High ceilings with wall-to-wall glass panelling, contactless systems controlling every function, an in-house valet service, concierge to cater to your daily needs and best-in-class clubhouses - welcome to uber-luxury housing. Catering to the creme de la creme with price upwards of Rs 20-25 crore, such projects are the playground of architects and interior designers. And while the overall real estate market has been sluggish, this segment has been fairly insulated from the effects of Covid-19. However, what have changed are customer preferences. Revenue from this segment forms a sizeable chunk, though the overall development size of these projects may be small compared to the rest in the portfolio.
Personalised Offerings: Selling uber-luxury homes is not a regular sales job. Most developers take the 'by invite only' approach in this segment. "Uber-luxury has a snob-value and we don't advertise for any such projects," says Mumbai-focussed Sunteck Realty's Chairman and MD Kamal Khetan. "Who are your neighbours is of great value. The class of people staying in the complex, the kind of lifestyle they lead, all these have to be bundled in the project," he adds. However, exclusivity and expansive green spaces top customer preferences. "We can't even show the project to two customers at the same time, we have to do it one by one" says Aakash Ohri, Executive Director, DLF Home Developers. The buyers list is curated through references and channel partners and vetted even before approaching the prospective customer.
Since there are limited options to choose from, uber-luxury sales happen largely by referrals. Deals also close much faster compared to other segments. "If they (buyers) like it and want to close it, they don't look at many options. They either connect or disconnect," says Ranjan Das, Head of Business Development at Lombard Standard, a real estate investment advisory firm. Three-dimensional models of the projects and graphic video representation play a major part in decision-making and influence clients even before they go to the location to visit the actual property, he adds. Most buyers also prefer to buy bare shell structures, and developers such as Sunteck and DLF say it works best since buyers can then customise the space and the decor to suit their taste.
With work from home emerging as the new reality, the need for change in scenery is being felt like never before. There is a rising demand for weekend residences in the suburbs, especially in a scenic surrounding. "If the property has a salon and spa within, it is a great draw," says Swaroop Anish, Executive Director, Prestige Estates Projects Ltd.
It's not just the green expanse or open space, carbon footprint is also a selling point. While people did not realise the value of green buildings earlier, usually built at a 20-30 per cent premium, today all that has changed, says Reeza Sebastian, President, Residential Business at Embassy Group, a leading luxury developer in the southern market. "Customer asks for sustainability initiatives. Natural ventilation, incorporation of biophilic design, zero discharge and recycling are a consideration while buying a home," she says. Non-touch experiences such as operating the lift with a foot peddle, app-based interaction and voice-based operations are now being incorporated into projects post Covid, she adds.
Price Play: The uber-luxury residential segment in India serves just about 2-3 per cent of the entire residential market. Mumbai leads the market with projects from leading developers such as Omkar 1973, Lodha World Towar, Rustomjee Elements and Signia Isles, with price point upwards of Rs 20-25 crore. The National Capital Region (NCR) follows Mumbai with projects such as The Camellias and King's Court, again priced above Rs 20 crore.
Though not comparable to Mumbai or the NCR, luxury and uber-luxury projects are coming up in Bengaluru, home to newly-minted young billionaires, including Embassy Boulevard, Four Seasons Private Residences, Prestige Golfshire and Kingfisher towers, which are priced in the Rs 8-10 crore range.
But, price tag is the least of the concerns in this segment. Niranjan Hiranandani, Founder and MD, Hiranandani Group and National President, National Real Estate Development Council (NAREDCO), says this particular segment is least impacted by changes in interest rates or policy tweaks announced by the government. "Investors here are more dependent on their personal wealth rather than home loans," adds Hiranandani.
The pandemic has also played its part in shaping preferences. Buyers are now keen on study or office spaces inside houses, large decks, cozy views, designer lobbies, private elevators and low density with a handful of neighbours, says Ritesh Mehta, Head, West (Residential Services), JLL India. In a recent Twitter survey conducted by the Lodha group with over 1,600 participants, nearly 90.2 per cent said they wanted homes with decks or balconies, over 80 per cent sought multi-purpose usable spaces and considered open spaces and additional spaces to accommodate full-time helps absolute necessities.
"Developers are rolling out business lounges and guests zones keeping in mind social distancing norms, and dedicated spaces for recreational areas inside the apartment. Gyms, lawns, hobby zones and the deck concept are back," adds Mehta.
Small, But Sizeable
The latest Knight Frank Wealth report predicts that over the next five years, the number of ultra high networth individuals (UHNWI) is likely to grow by 27 per cent globally. In India, the number is being projected at a staggering 73 per cent. The report also points out UHNWIs in India invest almost 34 per cent of their total wealth in houses. So it's no surprise that for most developers catering to both luxury and uber-luxury categories, half of the revenues are from those segments alone. Since supply has always been scarce in this segment, limited buyers make it more expensive. DLF, for instance, says the company witnessed not just 6X growth in the segment, but also managed to close deals over Zoom calls during the lockdown. Forty per cent of DLF's inventory consists of uber-luxury homes. Competitor Lodha says August 2019 saw around Rs 90 crore of business in the premium-luxury segment, but August 2020 witnessed a 100 per cent growth. "This year in August, we clocked about Rs 200 crore in the premium and luxury segment, which is 33 per cent of the overall Rs 617 crore achieved across the entire Lodha portfolio during the month," says Prashant Bindal, Chief Sales Officer, Lodha Group.
With the rupee to a dollar rate favouring NRI home buyers, developers are expecting a further pick-up in the segment. Hiranandani group says it is seeing higher conversions for luxury and uber-premium properties. Another shift is the preference for investing in ready-to-move or near-completion homes across cities in this segment. Khetan of Sunteck Realty says buyers, especially in Mumbai, don't want their money to get locked up, given that many of them have burnt their fingers with projects worth nearly Rs 1 lakh crore spread across south and central parts of the city stuck for many years.
The price in this segment also depends on the address. For instance, Altamount Road, Mumbai, commands a premium since it is home to leading industrialists.
While other segments of housing have seen discounted offerings, the uber-luxury market is fairly insulated from the downturn. "Prices in this segment saw a marginal correction as the holding capacity of sellers is relatively high. While buyers are expecting a 35-40 per cent correction, sellers are offering 10-15 per cent discounts," says Mehta of JLL India.