India’s branded luxury homes offer five-star comforts
Having a Four Seasons chef cook dinner for you in your home is just one of the services on offer in a private residences project branded by the hotel group and being built in Bangalore, designed to lure wealthy Indian buyers who are seeking more and more luxurious homes.
The Bollywood actress Deepika Padukone is among those who have invested in one of these Four Seasons homes, which are on sale for up to 220 million rupees (Dh11.9m).
The Four Seasons Hotel and Private Residences project, which is scheduled to open next year, is owned by the Bangalore- based developer Embassy Group and the global investment firm Blackstone.
Other high-end hotel brands including Ritz-Carlton and Hyatt have also tied up with developers to build branded homes in India, as global hospitality chains and Indian developers look to tap India’s growing number of millionaires and billionaires.
“There is a small but significant trend of hotel residences projects in India,” says Amit Oberoi, the head of valuation and advisory at Colliers India, a property consultancy. “The affluent are drawn by the prestige of owning branded properties that come with high-end interior specifications, quality amenities and housekeeping service akin to living in a luxury hotel.”
These launches come at a time when demand in India’s property market has slowed in recent years, which is having a negative impact, analysts say. But because the homes are targeted at the wealthy elite and there are a limited number of such projects, this is helping to drive a reasonable level of demand, considering the market conditions.
“As urban consumers seek fashionable amenities in their residences, ‘branded homes’ are quickly gaining prominence in India,” says Santhosh Kumar, the chief executive, operations and international director at JLL India consultancy.
“Typically, these are luxurious apartments combined with hospitality services provided by the likes of Hyatt, Four Seasons, and JW Marriott, renowned globally for their superior hospitality services.”
With wealth on the rise in India, the number of “super-rich” in the country has grown by more than 200 per cent over the past 10 years, with India accounting for 3 per cent of the world’s multi-millionaires, according to JLL.
“As a result, luxury consumerism has continued to increase,” says Mr Kumar. “Very often, exclusivity is expressed through luxury spending, which is shown through the wearing of premium apparel, fine dining at expensive restaurants, buying of expensive cars and also owning a luxurious home.”
Experts say such properties are not primarily intended to be investments and most will buy these homes for their own use.
“Status and demonstration of success are the decisive factors for the rich, especially the nouveau riche, when buying these properties. Investment-driven purchases are very few in this segment,” according to Mr Kumar.
James Price, the vice president of residential at Four Seasons Hotels and Resorts, admits that its residences are not aimed at the investment market and says that the company tells the developers of its projects to inform potential buyers of this.
“It’s a lifestyle product,” he says.
There are also Four Seasons private residence projects planned for New Delhi and Mumbai, but work on the project in the Indian capital has stalled.
“We see India as a market that we for sure want to get more deeply involved in,” says Mr Price. “We want to get involved in markets which have huge potential, which we feel this does.”
He says Four Seasons would consider more projects if the right opportunities arise.
Bangalore “is a market which is an aspirational city and we feel therefore it is right for the timing Four Seasons to come into this market”, he explains. “It has a critical mass of five-star brands coming in, which establishes a momentum for the market. It establishes it as a destination”.
Four Seasons private residences are meant to be entirely different products to hotel rooms, he says.
“The service standard is everything. But these are not just hotel spaces which are just designed as a bolt-on that the [development’s] owner can sell. These are residences which are designed around being homes and are tailored to the individual needs.”
Jitu Virwani, the chairman and managing director of Embassy Group, says “we’ll be very choosy about who we sell to” and describes the Four Seasons project as “a marquee asset” for his company.
Gautham Mukkavilli, the senior vice president of a large multinational who is based in Gurgaon and used in live in Dubai, has bought a three-bedroom private residence in the Four Seasons project, and plans to retire there. He declines to say how much he paid for the property.
“The branded residences concept is relatively new, but we are attracted to the project specifications, service, privacy and exclusivity of this project,” he says, adding that he is looking forward to services such as “round-the-clock concierge, chauffeurs on call, and the Four Seasons restaurants”.
The trend of building hotel residence projects is likely to keep gathering momentum in India and he says that Embassy Group would consider doing another hotel residence development with another global luxury brand if the group secures the right location in Bangalore.
Sartaj Singh, the president of the hospitality business at Embassy, says that the luxury hotel residence in India is a “new trend” and that the company has already sold “some apartments” in the Four Seasons projects, but the official launch of opening up sales is scheduled for Friday.
“There are many leads which are very strong and they’re ready to sign.”
Indian industrialists in Bangalore and other parts of the country are among the potential buyers. Embassy plans to target high net worth Indians abroad, including those who might like to retire in Bangalore eventually.
“We have identified a few markets like the Gulf, Singapore, San Francisco,” says Mr Singh.
Developers are attracted by the higher prices that branded residences can command and globally they carry a premium in price of about 20 per cent over similar unbranded properties, according to Mudassir Zaidi, the national director, residential, at Knight Frank India. Developers also benefit by association with these prestigious names, he adds.
But “the market has been tough and the luxury market has been tough as well”, Mr Zaidi says. “It’s a differentiator to add a hotel brand and that adds to the value offering but it does not mean that it will automatically start selling.
They have been selling but they have had to reduce premiums but that’s part and parcel of a slowdown in the market”.
Hotel residence projects are expensive to build.
“Premium hotel residences projects are for obvious reasons priced at very high rates,” says Mr Oberoi. “Therefore there is limited market for such products. We are witnessing mixed results at the moment due to this and also because the premium residential market in India has been witnessing a slowdown over the past few years. Buyers are waiting for the markets to turn around before investing, leading to an impasse.”
He adds that hotel residence projects should, however, pick up in the medium term along with the anticipated revival of the economy and property markets in India.
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Updated: January 30, 2016 04:00 AM