How Ultra Luxury Housing Defies All Market Trends

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

In India, the definition of luxury housing varies from city to city, and the demand for luxury homes in each city also differs. A plush 2 BHK flat in a central location or in an area near to corporate or IT employment hubs would qualify as a luxury home in Mumbai, Pune or Bangalore solely on the basis of location.

However, the classic Indian concept of a luxury home also involves generous size – so a 3 or 4 BHK apartment is definitely defined as luxury. As a rule, such luxury flats are built only by developers who have specific expertise in this genre, as apart from large size, customers look for highly evolved amenities and facilities to create the necessary luxury ethos.

What Drives The Demand For Luxury Homes

It is a mistake to club the demand for ultra-luxury housing with that of the rest of the property market, because the dynamics are very different. In the first place, the luxury homes market tends to be quite end-user centric in many cities.

The higher ticket sizes mean that only investors with considerable capital at their disposal are active in the luxury segment. The end-users who largely patronize the luxury housing segment generally do not need housing loans but buy such properties from their own capital, being from the affluent class.

Cities like Mumbai, Pune, Bangalore, Chennai and Delhi have their well-established high-value luxury homes locations. The people who live there have often been residents for several generations and are not open to relocating elsewhere.

These locations tend to have a rich share of natural ambience due to limited development norms being enforced there, and at the same time a high degree of social infrastructure which ensures that life there is trouble-free and convenient.

Among this location-driven buyer set, the demand for genuine luxury homes is considerable. Due to very limited supply in these areas, such properties often tend to change hands among this specific buyer segment.

Prices for such ultra-luxury homes are a function of both the high-value vanity addresses and the size and configuration. Rarely, a large family-owned property will be sold and redeveloped into limited-edition boutique homes which are immediately snapped up.

We can see this dynamic actively at play in areas like Cuffe Parade, Nepean Sea Road, Worli, Juhu and Lower Parel in Mumbai. In Pune, the specific areas for such luxury housing are Sahakar Nagar, Boat Club Road, Kalyani Nagar and Koregaon Park.

Since they are meant to function as family estates, luxury homes in such areas doubtlessly need to get the size factor right. Such extra-large ultra luxury living spaces are naturally expected to offer ultra-modern luxurious amenities which can be upgraded as technological advancements push the luxury envelope further up the value chain. These addresses may or may not be centrally located, but that factor does not, in any case, play a big role.

Montecito 3

Why Core Luxury Addresses Never Change

Spatial expansion of cities like Pune, Bangalore, Chennai and Delhi is constantly pushing the city boundaries further and in different directions. Simultaneously, new workplace hubs geared to the booming Information Technology sector spring up in the emerging locations, which IT companies prefer because of the lower property costs.

Residential catchments form around these IT hubs to respond to the demand for homes from their employees. These new residential areas usually see high demand for homes of all ticket sizes, including the more expensive ‘green homes.’

While these higher-end homes definitely fall in the category of premium housing, the locations themselves do not spell luxury. The same dynamic can be seen around large manufacturing hubs, where premium housing can be found in locations which have essentially have an industrial, blue-collar image.

Through all this expansion, a city’s core luxury address locations remain static and continue to hold sway even as the city itself grows in all directions.

These addresses have very little to do with Indian real estate’s primary growth driver, which is employment generation. They are the home of the city’s landed gentry – its long-established core of wealth.

Though property owners in these locations are often owners of very large businesses, they themselves are not dependent on quick access to workplace hubs. They have earned a far more leisurely life long ago, and their main objective and prerogative is to dwell among their peers in an environment untouched by the mass development in every other part of the city.

Immune To General Market Dynamics

The demand for luxury housing in these elite locations is therefore always steady. Developers who have the rare opportunity to create new luxury housing projects there will invariably have a dedicated inner circle of HNI buyers and investors who will snap up their limited-edition offerings.

Such housing is more or less impervious to the influence of recession, as the buyers are not dependent on home loans but largely use their own capital to buy such housing. The demand from investors and HNI end-users for luxury housing in the traditional core areas of the city is therefore always present.

When the opportunity to acquire properties in a new luxury project in such an area presents itself, such buyers will enter the project at the pre-launch or under construction stage to avail of the best rates.

