Indian billionaire Vijay Mallya, owner of the world’s second-largest liquor company, is razing his ancestral home in Bangalore to build $4 million apartments as the number of people rich enough to afford them grows.
United Breweries Holdings Ltd., which owns controlling stakes in Mallya’s liquor, beer and airline units, and Prestige Estates Projects Ltd. are jointly developing the 4.5 acre (1.8 hectare) plot in the south Indian technology hub, home to Google Inc., Microsoft Corp. and Infosys Technologies Ltd. Construction will start in December, Irfan Razack, chairman of Prestige, said yesterday after the developer’s shares debuted.
Demand for luxury apartments in India is rising as the biggest rally in stocks in 18 years in 2009 boosted the ranks of the affluent in the third-fastest growing major economy. Mukesh Ambani, India’s richest individual, will move into a 27-story skyscraper in south Mumbai that cost $2 billion to build and is the world’s most expensive home, according to Forbes Magazine.
“There is now considerable demand for high-end apartments in Bangalore, and it is led by the senior management class, corporate houses, non-resident Indian businessmen and high-net- worth individuals,” said Anuj Puri, Mumbai-based chairman of Jones Lang LaSalle Meghraj, the local unit of the world’s second-largest commercial property broker.
The combined net worth of the nation’s 100 wealthiest people climbed to an all-time high of $300 billion this year, equivalent to a quarter of the country’s gross domestic product, according to Forbes. India’s wealthy may almost double their assets to $6.4 trillion over the next five years as economic growth swells their ranks, Credit Suisse Group AG said in its global wealth report released Oct. 8.
V. Shashikanth, chief executive officer at UB Global, in charge of executing the Kingfisher Towers project, referred all media inquiries to Bangalore-based Prestige.
The 8,321-square-foot, four-bedroom units at Mallya’s Kingfisher Towers, named after India’s best-selling beer, owned by the liquor baron, will cost at least $3.7 million, said Razack, based on sales starting at more than 20,000 rupees a square foot. Sale of apartments will commence in the next couple of months, he said.
Homes in central Bangalore cost about 11,500 rupees a square foot in the quarter ended June, about 21 percent below the 14,500 rupees a square foot in the first three months of 2008, according to data from property broker Colliers International. Prices dropped by about 30 percent during the economic slowdown in the second quarter of 2009, Colliers said in its report.
Bangalore, 623 miles south of Mumbai, had a 13 percent increase in transactions in the September quarter compared with the three months ended June, JPMorgan Chase & Co. said in a note to clients dated Oct. 6.
“Interest in the premium segment has gained traction,” said Jones Lang LaSalle’s Puri. “The first three months of 2010 witnessed a surge in residential activity across all locations of Bangalore.”
Mallya, who with a net worth of $1.45 billion ranked 44 in the Forbes list of India’s richest in September, lives in a bungalow on the site he inherited from his father. The three bungalows on the land will be razed to make way for the tower, Bangalore-based Razack said in an interview in Mumbai yesterday.
Kingfisher Towers will comprise 72 apartments with Mallya retaining 60,000 square feet on the ground floor plus one other level, Razack said. Mallya will have a separate entrance and private elevators to his apartment, Razack said.
The tower with three wings will boast a helipad, two swimming pools, squash courts, spa and concierge services.
“This is a landmark development,” said Razack. “It’s one of its kind the city has seen or will ever see.”
New projects have come onto the market in Bangalore in the second quarter of 2010, Colliers said in its quarterly India market report in July. Demand for premium residential property increased because of an influx of expatriates coming to work in India’s technology hub, the report showed.
“Bangalore until two years ago was purely sold on location without any consideration for product needs or design,” Mumbai- based Anand Narayan, national director of residential agency at the Indian unit of real-estate brokerage Knight Frank LLP, said in an interview. “If the location was good it was expensive. Now that’s changing. Some developers are building exclusive products which come at a premium just like the Gucci limited- edition bags.”
Skyline Constructions & Holdings Pvt. will sell apartments in its Skyline Villa Maria in the city’s center for as much as $5 million by hand-delivered invitations that cost 12,000 rupees each to print, said Bangalore-based Naresh Dandapat, regional director-south at Knight Frank, the sole marketing agent for five of the six apartments on sale at Villa Maria.
Van Gogh’s Garden
The Villa Maria flats, which will be completed in 18 months, range in size from 6,000 square feet to 11,000 square feet, Dandapat said.
Bangalore-based Total Environment Building Systems Pvt. is selling the 17 duplex apartments and penthouses that range from 4,000 square feet to 9,000 square feet and cost as much as $5 million at its Van Gogh’s Garden development.
Mallya’s company holds a 55 percent stake in Kingfisher Towers, with the balance being held by Prestige. The development will have a saleable area of 490,838 square feet and is expected to be ready in three-and-a-half years, Razack said.
The 33-floor tower is being built on a road named after the liquor baron’s father Vittal Mallya, who started the business that 54-year-old Mallya has expanded to include brands such as Whyte & Mackay, the 166-year-old Scottish whisky.
United Spirits Ltd. reported sales of 100 million cases for the year ended March 31 to become the world’s second-largest spirits company by volume, according to a company April statement, dislodging Paris-based Pernod Ricard SA. Diageo Plc of London is the world’s largest spirits maker.
Prestige is refurbishing a floor at the adjoining Oakwood Premier Prestige Bangalore, a serviced apartment in the UB City development, for Mallya and his family to move into until the tower is ready, Razack said.
Mallya’s family owned about 15 acres of land with a brewery, the family’s home, staff quarters and offices on it. UB City, a 1.1 million-square-foot project of luxury retail, commercial and serviced apartments also developed by United Breweries and Prestige, was built on the site of the former brewery.
Prestige rose on its debut in Mumbai yesterday after raising 12 billion rupees in an initial public offering.
To contact the editor responsible for this story: Andreea Papuc at Apapuc1@bloomberg.net