Luxury housing uptick expected to continue in 2022
12/24/2021 2:59:00 PM
For the uber rich, a high-end property deal is no more than a number, particularly when it comes to homes in the range of Rs 80 crore to Rs 1,000 crore. While Delhi had its own share of super luxury bungalows being lapped up by
industrialists, pandemic or no pandemic, India’s commercial capital continued to epitomise this syndrome in 2021. Real estate experts say the trend is likely to continue in 2022.
Several transactions were registered in the Mumbai market until March 31, the day the Maharashtra government decided not to extend the stamp duty waiver. And yet, the trend of industrialists, diamond merchants and start-up
owners purchasing luxury ready-to-move-in properties has continued right until the end of the year.
In Delhi, too, several bungalow transactions were finalised in Delhi’s Lutyens’ zone and other luxury markets such as West End and Vasant Vihar. More recently, two branded players — Godrej Properties and Tata Realty and
Infrastructure — said they had plans to launch projects in the segment.
While Tata Realty and Infrastructure has plans to develop an ultra-luxury residential apartment project near Hailey Road in Delhi and is expected to invest close to Rs 200 crore by 2023, Godrej Properties said it has entered into a
joint venture with the TDI Group to construct a luxury housing project in the Connaught Place area.
“This is likely to be a trend going forward as most homebuyers in these posh markets prefer branded developers who adhere to RERA guidelines and GST norms. Of late, there have been massive delays by local developers active
in these markets,” points out Amit Goyal, CEO at India Sotheby’s International Realty.
Developers of high-value independent floors in some South Delhi markets have been avoiding registration under the RERA Act, leading to violations. The developers claim that they have been adhering to Section 3(2) (a) of RERA,
which provides for exemption from registration if the land proposed to be developed is less than 500 sq. metres in size or less than eight apartments are proposed to be developed on the property.
“While there are some challenges with regard to the supply of high-end floors in the Delhi market due to delays, the outlook for the super luxury market in 2022 remains robust. Having said that, the noose should be tightened around
these builders and circle rates should be rationalised and more categories created. A mere 20 percent reduction of circle rates across all categories until December 31, 2021 has not served any purpose,” he said.
“Most of the buyers buying properties in India are taking advantage of the lower mortgage rates and all-time-high equity market. Some of them are reinvesting to save capital gains from sale of equity shares or a stake in a start-up or
property,” said Goyal.
Recently, Anil Gupta, promoter of KEI Industries, a housing wire and cable maker, bought a property spread across 2,000 square yards in Delhi’s posh Shanti Niketan area for Rs 140 crore. The sale deed was executed on October
Earlier this year, the owner of a leading electronics contract manufacturer bought a house in New Delhi’s Lutyens bungalow zone for Rs 170 crore, in what is believed to be the priciest residential transaction in the city after the
This month, Mumbai-based Godrej Properties (GPL) announced that it has formed a joint venture with TDI Group to develop an ultra-luxury residential project over 1.25 lakh sq. ft in Connaught Place.
Tata Realty and Infrastructure is planning to invest around Rs 200 crore to develop ultra-luxury residential spaces near Hailey Road in Delhi. The Hailey Road project, which is likely to be launched in 2023, will comprise around 40-
odd luxury apartments spread over 100,000 sq. ft of built-up area across a 0.9 acre plot.
Speaking to Moneycontrol, Tarun Mehrotra, Business Head, North & East India, Tata Realty and Infrastructure, said: “We have not applied for DUAC approvals yet. We had applied for multi-storey approvals and those, in principle,
we have received. Now, we will be preparing building plans and applying for DUAC approval. Once DUAC clears we will apply to the NDMC.”
The company had bought the Hailey Road plot way back in 2012 for Rs 218 crore and had earlier announced plans to build four villas on it.
Low-density bungalows, luxury ‘jodi’ flats sell big in Mumbai
The year 2021 saw ready-to-move-in luxury apartments in Mumbai being lapped up by high networth individuals (HNIs). The year started with the mega bucks bungalow deal inked by D’Mart founder Radhakishan Damani and his
brother Gopikishan Damani for an Rs 1,001-crore independent house in Mumbai’s posh Malabar Hill area.
The registration took place on March 31, the last day of the reduced 3 percent stamp duty on housing units in Maharashtra.
