Property slowdown has its advantages too! While the real estate market is witnessing a lull and the property developers and builders are not very enthusiastic about launching new property projects, the hospitality segment is still buoyant with activity. Hospitality players are trying to make the most of this time when the property rates are stagnant and have even slowed down in some regions. High property rates have always bothered property buyers, home seekers, retailers and hotel segment. While the many are still waiting and analysing this situation, hotel operators are trying to make the first kill there.
Pune’s real estate market is a case study in this regard. Recent media reports suggest that many property developers have put their new construction on hold or are considering developing affordable homes which can be sold easily. In fact many residential and commercial property developers are now foraying into the hotel building business. At the same time two major hospitality operators have announced very prominent development there.
Last week, Pune-based Oxford Properties launched their first hotel project at Koregaon Park. Their hotel – called Hotel O – will be a five-star property and will cost the developer Rs500 crore. Oxford Properties plans to build such hotels in the other Tier II cities as well. As of now, they have marked Hyderabad, Ahmedabad and Jaipur for next expansion.
Another big development was from private equity fund Credit Suisse. The fund will invest Rs 430 crore in a Pune-based project by Indu Projects. Indu Projects is a Hyderabad-based property development firm that is building property in Pune and Hyderabad. The investment made by Credit Suisse will be utilised to speed the construction work at Pune.
These developments clearly indicate that the investor focus now has shifted to hospitality segment now. While the residential, commercial and office development has taken a back-seat, the associated segments (like developing hotels) has picked up. Such businesses are still raking in money, hence the investors are making the best of present opportunity while the property market recovers from its slowdown.
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