(Representative image)
BENGALURU: Sales of luxury real estate, properties worth Rs 1 crore and more, appear to have seen better traction than other segments in the last two months as the pandemic has given an opportunity for the wealthy to buy them sometimes at discounts or through flexible payment options provided by the builders.
This does not herald a bounce back of the segment, whose sales have been sluggish over the last few years. But it does not seem to have gone the way the mid-market segment – properties valued between Rs 40-80 lakh – has. The latter fell sharply due to the pandemic, salary cuts and job losses. “We have been seeing good traction in high-end apartments and villas in the last few months, those whose areas range between 2,500-4,500 sqft,” said Rajendra Joshi, CEO of Brigade Group’s residential business. “About 7-8 apartments, all of which are worth more than a crore, were sold in August, compared to 5 in a good month.”
Embassy, which focuses on premium properties, says it sold apartments worth Rs 75 crore in the last two months, mostly across its projects in north Bengaluru. “April and May were very muted,” says residential business CEO Reeza Sebastian, “and people out in the market now are serious buyers, so we are offering relaxed payment schedules.”
The rich who would buy such properties are seen to have been relatively less impacted by the downturn, less worried about layoffs. Mostly they are business executives in very senior positions or businessmen who find the current market an opportunity to buy bigger villas or apartments or penthouses with hard bargains – discounts going up to 20%, says Pankaj Kapoor, CEO of real estate analytics company Liases Foras.
Kamal Sagar, CEO of Total Environment, says sales in luxury projects have not been impacted due to the lockdown as that segment is not impacted due to job loss or salary cuts.
One of the notable high value transactions that happened in the last few months in Bengaluru is by Catamaran Ventures, the family investment office of Infosys co-founder Narayana Murthy. Catamaran has bought an apartment in Kingfisher Towers for about Rs 28 crore as part of the company’s portfolio diversification, according to people familiar with the matter. The apartment is about 8,000 sqft, so the per sqft rate was about Rs 35,000. Catamaran confirmed the deal but declined to comment on the value.
Residential real estate as an investment option fell out of favour among HNIs and the wealthy because of lower yields and price appreciation in the last decade. “But because of Covid and the sharp movement in interest rates, there has been some interest among investors if the property size is large and they are getting reasonable discount,” said Dharmendra Jain, executive director – advisory, Kotak Investment Advisors.
Farooq Mahmood, CMD of property consultancy Silverline Realty, thinks these sales are the result of pent up demand from buyers who were fence sitters. Silverline has done 20 high value transactions – each more than Rs 2 crore – between June and August, compared to negligible numbers in the first five months of this year.
