With the realty sector at a standstill, real estate developers have discovered new means of business to cope with the adverse situation. While many developers are worrying about low consumer confidence to invest in real estate, a few of them have introduced the concept of community rental homes for owners. It is good news for expats or locals searching for rental space in individual houses or apartments for a short- or long-term stay in Kathmandu.

“Despite the stagnant real estate, the demand for rental space is ever on the rise. Our first priority is, of course, to sell project units to customers. But when transactions in the realty sector started slowing down, we started our renting venture,” says Bijay Rajbhandari, chairman of CE Group of Companies.

Stating that renting out has had a positive impact on the whole project, Rajbhandari adds, “We’ve come across many cases in which the lessee has bought the property after experiencing quality and comfort when living there.” He says that at times, tenants recommend the property to their kin, not to mention the highly effective word-of-mouth marketing. He believes renting the completed project is, in fact, proving to be a powerful tool for promotion.

CE Group of Companies started renting their completed projects three years back. Since then, the company claims to have witnessed significant growth in business. According to Rajbhandari, they observed 20 to 30 per cent growth in rentals this year compared to the same time period last year. The main chunk of clientele looking to rent individual houses and apartments are expats, diplomats, high officials, embassy staff, et cetera. Reportedly, the ratio of expats and locals opting for rental space at their projects is 80 to 20.

As per the requirement of their clients, the company offers one to four bedroom fully furnished apartments that are equipped with all the basic amenities. Stakeholders state that people are attracted to renting space in housing colonies and apartment building owing to more privacy and independence that they offer as compared to staying in hotels. The rents in housing colonies and apartments depend upon the location, property, facilities, size, furnishings and the rental time period.

According to Rajbhandari, realising the lucrative possibility in renting out, they have started a provision for leasing out 10 per cent of their completed projects. He adds that they enjoy passive yet steady income from the rented space. The company provides rental service in Rio Apartments at Kupondole, Retreat Apartments at Bijeshwori, Vinayak Colony at Bhaisepati, Veena’s Residency at Dhapasi, among others.Pramod Kaji Baniya, senior manager at Swayambhu Hotels and Apartments, under Brihat Investments, says, “A number of business people who come to Kathmandu prefer the kind of privacy and liberty that even the best hotels can’t provide,” adding that their venture was initiated to cater to this segment by offering luxurious service of rental stay in community living units.

Brihat Investments offers service apartments at Sitapaila and Panipokhari, and rent out individual houses at Brihat Community Living at Ramkot. Their rental properties come with a fully equipped kitchen and private dining space. The rental charge for a one bedroom apartment starts at USD 55 per day while it costs USD 1,050 per month. According to Baniya, the trend of staying in rented space among short- and long-term visitors to the country is increasing and they now have regular clients who stay with them every time they are in Nepal.

But it is not only real estate developers that are offering high-end full furnished apartments and individual housing projects for rent. Lumanti — a non-government organisation — has followed suit by introducing Low-Income Rental Housing at Dhobighat. A residential house, designed for rental purpose and to be operational from next month, will have 24 rooms with a kitchen corner and attached toilet.

Sama Vajra, programme manager at Lumanti, informs, “This rental housing is basically targeted at low income generating groups. We have designed the rooms after discussing the needs of our prospective clients.” According to Lumanti, they will charge those renting out space from them Rs 3,000 per month and they claim to be receiving a number of inquiries about the property.

According to Vajra, Lumanti has invested Rs 15 million on the building that is spread over an area of nine aanas. The project is supported by the UK based INGO, Homeless International.

source: the himalayan times,14 June 2013