MUMBAI: India’s super rich are spotting opportunities in an otherwise depressed property market, and leveraging on it to buy luxury pads for themselves. In the past one week, two large South Mumbai bungalow deals have been clinched by the biggest names of the corporate world, while at least one more iconic property, Hindustan Unilever’s guest house Alhambra on Carmichael Road, is generating good interest.
Last week, industrialist Kumar Mangalam Birla emerged as the highest bidder for the sea-facing,30,000-sq-ft, Jatia House in Malabar Hill. The Aditya Birla Group chairman is paying Rs 425 crore for the property, making it the most expensive bungalow deal ever in India, surpassing the 2012, Rs 400-crore Maheshwari House transaction.
In the latest, Cyrus Poonawalla, chairman of Poonawalla Group, is buying US consulate’s Lincoln House at Breach Candy for Rs 750 crore. The property spread over 2.06 acres is much larger than Jatia House. Last year, the Godrej family acquired Mehrangir, the house of Homi Bhabha, father of India’s nuclear programme, in Malabar Hill for Rs 372 crore.
Birla, Poonawalla, Godrej and others paying stratospheric prices for these iconic properties are buying them for private use, and market experts expect some more deals like these, as the appetite seems to be growing for such private residences.
“These deals may not be an indication of prevailing market rate, as drivers for such transactions are not technical and commercial valuations,” aid Shashank Jain, partner-transaction services at PwC India.
“Given the large size of such deals, primarily for personal use, not everyone is in race to buy and money is not a constraint for the ones who are in fray,” Jain said. He expects a few more such properties coming out in the market. The aspirational value of these homes is often driven by their exclusivity and iconic status.
“In the first place, the supply for such assets is extremely restricted, they are in a class of their own, with no comparable options,” said Anuj Puri, chairman and country head at property consultant JLL India. “Secondly, the sentiment and purchasing power of the buyers of such properties is not governed by economic considerations like interest rates and stock market performance.
“There are only a few locations that boast of neighborhoods where super rich industrialists are keen to reside”.
In south Mumbai, Carmichael Road, Altamount Road, Nepean Sea Road and Malabar Hill are among the most sought-after addresses. In New Delhi, Lutyens’ Delhi, Dr APJ Abdul Kalam Road (until recently Aurangzeb Road), Amrita Shergill Marg and Prithviraj Road are known for the prominent and influential personalities residing there.