The positive change in India’s economic prosperity has increased the number of “super rich”[1] people in the country, a number that has grown by more than 200% in the past ten years, and now accounts for 3% of the world’s multi-millionaires. As a result, luxury consumerism has continued to increase. This is visible in the Indian luxury retail market, which is likely to grow at a compound annual growth rate of above 18% from now to reach USD 14 billion by 2016[2]. Very often exclusivity is expressed through luxury spending, and this is shown through the wearing of premium apparel, the buying of expensive cars and even in fine dining, while having a luxurious home is another way of expressing prestige and wealth.

Currently, as consumers seek fashionable amenities in their residences, “branded homes” are quickly gaining prominence in India. Typically, these are luxurious serviced apartments combined with hospitality services provided by the likes of Hyatt, Four Seasons, Le Meridian and JW Marriott, to name a few. Some other apartments are joint-ventures with well-known fashion houses such as Armani and Swarovski, which lend their names while designing the interiors.

Indian developers and their international brand-name partners

In India, the total number of units in such projects is generally low to maintain exclusivity. Another key feature of branded residences is prime residential locations, and at present these are limited mostly to Tier I cities. Interestingly, in India the premium commanded is not as high as it is in other Asian countries. In addition, there is a stark difference to what is inside and outside such properties as top Indian cities have barely managed to keep pace with the required infrastructure needed for a modern environment. Moreover, in a country like India, where people always look for value for money, the high maintenance cost of such property sometimes acts as a deterrent, even for the super-rich.

However, status and the demonstration of success are the decisive factors for the rich, especially the newly rich, when buying these properties, for investment-driven purchases are very few. Luxury space with commensurate amenities in top locations and targeted at the right class of people ensures that demand in this niche segment market is met with the right product. More and more developers are now working on this segment and we should see more launches in the next few months. While the top developers are roping in international designers to build luxury residences in Tier I cities, lesser known developers are employing well-known domestic designers to do the same in Tier II cities. Overall, we are set for interesting times as we see more luxurious creativity across the length and breadth of this big country.

[1] Wealth Index by New World Wealth, June 2014 – has ranked India eighth and home to 14,800 multi-millionaires (an individual with net assets of at least USD 10 million), below countries such as the US, China, Germany and the UK, but above Singapore and Canada.

[2] India Luxury Summit 2014, Assocham and KPMG

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