International and Indian property developers are queuing up to cash in on the growing need for one-bedroom, one-kitchen service apartments in cities like Pune, Bangalore, Chennai and Kolkata. Indian realtors and their peers from Japan and Thailand are targeting young IT and ITeS professionals in these cities.

Many domestic real estate companies, including Hindu Properties and Puravankara, are evaluating the potential of this segment, along with Japanese and Thai developers, who could not be identified, are finding this market lucrative, too. Now in demand, these apartments provide interim housing to the corporate and the leisure traveller, allowing up to 25-40 per cent savings off usual hotel accommodation.

Ganesh Raj, senior partner and head — real estate practice, Ernst & Young (India) said, “the demand for new commercial spaces in India has grown by almost four times in the last five years. The service sector, especially IT and ITeS, is the main driver of the demand for commercial spaces in the country. There is an estimated demand of 60 million sq ft of office space per year for the next five years, requiring an estimated investment of $7 billion per annum.”

The supply of branded serviced apartments is scanty across all markets, except in Mumbai, which has players like Taj Wellington Mews, Lakeside Chalet Marriott Executive Apartments, the Grand Hyatt Residences, and the Grand Residences attached to the InterContinental here with a total of 400 units.

Oakwood Asia Pacific — the world’s largest rental housing solution company, providing high-quality, furnished and unfurnished accommodations throughout the two Americas, the UK, Europe and Asia — will open a portfolio of luxury, serviced apartments in Mumbai, Bangalore and Pune by 2007-end and in Chennai in 2009.