Mumbai: At the pinnacle of the luxury market
Jul 22, 2013
Source : The Times of India

 

MUMBAI: Historically, Mumbai has not just been the financial capital of India but also the ‘luxury capital’ of the country. However, some people are critical of this assessment, pointing to the fact that luxury brands like Louis Vuitton or Gucci have spread to stores in other markets, as well. Nevertheless, when it comes to real estate, the city’s property market still commands a premium in India and also in the global context.

Mumbai’s strong real Estate market fundamentals are reflected in all segments, from office space and luxury retail, to luxury housing. Although the port city is constrained for space, it continues to dominate other property markets across India and remains the first choice for luxury brands, film stars, multinationals and global conglomerates.

Across the world, luxury destinations have flourished as extended suburbs of the main city, thus supplementing the main city. For instance, in the Delhi-NCR region, Gurgaon has fared better than Delhi as a luxury destination. In contrast, a port city like Mumbai does not have that luxury. Despite this, Mumbai has witnessed the maximum number of entrants into the luxury segment in the last one year.

With numerous high-end malls in the advanced stages of planning, the city is poised to attract more fashion labels in the luxury category. Pranay Vakil, chairman, Praron Consultancy, feels that it is not fair to compare Mumbai with Gurgaon or any other city, without getting into the ground realities of these vastly different real estate markets. According to him, Mumbai is costlier because earnings are higher in the city.

In comparison, prices are lower in Gurgaon as affordability is lower. “Cities, such as Gurgaon, Pune and Nagpur, can expand because they are not constrained by natural boundaries. Unlike Gurgaon, Mumbai does not have the space to expand. There is a limit to vertical growth, as well,” Vakil points out, emphasising the need to improve infrastructure and connectivity. The Bandra-Worli sea link made a huge difference to connectivity in the city, he notes. Development of coastal roads, ring roads and the Trans-Harbour Bridge can change the scenario, he feels. “Gurgaon improved after eight-lane highways were introduced. Same is the story with Ahmedabad and Pune. Unfortunately, infrastructure has not improved in Mumbai,” laments Vakil.

Devang Varma, director of Omkar Realtors & Developers, insists that Mumbai will not lose its tag of the luxury capital of India for quite some time. Poor infrastructure is an issue in Mumbai and new cities like the NCR are coming up but Mumbai is definitely not sliding on this front. In fact, a lot of redevelopment projects in Mumbai are offering luxury residential houses, he says. “To a certain extent, the growth in new cities has been better than in Mumbai but even in these locations, infrastructure development has not kept pace. Consequently, these locations are also becoming congested. Although there is a perception that multinational brands now prefer emerging markets to Mumbai’s saturated market, the fact is that the money is still in Mumbai, with NCR being a strong alternative,” Varma explains. Bangalore, Pune, Hyderabad and Chennai are preferred, more as ‘test run’ destinations, he adds.

Abhay Kumar, CMD of Grih Pravesh Buildteck, also believes that it is too early to say that these new destinations can match Mumbai. Nevertheless, he agrees that the luxury real estate market is not exclusive to Mumbai any more. These other cities have various limitations, as far as super-premium projects are concerned. They still lag behind Mumbai with respect to professionalism and transparency in dealings. Political will also plays a major role, explains Kumar. “Delhi and Mumbai remain the favourite destinations for large government projects and installations and this creates demand for realty in a big way,” says Kumar.

Although emerging cities have several advantages, some analysts believe that these destinations have been unable to create an image that attracts luxury brands and financial institutions. Regulatory provisions in Mumbai may be a far cry from what is desired for real estate. Yet, the city has an aura associated with luxury living. Moreover, one needs to understand the psyche of an investor. No market has given better returns on investment than Mumbai’s luxury real estate segment. With several upcoming and planned infrastructure projects, the push towards redevelopment and taller buildings, Mumbai seems set to retain its top position in India’s luxury realty market.

Historically, Mumbai has not just been the financial capital of India but also the ‘luxury capital’ of the country. However, some people are critical of this assessment, pointing to the fact that luxury brands like Louis Vuitton or Gucci have spread to stores in other markets, as well. Nevertheless, when it comes to real estate, the city’s property market still commands a premium in India and also in the global context.

Mumbai’s strong real Estate market fundamentals are reflected in all segments, from office space and luxury retail, to luxury housing. Although the port city is constrained for space, it continues to dominate other property markets across India and remains the first choice for luxury brands, film stars, multinationals and global conglomerates.

Across the world, luxury destinations have flourished as extended suburbs of the main city, thus supplementing the main city. For instance, in the Delhi-NCR region, Gurgaon has fared better than Delhi as a luxury destination. In contrast, a port city like Mumbai does not have that luxury. Despite this, Mumbai has witnessed the maximum number of entrants into the luxury segment in the last one year.

With numerous high-end malls in the advanced stages of planning, the city is poised to attract more fashion labels in the luxury category. Pranay Vakil, chairman, Praron Consultancy, feels that it is not fair to compare Mumbai with Gurgaon or any other city, without getting into the ground realities of these vastly different real estate markets. According to him, Mumbai is costlier because earnings are higher in the city.

