 "Indian market maturing but slowly, says Lord Andrew Hay of Knight Frank")
Where does real estate delivery stand in India compared to international standards?
I think the market has become good at designing schemes, more sophisticated and better on delivering on time, but the two huge opportunities for service are between the first deposit and the delivery of the flat, and afterward for developers and for us; furnishing, finance, management, legal work and tax planning. The market in London is arguably the most mature in the world but even there, we are embarking in April to completely re-engineer our services because we feel it is below what it should be. Rich investors that are online a lot want better service, so we are investing huge money to ensure that they are happy.
Has buying real estate internationally become easier for high net worth Indians?
From the last ten years, we were living in a global world. That is now changing, with a surge of nationalist sentiments everywhere. Korea and America and many others are becoming inward looking. Our projection for wealth growth is 42 per cent for the next decade versus 47 per cent in the last one, which is still impressive but the economy is not controlling the movement of wealth, it is government intervention that makes it hard for investors. If you take China, for example, my concern is the government could switch the lights off and change everything. I personally feel India has huge potential.
Most investors see London as an international safe haven. What is the pace of Indian investments there?
Yes, there is a track record of that, but at the moment, it is at a low point. In 18 months’ time, once Brexit and the political environment are clearer, things should turn. It had ramped up a year ago because of currency devaluations and property discounts, so you could have got homes 30-40 per cent cheaper. But at the moment, things will be slow for a year. Dubai, on the other hand, is an option with better yields and is close by.
Where in London does most outbound money from India go?
Twenty-three per cent of a development called Clarges in Mayfair is owned by Indians. It overlooks Green Park and is priced at £4,500 a square foot. It is situated in prime central London that includes Knightsbridge and South Kensington where it would be around 5 per cent for Indian buyers.
What do your wealthiest clients look for?
Best in class, of course, but the greatest luxury of all is discretion and privacy and that is what these people want the most. We have dealt with 673 billionaires over the years and while there are a few people who want to be upfront with their wealth, for the most part, it is low profile. A lot of what we sell does not go online, no brochures, just privately-placed. Another thing they want is technology — smarter-than-smart homes. If you are single, then the home of tomorrow may or may not have a kitchen because you can order gourmet meals online. A robot will do the housework. This is very close to becoming a reality.
What is the sweet spot for real estate prices for homes in London where the majority of deals happen?
We really like it all but to answer your question, we sell everything from £0.5 million to £250 million. The real activity is between £5 million and £10 million, which has been hit over the last few years. Below that, it is a domestic market. Above that segment, there are few deals anyway. The mid segment has been affected from a tax point of view in Singapore, London and Hong Kong. In London, 30 per cent of that segment has simply gone because of government intervention.
Which are the top five global real estate markets where you see Indian money migrating?
Not in order but London, New York, also a safe haven. Then Germany is becoming one with the Euro zone being so unstable, so Berlin and Frankfurt but not much Indian presence there. I have to say Singapore and Hong Kong are established and growth in the next few years will take place in Sydney and Auckland. Certainly (specifically) for Indian buyers the go-to markets are London and New York as well as Dubai, which is not on my list.
I think the market has become good at designing schemes, more sophisticated and better on delivering on time, but the two huge opportunities for service are between the first deposit and the delivery of the flat, and afterward for developers and for us; furnishing, finance, management, legal work and tax planning. The market in London is arguably the most mature in the world but even there, we are embarking in April to completely re-engineer our services because we feel it is below what it should be. Rich investors that are online a lot want better service, so we are investing huge money to ensure that they are happy.
Has buying real estate internationally become easier for high net worth Indians?
From the last ten years, we were living in a global world. That is now changing, with a surge of nationalist sentiments everywhere. Korea and America and many others are becoming inward looking. Our projection for wealth growth is 42 per cent for the next decade versus 47 per cent in the last one, which is still impressive but the economy is not controlling the movement of wealth, it is government intervention that makes it hard for investors. If you take China, for example, my concern is the government could switch the lights off and change everything. I personally feel India has huge potential.
Most investors see London as an international safe haven. What is the pace of Indian investments there?
Yes, there is a track record of that, but at the moment, it is at a low point. In 18 months’ time, once Brexit and the political environment are clearer, things should turn. It had ramped up a year ago because of currency devaluations and property discounts, so you could have got homes 30-40 per cent cheaper. But at the moment, things will be slow for a year. Dubai, on the other hand, is an option with better yields and is close by.
Where in London does most outbound money from India go?
Twenty-three per cent of a development called Clarges in Mayfair is owned by Indians. It overlooks Green Park and is priced at £4,500 a square foot. It is situated in prime central London that includes Knightsbridge and South Kensington where it would be around 5 per cent for Indian buyers.
What do your wealthiest clients look for?
Best in class, of course, but the greatest luxury of all is discretion and privacy and that is what these people want the most. We have dealt with 673 billionaires over the years and while there are a few people who want to be upfront with their wealth, for the most part, it is low profile. A lot of what we sell does not go online, no brochures, just privately-placed. Another thing they want is technology — smarter-than-smart homes. If you are single, then the home of tomorrow may or may not have a kitchen because you can order gourmet meals online. A robot will do the housework. This is very close to becoming a reality.
What is the sweet spot for real estate prices for homes in London where the majority of deals happen?
We really like it all but to answer your question, we sell everything from £0.5 million to £250 million. The real activity is between £5 million and £10 million, which has been hit over the last few years. Below that, it is a domestic market. Above that segment, there are few deals anyway. The mid segment has been affected from a tax point of view in Singapore, London and Hong Kong. In London, 30 per cent of that segment has simply gone because of government intervention.
Which are the top five global real estate markets where you see Indian money migrating?
Not in order but London, New York, also a safe haven. Then Germany is becoming one with the Euro zone being so unstable, so Berlin and Frankfurt but not much Indian presence there. I have to say Singapore and Hong Kong are established and growth in the next few years will take place in Sydney and Auckland. Certainly (specifically) for Indian buyers the go-to markets are London and New York as well as Dubai, which is not on my list.
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