What is the fate of branded luxury homes in Indian real estate market?
The concept of branded/ branded luxury homes is fairly new in the Indian real estate and caters to very exclusive niche category with a restricted number of buyers; however, it has still started garnering attention. The basic idea behind branded homes is that the developers or real estate companies are becoming savvy about brands; in a bid to boost the value of their properties they tie up with international luxury hospitality/ lifestyle brands or with celebrities/famous personalities and offer a unique lifestyle to the Indian home buyers, specifically in cities like Mumbai, Pune and Delhi-NCR etc. For example, Disney's themed residences are available in Bangalore, Hyderabad and Kochi.
Even though the concept of branded homes is new to the Indian real estate market, the segment is growing as it is targeting the audience with factors such as comfort and luxury. The segment also vouches for growth prospects for the economy. Let’s look at the attractions and limitations of this segment and analyse whether such co-branded properties are a good investment option:
Who is the target?
The target and buyers of this segment belong to India’s super-rich section that have preference for convenience and value the luxury homes designed and often managed by international hospitality or signature designer brands. Developers of branded luxury homes provide personal customization to their buyers as long as the customizations do not detract from the overall project specifications, aesthetics and integrity.
What are the attractions for buyers?
- Designer label
- Exotic location
- Professionally designed interiors
- Theme-based exteriors, international-level sports amenities and resort like facilities
- Evolved in terms of concierge services, high-grade electronic surveillance and security and valet parking
- Appealing to people who have lived abroad and are used to apartment culture
What are the challenges for developers?
The segment of branded houses has its fair share of challenges. Let’s have a look:
Limited buyer segment: A larger section of the population falls in the mid-income category and affordable housing is the need of the day; the home buyers and developers alike are focusing on budget housing as of now. Therefore, the branded segment has a limited demand.
Locations: Branded housings can use selected land parcels shortlisted on the basis of posh locations. There is a shortage of such locations within the main cities; moreover, approvals of land parcels within high-prestige locations have to go through a lengthy procedure.
Infrastructure: Culminating the required infrastructure to adequately supplement the overall luxury experience
PR and marketing: Sealing the tie-ups with the right brands after verifications of all sorts is one of the biggest challenges.
The fate of branded residences as a property investment segment is still uncertain. The higher percentage of demand for residential properties in India remains in the budget/mid-income/affordable category and comes from buyers who can avail ready bank funding. Therefore, the growth of branded luxury housing segment depends on the buyers of ultra-luxury housing, which in turn depends on the rate that India’s economy will be able to produce such individuals.