y r u x Lu es Hom
A Growing Preference for New Age Buyers Source: Jones Lang LaSalle India
D
espite the global economic and financial crisis, the Indian residential market is relatively stable in general, as demand for luxury housing grows gradually. This growing demand can be attributed to the rise in the number of high net worth individuals (HNWIs), the rapid pace of urbanization, the influx of global lifestyle trends and an increase in the number of non-resident Indians (NRIs). Also, the recent fall in the value of rupee in global financial markets boosted buyers' interest in investing in luxury housing and encouraged developers to launch luxury/super luxury housing projects priced from Rs 10-200 million. The fact that most buyers have been seeking quality products recently is compelling developers to come up with luxury projects in collaboration with global property developers and architects. To attract buyers, developers are now trying out a variety of new products in the luxury housing segment, including Singaporean and US-style apartments, homes that are similar to plush hotels and branded luxury residences. Developers are also increasingly adding lifestyle amenities such as golf greens, schools, hypermarts, jogging tracks, independent swimming pools, complete home automation, Value of Luxury Residential Projects Launched During 2008-2012
apartment is not much. Of course, this depends on location and varies from city to city, where perhaps luxury residential projects have a higher risk and longer gestation period compared to midend/high-end apartment projects.
(21%), Bangalore (11%) and Chennai (10%). The Tier II cities are at a nascent stage in luxury residential launches. In 2008-2012*, Kolkata accounted for 7% of total luxury launches, followed by Pune (5%) and Hyderabad (2%).
The total value of luxury homes, launched
The residential market is currently going through a phase of slow demand, although growth for luxury housing looks moderate and demand is stable, giving buyers the opportunity to negotiate. Over the short term, no price increases are expected, despite the fact that the value of luxury homes is likely to increase significantly over the medium-long term. The value of luxury homes will be fuelled by presence of around 1.53 lakh HNWIs (whose numbers are growing at fast rate), people who inherited wealth and have dynamic lifestyles, as well as those in the newly rich segment (according to World Health Report 2010).
City-wise Market Share of Luxury Residential Projects Launched During 2008-2012 Pune 5% Hyderabad 2% Chennai 10% Mumbai 21%
*2012 includes the value of projects launched during 1Q12 to 3Q12 Source: Real Estate Intelligence Services
in 182 luxury residential apartments, offering a total of 25,570 units across India's top seven cities of NCRDelhi, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata in 20082012*, was around USD 30 billion. NCRDelhi, Mumbai, Bangalore and Chennai are leading in terms of market share of these launches, with NCR-Delhi leading (at 44% of the total), followed by Mumbai
8.55 8 5.61
6
4.73
4 2
1.69
0 2008
2009
2010
2011
2012
Value (USD Billion)
modern clubs with exclusive members' lounges, spas, Jacuzzis, concierge desks and gyms. Spacious luxury apartments also invariably come with top-quality interiors, bathroom fittings and kitchen decor, often featuring imported materials. Thus, the desirability index of upcoming projects depends significantly on their lifestyle offerings and exclusivity. The difference in cost between a midend/high-end apartment and a luxury ESTATE AVENUES / JANUARY-2013
Grade A Office
Rental Value
Capital Value
Retail
Residential
Delhi NCR Mumba Bangalore Chennai Pune Hyderabad Kolkata Source: Jones Lang LaSalle Research
BANGALORE
9.88
10
National Capital Region (NCR) 44%
Financial Indicators
14 12
Kolkata Bangalore 7% 11%
80
Bangalore's residential market has exhibited steady consumer demand during the last two years, and this trend continued through the month of October. There was a moderate number of new launches over the month, among which the major projects were NCC Group's NCC Ivory Heights in Mahadevapura and Assetz Homes' Assetz Clover Greens on Sarjapur Road. Because of the increasing number of people entering Bangalore on the back of Residential Rents Capital Value growing employment opportunities in the city Key Precincts Rs per month for a 1,000 sq ft INR per sq ft and the shortage of ready2-BHK apartment to-occupy apartments, the Old Madras Road 10,000-15,000 5,000-6,000 rents of residential properties increased in Indiranagar 18,000-20,000 10,000-20,000 October. Meanwhile, Bellary Road 10,000-14,000 3,000-6,000 owing to the rising price of projects that were nearing Hosur Road 10,000-14,000 3,000-4,500 completion and the launch Whitefield 12,000-15,000 3,000-5,000 of new projects at above Tumkur Road 7,000-11,000 3,000-5,000 the market's average price, capital values marginally Kanakapura Road 8,000-12,000 3,000-4,500 appreciated across every Mysore Road 8,000-10,000 2,500-3,500 submarket.