The growth in the number of India’s rich and their wealth assets as well as the chaotic financial markets of past few years are attributed as the reasons for HNIs (high networth individual) investing in the uber-premium properties. The trend is also diverting the attention of developers towards a new segment of residential development, also known as branded luxury homes.
The unreliable fluctuating market world over has prompted the super-rich to focus at investing more in tangible asset that is real estate. This has led to the growth in demand for premium developments, encouraging the developers to differentiate their real estate projects as super luxury developments. These projects are developed in association with world renowned architects, brand companies and fashion houses (e.g. Disney, Armani, Jade Jagger, etc.) to create a premium proposition and attract a larger share of this expanding market.
J.C. Sharma, Vice Chairman and MD, Sobha Developers comments, “The higher disposable income and aspirations of buyers is spurring a demand for luxury homes. Over the past few years, many successful first-generation professionals and businessmen with high-income profiles have emerged, who have the desire to live in houses that match their high-flying lifestyle. They either opt for a luxury house near Central Business District (CBD) areas, where the rate per square feet is high or they prefer to live in the suburbs in a large-sized villa within a gated community with amenities and facilities, so that they get a sense of exclusivity.”
“Luxury residential properties have become a fast growing segment of the real-estate business which attracts a number of domestic developers as well as many foreign investors. With a number of options to opt from, real-estate business seems to be on a high and with that, the lifestyle desires and expectations from a resurgent economy have made most real-estate developers take a keen interest in the luxury housing-segment. The demand for super luxury homes has increased by 15 to 30 per cent. This rise in demand has made most developers think of new ideas and innovative plans to cash in on this dedicated, boutique-homes category,” says Arun Singh VP – Marketing, Adel Landmarks Ltd.
Describing Branded Luxury Home
• Technological sophistication can include 24-hour concierge and security services, private elevators, integrated entertainment systems, fully networked homes and remotely controlled home appliances.
• Integrated hotel-style services are favoured by the wealthy like private dining rooms, private cinemas, conference areas, clubs, health & fitness suites, nanny & housekeeping and sauna, spa and salon services.
Originally, branded residences were residences linked to a hotel. This has evolved into several concepts, such as emphasis on exclusive services and facilities to distinct architecture and interiors, as a means of creating a brand identity in sync with the wealthy residents. In India, developers are tying up with 5-star hospitality brands like Delhi based Supertech with JW Marriott and Le Meridien, Ireo with Grand Hyatt, and 3C with Four Seasons to provide hotel style services to their customers after the delivery of the apartments. In all these projects, room services are to be provided by the hotel group to the occupants.
A branded home bears the unmistakable hallmark of the designer’s vision and sense of style. These limited edition homes are living spaces that transcend time and trends, bringing the elegant designer lifestyle into the everyday life of the resident. It’s no longer just about wearing fashion; it’s about living it 24×7.
When celebrities design or endorse a project, they keep their brand image firmly in mind. Collaboration with a brand name lends credibility, endorsement and identification to the development. The context is an important element of branded development as it attracts people who are buying into a lifestyle that will enable them to meet likeminded people. For instance, Michael Schumacher World Tower (MSWT) at Gurgaon by Homestead Infrastructure Development Ltd. is a tribute to the Formula One Champion. The tower with 110 limited edition lifestyle suites is conceptualized by the London based international practice Upton Hansen Architects (UHA) and developed by Shapoorji Pallonji. The building aerodynamic curves are reminiscent of the racetracks and features a cantilevered helipad at the apex of the building. The tower will also contain a museum featuring an exclusive collection of Schumacher’s memorabilia, so as to let the residents take a walk down the memory lane and explore the journey of the legend. Another example is Lodha Developers tying up with Jade Jagger, daughter of legendary rock musician Mick Jagger for Lodha Florenza tower in Mumbai. Jade Jagger isn’t a designer in the traditional sense but her bohemian lifestyle and taste are well recognized and the owners who find an alignment with her style and taste are keen to buy schemes designed by her.
Arun Sing explains, “A luxury designer home provides a complete living experience, replete with the highest level of services and amenities. The association with international fashion designer, brand or a fashion house helps the developer differentiate his offering from the other players in the market and breaks through the clutter. Engaging the international designers and fashion houses is more about gifting people a distinctive lifestyle. The project are designed as a union of practicality and dreams and offer after customers opulence, grandeur and sheer luxury. Designer residences bear the stamp of the designer’s unique aesthetics and break new ground in architecture, design and styling. Every element is carefully chosen and the finishing and materials are of the highest quality.
Amenities play a major role while choosing a property. In real estate, amenities are defined as location, access to a park, lake, highway, view or other factors that enhance the pleasure and enjoyment of the occupants. Considering the fact that there are people of all age groups, developers take care of all needs – kids play area and swimming pool to sporting and gym faculties to gardens for senior citizens and a lot of landscaped area whereby people can enjoy these facilities at their fullest in the heart of the city. Exclusive facilities can range from spa, jogging tracks, yoga centres, laundry, lounge etc. In addition, a luxury home owner expects to have the assurance that their families and property are safe in all respects. A genuine luxury project has uncompromising human security as well as electronic surveillance and safety measures firmly in place. You require good service staff for maintaining landscaped gardens and for regular upkeep of facilities. The builder may tie-up with lifestyle brands and hospitality brands for concierge and house-keeping.”
