Differentiation through product positioning and brand partnerships can earn rich dividends in the luxury property segment, explains KAMAL KHETAN.
India is currently one of the fastest growing real estate markets in the world. It not just attracts domestic real estate developers but foreign investors. Indian luxury housing market is gaining momentum and holds immense potential. Rapidly growing ultra-high-net-worth individuals, increased aspirations, and changing lifestyle are the factors effectively contributing to the growth of the luxury housing sector in India.
The luxury market
Over the past year, Mumbai has witnessed an overall increase of 30 per cent in luxury home sales. Also, the past few years have seen a tremendous response from the NRI market. This contributes about 14-15 per cent to our company´s overall revenue, and growth has been consistent.
While the marketplace has been challenging, Sunteck Realty has created a portfolio of 24 projects with a development potential of 24 million sq ft, of which we have delivered six projects and have eight ongoing projects expected to be completed over the next three to four years. The biggest USP of all our projects is locational advantage, offering proximity to various avenues and ensuring excellent connectivity to all parts of the city.
Successful strategies One of the keys to our success is our decision not to give in to the fad of amassing a land bank by paying a huge cost for acquisition. The company started by bidding for a residential property in commercial real estate-dominated Bandra Kurla Complex (BKC) in Mumbai. Towards the end of 2006, when a government-owned, 2 acre plot in BKC went on sale, we emerged the highest bidder. We wanted to capitalise on our vision and get the first-mover advantage. Signature Island turned out to be a game-changer for us as well as the real estate market. Prior to this, potential buyers were unsure of buying residential properties in BKC. We have crafted bespoken creations under our ´Signature´ and ´Signia´ brands and cater to ultra-high-net-worth individuals and the head honchos of global conglomerates. Over the past few years, BKC has become the most sought-after commercial and residential destination and a hub for the country´s most celebrated gentry.
In a first-of-its-kind strategic tie-up in India, we tied up with Walt Disney for our Goregaon-based Sunteck City project. Our apartments in the property are Disney-themed and we offer benefits of this association to customers. For our landmark projects, we have an exclusive tie-up with Vertu to provide ´Signature Concierge Services´ at our Signature Island property. We have also partnered with names like Talathy & Panthaky and The Charcoal Project for designing the interiors of our properties.
We also expanded our residential and commercial properties to markets like Nagpur and Goa. The tremendous response received in these cities has given us the confidence to explore markets beyond Mumbai. We have carved a niche for ourselves in the luxury and ultra luxury segment by differentiating ourselves in each micro market through product positioning, brand partnerships and having different reputed channel partners for each product to attract corporate, HNI and retail customers. In the year gone by, we partnered with a high-end luxury car brand and hosted their car launch at ´Signature Island´ to reach out to their esteemed customers.
Stamp of approval
We are consistently driven to build a company that is financially prudent, viable and maintains the utmost standards of quality and transparency. We are backed by respected strategic partners like Ajay Piramal, Kotak Realty Fund and noted pension funds, FIIs and private equity.
In fact, we have been recently assigned a long-term Rating ´IND A+´ by India Rating and Research (Ind-Ra), popularly known as the Fitch rating. The Ind-Ra rating reflects our strong financial performance, strong cash flows, low debt-equity ratio and operational and sales expertise. The rating also highlights our robust business model with prudent financial management and careful selection of projects and land acquisitions at a time when the real estate sector is going through tough times.
About the author:
Kamal Khetan, Chairman & Managing Director, Sunteck Realty Ltd is involved in the formulation of corporate strategy and acquisition, while providing guidance on execution and diversification plans of the company. Under his guidance, the company manages a development portfolio - ultra luxurious and premium segment - of over 25 million sq ft over 24 projects and four rented assets in Mumbai.