BackReal estate cos diversify into spas and resorts
Real estate cos diversify into spas and resorts
PremiumRedefining business: A 3D rendition of the spa being built by Brigade group in Chikamagalur. Real estate developers are looking at several luxury verticals to expand their presence across the country.
Bangalore/New delhi: A Swedish massage, a vigorous Kerala head rub or a good old steam bath — developers are offering all this and more at picture perfect destinations that are a good trek away from cities.
After making luxury villas and apartments in the heart of town, property firms are now wooing people to exotic spas and resorts.
From luxury to leisure, real estate companies such as Brigade group, Omaxe Ltd, Prestige group, Sobha Developers Ltd and Value Designbuild Pvt. Ltd, are entering into the leisure segment to build health resorts and spas in the backwaters of Kerala or amid the plantations of Chikmagalur in Karnataka.
“The huge demand and scope of business in the leisure and hospitality segment are the major drivers for builders like us to get into this vertical," says Vineet Varma, chief executive officer, Brigade Hospitality Services Pvt. Ltd, a fully owned subsidiary of Bangalore-based Brigade group. “Also, there’s only so much you can do in the residential and commercial sectors and new verticals like these complete our portfolio."
Brigade group is coming up with a Rs100 crore premium health spa resort in the quiet coffee plantations of Chikmagalur, about a four-hour drive from Bangalore.
While the group will develop the property, it has teamed up with Singapore-based hospitality brands Banyan Tree and Angsana to operate it.
The leisure segment has attracted not just top-of-the-line developers but also new entrants.
Value Designbuild, a five-year-old real estate company based in Bangalore, is also set to develop a spa along with leisure homes.
The company has earmarked a plot of land in Srirangapatnam (Karnataka) for a spa and plans to build high-end, leisure homes in Coorg in Karnataka.
“Spa and health resorts are a south India phenomenon particularly in the Kerala belt where Ayurvedic health treatments are a rage with domestic and international travellers. For us, a spa project is to attract weekend travellers raring to get away from the city," said Koshy Varghese, managing director of Value Design.
Another Bangalore company, Sobha Developers Ltd, has a full-fledged Ayurvedic spa offering the traditional Kerala Ayurvedic massages, herbal baths in its first integrated township Sobha City in Thrissur in Kerala.
“Tier II or smaller cities offer a lot of variety for real estate development and we want to capitalize on the growing demands for our consumers. With the middle class getting richer, it is imperative to give them choices with projects like these," says J.C. Sharma, executive director of Sobha Developers.
A lot of developers are looking at spas and resorts because it is a revenue generating business line, says Akshay Kulkarni, Cushman and Wakefield Inc.’s, a property consulting firm, director (hospitality) for South Asia. “Residential developers normally develop, construct and exit a project. A residential asset does not generate consistent revenues whereas spas and resorts do."
It’s not just south-based builders who are diving into resorts.
Companies such as Delhi-based property developer Omaxe Ltd are also taking active interest in such ventures. Omaxe has tied up with Thai Privilege Spa, often rated by some among the world’s best spa chains, to build spas in the company’s luxury residential projects.
Initially, the agreement is to establish and operate 10 spa outlets of Thai Privilege Spa in Delhi and north India.
Omaxe has also partnered with tennis player Leander Paes-promoted Leander Sports, a wellness concept design company, to design and manage fitness facilities in five of the company’s townships in north India.
Leander Sports will provide the concept and design of health clubs, spas, meditation centres, yoga cells, gym and sports complexes in the company’s townships.
“People living in high-end apartments aspire for a better living," says Arvind Parekh, director, Omaxe. “There are people who even go on a holiday to Bangkok just to get a spa treatment. There is a demand for spas. Therefore, we thought of providing spas within the townhsips itself."
Analysts say that though there is a substantial demand for such developments, spas and resorts would be commercially viable only in larger developments when combined with a hotel, retail space or when it is located in a large township development.
Naresh Dandapat, regional director (south) of Knight Frank India Pvt. Ltd, says he believes the resort business in India has not proved to be a success story over the years.
“It is a relatively new phenomenon here and it is too early to say whether it turns out to be a profitable venture for developers in the long run," Dandapat said.
“The best way for developers to do it now is to tie up with an international name which gives the project great brand value."
Parekh agrees, “Running a spa is a very specialized business. There are different types of treatments available at spas these days and to provide an international experience you need to have special facilities and trained personnel. This is where an international company can add value."
Brigade, for instance, is developing a spa at the upcoming Sheraton Bangalore and has signed a management contract with the Angsana Spa brand.
Prestige group, together with hotel chain Marriott group, is developing a Rs1,000 crore spa and golf resort in Nandi Hills, just ouside of Bangalore.
Resort and spa projects in smaller cities towns such as Periyar in Kerala or Manesar in Haryana are location-specific ventures, said Sudeep Jain, executive vice-president of Jones Lang LaSalle Hotels, the hospitality division of property consultant, Jones Lang LaSalle Meghraj.
Dedicated real estate funds are eager to support such venspa and resort ventures, notes Pranay Vakil, chairman of Knight Frank India.
madhurima.n@livemint.com
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