13th February 2017 - Serviced Apartments and Serviced Offices - Fraternal Twins of the Serviced Property Industry
Serviced Apartments and Serviced offices in Gurgaon are not a new concept. Modelled along the lines of real estate in established markets abroad they are unique components of the real estate market in Gurgaon. Let's understand the core meanings and manifestations of the two.
A serviced apartment as the name suggests is a fully furnished ready to move-in apartment typically with some services provided for like a cook, cleaning person, internet, telephone, cable tv, maintenance and electricity all paid for by the serviced apartment provider. A serviced office is a normally a plug and play solution with workstations, fittings and fixtures, facilities for internet, telephone, café, tea-coffee service, maintenance, electricity paid for, etc. Serviced offices come in more variants as in adjustable features depending on the package on the table and services on offer starting from something as small as just as presence or virtual office with address and basic facilities like mail and dedicated line to a full-fledged corporate presence plug and play solution.
Typically, the mark-up in terms of costing from a client perspective for a serviced apartment visa via a regular furnished apartment is about 25-30% whereas for serviced offices the mark-up visa vi a regular furnished space is almost 2-3 times! This is a case in point for the existence of multiple players in the serviced offices industry location wise ranging from Sohna Road to the Golf Course Road in Gurgaon.
In the serviced apartment business there are few key players in the market those who have a reasonable reputation and have been in the business for a while. They typically target a segment of tenant profile like Japanese and Korean expats and have full-fledged teams looking after client interests pre and post renting.
Acquisition or procurement of spaces both for serviced apartments and serviced offices is not a problem normally, particularly in a down market with a range of supply options available at reasonable rentals. They lease from landlords and further sub-lease to tenant clients. An area of prime concern for players is continuously attracting demand for spaces as also keeping clients within their apartments / centres for as long as possible to keep rent metres ticking. Like in the conventional leasing business, tenant profile is also an area of concern for players.
As the real estate market picks up it will be interesting to see the responses and strategic moves by both serviced apartment and serviced office players as also how this segment of market structure adapts as the market changes. Watch this space for more!!
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