In comparison, prices are lower in Gurgaon as affordability is lower. “Cities, such as Gurgaon, Pune and Nagpur, can expand because they are not constrained by natural boundaries. Unlike Gurgaon, Mumbai does not have the space to expand. There is a limit to vertical growth, as well,” Vakil points out, emphasising the need to improve infrastructure and connectivity. The Bandra-Worli sea link made a huge difference to connectivity in the city, he notes. Development of coastal roads, ring roads and the Trans-Harbour Bridge can change the scenario, he feels. “Gurgaon improved after eight-lane highways were introduced. Same is the story with Ahmedabad and Pune. Unfortunately, infrastructure has not improved in Mumbai,” laments Vakil.

Devang Varma, director of Omkar Realtors & Developers, insists that Mumbai will not lose its tag of the luxury capital of India for quite some time. Poor infrastructure is an issue in Mumbai and new cities like the NCR are coming up but Mumbai is definitely not sliding on this front. In fact, a lot of redevelopment projects in Mumbai are offering luxury residential houses, he says. “To a certain extent, the growth in new cities has been better than in Mumbai but even in these locations, infrastructure development has not kept pace. Consequently, these locations are also becoming congested. Although there is a perception that multinational brands now prefer emerging markets to Mumbai’s saturated market, the fact is that the money is still in Mumbai, with NCR being a strong alternative,” Varma explains. Bangalore, Pune, Hyderabad and Chennai are preferred, more as ‘test run’ destinations, he adds.

Abhay Kumar, CMD of Grih Pravesh Buildteck, also believes that it is too early to say that these new destinations can match Mumbai. Nevertheless, he agrees that the luxury real estate market is not exclusive to Mumbai any more. These other cities have various limitations, as far as super-premium projects are concerned. They still lag behind Mumbai with respect to professionalism and transparency in dealings. Political will also plays a major role, explains Kumar. “Delhi and Mumbai remain the favourite destinations for large government projects and installations and this creates demand for realty in a big way,” says Kumar.

Although emerging cities have several advantages, some analysts believe that these destinations have been unable to create an image that attracts luxury brands and financial institutions. Regulatory provisions in Mumbai may be a far cry from what is desired for real estate. Yet, the city has an aura associated with luxury living. Moreover, one needs to understand the psyche of an investor. No market has given better returns on investment than Mumbai’s luxury real estate segment. With several upcoming and planned infrastructure projects, the push towards redevelopment and taller buildings, Mumbai seems set to retain its top position in India’s luxury realty market.

Latest Realty News

Banks seek priority sector tag for loans to affordable home builders
Jul 22, 2013
MUMBAI: The Reserve Bank of India is examining a plea by banks to recognise loans given to builders/developers of affordable housing projects as priority sector lending.
Days of price rise on residential side behind us: Deepak Parekh, HDFC
Jul 20, 2013
MUMBAI: Amidst stubborn prices in most of the real estate markets, HDFCBSE -2.35 % chairman Deepak Parekh today said the residential price escalation now seems to be a thing of the past.
Kalam roots for green buildings, efficient energy usage
Jul 19, 2013
PUNE: Green buildings, sustainable design and green architecture can ensure that the impact of constructions and infrastructure development on the environment is contained, former President APJ Abdul Kalam said at the GreenCo Summit 2013, which was inaugurated in the city on July 15. Kalam advocated continuous research by recyclers, electronic systems manufacturers and user groups to make green energy cost-effective.
Sea-facing Worli flat goes at Rs 1.23L/sq ft, the highest in the country
Jul 19, 2013
MUMBAI: The Mumbai realty market threw up another record when a 10th-floor, sea-facing flat of the marquee SamudraMahal in Worli sold at the rate of Rs 1.23 lakh per square foot, the highest in the country.
‘Govt willing to relax norms on deemed conveyance’
Jul 18, 2013
MUMBAI: The Maharashtra government on July 17 promised a string of reforms in the existing law on deemed conveyances to give relief to thousands of flat owners in old housing societies who are eager to complete the formality of conveyance.
Recession-struck real estate developers pitch clients on Facebook, Twitter for buyers
Jul 18, 2013
MUMBAI: For many real estate developers one good thing about the recent slowdown in demand is that it has helped them find a cost-effective medium to sell housing projects: social media.
Worli in Mumbai is a realty market to reckon with
Jul 17, 2013
MUMBAI: From being a traditional textile mill location a few decades ago, Worli has come a long way to emerge as one of the prime real estate destinations in the country’s commercial capital.
Pune’s smart homes revolution
Jul 17, 2013
PUNE: Over the last two decades, Pune rapidly developed a strong IT culture. In the beginning, this culture was limited to employees of the many IT/ITES parks it is home to. However, today it has touched almost everyone who lives in the city. The cyber revolution in this city is inescapable – those who do not own computers visit internet cafes to access the online world. The younger generation below the age group of 30, is defined by connectivity and these are the people who will define Pune’s f
Borivali-Goregaon projects: Offering décor delight
Jul 17, 2013
MUMBAI: The Borivali-Goregaon west stretch has witnessed rising property prices for the last six months. Most of the home buyers are looking for smaller sized units – 2 and 3-BHK configurations because of the rising property prices. Depending on the budget, developers are offering various décor features – both, internally and externally, in their new projects.
Hinjewadi faces an ever-increasing demand for 2-bhk apartments
Jul 17, 2013
PUNE: Hinjewadi, once looked upon as a sleepy countryside area, has been fast evolving into a real estate hotspot. The locality, situated towards the west of Pune city, offers all types of properties for every segment of the society. According to the Data residential properties such as plots and apartments in Hinjewadi, are available within a wide range of Rs 13 lakhs to Rs one crore and above.

Latest Realty News Of State

Realty Talk's