In November 2021, Bollywood actor Madhuri Dixit chose a new apartment to reside. It’s a glossy premium project wherein the actor and her husband would be paying a rent of a whopping Rs 12.50 lakh a month. The contract is for a period of three years and Dixit has also paid a security deposit of Rs 3 crore.
It had me thinking about an aspect that is not commonly explored—how do elite Bollywood actors and top cricketers decide on their housing deals? What are their criteria for selection? Do they negotiate hard? Do they have advisors? Do they prefer to rent or buy?
As a disclaimer, I must point out that this is a segment where transactions are generally kept under the radar for the sake of privacy. My own limited interaction with the industry has not been with the actors but with their advisors or representatives when they have sought my view on certain projects.
Also Read: How much real estate space can $1 million buy?
Yet, seeing the choices eventually made by them it’s not hard to assess the reasons behind their decision-making. So here goes:
Exclusivity: The one common thread joining almost every heavyweight celebrity is that they want to buy or rent in projects that have exclusivity. Example: in the building where Madhuri Dixit has secured the rental, there is only one apartment per floor.
Additionally, the project in itself should be such that the remaining residents are also in the same financial league. There is then little possibility of residents getting over-awed with a major celebrity wandering around. Example: Aishwarya Rai has an apartment at Sunteck’s luxurious Bandra Kurla Complex project where other buyers include equal or even bigger giants like Uday Kotak.
Amenities: While it is true that several stars have their own bungalows which have their own set of amenities, the truth is that owning bungalows is not everybody’s cup of tea. The alternative is to explore offerings in top-league projects that provide a host of amenities. Example: Shahid Kapur, Akshay Kumar own apartments in the much-awaited Oberoi 360 West project at Worli where the design and list of amenities are expected to set new benchmarks in luxury.
Rent or Buy: The eternal debate in housing is widespread even in Bollywood. Some prefer to rent. Some want to buy. People who don’t stay in Mumbai are often flummoxed when they hear of celebrities staying on rent. The question among many is – Isn’t he/she doing well financially to just buy a house himself?
At the same time when celebrities like Ranbir Kapoor take apartments where the rent itself is over INR 10 lakhs per month, the question is – Isn’t it just better for them to buy the apartment? One of the welcome changes in the last decade has been that practicality has taken center stage in decision-making. Example: Virat Kohli and Anushka Sharma tested their waters in Raheja Legend at Worli via a rental and then decided on their ownership decision. (And then went to an altogether different location)
Advisors: As with every home buyer, celebrities also have their own set of advisors who assist in decision-making. The advisor is of no demarcated role or designation. It could be the father, mother, chartered accountant, trusted broker etc. Few have structured family offices that aid their transactions. Vishal Masand of TMRA Advisors that has a record of servicing several celebrities says “Trust is a must but safeguarding their privacy is the key.”
Asset Class: Despite the trend towards equity markets in recent years the routine asset class most celebrities venture towards is Property. Some of them have built a vast net worth on the back of their investments. Akshay Kumar and Shah Rukh Khan are known to be amongst the savviest property investors in the movie industry – with Kumar in particular supposed to be amongst the cleanest in his dealings.
Intermediaries: In a small circuit where the wealthy often know other wealthy people – the scope for intermediaries has diminished. Besides, builders and actors have historically shared a close relationship. Yet intermediaries exist and will in all likelihood continue to do so. There are two reasons. One is that high-profile celebrities have an image that doesn’t allow them to easily haggle in deals. Thus, they need someone to do their bidding. The other is due to ego-management. A communication said incorrectly or sharply between two heavyweights can make a good deal fall apart. Rumour has it that an ego clash between a giant celebrity and a high-profile listed developer scuttled a deal in one of the most expensive projects of India.
At its core, Bollywood celebrities and Indian cricketers do transactions not very different from the rest of us. They value their hard-earned money. They explore multiple options. They seek advice from their trusted friends. Their wealth is primarily parked in real estate. Where they differ essentially is on their surroundings. Most of us want - community. They want exclusivity.