The marketing strategy for homes in a city’s core luxury areas also differs significantly from the kind of campaigns developers use to promote mid-income housing projects. The marketing approach focuses more on the aspiration for exclusiveness and status among people who can afford to avail of it.

While word-of-mouth communication among core investors usually suffices to draw massive inquiries, developers will also advertise these offerings in prestigious lifestyle magazines, airport lounges and similar platforms.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

Sahakar Nagar – Pune’s Most Aspirational Neighbourhood

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

Pune is witnessing a very high rate of cross-border cultural exchange, with an increasing number of its citizens traveling abroad even as more and more international tourists explore the city each year.

The IT culture, glitzy shopping malls boutiques offering the latest in global fashion trends and international schools are all part of this process of cultural homogenization. Pune has become a truly cosmopolitan city, thanks largely to the influence of its burgeoning IT sector.

Nevertheless, the historical Pune – the city which holds on to its traditional values and outlook – continues to exist. Because of the mass-scale development happening all of the city, it is less visible today than it was just ten years ago, but the spirit of Punyanagari lives on in its core areas.

Sahakar Nagar is perhaps the most prominent of these strongholds of Pune’s traditions.

Sahakar Nagar needs no introduction to citizens of Pune. This elite residential area is one of the oldest, greenest and most respectable addresses in the city. The area was developed after the 1961 floods in Pune, and has become a prominent location today.

Sahakar Nagar is home to some of Pune’s most established businesspersons, politicians and movers and shakers, and has been a very exclusive and largely closed real estate market for decades.

Simultaneously, Sahakar Nagar represents a unique balance because it has retained the city’s traditional Marathi culture while at the same time evolving to keep pace with the times.

Aerial view of Sahakar Nagar, Pune
Aerial view of Sahakar Nagar, Pune

From the outside, the tranquil dignity and old-world charm of this venerable residential location gives no visible indication of change. However, Sahakar Nagar has been seeing a constant process of reinvention which has resulted in excellent civil infrastructure.

This area is unique in yet another aspect. Because of the fact that the residents of Sahakar Nagar will never want to move anywhere else, getting a resale home here is a huge challenge. Also, since it is fully developed and occupied for several years now, there is next to no new residential supply.

Sahakar Nagar is one of the last predominantly end-user driven locations in Pune, though investors are always keen to make a play in this distinguished luxury neighbourhood. It is a genuine stronghold of the city’s elite and affluent families that has never been open to investors.

The past few years have seen no new projects at Sahakar Nagar because of the lack of land. The primary residential configuration at Sahakar Nagar is bungalows and villas, which comprise most of the housing landscape of this high-profile location.

The resident profile primarily reflects Pune’s orthodox Hindu Brahmin community, which has helped preserve Sahakar Nagar’s reputation as one of the last outposts of the city’s traditional roots.

The location itself is perfect. At a high elevation, it offers a breath-taking view of the Parvati/Taljai hill area as well as thick reserved forest lands. Bharati Vidyapeeth, one of Pune’s most upscale educational institutions, has its campus close by.

The Pune-Satara road provides ready access to Swargate Bus Terminus, a vital transit hub in the heart of the city, as well as other key areas of Central Pune. The Mumbai-Pune Expressway is within easy commuting distance via the Katraj Bypass. Sahakar Nagar is also within a stone’s throw from City Pride Cineplex, and has its own integrated high street shopping area which most of the local residents patronize.

Thanks to its unmatched locational advantages and also its unique profile, Sahakar Nagar is a highly aspirational luxury address. Due to scarcity of developable space, top-class projects in the area are a focal point for high-end investors as well as families looking for prestigious permanent residences.

With next to no availability of residential units of any kind, Sahakar Nagar’s status as a stronghold of Pune’s elite stands unassailable.

Amit Enterprises Housing Ltd. established its foothold in Sahakar Nagar back in 2007 with the launch of the luxury apartment project 9 Green Park. This project was completed in 2012 and is, not surprisingly, completely sold out and occupied. However, another luxury apartment project by AEHL now offers the hope of home ownership in Sahakar Nagar to Pune’s discerning few.

