[ecis2016.org] With Kolkata witnessing a spurt in launches of luxury properties, we look at what’s on offer in this segment and whether such projects can garner sustained demand in a cost-sensitive market
At a recent financial seminar, a panelist suggested that amidst the over-supply in markets across Mumbai, Bengaluru and Delhi-NCR, the luxury segment in Kolkata stood out. This raised the question of whether a cost-conscious city like Kolkata, could get big ticket investments in the luxury segment. An outside impression could indicate that lower ticket sizes are being sold as luxury properties in Kolkata. Does this suggest that Kolkata has come up in the luxury and ultra-luxury property segments, due to the lower ticket size?
You are reading: Kolkata: An emerging hotspot for luxury realty?
According to industry estimates, the city has witnessed a 20 per cent rise in the sale of luxury properties, amidst the overall slowdown.
Luxury segment in Kolkata – A snapshot
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Subhankar Das, a local property broker, asserts that luxury properties in his portfolio have been more consistent in the city, than affordable housing. According to him, there has never been a dearth of rich people in Kolkata. However, their preference has always been towards plotted developments.
“In my opinion, south Kolkata is a far better performing market than south Mumbai, south Delhi or south Bengaluru. Upmarket projects that have come up in posh localities like Chowringhee, Rawdon Street, Ballygunge and Jodhpur Park. These expensive launches, targeting the HNIs, have many takers from the Bengali, Marwari and Gujarati communities, who have switched to living in apartments that offer far more comfort and amenities,” says Das.
Check out properties for sale in Kolkata
The demand-supply equation, vis-à-vis luxury properties in Kolkata
The healthy demand for luxury properties, raises the question as to whether luxury properties are in short supply in the city. Rakesh Gupta, director, Squarewood Projects, point out that luxury properties in Kolkata are not just catering to individuals from the city but also to the rich clients from across east India.
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Buyers from Ranchi, Jamshedpur, Asansol and Guwahati, are betting big on the luxury properties in Kolkata. “Kolkata is the only metro city in east India and hence, it is witnessing traction from rich people across the cities of the east. However, there is definitely an over-supply in this segment now. The luxury developers are also over-leveraged and debt is very high. It will take no less than seven to eight years, for the luxury properties to get absorbed. Most of the luxury properties, other than Trump Tower, have had a long wait, for buyers,” Gupta elaborates.
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Analysts maintain that while many developers strive to pull off luxury projects, over-supply could be detrimental, in the absence of product differentiation in the segment. Developers with over-leveraged balance sheets may fail to stay afloat. It all depends on the business model of the developers. Nevertheless, those who are sitting on prime land parcels and opting for joint ventures or joint developments, will be able to survive.
(The writer is CEO, Track2Realty)
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Source: https://ecis2016.org
Category: Lifestyle
