RIP Luxury Property - Decoding the DNA of Luxury Residences

If ever there was a segment of Residential Real Estate which has been subjected to an obituary much before its time was due, it would be the Luxury segment. With every developer talking of “Luxury Properties” that seem to be mushrooming around every corner, perhaps it is understandable why the rich and affluent are going only with the tried and tested and not experimenting with the new and upcoming.

To understand this trend better, perhaps we need to scrape the surface a little to see and understand what luxury real estate is all about; not only in the context of local geographic market but more as a trend.

The etymology of Luxury in itself gives us an idea into the ambivalence of this subject matter. Luxus the Latin word which is the root for Luxury can either be taken as “something deviating from the norm” or “Excess/Profusion/extravagance”. Thus balancing these aspects of Luxury has always kept the marketers on their toes. In context of Luxury Residences, the ambivalence comes in doing up what would be considered elegant utilitarian amenities versus what would be wasteful extravagance of no practical use to the home owners.

Luxury is not only about ownership anymore as there is a tangible shift towards the overall experience around it as well. For the sake of simplicity let’s try and understand what all facets combine to create the Crown Jewel of Real Estate - “Luxury Property”

Location

​Oft quoted, seldom disagreed, Location is probably the single biggest attribute for Real Estate Investment. However, it has to be seen in light of planned or announced future developments as well. As a thumb rule, connectivity and shifting of Economic and Social focal points affects the future viability or attractiveness of a particular location. What is City Center today can very well become an outlying destination in a span of 5-10 years. The closest and most evident example of this can easily be seen in Gurgaon. The city centre has gradually moved from Sector 14 across the NH8 to MG Road-Iffco Chowk, onto Galleria - DLF Phase IV and now to Golf Course Road. In times to come even this would shift to any location that is able to create something that has the capability to gravitate the urban centre, the best of community living and an extremely desirable address all within itself. What DLF is doing with DLF V campaigns is just to reinforce what is happening around it. Change of the urban melting pot from one location to another but with a vision to keep it there for coming few years.​

Concept

​With the affluent Indian getting exposed to the Best the World has to offer, the taste and preferences are undergoing a rapid change. The platter of offerings has suddenly started looking like what their counterparts in US/Europe enjoy and partake across the globe. Half a decade back Mixed Use development (i.e. Residential with Commercial / Retail/ Hospitality) were looked down upon but now it’s the Convenience that such a community provides which becomes the main talking point. Walk to work, walk to retail, walk to Social hotspots is the new buzzword for choosing an address. With the best in designer homes, hospitality management and branded residences making a beeline for Indian shores, the customer is now spoilt for choices. Private Elevators, Dedicated Concierge Desks, Non-obtrusive deck areas, upkeep and maintenance by the best in class and more such elements- precipitated by the need to have certain amount of privacy and snob value.

​Bigger the Better

​Luxury Properties are all about opulence and living it big. Anything less than 4500-5000 sq ft cannot be seen as even the starting point of luxury residences. Large, Expansive Public Areas and more than accommodating Private Spaces with heady mix of Family Areas and Lounges, Decks which can host 50 of your guests for an evening wine session - signify your arrival to the world. The trend is steadily moving towards 6000-8000 sq ft units aiming at replacing the concept of large areas that come as part and parcel of Villas / Bungalows. Home owners are increasingly being spoilt with choices like in-home Private Theatres, Lap / Splash or even Infinity Pools on the deck, or even Terrace Garden Bars. Living life Grand Size is the basic threshold.

Best from the World

​Whether it is the building architecture or façade, or the interior scheme with best in class specifications from all over the world, the Luxury Connoisseur is now demanding it all. From the likes of Tony Chi, Lord Norman Foster, Glen Pushelberg, Girogio Armani, Philip Starck everyone is involved in some of the most landmark Luxury developments happening in India. The availability of best brands in designer kitchens, washrooms, appliances and millwork is only adding to the growing list of basic expectation from these Luxury Homes. The brands which adorn the White House or Kremlin or even Burj Al Arab are now steadily finding their way into Indian Homes courtesy the need to be serviced by what the best addresses in the World boast of.

Exclusivity of the Community

​The community profile in itself has a major bearing on the purchase decision for any luxury development. The affluent want to hobnob with their own kind and this factor alone leads to the need to create high entry barrier to these developments. The pricing and total supply provides the filter to ensure fulfillment of this desire of being part of a like-minded community of the city’s elite. Whether it is achieved through Pre-Sale Qualifying (the genuine by-invite only concept) through series of profiling forms, it was never so evident to the marketers that selling is not the key task - creating a community which they can take pride in should be the goal. Once created, the community’s profile ensures that the development takes a different trajectory in terms of becoming the most sought after address in town.

Nothing is aspirational

​For a prospective buyer of Luxury- nothing is aspirational; a point seldom understood by marketers. The sense of arrival or defining their success or even measuring their wealth is not the yardstick for these offerings. This segment of buyer can easily afford what money can buy, the trick is how to re-align their thought process from being inherently thrifty to splurging on yet another glass and steel structure which would never become their primary address. The key is to appeal to their sense of gratification of owning everything that money can buy today and before anyone else and would add to their never ending list of acquisitions. Just another feather to their cap or if the product is worth it, the Crown Jewel of their luxury collection.

Till the marketers realize that Luxury Housing is not about Price per sq ft but about emotional connect per attribute, the day of Golf Courses, Wine and Cheese events, Single Malt Tasting, Polo Matches et.al are far from over.

Author: Kumar Gaurav