one.

Prime properties

The next aspect to determine is whether the project and property meet 'prime' criteria, as well. There are over 30 important technical specifications that a commercial property must meet, and this needs to be verified by an expert. If the project is under construction, the buyer or investor must be fully updated on the construction risks, the developer's track record, etc. The project and property must also be assessed for:

- Repositioning potential

- Refinancing potential

- Refurbishment potential

Finally, prime locations and prime commercial properties in them naturally come with prime prices. Since returns on investment are important, one must determine whether the location will also offer good capital appreciation.

Regardless of whether the purpose of buying a commercial property is self-use or investment, using the services of a reputed real estate consultant is a key factor for success. Expert, research-driven advice can ensure that one is not buying into a property or location which has or will have major drawbacks high vacancies and result in low returns on investment.

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Follow these formalities to ensure a smooth sailing of your tenancy.