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.

Realty Plus - - Editor-In-Chief Note -

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

the Def­i­ni­tion

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

neeraj Bansal

Mona jalota

sid­dhart Goel

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