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BW Businessworld

Homing In On New Heights

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Most people discover the joys of life amidst their families, their hearth and homes. And they spend half their lives in the warmth of their homes. Considering this, to splurge on creating a nice, exclusive little world for themselves is not such a bad idea. Those who have the money can do it with aplomb; luxury homes can be built or bought off the shelf. Those who don’t have the money slave and save, and hope to get there; others have to settle for leafing through smart, gleaming brochures. And dream.

So how does one define a luxury home? Is it determined by the cost? Yes, cost is one crucial factor. Builders define a luxury home in Mumbai or Delhi as one that costs Rs 5 crore or more; Rs 3 crore or more in the other metros. “More money buys you a larger space, which is necessary for luxury living,” says Anshuman Magazine, CEO of property consultancy CBRE South Asia. “But that is not all. A luxury home is defined by many things — locality, the quality of design and fittings, the level of maintenance and the character of the community around.” Providing air-conditioned apartments in gated communities with a gym and pool, Magazine says, is passé. Things have moved on and the luxury hunter wants his apartment to be automated: where lights come on when he enters his bedroom; and in which he can control his television and curtains by tapping on his iPad.

“We have moved ahead from providing just nice marble flooring,” says Abhisheck Lodha, managing director of the Lodha Group. Over 50 per cent of the group’s Rs 8,700-crore revenues come from luxury sales. “We have evolved to the next level where details of design and interiors are crafted to indulge the senses,” he adds. The Lodhas were among the first developers to begin selling branded homes with elegant interiors — an Armani tag for their World Towers in Mumbai, Philippe Starck for their New Cuffe Parade project and Jade Jagger for Fiorenza.

What is in it for the builders? Anuj Puri, CEO of property consultants Jones Lang LaSalle (JLL), estimates the “market for super luxury does not represent over 5 per cent of the overall residential market”. However, a class of builders is focusing on the luxury segment because of the higher returns. “Quality sells. Luxury homes give us between 30 to 50 per cent premium over the market,” asserts Lodha.
NO LIMITS: Akshaya Homes' Abov in Chennai is a 38-storey tower with just 31 apartments of an indulgent 6,700 sq. ft each

But in a slump, doesn’t the larger ticket size make marketing more difficult? Notes Shveta Jain, executive director of residential services at broking house Cushman & Wakefield, in a recent report: “The share of high-end segments in new launches has increased... in spite of stagnant demand. It is largely due to aspects like high land prices and development cost that developers have chosen to go for higher ticket size projects even while demand is more for affordable and mid-end segments.”

The Luxury Of Space
Luxury homes are defined by a mix of many attributes, but at the centre is providing the user the freedom from urban claustrophobia. One such project is Chennai’s Abov by Akshaya Homes, promoted by T. Chitti Babu. “Luxury living in Chennai was thought of as a build-it-yourself bungalow with a large garden. A house on a 1,500 sq. metre plot in Poes Garden would cost Rs 70 crore,” says Babu. “So, I decided to give the same luxury at one-tenth the price.”

Babu’s project is a 38-storey tower in Chennai’s OMR area. It has just 31 apartments, each of them an indulgent 6,700 sq. ft, and one apartment to a floor. Each apartment has it’s own plunge pool, with a larger community pool on the ground floor. The club house, on the 34th floor, and the Ocean Bar, offer a panoramic view of Chennai. Each home is fully loaded. It includes touchpad-operated controls, 10 years of maintenance provided by the developer, exclusive suites for guests, a private movie hall, and even a grand piano in the lobby. Price tag: Rs 6.5–7.2 crore.

“Ten years ago, apartment culture was unknown to Chennai’s rich. Luxury apartments are a recent phenomenon,” says Babu.  He has sold 11 of the 31 apartments and expects to complete the project by 2015. Babu is set to launch his next project with apartments priced in the Rs 15-20 crore range.

The Kingfisher Towers in Bangalore, developed by the Prestige Group on Vittal Mallya Road, has a similar offering of space-in-the-sky with 8,500 sq. ft apartments, each with just four large, luxurious bedrooms. The community of 64 flatowners will spread themselves out over five floors of parking, a swimming pool on the 15th floor, clubhouse facilities on the 6th floor, and round-the-clock concierge services. The cherry on the project is the Mallya family occupying all 50,000 sq. ft of the top two floors. “The exclusivity of just 64 apartments among the who’s who has driven up prices to Rs 25 crore a flat,” says CBRE’s southern head Ram Chandnani.

The Lodha Group, having bought the famous 17-acre Mumbai Textiles Mills from DLF for Rs 2,727 crore, has also decided to provide ‘bountiful space’ as the unique selling point for its new project, The Park. “We have learnt from London and New York where the best residences abut Hyde Park and Central Park,” says Lodha. Community spaces include a one-acre children’s park, large gymnasiums designed by Evander Holyfield, a cricket ground and even a spice garden. The pricing is equally stunning. The smallest two-bedroom flats start at Rs 3.5 crore, the 5,500 sq. ft ‘town houses’ will cost Rs 25 crore and the independent 1,000 sq. yard bungalows will touch Rs 100 crore and more.

Branding Adds Value
What was started by Lodha and a few others has become a stampede in the luxury segment. Branding interiors or entire apartments with tags such as ‘Casa Armani’ has found good response. Those who did not have the patience to get their interiors done themselves felt western designers added elegance and modernity to homes. It gave them a ‘status address’ too. Branding around sports and golf-themed projects are an increasing trend too, says JLL’s Puri. “Golf is fast becoming a status symbol and lifestyle statement of the Indian super rich.” For builders, this means faster sales and a higher premium.
STEP UP: Bhagtani Krishaang by Jaycee Homes in Mumbai offers apartments priced at Rs 5 crore for the upper middle class (Photograph by Umesh Goswami)

In Gurgaon, for instance, London-based Homestead Infrastructure has launched the Michael Schumacher World Tower. Offering selling points such as a cantilevered helipad, a glass dome atop the building and a Michael Schumacher café, the 28-storey project is offering around 100 homes in different sizes at Rs 14,000 a sq. ft.

More recently, IREO has announced an agreement with Hyatt Hotels for developing ‘Hyatt’ branded residences as well as a Hyatt hotel franchise for its township in Gurgaon. The 29-acre layout will include 265 ‘Hyatt’ homes managed by the hotel chain, a 460-room luxury hotel, office space and high street retail. The interiors will carry the ‘Tony Chi’ branding for residences.

Interestingly, this niche luxury homes market is growing with developers targeting the aspirational upper middle class. One such Mumbai project is the 25-storey Bhagtani Krishaang that overlooks the Powai lake. With car parking and clubhouse amenities rising to level 6, residences start from level 7. A 30-ft lobby with a mural running through it adds grandeur to the tower. “The 2,400 sq. ft apartments are a cut above the rest. At Rs 5 crore apiece, we have made luxury homes affordable,” boasts Dipesh Bhagtani, executive director of Jaycee Homes. Agrees Lodha: “Luxury living need not be the exclusive preserve of the very rich. It should be available at all price points.”

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(This story was published in BW | Businessworld Issue Dated 07-10-2013)