Nishant Joshi, 24, has been travelling to London with his family since he was 12, living with cousins or in hotels. A year ago, he decided to launch the Parisian fashion school Mod’Art International in India, and racked up frequent flyer miles by travelling to Europe nine times in the first year.
“Since I’ll have to continue to travel to London, it only makes sense for me to buy a house,” he says. Being part of the close-knit Gujarati community there, he has already found a place owned by a Gujarati lady who will soon be relocating to Kenya to be with her cousins. He plans to pay for his four-bedroom “semi-house” with a “buy to let” scheme from a bank.
“I’ll give a part of the house on rent and that money will go directly to the bank,” he says about the place in Kensington that costs about £400,000 (around Rs3.17 crore). “I love staying in London and since I have a lot of family and friends there, it’ll work like a second home for me,” he adds.
He’s the kind of person Lady Raine Spencer, a director of Harrods Estates Ltd, wants to woo. She was an exhibitor last month at Extravaganza 2008 Mumbai—an exhibition of luxury goods that included everything from jets to cigars, Scotch, yachts and cars. Despite the excitement caused by a life-size replica of Embraer’s Phenom 300 jet and the latest gleaming Maybach, international property agents were a category of exhibitors whose stalls saw heavy traffic, even without eye-catching displays.
The greying British countess, in a demure yellow and blue frock, sat in the Harrods Estates stall (the property division of London’s most famous store), with a Harrods teddy bear on her lap, and answered questions about the properties they sell in London and the surrounding countryside. The sale price of these homes is less than £3 million. “In the last few years, the percentage of Indian buyers has shot up to 12%. A few years ago it was about 4%,” she says. Almost 67% of Harrods Estates’ business comes from the West Asian, Russian, Chinese, French and Italian markets. Now, the Indian market is an important slice in that pie chart.
Indians, both expatriate and resident, are buying property abroad. Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj, says that Indians look at Dubai as a good investment option, while those who have children studying in the UK and the US buy homes there for convenience. Malaysia and Thailand are upcoming holiday home destinations. “A house on the beach in Pataya costs less than a similar one in Goa. Also, the infrastructure is better and one can get a mortgage of up to 80% of the value of property,” he says. Nothing comes in the way of you and that villa in Bangkok other than the ceiling of $100,000 per person (around Rs40 lakh) that the Reserve Bank of India allows us to repatriate each year.
Mark Collins, managing director of Harrods Estates, says that most often Indians are looking for big lateral spaces, as opposed to the traditional duplex or triplex kind of homes available in the UK. “We now have whole floors in buildings for sale,” says Collins. Besides that, he says, Indians also appreciate the concierge services Harrods’ homes offer, where tickets for theatre and travel as well as reservations at restaurants, and shopping help can all be arranged. “We increasingly see Indian buyers who are based in India but also have homes in the south of France and London,” Collins says.
Tyler Randell, a property consultant with UK’s Ready2Invest, says Indians make up half of the visitors at similar property shows in London. The firm has “a lot” of UK-based Indian clients, Randell says. “And we’ve noticed that if we do one good deal for them, Indians will come back to do more,” he says.
To attract more buyers, there were seven international property agents at the Extravaganza show, from the UAE, UK and France. Some, such as France-based Burger Sotheby’s International Realty, which specializes in luxury properties in St Tropez, Cannes and Cap Ferrat, have had no Indian buyers. “We’ve come to this show to change that,” says sales manager Sandrine Palmier.
Dubai is still the most preferred destination. Ishu Rupani, partner at Blue Water, Dubai, who is selling apartments in Dubai’s most luxurious properties such as Palazzo Versace and the Pentominium, says the real estate business took off in 2002. Till then expatriates could only lease homes.
After recent changes in regulations, Rupani says, anyone can buy property outright in Dubai. “The biggest buyers are expat Indians. They go back and tell people at home how easy it is, and so we have a substantial number of Indians, as well as Americans of Indian origin, buying in Dubai,” he says. “All you need is a chequebook and a copy of your passport.”
