Namrata Ekka

Do you know the meaning of Warm Shell and Bare Shell, the terms widely used in real estate?

Though some terms are a clear giveaway but not all are the same. Take the case of the term Warm Shell which refers to a unit with very little furnishing, fixtures and equipment, while on the other hand, a Bare Shell is a property after completion of construction and installation of very basic building services.

So which property should a buyer prefer to buy, warm shell or bare shell. Are there any advantages or disadvantages attached to them? To find out, let’s read on.

What is a Warm Shell?

A Warm Shell is a residential or commercial building with finished interiors, cooling and heating system, rest-rooms and plumbing, interior lighting, (the parameters may vary) etc. These property units are nominally ornate and ready-to-use.

Warm shell is an upgraded version of a basic property to make the unit habitable. Warm Shell in the residential market are at a lower cost as compared to the projects offering furnished apartments.

Sanjay Rastogi, director, Saviour Builder Pvt Ltd says, “There are enough housing units in the market which have a warm shell bearing. Though there are some which are ready-to-move-in with new interiors, furniture, cabinets, appliances, etc. these units have comparatively less takers in the market as they are highly priced. Mostly buyers own some assets which they are likely to bring forth to their new house. Warm Shell units have complete finishing with the necessary basic requirements to support the owners when they move in. They are inexpensive compared to the furnished units and therefore a preferred consumer choice.”

The popularity of Warm Shell units can also be credited to the fact that almost all buyers have some individual style and therefore would not prefer the customised homes. Shweta Bawal, a homemaker residing,

“When we were looking for a new place to move in, we did come across and for some time contemplated on opting for a fully furnished home. The lights, furniture, drapes and readymade kitchen seemed alluring. However, the sheen faded the more we visited such units. My problem was that every house looked impersonal. There were certain items which were useful like the inset chimney in the kitchen, the cartoon-themed beds for the children, etc. which probably we would need to get installed anyway. My family’s touch was missing.”

Bawal says, “I remember the one time we visited a newly constructed building with many flats on offer. We checked a couple of them and were surprised to see almost all of them looked similar with minor changes here and there. That pushed me to the decision of buying a ‘Warm Shell’ fitout.”

Vinay Parle, partner, Find Space Consultants based in Bengaluru says, “Warm Shell improvements can be made when one is buying from an individual and not a developer. A party can voice their needs to a seller and an upgrade can be made depending upon the party’s negotiation skills with the seller.”

warm shell officeRenting a Warm Shell

A tenant looking for leased spaces can also come across Warm Shells. The prevailing criteria remain the same. Parle says, “Tenants can improve Warm Shell residential spaces after occupying as per requirements. In the commercial sector, these are perfect for offices who desire designed space.”

One can expect some sort of allowance from landlords when leasing a place to make improvements in units. This pay includes “…the ‘partial improvement’ cost that is essential for the tenant in order to occupy the residential space,” adds Parle.

“These improvements are not fully completed unless agreement of lease between landlord and tenant has been executed,” opines Parle. Therefore, remember to capture them in the lease or else you will need to pay additionally for them later.

In the commercial sector, a Warm Shell office is also known as a Vanilla Shell and is ready-to-use offices.

What is a Bare Shell?

A Bare Shell includes basic flooring, plastered walls and in some cases, pantry and toilet facilities in operational condition. It is a popular option for corporates and start-ups looking for office space. Some office hubs allocate a detached space as incubation centres for boosting start-ups and providing them a flexible arrangement according to the changing requirements. The option of commercial spaces depends on the preference of the various businesses and their expansion plans.

In terms of the residential sector, Bare Shells are not an uncommon feature. In Mumbai, many developers operating in the super-luxury segment, prefer to handover Bare Shell properties to their customers. Devang Varma, director, Omkar Realtors & Developers while speaking about the group’s ultra-luxurious residential development Omkar 1973 Worli says, “In the 3-tower marquee project, with Tower B offering Bare Shell apartments are completely sold and Tower C fast selling out.”

Why? The reason has the same root as that of Warm Shell. Buyers (in the luxury segment), prefer their home to be a reflection of their personality. As such, ready-made homes are a no-no for them. Also, owning a property in prestigious projects at a premium address is an attraction. In terms of price, the difference is not much. Developers use this factor of exclusivity to attract buyers.

Renting a Bare Shell

According to a representative from CIRIL Network, a membership-based premier owner operated network of commercial real estate brokerage companies in India, if taking a Bare Shell on rent, “… the landlord provides the bare space and the tenant does the entire investment on interiors in (commercial sector). Extended Bare Shell means landlord provides bare shell space with add-ons like back-up and toilets, etc.”

Renting a Bare Shell in the residential sector might not prove to be so lucrative. As a tenant, it is easier and suitable to take up a unit with all the conveniences in place, if not a fully furnished flat.

Owning a Bare Shell apartment or office space requires commitment from the buyer and the investor. One needs to invest money and time to properly set-up the units before living or using them.

If the office is small, the expenses attached to furnishing the office space might be too much to bear for the company. Similarly, tenants might not find this option appealing, as additional expenses for someone else’s property is the main deterrent.

A Bare Shell is also known as Unfurnished Shell lacking heating, ventilating and air conditioning (HVAC), and usually without lighting, plumbing, elevator or interior wall.

The idea of Warm Shell and Bare Shell is gaining popularity. Irrespective of whether you are purchasing or taking it on rent, it attracts both buyers and tenants by offering customisable units. Are you warming to the idea yet? Whether you are a tenant/landlord, get all the terms and conditions of the shell lease agreement before you sign. If necessary, have a real estate attorney review the contract prior to its execution. Failure to identify such key elements can cause additional items to be charged.