Montecito Entrance Lounge small

Montecito – located adjacent to 9 Green Park – enjoys the most spectacular view yet of Sahakar Nagar’s legendary natural splendour. This ultra-luxurious apartments project, spread over 4.3 acres of Sahakar Nagar’s most breathtakingly beautiful hilltop location, consist of two 16-storied towers that offer 64 apartments backed by five levels of reserved parking. This unique project is designed by none other than renowned architects Talathi & Panthaki.

Answering the call for luxury living in Pune’s most treasured and highly exclusive residential addresses, Montecito is AEHL’s final brush-stroke on a priceless masterpiece called Sahakar Nagar – a location that always has, and always will, capture the very essence of all that is truly Pune.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

Should You Invest In Property In Another City? 

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd. 

The understandable tendency of most property investors in India is to focus on the cities that they actually live in.

This is because they are already familiar with which locations see the highest demand and who the reliable and reputed developers are. Also, most people will have a fairly broad network of others people within their city who can advise them on potential property investments.

Yet, the Internet has opened the larger real estate playing field in India up more than ever before. A simple online search involving the keywords ‘buy home’ or ‘buy property’ will yield thousands of results from across the country.

And the trend is no longer limited to people who own computers – rapid smartphone penetration has opened up the Internet to a staggering number of people today.

According to a survey by Indiaproperty.com, the availability of user-friendly app’s and improved website designs have led to mobile-based property searches growing three times faster than PC-based searches.

This survey also established that real estate searches in Tier II cities, which have seen very fast smart phone penetration over the last few years, have grown 1.3 times over the national average.

The real estate data available for these cities is obviously available to all ‘netizens’. In other words, a larger number of geographies than ever before are drawing the attention of property investors.

For instance, Pune is a high focus area for real estate investors from Mumbai and Bangalore because of its amenable property prices, favourable appreciation statistics and the fact that properties in all budget ranges are available.

But how advisable or even safe is it for a non-resident to make a real estate investment in a city that he or she is not familiar with?

This question becomes even more important when one considers that the best prospects in terms of lower property prices and better appreciation are in such a city’s emerging corridors rather than its established real estate precincts. The first thing such a prospective investor needs to do is establish what kind of demand is driving such a location.

The primary driver for residential demand is job creation – if an identified city, town or periphery is seeing a lot of demand for homes from people who are attracted by a good job market, then it can be said to be a good residential property investment bet.

The other important variable is affordability. Quite a few non-metros as well as peripheral areas of larger cities currently qualify on these parameters.

Again taking the example of Pune – this city is classified as Tier II, but has a remarkable configuration as far as economic drivers are concerned. Pune’s economy and job market are driven by Information Technology and BPO firms, its vast manufacturing belt and a thriving services sector.

The steadily increasing demand for budget homes from employees working in all these sectors has resulted in a veritable real estate boom in fast-developing locations like Undri, Ambegaon, Wagholi and Bhugaon.

Amit's Astonia Royale in Undri
Amit’s Astonia Royale in Undri

However, these areas are being developed by both large organized builders with a strong market reputation and unknown small-time players with no verifiable track record. The question that any investor needs to ask in such a scenario is who to trust. This brings up the second important factor for an investor to focus on – namely which projects to invest in.

One of the aspects to be fully investigated is the reliability and market standing of developers active in such a market. Though the recently announced Real Estate Regulation bill will eventually weed out all fly-by-night operators, the fact is that many unscrupulous developers have historically been active in emerging locations.

Such developers may not have obtained all necessary clearances for their projects or even have clear ownership of their plots. They may also engage in shoddy construction, and often lack the capitalization to see their projects to timely completion. Buyers are attracted by the lower property rates they offer in order to attract demand.

However, due to the high demand driving the real estate market in such locations, many reputed developers who have been delivering quality projects on time for a long time are invariably also active there. Investors should only patronize such developers so that they can avoid unforeseen risks to their investments.

It definitely makes sense to consider cities other than one’s cities of residence for property investment, especially if one’s own city does not yield very attractive returns on investment.

Investors from Mumbai are so active on the Pune real estate market because while property price appreciation all over the financial capital has been next to flat for over three years, neighbouring Pune has been seeing property price growth of at least 15-18% in many of its emerging areas, and rental demand in the city is also very high and increasing constantly.

Property investments in other cities should be done after a lot of research and preparation, but they can definitely be extremely profitable for those who do their homework.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.