Rich Indians living luxuriously in homes away from home

Mon, 06/27/2022 - 05:24

Author: Lijee Philip & Kailash Babar

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From Candolim and Assagao in Goa to Medhufaru and Kunfunadhoo islands in the Maldives to Marina beach in Dubai, uber rich Indians are buying luxury villas and houses in locations considered safe or offering better taxation rates and business opportunities.

Indian business families, startup founders and CXOs are investing in luxury properties within the country and abroad in places where geopolitical risks are low, a trend that picked up last year post Covid-19 outbreak, luxury real estate development and brokerage firms told ET.

Investment diversification and residency status in another country as part of business expansion or where their children study are among key drivers for Indians to invest in luxury homes in domestic and offshore exotic locations, experts said. More importantly, it is seen as a promising asset class with good yields globally.

“The strategy is to de-risk by investing in different geographies,” said Ravi Machani, a Bengaluru-based entrepreneur and investor who has bought a luxury beach house in Candolim in Goa and has zeroed in on a luxury villa in Maldives, too.

According to a recent survey by Sotheby's International Realty, majority of high net-worth individuals (HNIs) in India plan to buy luxury residential real estate in the next two years, reflecting a strong and decisive turnaround in the luxury real estate segment. The main reason for purchasing property during the pandemic is a “lifestyle upgrade”, it said.

“There is a huge cohort of customers who want to buy homes outside their primary city in India and have bought property overseas too, helping us record our best quarterly performance till date,” said Nibhrant Shah, founder of luxury holiday home developer Isprava Group, backed by Godrej Industries NSE 0.76 % chairman and managing director Nadir Godrej, Piramal group executive director Anand Piramal, and Dabur India NSE 0.78 %’s Burman family.

Rohan Sharma, director, research and REIS, India, at international property consultancy JLL, said safe locations and countries with low geopolitical risks, better taxation rates, business opportunities are finding greater traction from Indians after the pandemic outbreak.

“Dubai has all these positives and a short commute time,” he said. “Europe for its relative stability is a big attraction, and so is the US.”

Visa-free entry, access to better healthcare and infrastructure, and overall quality of life are also big motivators for uber rich Indians to buy homes abroad post Covid-19, Sharma said. “Most locations and countries are offering visa residency status for investment of a certain amount, and in Dubai it is one million dirhams (or about Rs 2.1 crore).”

GOA RUSH

Last year, Pinky Reddy, wife of Sanjay Reddy of GVK, bought Palacio Aguada, a secluded prime sea-facing property in North Goa for Rs 80 crore, while Hyderabad-based GS Raju, a third generation entrepreneur, bought a luxury villa in Goa for around Rs 20 crore. “It was very easy to move in as these luxury villas are completely furnished,” Raju said.

Mumbai-based couple Suraj Sadanah, who runs a production house, and Manmeet Arora, a fashion designer, relocated to Sangolda in North Goa last year. “Although Goa has its fair share of challenges, like its slower pace at work yet its proximity to Mumbai and its quieter way of life, balances it out,” Arora said.

Ritu Nanda, a Goa-based designer of luxury homes, said, “A sleepy underestimated town, Goa is seeing a sea change in real estate pricing.” In Assagao, for example, property rate has gone up to Rs 5,0000 per square metre from Rs 30,000 two years back, she said.

Ooty, Coorg, Kasauli, Alibaug and Manali are among locations in the country that are on the radar of rich and wealthy Indians scouting for high-end luxury villas, experts said.

HOME AWAY

Rich Indians are investing in property markets of Dubai and Maldives as well. Several buyers of luxury villas in these locations that ET reached out to, however, did not wish to reveal their identity.

A Bengaluru-based founder of a digital brokerage firm, a crypto currency investor in his 30s, and a senior investment banker are among those who bought luxurious villas in Dubai recently. The investment banker also bought a villa in Goa.

“Property prices (in Dubai) are up by 50%, especially of villas which are in high demand,” said Viresh Chhabra, managing director of Forest Hills, a brokerage firm for high end houses.

Dubai allows complete ownership. Marina beach front, Creek Harbour, Business Bay, and Hartland are some of the prime locations there.

“There is a huge shortage of villas in these markets,” Chhabra said. “Since it’s a safe haven with a rental yield of 7%, buyers are willing to pay 1.5 to 2 million dirhams (about Rs 3.5 crore), with ticket sizes of villas going up to Rs 40 crore.”

Given the liberalised remittance scheme (LRS) limits of $250,000 per financial year per person, Indian families mostly pool in money, or invest closer to the end of one financial year to take advantage of starting the new financial year quickly to buy property abroad.

The most preferred investment in property abroad is in the range of Rs 2.5 crore to Rs 6 crore, in which range most global locations fall, luxury property brokers said. This is comparatively cheaper than similar properties in India, they added.

There are several luxury residential projects coming up in Maldives. Tata Housing is developing two residential projects at Nadhee and Odean in the city of Male. This is the second phase of the development planned by Tata Housing in the Maldives. The company has already developed two high-end projects – Arabia and Gakoshi – in Male.

Travel curation company Che Experiences recently announced a partnership with Soneva Villa Ownership in Maldives and is looking at Indian HNIs as potential customers.

“Currently, the return on investment in Maldives is as high as 15-20% in less than 10 years,” said Mohamed Ali Janah, one of the largest luxury property developers in Maldives. “There is no free hold allowed in Maldives. But investors use the villas when required and the rest of the year rent it out.”

A villa spread over 100 to 400 square meters typically costs $1-5 million, going up to $10 million in some locations, Janah said.

Source: Economic Times

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