Lodha Group plans to resume sales at Trump Tower Mumbai after a post-election hiatus, providing a test for India’s languishing luxury home market, and the U.S. president’s brand. Lodha, one of India’s largest property developers, will resume marketing apartments in the 75-story development in the next few months, said Abhishek Lodha, managing director of the privately held firm. The building is about 60 percent sold and on target to be completed in 2019, he said. “We made a conscious decision to not sell in the immediate aftermath of his win because we didn’t want to be seen as taking advantage of the changed political circumstances,” Lodha said in an interview at the company’s offices in Mumbai. “We will start sales in June or July and we’ll know better then.”
Enthusiasm for the Trump brand has faded in some parts of the world since Donald Trump was elected president as he moved to enact controversial policies, including a travel ban on several predominantly Muslim nations. He’s also sought to restrict H1-B visas, which are used in large numbers by Indian companies and outsourcing firms. The March opening of a Trump hotel in Vancouver was marked by protests, and a Trump residential tower in Toronto put up for sale after its developer defaulted attracted no bidders apart from its debt holder. Some government ethics experts argue that Trump should sell his business to avoid any risk that his policy could be seen as driven by his family’s corporate concerns, though the law doesn’t require that.
Lodha hasn’t had any communication with President Trump as he’s no longer involved with the business, Abhishek Lodha said. Lodha said he’s confident the Mumbai tower will be a success, with buyers attracted to the building’s post-sales services, a Trump specialty. The tower, which will be sheathed in a “golden-curtain” facade, includes a 24-hour resident manager, membership of a private jet service and access to a seven-acre private park.
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Trump Tower Mumbai is one of 31 projects Lodha has underway in India and the U.K. The company is developing the 117-story World One tower in the city, which it bills as the world’s largest residential tower and owns Mumbai’s largest land bank, according to its website. Sales of luxury housing have taken a hit since India’s government Nov. 8 banned high-denomination notes to crack down on corruption and tax evasion. Real estate has long been a place where Indians have parked cash, often using money on which taxes haven’t been paid.
While the overall market has snapped back since then, the rebound’s mainly been led by affordable housing, Pankaj Kapoor, founder of Mumbai-based Liases Foras Real Estate Rating & Research Pvt, said. Sales of luxury homes are “dead,” and it would take about seven years to sell the luxury inventory on the market, with prices unlikely to rise for three or four years, he said.
Still, Lodha reported sales reached a monthly record for March, helped by both luxury and mass-market homes. That plus a contribution from its London properties helped push net sales for fiscal 2016-17 up 30 percent to between 83 billion rupees ($1.29 billion) and 85 billion rupees, despite demonetisation and Brexit, the company said. The company continues to evaluate an initial public offering, Lodha said. “We said in late 2016 we have an 18-month time-frame to obtain the regulators’ approval and we’ll stick to that,” he said, adding it was too early to speculate on a size of a potential IPO. “We’d love to be in the public domain because it would give us the ability to create more wealth for our associates and our employees,” he said. “For us that’s the single most important reason to go public, as opposed to raising capital.”