Lodha to launch 2-3 luxury housing projects in FY24 to meet demand

Lodha to launch 2-3 luxury housing projects in FY24 to meet demand

Macrotech Developers, which acquired five plots of land in the Mumbai region and Bengaluru during the first quarter of this financial year, plans to develop Lodha-branded housing projects with a revenue potential of Rs 12,000 crore, a quarter of which would be in the luxury segment.

To cash in on strong demand, Macrotech Developers plans to launch 22 projects across the Mumbai Metropolitan Region, Pune and Bengaluru. Two or three of these projects are expected to be in the luxury segment, a company official told Moneycontrol.

“As much as 25 percent of the Rs 12,000 crore would be in the luxury category. These would be across two to three new projects, where units are priced upwards of Rs 25 crore,” said Prashant Bindal, chief sales officer. “You cannot launch many luxury projects because a lot of effort goes behind launching a luxury product in terms of the overall design, the façade and the structure. So one has to be very careful when launching a luxury product.”

The contribution of luxury housing projects is not in terms of volume but in terms of value, he said, adding that the company sold 2,350 units worth Rs 3,450 crore in Q1.

“We have a scale ranging from Rs 40 lakh to Rs 400 crore,” he said. “Of the Rs 3,450 crore, nearly Rs 800 crore business came from the luxury segment that comprises units priced at Rs 25 crore and above,” he said.

He said that in any 30-storey tower comprising luxury housing units, an average of 17 to 18 families buy into the entire tower.

“Generally, half of them end up buying two floors and the other half buy one floor,” he said. “A building with only select families staying in it is making a statement in itself.”

Bare-shell homes

Traction in the luxury segment has been high over the past two years and its share has gone up to at least 25 percent now from barely 10 percent earlier.

“Most of these buyers already own at least one house. They may own multiple offices as well. For them, buying a luxury house is buying a statement,” Bindal said.

The luxury segment does have its unique aspects. For example, 99 percent of the luxury homes bought in Mumbai are sold as bare-shell units.

“In the last three years, we have been developing only bare-shell units because even if you give them a fully loaded one, they break it and build to suit their style. Therefore, while the brand, location, amenities are important, the contours of the design are equally important,” he told Moneycontrol.

Another factor is amenities, which play an important role in the final purchase decision.

“Most buyers reside in old standalone buildings and depend on clubs for facilities such as the swimming pool or the gym. It is important that all facilities are made available to them within a building,” Bindal said.

Although luxury buildings are not very tall, that does not mean they are faster to construct.

“Generally, the construction timeline is similar to any other building as creating the bare structure is easier but designing the facade takes the maximum time,” he said.

The Lodha Malabar luxury apartments in South Mumbai cost upwards of Rs 150 crore. Most buyers in this project bought two or three units worth Rs 250 crore to Rs 400 crore.

“A 30-storey building generally gets completed in 18 months, but this may take another 12 to 13 months to complete the facade because this is expected to be designed on the lines of the Empire State Building in New York,” he said.

Again, in a bare-shell luxury project, the height of the ceiling and views are important.

“Vertical windows play an important role in any luxury product because it gives a sense of scale to the living room,” Bindal said.

Redevelopment projects

Location is key to any luxury project.

“You cannot create an uber luxury apartment worth Rs 50 crore, Rs 100 crore in Navi Mumbai or in Thane. It has to be in South Bombay or Bandra. Land is available in prime locations. That’s where redevelopment projects can come up. You first procure that land, then you redevelop it, tenants are then moved based on the current terms and conditions, and then the uber luxury building comes up on that site. This land is available only after you demolish an existing building.

The company is planning to launch a luxury project in Worli Sea Face soon. “This may be a 30-storey project,” he said.

In all uber luxury projects, the company offers only full floors. No unit is less than Rs 250 crore on any floor. Most of them are spread across an area of 150,000 square feet.

Jodi apartments

In terms of volume, jodi apartments – two or more units merged into one – comprise 10 to 12 percent but in value terms, they account for almost 30 percent of an entire tower. This is becoming a popular format in Mumbai.

“Two years ago, we only created standalone units. Now we create the units on certain floors in such a way that they can be combined into jodis,” he said.

This is popular among business communities.

“When they shift, they want the whole family to move. They want to be separate and they want to be together at the same time. That’s the reason why this format is popular among business families,” he said. “We make an effort to ensure that we design at least 15 to 20 percent units in such a way that they can easily be combined.”

Bindal said the new project that the company is planning in Worli is expected to have one unit on each floor.

“Every unit will not be less than Rs 200 crore. In the other project at Tardeo, there are single units as well as two units that are available. These can be combined into a single unit of 3,200 sq. ft but the jodi unit will be about 6,500 sq. ft. We have created a special provision for jodis in any new product that we intend to come up with,” he said.