Bare-Shell V/s Warm-Shell Properties: Which One Should You Go For?
Most of us nurture the dream to have our dream home one day. Understandably so, all of us dream differently. Some of us want a ready-to-move-in home because waiting is not really our thing; some others would want to spend their time, energy, resources and apply their vision in building for themselves the perfect abode, which would bear their signature all over. The property market is acutely aware of the needs of both types of dreamers. When you go home shopping, you would find plenty of ready-to-move-in fully furnished options. You would also find in equal numbers warm-shell and bare-shell properties.
Before moving further, let us first understand how one is different from the other.
Bare-shell properties: A bare-shell property is, as Abhineet Seth of Abodekraftz put it, a “ready-to-fit-in property”. This means the walls would be plastered, the bathrooms and the kitchen would be working, too. Basically, the developer has got the basic structure ready, and water outlet and electricity in-let facilities are in place. In commercial set-ups, the developer may also have installed water sprinklers, air-handling units and fire safety equipment in place.
The picture below would give you a clearer idea about bare-shell properties.
Warm-shell properties: While these also do not quite fit the parameter to be called ready-to-move-in units, warn-shell properties are certainly the upgraded version of bare-shell ones. In this case, the developer offers the consumer certain other facilities, apart from proving the basic structure, making them habitable. Apart from basic flooring and paints, etc., however, no other interior work or furnishing would be in place in a warm-shell unit, also referred to as a vanilla-shell property.
The picture below would give you a clearer idea about warm-shell properties.
What do buyers prefer?
As far as the residential segment goes, buyers looking for affordable properties would generally not venture into bare-shell or warm-shell properties for the simple reason that they would not want to inflate the cost. This buyers segment would look for fully furnished units if they are buying for self-use or even for renting purposes. The same is true of businesses looking to lease smaller spaces. They would prefer a furnished set-up to keep the costs down.
Buyers looking for luxury properties that cost between Rs 5-15 crore would invariably go for properties in good locations which only have a basic structure in place.
“Even if money is not a concern, this buyer segment would not be willing to pay a higher price for a fully-furnished unit because they would want their home to stand out. They would want to do their own interiors, using high-quality materials,” says Seth.
Even if the buyer has bought this property for an investment purpose, they would go for bare-shell properties. “In case the buyer plans to rent the property, they may not want to invest too much in the asset. In such a scenario, they might opt for a fully-furnished luxury space,” says Seth.
In the commercial segment, start-ups and entrepreneurs looking for office spaces, ranging between 500 and 1,000 square metre (sqm) prefer warm-shell properties while those looking for bigger spaces spanning over 2,000 sqm would mostly go for bare-shell structures.
“Businesses leasing for a long term prefer bare-shell properties because they would like to give a personal look-and-feel to the workspace,” Seth says. “Those who are acquiring the space to lease further would also prefer the same for the same reason,” he adds.
Why is the market full of such properties?
Because of the demand for such structure, real estate biggies have been launching projects specifically for this buyer segment. DLF’s The Aralias and The Magnolias in Gurgaon are the perfect such examples of bare-shell properties.
“From the developers’ perspective, creating and selling bare-shell properties is more profitable as they make profits on only the location and the basic structure. There is hardly any profit that they can make by doing the interior work, despite the fact the latter demands a great deal of investment,” says Seth.
“A developer would find it much easier to sell a bare-shell unit for, say, a crore-and-a-half if the location deserves that much. However, if he goes ahead and spends another Rs 50 lakh doing the interiors, he might find it hard to get any takers for the simple reason that buyers see this as a limitation. They also might have doubts about the quality of the material used in doing the interiors. They would rather do it all on their own,” Seth adds.
Selling warm-shell and bare-shell properties are also easier for builders and sellers because they are less expensive when compared to fully-furnished units.
“More importantly, such units offer the buyer the liberty to develop their space as they might have dreamed,” adds Seth.