The Price Premium
• The branded developments feature innovations and merge the hospitality style decor and services which justify the high cost to buyers who are looking to buy into the latest trends.
• The convenience of the services on offer uplifts the capital value of the property and is appreciated by the buyers who want to make a statement and for which they are happy to pay high service charges.
• The opportunity to be associated with the well-known designer or architect involved in the scheme is a major attraction for the buyer as it creates an exclusive personality of the home and a brand with which they can identify themselves.
• With the purchase of a branded residence, buyers steps into international style property ownership. The ability to identify with a known brand gives them confidence in the delivery of the development and its ongoing management.
According to developers, attaching a large premium to the price makes the projects exclusive. Also, being a niche market, the demand for super-luxury housing is not volatile. The HNI segment is not dependent on home loans for its realty purchase and remains unaffected by hardening interest rate stance taken by RBI.
The Projects Galore
• In metros like Mumbai, due to limited availability of land luxury properties are growing vertically. Apartments stretching over an entire floor have landscaped terrace gardens, central air-conditioning and private swimming pools.
• Alternative to the assembly line construction is boutique, or customized apartment cluster. These are defined by exclusivity rather than volume. A typical project has just 5-10 units comprising large-format apartments.
• The row houses or villas in NCR are the horizontal developments with neighbourhood comprising premium restaurants, cafes, spas, lounges, common swimming pools and other first-class offerings. Spacious villas invariably come with designer interiors, bathroom fittings and kitchen decors and central heating in places like Delhi.
Prestige Estates Projects is collaborating with Disney India to feature Disney-inspired residences consisting of 3,400 apartments and over 200 villa units in Bangalore. Pune based real estate firm Panchshil Realty will be bringing the Trump brand of luxury in its Trump Towers Pune and has also partnered with Philippe Starck for his foray into India under the yoopune brand.
Likewise, Omkar 1973 in Mumbai by Omkar Realtors boasts of collaboration with renowned architect Norman Foster and Interior designers Hirsch Bender & Associates, USA. The development offers its residents, pet spa, aqua gym, sporting facilities and other amenities at par international hospitality chains. Lodha Developers has partnered with Armani/Casa Interior Design Studio to create the interiors of its project, World Towers in Mumbai. The first design in Asia by the Armani/Casa Interior Design Studio will have residential units featuring Armani/Roca bathrooms and Armani/Dada kitchens.
Apart from designs by international designers, luxury homes are defined by intelligent living spaces networked through latest gadgets and technology. Mantri Developers has collaborated with networking provider Cisco to deploy information and communications technologies in its recent luxury residential projects in Bangalore. Sunteck Realty has tied up with luxury mobile phone manufacturer Vertu to provide concierge services in a residential project aimed at top corporate executives. Total Environment Building Systems Pvt. Ltd for its Windmills of Your Mind project in Bangalore has complete automation features accessed by using Apple iPad.
“When it comes to high-end properties, it is usually the HNIs who invest in this segment and their requirements also are niche when compared to the premium segment. They prefer to have more of individual spaces and expect an enhanced quantum of luxury for themselves. Smart home features, building management systems and professional facility maintenance come in as default for such projects.” Explains Sanjay Raj, ED & CEO Prisha Properties.
Potential & Challenges
As per industry experts, the branded luxury homes demand driven by home grown HNIs and NRIs is expected to grow and exert an upward pressure on property prices especially in markets like NCR, Mumbai and Bengaluru where the demand-supply gap is high. Developers are, in fact, experimenting with a variety of new products offering niche services that are a step-up from a lifestyle that the affluent class has already been exposed to.
“The luxury segment does not operate along the lines of traditional housing construction cycle, where there is a perceptible price difference between the pre-launch to the near-completion stage of a property. In case of a luxury property, however, from the inception to the completion of the project, there is just about a negligible price escalation where the operating keyword is “construction”. Since the investment quantum is so significant in a luxury project, buyers typically invest in it only when there is a perceivable change in construction status. Especially in the present market scenario, where there is a significant amount of inventory in almost all housing segments, the end customer has enough and more choice. In such a scenario, luxury projects can only hope for interested buyers at the completion and near-completion stages, where the home buyer is assured of a premium product.
Execution would be one of the most uphill tasks faced by developers of luxury property across India. The average national delay time of completing projects is about 13 months. Add to that credit availability, which is usually a major issue for developers. Non-availability of good land parcels also restricts developers to rethink their strategy on luxury homes. The key challenge is the velocity at which one can dilute one’s stock; and the key for the success of such projects is to be able to build a minimum threshold volume with respect to sales in a project,” adds, Arun Singh.