By Bindu D Menon
Key real estate players in the market such as DLF, Lodha group, Sunteck Realty and Godrej, among others, are betting big on their luxury residential real estate portfolio as the appetite for exclusive addresses grow among high net-worth individuals (HNIs) and non-resident Indians (NRIs). From the companies perspective, though the luxury real estate market is still a small segment of their overall portfolio, the sales margins in this bracket is significant owing to the price point it sells.
Earlier this year, DLF said it had sold 70 units and recorded an impressive sale at its DLF Camelia project, priced between between Rs 27 cr to Rs 50 crore. Other luxury residential projects like Sunteck’s project Signia Pearl, which is priced between `22 cr-`25 crore, and Lodha’s Malabar, priced over `25 crore, are also seeing huge demand and invariably have a waiting period.
“Luxury is intangible. Today, its price inelastic and conversations have moved beyond the budget. The demand for luxury and super luxury segments have surged, almost doubling over the past five years,” said Aakash Ohri, joint managing director and chief business officer, DLF. He said the buyers of super luxury homes typically encompass businessmen, expatriates, new-age entrepreneurs, HNIs, and NRIs.
Lodha group also echoed similar sentiments and said that 12-15% of its sales come from the super luxury space.
“Currently, our luxury portfolio stands at 12-15% of the total sales of `14,500 crore. Last two years, the housing sector has been on a bull-run and we will continue to invest in such projects,” said Prashant Bindal, chief sales officer, Lodha Group.
He said that the super luxury space is a statement product that was dominated by entrepreneurs. In the last 18 months, however, several professionals are also keen on owing a luxury residential property.
The company plans to keep investing in the luxury space and increase its portfolio in the coming years. “We will continue to invest to boost the overall growth,” Bindal said.
India’s ultra-high-net-worth individuals (UHNWI) with net worth of over $30 million will rise by over half (58.4%) in the next five years. From the last count in 2022, the number is likely to grow to 19,119 individuals in the next five years in 2027, showed ‘The Wealth Report 2023’ released by real estate agency Knight Frank. The billionaire population is also expected to reach 195 in 2027, from the current 161 in 2022.
India Sotheby’s International Realty said that real estate players are witnessing a wait list to buy super luxury residential properties. “As wealth is increasing in India, more buyers are showing interest in owning luxury homes. The supply is limited and demand is steady. Marque assets gets picked up even when the cost is high.” Amit Goyal, managing director, India Sotheby’s International Realty said.
He said that several HNIs are also looking at luxury farmhouses in Alibaug (in Maharashtra) and Goa to expand their realty holdings. Goyal added that the company is looking to set up an office in Goa to cater to the latent demand.
DLF’s Ohri said that coupled with pent-up demand, there has been a notable increase in the interest from NRIs to capitalise on opportunities to invest in luxury properties in India. Over the past three years, the number of NRIs seeking homes in India has significantly risen. Simplified tax structures, property indexation benefits, favorable currency fluctuations, streamlined digital processes, and transparent regulations attract them to invest in luxury properties.
However, a study by Anarock shows that supply of luxury real estate has dropped 20% from 31,700 in 2021 to 25,360 in 2022, pushing up the prices further.
Starting prices in most of these luxury residential projects begin from 18,000 per sq feet. The apartments are usually over and above 5,000 sq feet in size and are complimented by unique architectural designs, personalised amenities such as a 24/7 concierge services and exclusivity in design and fixtures.
Almost all the real estate players FE spoke to said that super luxury properties are by invitation only as this segment requires a customised and curated experience for the buyers.
“We focus on crafting exceptional residential experiences that cater to the aspirations of our exclusive clientele. It includes meticulously designed and curated plans. He said the demographic of buyers for its projects were a mix of professionals seeking ultimate comfort and prestige, as well as more mature individuals looking to indulge in the epitome of luxury living, said Kamal Khetan, chairman and managing director, Sunteck Realty Ltd.