Bangalore: Kamal Sagar hasn’t stopped shopping for marble in the hills of Bottichino, Italy, for Windmills Of The Mind—a luxury residential development overlooking a lake in east Bangalore. The 20mm marble slabs, selected from around 25 quarries there, are for the spacious luxury homes being designed and developed by Sagar, his wife Shibanee and their 320-member team.
Each villa at Total Environment Building Systems Pvt. Ltd’s 24-acre project site in Bangalore’s Whitefield area will cost nearly Rs4 crore. The project is on schedule and the first set of villas will be handed over by June.
Expensive bet: Windmills of the Mind project in Bangalore where each villa will cost at least Rs4 crore. Madhurima Nandy / Mint
In south Mumbai, Orbit Corp. Ltd, a publicly traded property developer that primarily builds high-end projects, is constructing a 29-storey tower that will house only three “bungalows”. Each house at Orbit Sky Chateau will be three storeys high and spread over 13,000 sq. ft. Up to eight floors will be for parking space, and each house will be separated by a few vacant floors.
Pujit Aggarwal, Orbit’s managing director, plans to sell the project at Rs80,000 per sq. ft.
“This project will be exclusive with the best amenities, at a great location. There will always be takers for such properties,” said Aggarwal, who is procuring approvals and is jointly developing it with the land owner.
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Sagar and Aggarwal are among the few developers still optimistic about riding out the economic downturn without having to hop onto the affordable realty bandwagon as many others have. Such niche, luxury projects were more common during the boom years of 2004-07 for Indian realty, which had ignored a large pool of potential buyers looking for affordable homes. The global slowdown since has forced many developers to return to budget housing projects in the past eight months.
Sagar’s company already has other luxury projects under development in Pune and Hyderabad and plans to enter new markets this year. Orbit’s Aggarwal says the firm is planning another premium project in Lower Parel, Mumbai, after changing the format from commercial to residential.
Clearly, there are at least some buyers for these ultra-expensive homes. Ravi Pai, chairman and managing director of Softjin Technologies Pvt. Ltd, a Bangalore-based, mid-sized information technology company, has booked a villa in the Windmills project, both as an investment and a second home. “I don’t intend to sell it off. The market is bound to go up in a year or so...,” said Pai.
Real estate analysts are not sure how this niche clan of developers will survive if the downturn continues and they are pushed to scramble for cash.
“Sooner or later, these companies have to drop ticket size, slash prices further and repackage their projects as they cannot sustain this format,” said Akshaya Kumar, chief executive officer of Parklane Property Advisors. “The market dynamics have changed and they need cash flow specially with investors and banks not caring to help them out. They won’t be left with a choice.”
Total Environment has already cut prices—to Rs5,900 per sq.ft from Rs6,500 per sq.ft earlier—for the Whitefield project. “Our sales have dipped in the past few months and we have cut prices, but we will not compromise on our product positioning and...,” said Sagar. “We have raised debt as required for each project and are looking at joint development projects now.”