The Hindu Business Line : Now, book a `condotel'

With an overall slowdown in real-estate looming large, developers and promoters are looking to new formats to improve sales. One such is vacation home sales with a rent-back agreement.

This format ensures buyers that their investments not only offer them return but also the comfort of being able to occupy their resorts at their convenience. Though popular overseas, this revenue generating model has few promoters among the builder fraternity here as it ties them down permanently to the projects.

The Philippines-based Sterling Construction Systems is building 217 `serviced, custom-sized vacation homes' in scenic Neral, about 80 km from Mumbai. About 170 have been sold in a couple of months, with bankers and business houses taking to the concept.

The company intends to replicate the model in Kerala, Goa, Shimla, Mussorie and Chikmaglur.

The promoters call the vacation homes `condotel', which offers ownership of a fully-serviced vacation home. When buyers are not using the home they can leverage the support of the hotel chain on the premises to rent and manage the units as a hotel room.

The difference between a hotel and a condo-hotel is that a hotel typically has one owner, either individual or corporate, but condo hotels are sold off unit by unit, said Mr Harinder Bhalla, Vice-President, Sales and Marketing of SCS.

The hospitality partner of SCS is the global hotel chain Best Western, which will manage the resort and service the apartments. The condo units, varying from 500 sq.ft to 1,100 sq.ft are priced between Rs 23 lakh and Rs 57 lakh.

The resort is a 60-room complex close to the condo units.

Rent back is 6 per cent of the property value of the units. Furnishing and interiors of about Rs 3 lakh will be at buyer cost and should conform to Best Western's standards. Unit-owners are given the option of 30 days stay a year. Maintenance, otherwise charged, is Rs 4 per sq.ft.

Mr Deepak Gupta, COO, Best Western, said there were over 4,000 hotels in the chain and their daily online bookings amount to $1 million.

Add-ons onsite include a swimming pool with an ultra-modern club house, a spa and gymnasium.

Urban format

Mumbai-based Royal Palms, which has a sizable land bank in Goregaon, has attempted to push across this format with fair success.

About 40 condo units have been booked in its Piccadilly V, which comprise70 units of 340 sq.ft each. The units cost between Rs 23 lakh and Rs 30 lakh, depending on floor rise.

Mr Dilawar Nensey, Joint Managing Director, Royal Palms, said the condos have generated a lot of interest among those aspiring to buy a second/weekend home. Most of the buyers are IT executives, diamond merchants and senior executives of multi-national companies.

Rent back is between Rs 10,000 and Rs 12,000, less maintenance charges of Rs 1,400. Poyal Palms owns two hotels at Goregaon - Park Plaza and The Palms, though the condos are furnished to three-star specifications.

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