Art sellers shifting towards property selling in luxury India

Affluent buyers looking into India's most exclusive homes may not have to worry about being closed off from deals occurring behind closed doors. This is as art auctioneers, Sotheby's plans to sell around 40 choice properties at list prices of Rs 15-200 crore. Included is a bungalow in Lutyens' Delhi (Rs 150 crore), as well as 'private residences' with ancient forts of Rajasthan.

As India is rising as a real estate destination and the number of high networth Indians is rocketing, the international auction house has readied a list of marketable and sellable properties. The president and chief executive of Sotheby’s International Realty Affiliates LLC explained expansion in India was one of the group’s main goals for 2014 as Northern India is one of the most rapid growing and beautiful markets in the world, with an evolving luxury real estate market.

Sotheby's has selected property advisory firm Real Pro Infra Pvt Ltd based in Delhi, as the elite leading franchisee for 25 years for the purpose. Real Pro has recognised the 40 homes to be added to Sotheby's global portfolio. Real Pro Infra’s founder director and chief executive officer, Amit Goyal claimed the aim is to enable assets to be available to international buyers such as NRIs (non-resident Indians) as well as to offer access to Indian buyers towards properties from areas oversea, including Dubai, London and more. 

Asia is a vital focus area for Sotheby’s as it is a rapidly rising luxury market and consumer interest. They have established in Beijing, alongside North India. Initially, Sotheby's are to act as an intermediary in the buying and selling of valuable assets. It declined to provide details including the commission to be charged. Those engaged in the business claim the fee is typically around 1-2% for such deals.

This flags a first for the Indian luxury real estate market, which was principally motivated by strong regional Indian companies and select brokers. The increasing appetite of Indians for items of luxury, such as elegant homes, offers a profitable business opportunity. Affluent Indians target on average, 44% of their investments towards real estate, as the global average is 24%.

Forecasts claim that by 2023, only China, Russia and the US will have more billionaires than India. Most prosperous Indians tend to purchase homes in cities, in comparison to the countryside although only a fifth of them are considering purchasing another residence this year.

Estimates by Knight Frank, real estate advisory firm, suggest India is sixth in the top 10 countries for billionaires from 2013 - with 60 billionaires. This is assumed to grow to 119 by 2023. 383 centa-millionaires (those with $100 million in net assets), were recorded during 2013 and this is likely to double in the next decade.

Sotheby's research reveals that India was also among the top 10 countries viewing the list of luxury residential properties available around the globe. Sotheby’s is expecting to sell at least 50-60 homes over the next year. With the exception of standalone properties owned by families and individuals, Sotheby's are also to tie up with developers to market luxury developments to clients around the globe. International property consultants including CBRE, Cushman & Wakefield and JLL have been operating in India for some time within the residential space, however their main focus continues to be the commercial segment.

Knight Frank also deals with valuable residential properties. The regional director of Knight Frank, Mudassir Zaidi explained the demand for high-end homes in India is accelerating, particularly in re-sale space. This is with a considerable number of upcoming new developments, strengthening the supply pipeline. Demand mainly occurs within the top Ten Indian Cities. Saffronart Indian Auction House also sells assorted homes via catalogue.

The company are contemplating auctions for homes similar to the way in which it sells valuable jewellery and artwork. This is as they sell approximately 75% of inventory in the catalogue each season. So far, Saffronart have been selling homes with Cushman & Wakefield; both parties acting similar to brokers.