Luxury Real Estate Faces Challenges, but Strong Developers Hold the Key
The luxury real estate segment is facing a period of fatigue, with limited participation from fewer players and high inventory levels. However, there is a silver lining: much of this inventory is held by strong developers, according to Harmohan Sahni, CEO of Raymond Realty.
“My personal view is that on the luxury (real estate market) side, there is some kind of tiredness. It is not in the deep end of the market and has fewer players. The inventory is quite high in the market today, but the good news is that it's in strong hands,” Sahni said during the Q4FY25 investors call.
Discussing current trends in the real estate sector, Sahni noted that market dynamics vary across different product segments. The premium segment, where Raymond Realty operates, continues to remain robust. “We are playing in deep markets, so volumes are very, very strong,” he said. The market in Thane, for instance, continues to grow despite intense competition. “As the market has expanded, so has our share,” Sahni added.
While new players have entered with large-scale projects, the company has maintained its growth. It’s a deep, user-driven market, and importantly, prices have remained stable, he said.
Raymond Group’s long-term strategy for its real estate arm is ambitious. “We want to be one of the significant players in the country,” Sahni stated. The residential segment presents a massive opportunity, as owning a home is a fundamental aspiration in India. There are about six or seven major markets in the country that account for 70% to 80% of the total market value. Mumbai, and specifically the Mumbai Metropolitan Region (MMR), is one of the largest among them. The company’s strategy is to first establish a strong foothold in this key market, he said.
“We are not looking at the bottom of the pyramid. We are not in the affordable segment. We are not in the luxury segment; the ticket size and price points are going to be for the masses, so it is affordable luxury. It is the premium segment that we are targeting, and the Raymond Brand itself lends to that. And that is a strength that we have. And within the team also, the execution capability is very high on that segment, and we have demonstrated that in the last five years,” Sahni explained.
Textile major Raymond entered the real estate sector through its subsidiary, Raymond Realty, with the launch of its debut project in Thane near Mumbai in 2019. This was followed by the launch of 'The Address by GS' in Bandra, Mumbai, in 2024. The company has since announced upcoming projects in Mahim and Wadala, further strengthening its presence in Mumbai. It also plans to expand into the Pune market.
In an interview with HT.com in August 2024, Sahni had said that Raymond Realty is planning a residential project in Pune with an expected topline of around ₹2,000 crore and is currently in the process of identifying a suitable land parcel.
