As land prices stabilise in city, hospitality industry sees boom
The city real estate sector has witnessed a stabilisation of prices, and the hospitality industry is grabbing the opportunity to expand
The city real estate sector has witnessed a stabilisation of prices, and the hospitality industry is grabbing the opportunity to expand.
Areas like Sarjapura Road, Yeshwanthpur, Marathalli, Kanakapura and Whitefield are set to see the opening of new star hotels.
The boom is resulting in a number of hotels in different ranges launching their projects.
"Any land bought for a hospitality project should be considered as an asset as usually there is a five-year window we place for such projects from the time it is conceived.
Land rates on the outskirts of the city had skyrocketed
about six months ago
"Many groups had invested in various projects when the BIAL started operations. Some are now ready, others are cashing in on this period of boom.
There was a time when it was difficult to find rooms in the city and even if you did find something, it was very expensive," said Irfan Razack, CMD, Prestige Group.
Industry data shows that there is more supply, and that is good for the consumer.
"There is enough and more choice, and the prices are quite affordable with more chains opening up," said Razack. "This means that the prices will remain affordable for the consumer."
Nailing the target
Experts who have been in the business for over two decades believe that the market has become quite mature in the city over the years.
"The supply and demand has stabilised, the market has become mature and each group today is focusing on appealing only to its target clusters," said Prem Joseph, director (sales and marketing) of Movenpick Hotels and
Resorts, which recently opened in the city.
Trends show that earlier a techie working in Electronic City would live in the heart of the city but now, with the land rates stabilising, there are a lot of residential options around that area itself.
For a hospitality group, the break-even period is between five years and eight years. "It is a long-term investment and many are showing faith in Bangalore," said Joseph.
Also, land rates on the outskirts of the city, which had gone through the roof about six months ago, are now stabilising and this is appealing to real estate tycoons too.
"North West Bangalore is becoming the highlight now and will see a lot of growth over the next two to three years with the development of Metro, the launch of the World Trade Centre and Orion Mall.
Bangalore has seen growth majorly due to the IT boom and hence it is quite true that hotels with close proximity to tech parks and the BIAL have seen a tremendous increase in demand," said Martin Wuethrich, general manager, Sheraton Bangalore Hotel (at Brigade Gateway).
For now experts have given the hospitality industry the thumbs up.
"The demands of customers are being met, people are only happy to cut down on the travel time and now
even the mid-level hospitality groups are cashing in on this period of boom.
There's a vast demand and Bangalore is living it up, by providing vast supply," said M Chandrashekhar, chief executive, Eco Pack real estate services.