Home Is Where The Money Is

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Mukesh Ambani's $1-billion glass tower might not be much for a man worth $22 billion, but when it is completed by 2009, it will officially be the world's most expensive pad. The desire for luxury and premium houses is, however, no longer restricted to a few rich men. With an increasingly open economy creating new business opportunities and first generation businessmen, and with multinationals setting shops in India, luxury houses are coming up in every city in a big way. Little wonder then, that residential properties in India are touching skyrocketing prices in recent years. However, some of the most exclusive and most expensive addresses in India are found in the old world charm of Kolkata's Alipore Road, Delhi's hallowed Lutyens' zone and Mumbai's shore-hugging Napean Sea Road. According to global real estate consultancy Cushman &amp; Wakefield (C&amp;W), Amrita Shergill Marg, Chanakyapuri, Golf Links and Jorbagh in Delhi are considered prime and prestigious. The cost of one acre is approximately Rs 130 crore (exactly the amount P. Chidambaram allocated for new Navodaya Vidyalayas in this year's Union Budget) at Amrita Shergil Marg, Rs 160 crore at Aurangzeb and Prithviraj Road, and approximately Rs 18.75 crore for a 375 sq. yard plot at Golf Links. So, while the aggregate value of property at Amrita Shergill Marg is at Rs 7,236 crore based on estimates by C&amp;W, India's financial capital Mumbai turns out truly to the ghetto of wealth. Delhi may have raised the bar where expensive residential rates are concerned, but Mumbai is still leagues ahead on average. A view of Malabar Hill In Mumbai. It is counted as one of the most expensive real estates in the world (photo by Sanjit Kundu) At Rs 12,375 crore, Napean Sea Road stands as the most expensive. Other premium areas in Mumbai include Malabar Hill and Cumballa Hill. In Malabar Hill, the average capital value is between Rs 35,000- Rs 60,000 per sq. ft, while the average rent of an apartment measuring approximately 1,400-2,000 per sq. ft could range between Rs 250,000-350,000 per month. In Cumballa Hill, it is Rs 35,000 to Rs 65,000 sq.ft. on an average for a built up area of 1,500 to 3,000 sq.ft; in Malabar Hill a 2,000-sq.ft plot would cost approximately Rs 15 crore. Napean Sea Road has been rising in its attractiveness over the past few years. The price has now been pegged at Rs 50,000 per sq. ft depending on the type of building. In Hyderabad, the addresses of the city's who's who can be traced to Jubilee Hills and Banjara Hills. C&amp;W attributes the reasons to a lot of new construction and mixed commercial and residential land use coming up in the area after 1995. In Bangalore, the cost in Lavelle Road, which enjoys the proximity of prime high streets such as MG Road/ Brigade Road or the Bangalore Club, is approximately Rs18,000 per sq. ft, the built-up area of which is an average between 3,000-5,000 sq.ft. Palace Orchards is Rs 20,000 for an average built-up area of 3,000-5,000 sq. ft. In Chennai, the Boat Club and Poes Garden are known for having very specialised, branded and large apartments of over 2,500 sq.ft. in area. There are no mid-range properties here. While it is Rs 22,000 per sq. ft for an average plot size between 3,000-4,000 sq. ft, it is Rs 17,000 per sq. ft for 2,000-3,000 sq.ft at Poes Garden. &quot;There is a steady demand for luxury houses in India&quot; -- Pankaj Renjhen, MD, Jones Lang Lasalle Meghraj So, what determines the prices of these A-grade properties and what makes them fetch such amazing prizes? &quot;They offer increased privacy, exclusiveness and enhanced quality of living,&quot; says Pankaj Renjhen, managing director, Jones Lang Lasalle Meghraj, a real estate services company. &quot;These are important factors to high net worth investors (HNIs) and aspiring home buyers willing to leverage their existing finances to the nth degree. They focus on people accustomed to a highly affluent lifestyle. The facilities they offer are also decidedly luxury-oriented, rather than based on mere convenience.&quot; Renjhen, whose company provides comprehensive integrated real estate and investment management expertise to domestic and global clients, is of the view that factors such as exclusive location, brand name of the builder and the luxury aspects of the project drive the high costs. &quot;There can certainly be over-valuations, just as there are buyers who are willing and able to pay for overpriced properties,&quot; he adds. &quot;The prime, prime property normally don't go through too much fluctuation,&quot; Anshuman Magazine, chairman and managing director of CB Richard Ellis South Asia. &quot;The supply is limited and people living in high end are not trading. Someone who has got that much money is not going to sell that often, so that always creates a shortage and that's what maintains the prices. New construction does not happen and existing occupants don't sell.&quot; {mospagebreak} PREMIUM VILLAS: Metrocorp&rsquo;s Nirvana in Bangalore (L) and Casa Estebana in Hyderabad (photos: Jones Lang Lasalle Meghraj) However, there are others who think all this is a power game. &quot;There is no basis of valuation, say, a Rs 200-crore property can become Rs 300 crore overnight,&quot; says Sanjeev Vohra, one of the promoters of Shreenidhi Realtors based in Delhi. The fact remains that in India the prices of A-grade properties have gone significantly. &quot;Even if the overall market prices were to go down, it wont impact these areas, even if there is a decline in prices it would be minimal,&quot; says Magazine. Far from this exclusive niche market is a breed that is trying hard to ape the lifestyle of the rich and famous. A booming economy and growing incomes have meant that even the upwardly mobile middle class can now aspire for lifestyles that only the very rich enjoyed till recently. A recent survey conducted by Jones Lang Lasalle Meghraj, states that over the past few years, a number of projects in the premium and luxury residential segment have been marketed. These houses are different from those in the yesteryears when a premium home used to mean just a house that is centrally located, large and comfortable. &quot;As the price goes up, the audience goes down&quot; -- Anshuman Magazine, chairman &amp; MD, CB Richard Ellis These homes are being developed not only in Mumbai, Delhi and Bangalore, as was the case in the mid-1990s, but also in almost all metropolitan cities and some mini metros across India. At present, the format of such premium and luxury homes on offer across the mentioned cities is quite varied, ranging from inner city and suburban condominiums, suburban villas and town houses, to golf villas and some unique holiday residences in the hills and along beaches. &quot;Whatever there is in the market is mostly sold out,&quot; points out Vohra referring to the new, luxury homes. &quot;By 2010, even if there is excess supply, there would only be a 10-15 per cent correction. The bottom line is good.&quot; &quot;No doubt, the supply is not that much relative to what it should be for a country like ours,&quot; says Magazine. &quot;But is there a short supply is a different question. Is the demand more than what the supply? That will, of course, depend on city to city but generally speaking, yes, the supply is short because every body does not want to take a risk as a developer building luxury houses, which cater to a smaller segment. As the price goes up, the audience goes down.&quot; &quot;There is a steady, though limited demand for luxury homes in India. However, they will have little bearing on the sector as a whole, since Indian real estate is and will continue to be about housing the middle and lower middle class,&quot; sums up Renjhen. All the same, getting rich and flipping houses seems no longer a thing of the past!