In India, the concept of branded luxury homes is only two or three years old but it has gained a foothold in market and growing by 5-6 per cent a year.
The numbers will be small because it is an exclusive, niche category with a limited number of buyers, says Anuj Puri, Chairman and Country Head, Jones Lang LaSalle.
According to a press note from the international property consultant, the basic premise behind branded residences is that the developers of such projects tie up with international luxury hospitality or lifestyle brands to create unique and highly differentiated offerings.
As with new business segments, the target market is being primed to create demand, and supply will follow growing demand.
This process is happening with a fair degree of success in cities like Mumbai, Pune and Delhi NCR.
Branded luxury homes bring various advantages beyond a designer label and location with them.
They boast professionally designed interiors and exteriors, highly evolved, centralised facilities management and various additional features like concierge services, high-grade electronic surveillance and security and valet parking. These factors have high appeal value, especially to buyers who have seen such homes abroad and aspire to live at such levels.
Branded luxury homes are targeted at that segment of India’s super-rich that prefer the conveniences and status value of luxury homes designed, marketed and often managed by international hospitality or signature designer brands.
Developers of branded luxury homes provide customisation to their buyers within the scope of the brand’s identity, according to Puri.
The overall share of luxury homes in the Indian real estate domain would not exceed 6-7 per cent, depending on how “luxury” is defined in various markets.
In industry terms, we define “luxury” housing as homes costing Rs 4-5 crore, while homes with ticket-sizes of around Rs 1-1.5 crore fall in the premium or high-end segment.
ChallengesThe branded residences segment is not without challenges.
These would include a limited buyer segment, finding the needed land parcels within high-prestige locations, providing the required infrastructure to adequately supplement the overall luxury experience - and, of course, getting the right brands to come on board in the first place.
The latter factor is by no means without challenges, since international designer labels – by their very nature - have very high brand standards which a proposed project must demonstrably be able to live up to.
The fate of branded residences as a property investment segment still hangs in the balance.
High-end apartments and luxury homes often take more than six months to sell.
The branded luxury housing segment will grow depends on the pace at which India's macro-economic environment is able to produce such individuals.