From being termed as the Silicon Valley of India, Garden City, IT Capital of India and one of the country's fastest growing metropolises - Bengaluru, has now acquired another trait. The city is now home to some of India's most opulent and exclusive super-luxury residential structures. Against all expectations, this segment has held firm in the city in the last one year and even shown signs of an upward trend. In fact, the market witnessed major transformation in the recent past with the Kingfisher Tower setting a new capital values benchmark with per sq ft selling upwards of Rs.33,000 in the super luxury category.
These new dynamics have been referred to as the 'coming of age' of Bengaluru's residential market, and global property consultancy company Jones Lang LaSalle India analysts see a remarkable maturing process in the city.
Says Bijay Agarwal, MD, Salarpuria Sattva, "Providing a blend of good weather, excellent work opportunities, quality education and cosmopolitan atmosphere, Bengaluru has the makings of a global city."
According to JLL data, residential property capital values in Bengaluru have increased by 25 per cent since the trough in mid-2009, not factoring inflation. Currently, the absorption of residential spaces in the city is skewed towards the Rs.3000-7500 per sq ft price band, but there is also significant momentum in the price band of Rs.7500 per sq ft and above. The upcoming supply in this category of homes is a clear indication of this trend.
Moreover, there are approximately 1100 super luxury home units price-tagged at Rs.5 crore and above in various stages of planning and construction in the city. This translates into a market worth more than a billion dollars. Even considering this, the capital values in Bengaluru's super luxury homes market are still more attractive than those of Mumbai or Delhi. Once the city's infrastructure development catches up with the current pace of real estate development, there will be no stopping Bengaluru's residential market.
"The key reason for this segment doing well here is because prices in Mumbai or Delhi have skyrocketed. A super-luxury home that might cost Rs.5 crore in Bengaluru may easily be priced at Rs.15 crore or above in the other two cities. The market here is attracting NRIs to come back and live. All put together, super-luxury in Bengaluru comes with an attractive price tag," observes Hisham Syed Tamiz, MD, Ezzy Group.
Developers, on their part, have been reinventing their offerings constantly in terms of the amenities offered. From completely automated 'smart' homes to private pools and from extravagant landscaping to golf courses in the backyard, the differentiators are varied and unique. "The changing demographics of the country coupled with the rising aspirations have pushed up the demand for ultra-luxury housing," states Uzma Irfan, executive director, corporate communications, Prestige Group.
A minimum profit margin of 50-60 per cent is also one of the reasons why developers are looking at this category.
Says Preenand Premachandran, CEO, Hebron Properties, "The demand for ultra-luxury homes has been on the rise in the city in recent times. The segment has created quite a flurry as developers are offering uber-luxurious homes for the discerning customers. Above all, the handsome profit margins also lure builders to offers such homes."
Prestige, Sobha, Salarpuria-Sattva, Mantri, Ezzy Group, Hebron Properties, Brigade, Skyline, Total Environment, Nitesh Estates, Golden Gate Properties are among the few developers in the city that not only seek to bring about innovation in their projects but also add an 'exclusivity' factor to the lifestyle of their ultra-rich customers.
Key locations
Traditionally, the central business district (CBD) was the location of choice for super-luxury homes but now North Bengaluru and Whitefield have also emerged as strong alternative destinations for such projects. Some of the projects currently gracing Bengaluru's CBD include Prestige's Edwardian, VanGogh's Garden by Total Environment, Century's Renata, Skyline's Villa Maria, Brigade's Rhapsody and Crescent and Nitesh Estates' Logos.
The North Bengaluru market for super luxury housing includes areas such as Devanahalli, Hebbal, Hennur Road, Doddaballapur and Yelahanka.
"The market here is attracting both non-resident Indians (NRIs) and domestic buyers. Despite being away from central areas, the zone has witnessed number of launches in 2012 in the high-end category," states Snehal Mantri, director (marketing), Mantri Developers. "The demand in North Bengaluru for ultra-luxury homes is on the rise largely due to the on-going and planned infrastructure developments in these areas. The International Airport is the key catalyst for growth of the North Bengaluru micro-market. Though nascent social infrastructure and non-availability of water are challenges, North Bengaluru has enormous potential in this segment," claims Hisham Syed Tamiz.