In another bungalow deal, a company owned by Surat-based diamond merchant Ghanshyambhai Dhanjibhai Dholakia bought a bungalow at Worli Seaface in Mumbai for Rs 185 crore. The 19,886 sq. ft property, called Panhar
Bungalow, and comprising a basement, ground floor and six other floors, was bought by Hari Krishna Exports. The seller of the property was Arkay Holdings, which is owned by Essar Group. The property deal was registered on July
30. The per sq. ft cost worked out to around Rs 93,000 per sq. ft.
Real estate experts say that demand for independent houses in the uber-luxury segments, especially above the Rs 100 crore range, picked up in Mumbai, particularly during the two waves of the pandemic.
“Due to limited availability of such bungalows in a city such as Mumbai, decent appreciation of such properties is expected over a period of three to five years,” said Ritesh Mehta, Head Residential Property Sales, JLL.
Later, in one of the biggest high-rise deals in India, the promoters of Mumbai-based real estate major K Raheja Corp decided to keep possession of three floors of their ritzy project in Mumbai — sprawled over 60,000 sq. ft and worth
Rs 426 crore. The project, named Artesia, an iconic standalone 45-storey tower, is located in Worli and has an expansive view of the Arabian Sea and the Bandra Worli Sea link.
Mehta points out that demand for ready-to-move-in luxury units that are now few and far in between is expected to continue into 2022. The segment picking up these units includes industrialists, corporate houses, stockbrokers and
even those who have made money from recent IPOs.
“Besides demand for bungalows, there is enormous traction in the case of Jodi apartments or one family buying the entire floor comprising four units. Families want to be together during the pandemic. Earlier, they would pick up
luxury units in different projects but now they are buying apartments on the same floor. It is therefore not surprising that in a tower of 180 units there are not more than 100 families,” he explains.
Taller buildings by the sea
The luxury home inventory is only going to increase in the years to come with the Coastal Zone Management Plan (CZMP) for Greater Mumbai receiving approval by the Union Environment Ministry. This will lead to taller structures
coming up near the seashore as developers will receive two-and-a-half times the construction rights on such plots. Earlier, construction was restricted because of their proximity (500 m) to the coast under Coastal Regulation Zone
(CRZ) II rules.
It was therefore not surprising that in October, Imperial Infra, a Boman Irani-led Rustomjee Group firm, concluded a sale agreement with the Bandra Parsi Convalescent Home Trust for a 1-acre plot near Taj Land's End Hotel.
According to media reports, the Trust received Rs 234 crore from the sale, with part of the proceeds going to the suburban collector as the collector's fee. Luxury residential towers can come up on this plot, say real estate experts.
“With this, the entire Bandra seafront is expected to open up for construction and redevelopment. This will lead to construction of more luxury stock in the next five to six years and that will help rationalise prices going forward,”
IPOs and fund raising propel the luxury property market
The luxury story does not end here. If one were to look at the registration data of luxury properties in 2021, there were around 25 property deals priced over Rs 50 crore and worth Rs 2,936 crore that were registered in Mumbai in
2021, data shared by Zapkey.com showed.
As many as 21 such deals worth Rs 1,235 crore were registered in Mumbai in 2020 despite restricted registration activity on account of the lockdown. And in 2019, 14 luxury deals worth Rs 886 crore were registered and that too
before the pandemic and without the stamp duty waiver.
“It is pertinent to note here that in 2021, there was one large-value deal worth over Rs 1,000 crore by the Damanis due to which the total luxury sales touched Rs 2,936 crore this year indicating massive growth despite there being no
stamp duty waiver for almost nine months,” said Sandeep Reddy, co-founder, Zapkey.com
Wealth created through stock markets, IPOs, private fund raises, finds its way into real estate, especially in high-end apartments, explains Reddy, adding this trend will continue in 2022.
A case in point is the property bought by Siddharth Shah, founder of online pharmacy chain PharmEasy, which acquired Thyrocare. He bought an apartment in Mumbai’s Khar West for Rs 40 crore in August 2021.
In Delhi too, soon after India’s biggest online-education startup Byju’s signed a deal to acquire tutorial chain Aakash Educational Services for $1 billion in April, the latter’s founder JC Chaudhary, bought a 2,000 square yard property
in south Delhi’s Vasant Vihar area for over Rs 100 crore.
He later also purchased a 5-acre farmhouse in south Bijwasan area for around Rs 96 crore.
Source: Money Control