Branded Projects

By invitation only

11:00 AM

By invitation only

By tying up with global lifestyle brands and hospitality chains, developers are redefining the meaning of luxe living

When you have money, great ideas have a way of reaching you. The idea of a branded home, for instance. It is slowly but steadily catching on, its impact felt most prominently in the super-luxury housing segment.

Developers are increasingly tying up with international brands and hospitality chains to launch such apartments, priced mostly within a range of Rs 10 crore to Rs 25 crore. The move is meant to create a differentiation in a real estate market, which is struggling against slowdown.

Insiders believe the definition of luxury housing itself has undergone a change. Once upon a time, it meant having a swimming pool, clubs, parks, designated spaces for various games and, of course, gated apartments. Suddenly, all of it has become passé or middle class, if you will. The upper middle class and rich are looking at luxury from a different perspective, which is where these branded homes come in.

Says Brotin Banerjee, managing director & CEO at Tata Housing Development Company: "Today, Indian customers are exposed to international markets and they are well aware of diverse cultures and lifestyles prevalent abroad. With changing times, consumers today are more demanding than ever and seek luxury at par with international standards. They are not only interested in homes with larger spaces, fancy facades or super-luxury amenities but prefer luxury homes designed and often managed by international hospitality or signature designer brands. Branded housing helps in catering to a niche audience and increasing demand is coming from cities such as Bangalore, Delhi, Chennai, Kolkata and Mumbai and aspiring urban elites from emergent and tier 2 and 3 cities.”

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 in all new business segments, there was no specific pre-existing demand for such homes - the mind-set of the target audience first needs to be primed to create demand, as supply will only follow demand.

There is a good reason why branding is catching on. For one, they are recession proof, which is why developers were shifting their focus to luxury and ultra-luxury housing segments. Such projects give much higher returns to the developers rather than homes in the middle or affordable segment. Perhaps, understandable.

Rohit Kumar, head of research, DTZ Consultancy, says developers want to play safe and this is the segment (ultra-luxury), which has seen the minimum impact of the slow down in the real estate sector. Such branded homes or homes associated with celebrities appeal to the lifestyle and adds to the aspirational value of buyers. The trend has particularly caught on in Delhi-NCR, Mumbai and Bangalore.

Consider the following:

  • Supertech, a north India-based real estate entity, has recently tied up with Italian fashion brand Armani for offering branded apartments at about Rs 10 crore and above, at its Supernova project in Noida. Supertech will have 100 residences by Armani Casa, with an area of 3,000-5,000 sq ft each, to be sold through invitation only. The company will pay a one-time fee for the services, besides buying interior design products from Armani.

  •  Another real estate firm, Ireo, has allied with Hyatt Hotels to introduce branded Grand Hyatt Residences in Gurgaon, to be managed by the hotel at a price of Rs 11-25 crore. Here, buyers will avail of five-star hotel services at their homes, something like a serviced apartment.

  •   Realty firm, 3C is aligned with the Four Seasons Hotels and Resorts for branded residences in a mixed land use project in Noida.

  •  In the past, Armani had earlier tied up with Mumbai’s Lodha Group to design residences and common spaces of the World Towers, Upper Worli, Mumbai.

  •  Gauri Khan, superstar Shah Rukh Khan's wife, designed Glitterati by Kolte Patil Developers. Twinkle Khanna, married to actor Akshay Kumar, did the same with YOO Philippe Starck - Panchshil and One North, along with Panchshil Developers.

  • Luxury means different things to different people. Today, a Rs 2 crore kitchen with ultra modern gadgets is a sign of luxury, all thanks to the booming Indian market driven by rising disposable incomes and aspirational young consumers.

    And no stops are pulled. At Leela Residencies in Bengaluru’s Bhartiya City, you can have a chef on call, concierge services, a travel desk, chauffeur-driven Limousine or BMWs at the push of a button, laundry services, private elevators, access at discounted rates, private wine coolers and a priority pass at airport lounges among others, at your door step. It is the hotel’s job to look after the needs of 144 exquisite residences.

    Says Snehdeep Aggarwal, owner, Bhartiya City, who has used expertise from US and UK, among others, to set the project in motion:  "At Leela Residences, we’re making a set of homes that suits everyone, from a business professional to an international athlete. Even a simple kitchen cabinet, when it’s made by a Boffi, becomes a piece of art. I think, as a vision, with this project we aim to take modern Indian luxury to the next level.’’

    Anuj Puri, chairman & country head, JLL India, says the concept of branded luxury homes is only two or three years old in this country. The segment’s growth could be pegged at roughly 5-6 per annum, owing to the fact that it is a very exclusive niche category with restricted number of buyers. “Branded luxury homes bring various advantages beyond a designer label and location with them. They boast of professionally designed interiors and exteriors, highly evolved, centralised facilities management and various additional features like concierge services, high-grade electronic surveillance, security and valet parking. These factors have high appeal value, especially for buyers who have seen such homes abroad and aspire to live at such levels’’, he says. There is no reason why not.

    Puri puts the overall share of luxury homes in the Indian real estate domain to not beyond 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,’’ he says, proving that a consensus on what constitutes luxury itself remains elusive.

    Branded residences segment are not without challenges though. These include a limited buyer segment, finding 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. The latter factor is by no means without challenges because 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. From the churn point of view, selling mid-income housing is easier than high-end or luxury homes since a larger base of the population falls in the mid-income category. The sale velocity is higher and the sales cycle is also shorter, with mid-income housing projects usually being sold within 3-4 months of their launch. In comparison, high-end apartments and luxury homes often take more than six months to sell.

    Explains Mudassir Zaidi, national director-residential agency, Knight Frank India: ``branding houses is not merely aspirational. There are people who genuinely know. They identify with brands, like the Trump Towers in Delhi and Mumbai, despite the fact that it is not a hospitality chain. Brand awareness associations have come up, even though developers in some markets have not been able to exploit the market potential and get huge premiums with their brand associations.’’

    The more important thing is whether this trend will continue. “Yes,’’ predicts Zaidi, who goes on to state that it will not just continue in India but elsewhere in the globe.

    There are its fair share of naysayers, though. Sanjay Sharma, managing director, Qubrex, a real estate research and brokerage company, is convinced that branding is a marketing gimmick to attract buyers in a crowded market. The market for such homes remains miniscule, meant only for high net worth individuals, he says. Perhaps, but then if homes are fetching good prices, may be the gimmick has worked.

    - by Ranjit Bhushan

    Source :- Financial Chronicle

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