Ezzy Group, a world-class infrastructure and property management company, forayed into India last year by launching two unique ultra-luxury residential projects. Corinth, located on Hennur Road, is based on Italian design and Tuscany style architecture while The Avenue at Whitefield, is a stunning collection of Boutique Residences, individually-designed to achieve the highest standard of living. Other premium projects in the location include Sobha Lifestyle, Prestige Golfshire, Embassy Boulevard and Embassy Lake Terraces.
The property rates in North Bengaluru are lower than other central areas in the city. While North Bengaluru properties are in the range of about Rs.5,000 to 7,000 per sq ft, CBD commands a rate of over Rs.20,000-25,000 per sq ft.
While North Bengaluru has projects spanning larger areas, the established residential hub of Indiranagar has smaller projects by developers such as Marvel, comprising 5-10 units priced at Rs.5 crore and above. Embassy and Divyasree have also put the Old Airport Road on the super-luxury residential map by launching their premium home offerings -- Embassy Grove and 770 East.
Unique offerings
The ultra-rich today seek 'exclusivity' that goes beyond luxury to suit their brand value. Super-luxury homes come with a plethora of amenities that one can imagine. Builders are, in fact, experimenting with a variety of new product offerings ranging from Australian-style villas to branded luxury residences.
"Generously proportioned homes offering an un-obstructed and breath-taking view are a key consideration for a luxury home. Developers thereby provide large apartments and condominiums associated with luxury," states Sanjay Raj, CEO and ED, Golden Gate Properties.
On offer are niche services that are a step-up from a lifestyle that the affluent class has already been exposed to. Add to this, interiors are designed by world class designers. Personal pool, fringe benefits such as free luxury cars and concierge services are also up for grabs. "The trend is to focus on exclusivity - which, generally, an independent villa provides," says J C Sharma, vice chairman & MD, Sobha Developers.
In sync with the trend of new concepts, Hebron Properties, real estate arm of Koshys Group, recently launched its maiden ultra-luxury residential project - Hebron Enclave - at T C Palya in K R Puram area. The project is based on Australian living concept and has a water creek in the campus along with a jogging track - a feature typical to Australian living.
DLF has also launched its luxury project Bella Greens on Bannerghatta Road to tap the growing demand for this segment. Being developed over 13 acres, this project offers 106 super luxury villas priced over Rs.2.5 crore onwards.
Salarpuria Sattva has as many as four projects offering super-luxury homes apartments and villaments in key locations: Salarpuria Sattva Luxuria (Malleshwaram 8th Main, close to the Sheraton in north Bengaluru); Salarpuria Sattva Magnificia (Old Madras Road, 2 kms from Indiranagar in east Bengaluru); Salarpuria Sattva Gold Summit (Hennur Main Road) and Salarpuria Sattva Greenage (Hosur Main Road), 2 kms from Koramangala in south Bengaluru.
Target audience
Increased property rates can and are often borne as long as there is a commensurate increase in the capital value and aspirational quotient of the property. Interestingly, for this segment, a higher ticket size is sometimes valued more as it attaches an esteem value to the property and limits its accessibility to the masses.
The target customers for such homes in Bengaluru include mostly the SEC A+ category, the HNI segment like CEOs, senior professionals, entrepreneurs in new-age businesses, even IT professionals and wealthy non-resident Indians who are looking for homes in India. To market these projects, over the last few years, developers have become tech-savvy and are tremendously increasing their presence in the online space.
Road ahead
The prices of luxury homes, which have gone up by 20 per cent in recent times, are set to escalate further after recent provisions made in the Union Budget, to the effect of reducing the abatement on service tax availed by developers for homes and flats above 2,000 sq ft or costing Rs.1 crore and above to 70 per cent from 75 per cent earlier.
While some property consultants are still sceptical about people rushing to buy these designer homes as the pay scales in the city are still a little lower than their counterparts in Mumbai and Delhi, urban planners say that thanks to the large-scale immigration into Bengaluru as well as a growing expatriate population, with land price burgeoning, it would still be more feasible for people to buy luxury homes here than the other markets.
Commenting on the current scenario, J C Sharma says, "The luxury segment has a double digit growth potential here as the infrastructure is improving significantly and the city has witnessed a rapid pace of urbanisation over the last one and a half decade." Experts predict that this segment will grow at a CAGR of around 15-20 per cent during 2013-2014 as there is a trend for constant upgradation of consumer's standard of living and purchasing power.
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