Mr.Om
Ahuja, CEO - Residential Services, JLL India
Many
developers / promoters are trying their best to create new zones and addresses
across India that can appeal to HNI property buyers. This endeavour has met
with varying degrees of success on the ground when it comes to swaying the
ultra-rich clientele. Barring upgrades in design concepts and the addition of
some new accoutrements to amplify a luxury lifestyle, the baseline concept of
luxury homes has not materially changed in many cities. Prominent addresses or
'pin code value' still matter, and the ultra-rich are willing to pay extra
premiums to get them.
That
said, cities such as Delhi, Gurgaon, Bangalore & Pune have by now seen a
high incidence of developers offering branded residences as alternatives to
premium homes at the most sought-after locations within these cities.
The
success in swinging interest levels of the target clientele has varied markedly
in tandem with the actual features being offered. While there is evidence of
first-generation wealthy buyers evaluating and considering such options in
these cities, the conversion rate among the historically rich has been
negligible. The consensus among this segment is that branded residences
offering very little value addition, and that the premiums charged on them are
based on artificial factors that do not provide true value.
Demand
continues to be robust for options in bonafide premium locations of the key
Indian cities, but newly tailored luxury addresses are also seeing their share
of action as long as the projects on offer meet certain parameters. To begin
with, deals conclude rapidly in sellers' markets where demand exceeds supply.
Annual
returns in such pockets are in the neighbourhood of 25 %, and this figure will
continue to see northward movement over the coming years as supply constraint
drive prices up further.
Ø Delhi..
In
Delhi, the preference of HNIs when it comes to established and high-value
locations is more or less inflexible. South Delhi is still the micro-market of
choice for ultra-rich clients from Delhi, Punjab and Uttar Pradesh with budgets
ranging from Rs. 50-300 crore. Golf Links in Delhi is a more vibrant market in
terms of demand when compared to even to Lutyens Zone. Shantiniketan and Vasant
Vihar are two other key HNI destinations where demand exceeds supply.
Golf
Links is actually the most sought-after location in South Delhi. Most other
cities have similar pockets, but also show evidence of a certain degree of
demand diversion to newer locations and concepts, which is not the case in
Delhi.
Ø Mumbai..
In
Mumbai, with the Central Business District (CBD) shifting to BKC for all
practical purposes, clients who would previously not have considered any
options other than Malabar Hill or Nepean Sea Road zone are now evaluating
newer areas like Worli, Bandra-BKC and Mahalaxmi as alternatives.
Considering
the limited supply in the historically prized locations, HNI buyers are looking
for premium options that provide 24x7 security, a gated community experience
and premium club houses as an amplification on their experiences in stand-alone
buildings in the traditional premium areas.
The
arrival of K. Raheja Corp's ultra-luxury gated community Vivarea in Mahalaxmi,
Mumbai has seen many wealthy south Mumbai residents accepting this as a luxury
address in all respects. As such, K. Raheja Corp has definitely managed to create
a new location that re-defines luxury in South Mumbai.
There
are similar examples in BKC and Goregaon, where Sunteck and Oberoi have played
a similar role in creating new luxury housing addresses for HNI buyers - and in
fact rebooting the whole concept of luxury living.
Ø Bangalore..
Similarly in Bangalore, developers such as
Total Environment and Chaitanya have provided the city with genuine luxury
projects in brand-new premium locations. These developers have been
instrumental in turning Whitefield into a high-value address and their
completed projects command steep premiums.
The
offering, product design, specifications and buyer profile are remarkable
enough to make a difference. Total Environment's project in one of the best
luxury offerings in India, and demand for such projects in Whitefield
significantly exceeds supply. Likewise, another project by this company has
turned Bangalore's JP Nagar into a highly aspiration luxury destination which
now commands the necessary clout of 'an address that matters'.
What
Ultra-HNIs Look For..
Ultra-rich
buyers look at following parameters when it comes to buying a luxury residence:
(1.)The
Profile Of The Residents..
It
really matters whether or not you share the neighbourhood with the tycoons,
celebrities and prominent CEOs of the city, as this makes a definite status
statement and is also good for business.
While
ultra HNIs do gravitate to creamy layer environments for reasons of prestige,
it is also true that many business deals are concluded at these residential
locations during social interactions over weekends and holidays.
In
Delhi areas like Amrita Shergill Marg and Jor Baugh come readily to mind for
these reasons. In Kolkata, Ballygunge and Alipore are practically defined by
such a resident profile.
(2.)
Low Density..
The
rich and famous do not like to live in the crowded areas of a city, but prefer
locations with lower population densities offer. For this reason, locations
like Malabar Hill, Worli and Bandra Bandstand in Mumbai are traditionally
locations where the rich pay very high premiums.
(3)
View And Privacy..
A
sea view, a view of a golf course and a high level of privacy (integral to the
concept of exclusiveness) matter a lot when it comes to defining luxury for
India's ultra-rich.
Luxury
offerings in cities like Mumbai, Delhi and Bangalore rarely generate a lot of
interest from the wealthy set of buyers if they do not score high on this
aspect are addressed in most aspects.
(4)
Ready Access To The City's Nerve Centre..
Apartments
in Mumbai's legendary NCPA commanded highest premiums for various reasons,
which included the profile of residents.
However,
their USP was that NCPA is closest to the erstwhile CBD of Nariman Point. Boat
Club in Chennai and Golf Course Road in Gurgaon share this important attribute
of proximity to these cities' 'centres of gravity. Mumbai's BKC area has become
the new luxury address of Mumbai because the CBD as well as the Diamond Bourse
have now shifted there.
(5) Overall Luxury Experience..
The
definition of luxury has been extensively abused in Indian real estate, and is
being closely scrutinized by ultra-rich buyers when it comes to evaluating
offerings.
Luxury
goes beyond club houses and the quality of fittings used in a project's apartments.
Multiple aspects of a project are evaluated to discern if the 'luxury' tag
indeed applies. Among notable success stories, One Avigna Park in Mumbai stands
out as a clear winner when it comes to offering real luxury in most respects.
It
may seem strange that India's ultra-rich are indeed booking into luxury
projects in new locations. However, this is nevertheless true in many cases
such as Atmosphere on EM Bypass and Urbania by Bengal NRI, south of EM Bypass
in Kolkata against the traditional luxury locations of Ballygunge or / Alipore.
However,
this trend is catching on in cities where HNIs perceive a vacuum in terms of
offerings at the traditional premium locations.
(Chart:
Ultra Luxury Home Location Rates In India)
For media Contact
Arun
Chitnis
Head
– Corporate Communications & Media Relations
JLL
India
Level
6, Amar Avinash Corporate Plaza
Bund
Garden Road,
Pune
411001.
Tel:
(020) 30930441 Fax: (020) 40196101
Mob:
+91 9657129999
Website:
www.joneslanglasalle.co.in
Blog:
www.joneslanglasalleblog.com/realestatecompass
Twitter:
JLLIndia_Realty
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