Morya Housing Ltd, the Indian representatives for Dubai Properties, has done around 40 deals in the past three years. Prices have risen more than 400% for some of these homes. “It’s easy to lease a home and get a return of about 12% compared to 5% in India,” says Divya Rao, head of marketing at Morya Housing.
YOUR NEW ADDRESS?
Location: Kotor Bay, Montenegro
Specs: There are one-bedroom (an average of 530 sq. ft) and two-bedroom (an average of (785 sq. ft) apartments with exterior walls created out of locally-sourced stone, and finished with mosaic tiled bathrooms, oak wood details and terracotta tiled roofs. The apartments have views of the water and surrounding mountains.
Price: Starts at $334 per sq. ft. and goes up to $421 per sq. ft. Add a compulsory $22,500 for the compulsory parking space.
Perks: The Unesco-protected Kotor fjord (steep mountains rise up from deep waters) restricts over-development, so supply of property is exclusive and limited. Currently, the Seagarden Resort is priced 16% under market value. And even though mortgages for foreign owners are very rare, one of Montenegro’s largest banks, Hypo Alpe Adria, will provide mortgage finance on the final valuation price.
Location: Canary Wharf, London
Specs: This penthouse is located on the 13th and 14th floors of the prestigious residential development. It covers 3,786 sq. ft over two levels and comprises a reception room of more than 800sq. ft, a cinema room, study, kitchen/breakfast room, master bedroom suite with dressing room, three bedroom suites, two roof terraces, two balconies and four underground parking spaces.
Price: £4,500,000 (or $8,911,400).
Perks: Stunning views from the large roof terraces, four underground parking spaces and 24-hour porterage and security.
Location: Culture Village, Dubai
Specs: This 80-storey tower with luxury residences will be a sister to Q1, situated on Australia’s Gold Coast. It offers studio apartments starting at 592 sq. ft, to four bedroom apartments of 4,453 sq. ft.
Price: Currently $600 per sq. ft. Is expected to go up to $1,000 by the time it reaches completion in 2010.
Perks: A private cinema, sky rise lounge, an indoor pool and gym and a business centre with a boardroom.
Location: Business Bay, Dubai
Specs: Eleven residential towers, a luxury hotel, malls, clinics and health clubs make up The Executive Towers. Choose from duplexes, penthouses, terrace and garden apartments. The penthouse is spread over 4,000 sq. ft, while the smallest, the studio apartment, measures 765 sq. ft.
Price: The three-bedroom apartments cost $13,18,857, while a penthouse will set you back by about $37,81,992.
Perks: Everything you need is within walking distance. The Podium, which is the centre of activity, has covered walking areas, fine-dining restaurants and shopping options.
Contact: www.morya.com or www.dubai-properties.ae
Location: Lagoon Village in the Perola da Lagoa golf resort, Silver Coast, Portugal
Specs: Situated 50m from the lagoon, 42 high-end town houses offer three bedrooms over two floors. Each unit is 1,325 sq. ft with 500 sq. ft dedicated to terraces and balconies.
Price: About $220 per sq. ft.
Perks: Each town house has its private plunge pool, as well as access to a communal swimming pool. The large floor-to-ceiling windows let in views of the lagoon, which borders a protected forest nature reserve. It’s a golfer’s dream: A nine-hole golf course is under construction, permission is pending for an 18-hole course, and six other world class courses are situated nearby. But the best part: The current prices are 30% below market value.
Location: Culture Village, Dubai
Specs: The Palazzo Versace complex includes condominiums for sale, as well as a luxury hotel, much like its Gold Coast counterpart. There are 188 condos, ranging from one to four bedrooms, but more than half have been sold already.
Price: The current price is $1,000 a sq. ft, but prices are expected to go up to $2,000 around the time of completion in 2010.
Perks: Besides the Versace name, the reason for the exorbitant price tag is the fact that the rooms come fully furnished. Expect a lot of gold, Medusa heads and Versace’s Roman-inspired design sensibility. In addition, you get everything from spas to cinemas, recording studios and a simulated marine environment for a scuba lagoon.