Understanding Super Luxury Living
India is currently home to the world’s fourth-largest population of millionaires in Asia Pacific region. What is fuelling the steady growth of this luxury sector, is the rising millionaire club across the country.
The demand for ultra-luxury homes in India has been aided by the growing number of Indian UHNIS and expats as well as the increasing demand from NRIS. India is the fastest growing large economy in the world, with GDP growing at over seven per cent. With high economic growth, the total number of ultra-high net worth individuals has more than doubled during 2015-16 to 146,600 UHNIS from 62,000 UHNIS in 201011, depicting a CAGR of 16 per cent during this period. As per another source, the number of UHNIS in India has reached 236,000 in 2016 from 184,000 in 2014, an increase of over 76 per cent in two years. Neeraj bansal, Partner and head, asean and bcre sector, KPMG India said, “Majority of the buyers of ultra-luxury properties in India constitute industrialists, CXO level executives, ultra HNIS, expats, and celebrities. Further, a lot of NRIS too have been investing in such properties in India. Besides, India is home to most of the Fortune 2000 companies in the world.” Mona Jalota, Director, international & NRI, Residential at colliers international india stated, “The Indian real-estate market is slated to almost double from $93 billion in 2014, to $180 billion by 2020. Luxury real-estate commands 6-8% of this market share .India’s luxury market has witnessed a growth of 20% over the past year and is estimated to have reached $ 15 billion currently.”
the Market size
The ultra-luxury residential market across top 12 cities in India is estimated to be about 15,350 units, spread over 85 million square feet. These constitute total ultra-luxury residential units launched over the past decade. Mumbai accounts for about one-fourth (25 per cent) share of the total units launched, followed by Gurugram and Bengaluru with nearly 20 per cent and 17 per cent respectively.
The total market size of ultraluxury residential realty in terms of the value is estimated at USD30 billion as of December 2016. Mumbai alone accounted for nearly half (49 per cent) of the total ultra-luxury residential market.
This was followed by Gurugram and Bengaluru, with over 17 per cent and 12 per cent respectively. “Within the Asia Pacific region, India has the fourth-largest population of millionaires with around 2.36 lakh individuals who fall firmly in the high net worth category. In the Forbes list of the ‘World’s Billionaires’ for 2017, India accounted for an impressive 101. Owing to steady economic growth and opportunity and a need for a commiserate lifestyle, these ultrahigh-net-worth individuals (UHNIS) continuously show an interest for expensive and luxurious housing, thereby driving a steady growth in this segment,” remarked Jalota
According to bansal, “The definition of an ultra-luxury project may differ or may have changed over the years. However, location is an important factor in driving the demand for such projects. Hence, the major component of ultra-luxury residential realty still remains in key central and prime suburban locations of a city. Factors such as, exclusivity, desirability and uniqueness of the project grabs the attention of the potential home buyer/investor in such properties. A number of global hotel chain managements have launched serviced residences and suites in partnership with realestate developers to grab a pie of the growing ultra-luxury residential market in India. Further, real-estate developers are now adopting modern technologies, impressive designs and architecture in order to differentiate their projects and stand unique in the market. Some of the projects with ample area also have amenities and facilities such as exclusive access to golf course or a world-class club membership.”
siddhart goel, senior Director - Research services, cushman & Wakefield felt the stature of the architect and the developer is also important for the ultra HNI. He elaborated, “European designers are the most sought-after by Indian HNIS. For instance, developers such as Lodha and Sunteck in Mumbai, and Panchshil in Pune tied up with internationally renowned designers such as Armani and Jade Jagger to offer contemporary and luxurious designs and craftsmanship. The ultra-hnis look for uniqueness even in the interiors, for instance, the type of materials such as wood, marbles, glass, etc. being used in the project while, the amenities provided in such projects vary across cities.”
the Marketing strategies
The marketing strategy adopted for selling ultra-luxury homes differs from the tools used for promoting other segments in housing. The developers usually have ‘by invitation only’ approach to market ultra-luxury projects. As bansal explained, “Developers of ultra-luxury projects have been targeting niche set of buyers/investors, and many target only same class of individuals. The sales are not open to any individual at random. There is a process being followed which involves invitations being sent to potential client, based on the client profile. Over the past couple of years number of branded or designer homes have been launched across the top cities in India. This creates a brand identity, gives an edge and also adds an awe factor to the project.” Adding to the same goel said, “No project detail is publicly shared and the invited clients are given a personal presentation/walk through for the project. The focus of the marketing campaigns is to tap the select target segment and draw their attention to the exclusive offerings in the projects, for instance, the association with an ace designer, tallest residential tower, etc. These projects are typically advertised in premium lifestyle magazines, airport lounges, private parties, etc. The developers also host exclusive events / programmes for the select audience and introduce the ultraluxury project, for instance test drive of a newly launched luxury car or helicopter ride to the nearest weekend destination.”
“The marketing strategy for luxury properties is a crucial element as the luxury scene is very competitive and one can stand out only by using strategic marketing. It is all about having a comprehensive and cohesive campaign, giving people various touch points to interact with and experience the story behind the luxury property, “concurred Jalota