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R. Ravikumar

Chennai, Aug. 1 The Chennai-based serviced apartments brand Star City plans to enter the Australian market very soon, Mr S. Muruga Barathy, Managing Director, Star City Hotels Pvt Ltd, told Business Line.

“We are primarily targeting the Indian student community in Australia,” says Mr Barathy.

According to him, it has identified a few properties in Sydney. “We are doing the necessary homework so that we can open our first facility by July 2008,” he said.

After that, it plans one facility in every six months. In total, it would have around 200 apartments over a period, which will cater to around 800 students there. In 2005, there were about 14,000 students from India and this year it has crossed 37,000, and “we target just a fraction of that”.

Asked about the funding, he said Star City has been considering various models to fund the proposed project, which includes roping in resident Indians who want to own an apartment in their names in Sydney.

The Indian investor has to pay just 20 per cent of the cost and the rest will be borrowed from local banks there. Star City will pay back the loan instalments to banks from the rent collected for a period of 10 years, after which the investor can own his/her property.

That apart, it also plans to expand its presence in Chennai with two more facilities; in Egmore and Sriperumbudur.

According to Mr Barathy, both the properties are coming up fast.

The Sriperumbudur facility will have 32 apartments in two acres with facilities such as swimming pool, a full-fledged restaurant, tennis court, small auditorium and facilities for indoor games. “We are also considering to open a bar there,” he said.

The Egmore facility, which is coming up at an investment of Rs 20 crore, will have 60 upmarket apartments with facilities such as swimming pool and gym.

While the Sriperumbudur project is wholly funded by the company, for the Egmore project, Star City has formed a 65:35 joint venture – Allied Investment and Housing – with the owner of the land.

At present, the company owns totally 140 serviced apartments in five facilities in Chennai – two in T. Nagar, one each in Nungambakkam, Santhome and Old Mahabalipuram Road – with an occupancy level of 95 per cent. With the rent varying from Rs 45,000 to 65,000 a month depending up on the size of the apartment, it earned a revenue of Rs 7.5 crore last fiscal and targets Rs 15 crore for the current fiscal.

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