Orbit Raises Bet on Luxury Homes as Affluent Indians Increase
Orbit Corp. Ltd. will begin work on building 850,000 square feet of luxury homes in Mumbai in 12 months, taking its total area under development to over a million square feet - Anoop Agrawal (Bloomberg)
Orbit Corp. Ltd. will begin work on building 850,000 square feet of luxury homes in Mumbai in 12 months, taking its total area under development to over a million square feet, Managing Director Pujit Aggarwal said.
The Credit Suisse Group AG-backed real estate company, which is building the houses in south Mumbai, plans to sell them at between 50,000 rupees ($1,104) and 60,000 rupees per square feet, Aggarwal said in an interview. Orbit will raise as much as 1.5 billion rupees in debt by March, he said.
"Good quality real estate has been available in a large quantity only since 2007 and so the latent demand is kicking in" Aggarwal said in his office in Mumbai. "There is genuine demand from premium house and supply has been very little."
Orbit shares traded 1.2 percent higher yesterday at 95.65 rupees as of 10:15 a.m. in Mumbai trading. The stock has dropped 39 percent this year compared with a 13 percent increase in the benchmark index.
Aggarwal is betting on strong demand for luxury houses as the rally in Indian stocks in 2009, the biggest in 18 years driven by fast economic growth, created a record number of billionaires.
Forbes Magazine's latest Indian billionaires list released in September comprised 69 people versus 52 last year. 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 India's gross domestic product, the magazine said.
Overseas investors have bought xx billion of Indian bonds and securities this year, xx percent more than the whole of 2009, helping the Bombay Stock Exchange's Sensitive Index rise to a record on Nov. 4.
Mukesh Ambani, India's richest individual, moved 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.
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.
"We are not being able to generate the amount of real estate that command a price of $1,100 a feet and above is much less compared to the demand," Aggarwal said. "So, whatever is built will get easily absorbed. This kind of availability of premium housing was last seen in the 1970s."
The world's second-most populous has 84,000 millionaires, according to the 2009 World Wealth Report by Cap Gemini SA and Merrill Lynch Wealth Management. The number of
millionaires in India and China is expected to triple between 2008 and 2018, the report said.