Backed­by­de­mand­fromNRIs, some realty firms stick to lux­ury projects

De­vel­op­ers in cities like Bengaluru and Pune are fo­cus­ing on lux­ury projects

HT Estates - - HTESTATES - Mad­hurima Nandy mad­hurima.n@livemint.com

BENGALURU: In the mid­dle of a real es­tate slow­down when most builders have turned to af­ford­able hous­ing projects, some con­tinue to bet on lux­ury homes, backed by de­mand from ul­tra­rich buy­ers and non-res­i­dent In­di­ans (NRI).

A hand­ful of es­tab­lished, well­cap­i­tal­ized de­vel­op­ers in Mum­bai, the Na­tional Cap­i­tal Re­gion (NCR), Bengaluru and Pune are fo­cus­ing on such projects, while the ma­jor­ity stick to mid-in­come or af­ford­able homes.

Af­ter zero launches in 2017, Mum­bai’s K. Ra­heja Corp. has two lux­ury project launches planned this year in south-cen­tral Mum­bai, one of the most ex­pen­sive mi­cro-markets in the coun­try.

“Homes at Rs15-25 crore and above are for high-value con­sumers, who are risk-averse, con­scious of what they are buy­ing, be­lieve in in­vest­ing eq­uity (not debt) and pre­fer homes that are closer to pos­ses­sion. We saw good sales even last year, with prices in Vi­varea in south Mum­bai up by 20% or so com­pared to two years back,” said Vinod Ro­hira, man­ag­ing direc­tor, (com­mer­cial real es­tate and REIT), K. Ra­heja Corp.

In­dia’s largest de­vel­oper DLF Ltd re­sumed sales on 1 Novem­ber, six months af­ter it hit pause as amea­sure­of­cau­tion in view of the roll out of the new real es­tate law.

In Novem­ber and De­cem­ber, DLF clocked around Rs450 crore of sales in its two Gu­ru­gram projects—Camel­lias (homes priced at Rs28-32 crore) and Crest (Rs6-8 crore).

DLF chief ex­ec­u­tive Ra­jeev Tal­war said the Novem­ber-De­cem­ber pe­riod was “an ex­cep­tional pe­riod of sales”.

“Cus­tomers have gone around and checked out pro- jects. Though we sell at a pre­mium, we have seen peo­ple showing­in­ter­est and­con­ver­sion to hard sales. Lux­ury homes will be for ac­tual users now, those who have ac­com­plished and are buy­ing for them­selves,” Tal­war said.

In 2017, most de­vel­op­ers re­frained from launch­ing projects and fo­cused on sell­ing ex­ist­ing stock, more so in the pre­mium end of the mar­ket.

Ac­cord­ing to 31 De­cem­ber data from prop­erty ad­vi­sory Cush­manandWake­field, launch of lux­ury units was down by 70% to 331 units last year, from 1,112 units in 2016.

“The lux­ury hous­ing seg­ment, for which de­mand is en­duser driven, is wit­ness­ing ro­bust growth ow­ing to HNIs (high net­worth in­di­vid­u­als) and in­creas­ing cus­tomer as­pi­ra­tions for a lux­u­ri­ous life­style.

Such an in­creased cus­tomer ap­petite works well for our busi­ness which as­pires to build prop­er­ties that rep­re­sent world-class stan­dards of de­sign, con­struc­tion and qual­ity,” said Anand Pi­ra­mal, ex­ec­u­tive direc­tor of Pi­ra­mal Group and founder, Pi­ra­mal Realty.

Ra­dius De­vel­op­ers, which fo­cused on ex­ist­ing projects last year, has two launches com­ing up in Mum­bai, priced at Rs12-14 crore.

Pune’s Panchshil Realty will launch an 80-acre project with 168 lux­ury vil­las.

Lodha Group plans to launch 3-4 newlux­u­ryand high-end­pro­jects in Mum­bai at Walkesh­war, Lower Parel and Parel. It may also launch a new town­house de­vel­op­ment in Pune.

“Lux­ury real es­tate is fi­nally com­ing of age. Gen­uine lux­ury of­fer­ings have al­ways found buy­ers who place ut­most im­por­tance on as­pects like qual­ity, crafts­man­ship, life­style and ser­vice stan­dards. Our Lodha Lux­ury Col­lec­tion (LLC) does not just score well, it also de­fines the bench­mark for the in­dus­try on th­ese pa­ram­e­ters,” said a Lodha spokesper­son.

Last year, Lod­ha­launchedthe third tower in TheWorldTow­ers project in Mum­bai and One Grosvenor Square at May­fair, in Lon­don’s West End.

It clocked early sales at the Lon­don project at around £6,000 per sq. ft. (Rs5 lakh per sq. ft).

The firm ex­pects greater trac­tion from its Lon­don project, with a weaker pound help­ing the cause of In­dian buy­ers.

Bengaluru-based To­tal En­vi­ron­ment Build­ing Sys­tems Pvt. Ltd, a prom­i­nent de­vel­oper of lux­ury and high-qual­ity homes, will launch projects in Pune and Bengaluru this year.

Ka­mal Sa­gar, prin­ci­pal ar­chi­tect and chief ex­ec­u­tive, said if de­vel­op­ers build beau­ti­fully de­signed homes and cus­tomers look at them as buy­ing a home and not just an in­vest­ment, it works well.

“The mar­ket has been slow but our ap­proach is cus­tomer­centric and cus­tomiza­tion in projects, which gives us a dif­fer­en­tial edge,” Sa­gar said.

“De­vel­op­ers with the fi­nan­cial band­width and po­ten­tial to build lux­ury projects have sus­tained the slow­down. Prices in this seg­ment have also not come down, es­pe­cially in prom­i­nent projects in Mum­bai, NCR and Ban­ga­lore,” said Raja Seethara­man, co-founder of Prop­stack, a real es­tate data an­a­lyt­ics and so­lu­tions firm.

MINT/PHOTO

A hand­ful of es­tab­lished, well­cap­i­tal­ized de­vel­op­ers in some cities like Pune and Mum­bai are fo­cus­ing on lux­ury projects

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