According to industry experts, this trend is catching up as companies now seek to offer more amenities to its employees. In fact, corporates have started to set up offices in tier II cities as the cost of operations are lower than in metros.
According to Raminder Grover, chief executive officer (Homebay Residential), Jones Lang LaSalle Meghraj (JLLM), There is immense potential for corporate housing, serviced apartments and guest houses in business districts and suburbs of metros. The demand largely stems from the information technology, ITeS, BPO, KPO segments. There is also demand from expatriates, diplomats, traveling executives and tourism.
The new genre of corporate housing has emerged as a cost-effective alternative for corporates, business travelers, tourists, expatriates and families. Gurgaon, Mumbai and Pune are markets that are actively working on this concept, Grover added. Bangalore-based Nitesh Estates recently executed a 5.73 acre corporate housing project worth Rs 100 crore for ITC in Bangalore. L S Vaidyanathan, executive director, Nitesh Estates, told FE, This has helped us gain confidence in implementing large developments and we are actively looking at increasing this portfolio.
Meanwhile, Shapoorji Pallonji recently acquired 300 acres close to Nippon Denro Ispat plant in Alibaug for residential and commercial development for corporates, according to company sources.
Besides, a Rs 100 crore project for Mahindra & Mahindra in Goregaon near Mumbai comprises a 23-floor building and is being developed by a group company.
The project has close to 144 apartments and is likely to be completed over the next two years. Phase 1 is ready.
Samira Habitat has started developing two corporate housing projects in Panvel and Alibaug. Investment banking firm Edelweiss too is understood to be setting up back-end office and a call centre in Alibaug for which it is currently scouting for builders for developing corporate housing for them.
As for the synergies between corporates and developers, Anand Narayanan, residential director of Knight Frank India Pvt Ltd, said corporates which have large cash surplus find residential assets more attractive than liquid investments.