When the scion of one of the world’s most iconic real estate brands comes to India to help market yet another luxury homes project – this time in the Millennium City of Gurgaon – the market sits up and takes notice. By all standards, the upcoming Trump Towers are a sizeable undertaking – the 47-storey towers will put 250 exclusive units on the market, with completion and possession slated for 2023.
As can be expected from such an iconic development by a brand that has already made a strong imprint in Mumbai, Pune and Kolkata, the price tags are astronomic, ranging from INR 55-110 million. This gives rise to a logical question – at a time when the luxury housing market in India has yet to pull itself out of the doldrums, is there any appetite for such an offering? Let’s examine some facts.
In the Asia Pacific region, India ranks 4th in the list of countries with largest HNI population. The HNI stratum of the Indian population largely remains shielded from the macroeconomic risks, recession, job uncertainty, etc. Also, the property buying preferences of ultra-HNIs skew decidedly towards exquisite, highly aspirational offerings. They are willing and able to purchase bespoke products selling at heavy premiums. This is very much in line with global trends.
Uber-rich Indian HNIs tend to park a significant portion of their wealth in real estate assets. The property ‘address’ and ‘brand’ are extremely important for such a clientele, and they are very choosy in selecting their associations.
Luxury has a very clear definition for them – a significant fact, since rising property prices in India paradoxically caused many projects to be categorized as ‘luxury’ while the amenities and facilities they provided fell far below the definite standards and definitions by which Indian ultra-HNIs recognize genuine luxury.
As a result, luxury branded residences such as Trump Towers definitely do wield considerable demand by ultra-HNIs in the Millennium City of Gurgaon. The success of this brand has been clearly visible in Pune’s Kalyani Nagar, where the rich and famous – including Bollywood celebrities – rushed in to grab a piece of the pie in this prestigious tower. The trend has been similar in Mumbai and Kolkata.
In fact, aspirational developments under the Trump brand also play a significant role in uplifting the profile of the overall location and its surroundings, thus changing the image and indeed future landscape of the entire region. Trump Towers are more than likely to provide this positive boost to the limping real estate sector in Gurgaon – and may even turn out to be a real boon.
In the past, Gurgaon has attracted real estate developers from all parts of the country to develop large residential projects. Due to the sheer city’s spread and the large influx of migrant population, Gurgaon’s real estate offerings cater to various social strata and budget bandwidths. In fact, of supply additions in Gurgaon between 2013-2017, only 15% came in the luxury segment (units priced greater than ₹ 1.5 cr). Also, from Gurgaon’s unsold inventory of around 54,000 units as of Q4-2017, only 10% belonged to this segment. Further, during the same period, only 3,000 units were added in the city’s ultra-luxury segment (units priced greater than ₹ 4 cr), of which a limited inventory of around 1,000 units was unsold as of Q4-2017.
These figures indicate that there is a definite demand for bespoke offerings by high-ranking brands and that HNIs are willing to seize a good deal that will complement or even amplify their social status quotient. Therefore, despite the overall subdued response to luxury housing offerings, Trump Towers will more likely than not be a winning ticket – for Trump as well as Gurgaon.
[The author is Vice Chairman – ANAROCK Property Consultants]