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Luxury homes are transforming the cityscape of metropolises across India, with developers looking to make their mark on the city by rising above the pack. Most of them aim to have that one trophy project that can distinguish them from the rest. And all this is at a time when the Indian real estate market has not been in the pink of health.
While that is the case with the overall sector, the one segment which seems to be bucking the trend is luxury residences. According to the Asia-Pacific 2016 Wealth Report by New World Wealth, India was ranked among the top five Asia Pacific countries in terms of the number of High Net Worth Individuals (HNWIs). HNWIs (millionaires) were defined as those individuals with net assets of $1 million or more (Dh3.6 million).
“The macroeconomic trends have positively contributed to the demand of luxury real estate in India, making it one of the fastest growing countries with HNWIs and their investment portfolio totaling up to 40 per cent in the realty market,” says Jitu Virwani, Chairman and Managing Director Embassy Group.
The NRI effect
Luxury home buyers expect to buy into a lifestyle that, by definition, only a few in the world can afford to have. In response to that developers are creating lavish havens of luxury, designed by architectural teams from around the world, services tailored to buyers’ individual needs and desires at high-prestige locations. “Additionally, services such as 24-hour concierge, valet parking, in-room dining and even limousine service are features that developers are offering these days to adequately supplement the overall luxury experience,” adds Virwani.
For instance, Embassy ONE in Bangalore is home to India’s first Four Seasons Hotel and Private Residences, where homeowners can have their dinner parties crafted and catered to by Four Seasons. “This is a segment that has continued to show strong demand. The supply side is limited, whereas we have witnessed a huge increase in buyers, who include not just big industrialists and businessmen but young entrepreneurs and professionals as well. They are extremely brand conscious and look for innovative designs and modern amenities,” says Swaroop Anish, Executive Director, Business Development, Prestige Group. The group’s products in the luxury segment include Kingfisher Towers, Prestige Hermitage, Prestige Leela Residences, Prestige Kenilworth, Prestige Golfshire and Prestige Edwardian.
Changing lifestyles and rising income levels are driving the demand for luxury homes. “As the economic scenario undergoes change, the real estate industry is constantly evolving to remain on top of the situation and making efforts to generate demand from buyers. The desire to be the best and different has driven the demand for super-luxurious homes wherein the price is not a constraint,” says R. Srividya, General Manager, Corporate Sales and Brand Engagement, Indian Property Show, Sumansa Exhibitions.
Responding to the market demands, developers are coming up with new formats of properties to capitalise on the changing environment. Buyers are also becoming more discerning and demanding better quality and services from the developers. “India’s rich are no longer willing to compromise, when it comes to a good life. They always opt for better locality with private luxuries like swimming pools, gyms, clubs, gardens and interiors based on Mediterranean or Italian architecture. They are demanding and are ready to pay for the luxuries they desire,” adds Srividya.
A key factor for all luxury homes is location and these residences are usually located in the most enviable addresses of the city, points out Anish. “Apart from location, these properties are a mix of product and service experience with personal attention to detail. Luxury is not determined just by the product, but also in the way the apartments are sold, the services offered and the entire living experience. Very often a home is the one space where people are willing to stretch their budgets and developers have recognised the immense potential of this sector.”
Other key amenities that an investor wants in a premium property are private gymnasiums, swimming pools and gardens, complete home automation, excusive interiors and advanced home security systems.
“Whether or not half of the facilities and technological embellishments they seek are available in the country or not is immaterial - today’s Indian luxury home buyers are willing and able to pay for having them imported, and builders are happy to comply. The desire to stand out and be ‘a cut above the rest’ is creating a demand for super-luxurious homes wherein price is not a constraint,” says Ashwinder Raj Singh, CEO, Residential Services, JLL India.
Versace, Giorgio Armani, Philippe Starck, Walt Disney and Donald Trump are just some of the celebrities, designers and major brands that are teaming up with developers to create homes in India. Along with Four Seasons, Ritz-Carlton and Hyatt have also tied up with developers to build branded homes in India.
“Luxury projects are being absorbed very quickly with HNIs investing into new concepts such as luxury branded residences and integrated planned townships. In the luxury homes market, the growth of branded residences could be pegged at roughly 5-6 per cent per annum, owing to the fact that it is a very exclusive, niche category with a restricted number of buyers,” says Virwani.
The luxury segment too is vast and fairly porous at the bottom of the pyramid with luxury homes available at different costs. “The affordable luxury homes segment in India is little diluted but it is no less than a real luxurious home, available to a middle to upper middle-class buyer, who is raising the demand of better living with better facilities,” Srividya.
As Singh from JLL points out, the luxury residential market in India is not solely targeted at the super-rich. “There is a correspondingly broad bandwidth of budget-led sub-categories for luxury homes. Among these, affordable luxury is probably the most interesting, largely because, though, it appears to be a contradiction in terms, it works very well indeed. We are still talking about swimming pools, clubhouses and gymnasiums, but these come in the form of shared amenities. The residents of such affordable luxury projects are definitely not rubbing shoulders with the city’s richest and most influential people at ‘snob value’ addresses.” Another interesting aspect of the affordable luxury segment, says Singh, is that developers, who build such projects, often shoulder the additional responsibility of introducing the whole concept of luxury to buyers, who do not have any prior exposure to it.
The luxury buyer
Most of the ultra-luxury projects are sold ‘by invitation only,’ a smart strategy developers are using to enhance the exclusivity quotient of these projects.
Investment in premium properties helps in further diversifying the assets of HNIs and is mainly motivated by a variety of reasons that range from a practical approach tending towards a passionate inclination or even investment purposes. “Owning a second or third house is one of the most common aspirations for the well-heeled, 79 per cent of them own at least two properties and the balance 53 per cent usually invest in three or more,” says Virwani.
Indian Property Show
When: June 2-4
Where: Za’abeel Hall 5; Dubai World Trade Centre
Over 75 Indian builders to gather at Realty India Expo Dubai 2016
Source: Sanaya Pavri, Special to Property Weekly