In July alone, several MNCs took up nearly 85,000 sq ft of residential space on lease in prime residential locations in Delhi and Mumbai. The effective rent of these apartment varies from Rs 80,000 to Rs 200,000 per month.
In Mumbai, the trend of MNCs taking up apartments is picking up around Worli, Colaba and Bandra. Some corporate like Heinz, AIG and International Finance Corporation have taken around 12,000 sq ft on lease for approximately Rs 150,000 per month.
Other areas like Napeansea Road and Cuffe Parade also saw companies taking up about 5000 sq ft of serviced space for a rent of Rs 175,000 per month.
The trend of serviced apartment is stronger in Delhi. As per a Cushman and Wakefield report, a Swedish MNC took a 2,500 sq ft apartment in Vasant Vihar and a villa measuring 5,000 sq ft in Luburnam (Gurgaon) for Rs 165,000 and Rs 120,000 respectively in July.
A Dubai-based private investment banking firm also leased an apartment measuring 3,000 sq ft for Rs 125,000 on Aurangzeb Road.
These companies are not just leasing but also investing in independent houses. An independent house on a 500 sq yard plot was taken up by an MNCs for Rs 4.95 crore (Rs 49.5 million).
Another 8000 sq ft of independent houses were bought in Gulmohar Park and Beverly Park and New Friends' Colony with prices ranging from Rs 80 lakh (Rs 8 million) to Rs 2.75 crore (Rs 27.5 million)
"The MNCs looking at cutting costs on expatriates view serviced apartments as a cost effective option. They also allow flexibility as the companies can take them up for short to medium term without fuss," Sanjay Verma, joint managing director, Cushman and Wakefield said.
Normally, an MNC spends around Rs 15,000 per day on accommodation of top company officials who are in India for a short term project which amounts to Rs 450,000 per month. But with serviced apartments available for Rs 200,000 per month, operating overheads costs are reduced with a huge margin.
"Companies are finding apartments with support facilities like guest lounge, swimming pool, spa etc a better option than the hotel suites which become financially unviable for officials brought in for a medium term project," Verma said.
At present, the service apartments are coming up in Gurgaon with MNCs relocating in the suburbs due to large availability of large land parcels.
Some of the developed and upcoming projects are Vipul's Peach Tree, Enkay Condominiums and Ambience Apartments, Savoy Suites and Qutub Serviced Houses in National Capital Region.
In Mumbai, the Hiranandani Group is also looking at such developments in Powai which will cater to expatriates.