By: Neeta Lal

Driven by a search for post-Covid 19 safe havens, a shaky rupee, access to better health care, frustration over India’s shambolic infrastructure and pollution – and bolstered by burgeoning bank accounts – India’s filthy rich are joining Russian oligarchs, Arab oil sheikhs, African satraps, and dotcom billionaires in seeking out opulent quarters in places where the sun shines and the traffic moves, generating envy, admiration, and jealousy back home.

They are led by billionaire Mukesh Ambani, who recently bought a US$80 million beach-side villa in Dubai, the emirate city’s biggest-ever residential property deal. Ambani’s 10-bedroom mansion on Palm Jumeirah nestles in the northern part of the palm-shaped artificial archipelago and is reportedly outfitted with a private spa and indoor and outdoor pools, among other baubles.

Apart from Dubai, Ambani, listed by Forbes as the world’s 11th richest man with a net worth of US$103 billion, has also bought properties in London including Stoke Park Ltd for US$79 million, paid for by his Reliance empire and which houses a Georgian-era mansion. Two of Ambani’s three children are reported to be on the lookout for second homes in New York.

Mumbai-based real estate agent Zulfi Boolani, 42, whose unnamed client recently invested in a US$7 million condo in a holiday home in Greece, says Indians are increasingly reassessing why they should pump money into a domestic holiday home when such an investment, say in Europe, can also fetch them a Schengen residency as well as visa-free access to 26 Schengen states along with it.

Inquiries for investment-based immigration from Indian high-net-worth individuals surged a record 62 percent in 2020 Boolani said, adding: “These queries further jumped 30 percent in just the first five months of this year and my team is currently helping two clients zero in on second homes in Portugal.” According to the realtor, New Jersey and Atlanta in the US, Toronto in Canada, and Melbourne and Sydney in Australia are also emerging as attractive investment destinations.

Recent data from the Reserve Bank of India underscores Boolani’s point. In the 2021-22 financial year, deep-pocketed Indians pumped US$1.69 billion directly into foreign bank deposits, equity, and debt instruments, as well as buying property outside the country, a 40 percent jump from 2020-21 and nearly six times the US$292 million that Indians invested abroad in 2014-15 in these asset classes.

According to a recent survey by Sotheby's International Realty, a majority of HNIs in India plans to buy luxury residential real estate in the next two years, “reflecting a strong and decisive turnaround in the luxury real estate segment.” Analysts say much of this is driven by a desire to diversify businesses and multiply wealth.

“Residency status in another country as part of business expansion or where their children study as well as a slowdown in the domestic real estate market are key drivers for Indians to invest in these luxury homes. HNIs from India also like to have a foothold in places like Dubai etc due to citizenship offers and tax rebates,” said Prakash Kothari, an Ahmedabad-based investment consultant.

Dubai’s “golden visas” scheme, launched in 2019 to relax curbs on home ownership for foreigners, has been very successful in India, Kothari said. The 10-year residency scheme aims to attract foreign investment and lure the best talent from across the world in diverse areas. The visa is automatically renewed every decade as long as candidates meet the established requirements and conditions. Many Bollywood stars have received these sought-after permits, he added Kothari.

India’s growing billionaire club is also fueling such investments. Those having net assets of US$30 million or more increased by 11 percent last year due to buoyant equity markets and the digital revolution, according to Knight Frank. This percentage is further expected to grow by 43 percent to 162 by 2025 from 113 in 2020. As per its Wealth Report 2021, there are currently 5.21 million U-HNIs globally, of which India hosts 6,884.

Indian industrialist Gautam Adani, for instance, recently saw his net worth surge by US$60 billion this year alone taking it to US$137.4 billion. This makes him the third richest man on the planet and the only one from Asia.

“Dollar-denominated markets like New York and Dubai are especially popular because the rise of the dollar against the rupee means that Indian property owners gain even if there’s not much buoyancy in the local value of the real estate,” said a Sotheby’s realtor.

However, apart from the business angle, increasingly the rich are also thinking of access they will have to better healthcare and infrastructure abroad as also the overall quality of life.

“The pandemic exposed India’s fragile Third World health infrastructure, especially when the Delta variant lashed the country last year,” Boolani said. The hospitals were so ill-equipped that even the rich couldn’t get beds. “This has increasingly brought about a thinking that it’s better to also invest in a nest in a more developed country.”

According to Sonu Shivdasani, CEO and co-founder of Soneva, a Maldives chain founded in1995 by Shivdasani and his wife and which owns resorts across Maldives and Thailand, there’s a lot of interest from Indian buyers in homes starting at US$4 million for a two-bedroom island villa.

“Soneva is the only company in the Maldives to sell property to foreign investors,” he said. “Previously, villa owners were from long-haul destinations, such as China, the UK, Germany, Switzerland, or Scandinavia. Today, we are seeing higher demand from short-haul markets such as India and Thailand as well.”

Soneva’s forecasts show India won’t just be the number one market in the Maldives but will also account for three to four times the arrivals of the nearest market, he added.

Apart from Soneva, Maldives is also seeing a flurry of activity from other real estate developers. Tata Housing is working on two residential projects at Nadhee and Odean in Male after previously constructing two other high-end projects – Arabia and Gakoshi – in the city. Realtors say because there is no free hold allowed in Maldives, investors use the villas during vacations and rent them out at attractive rates for the rest of the year. Here, a 100 to 400 sq m villa typically costs US$1-5 million, going up to US$10 million in some locations while fetching good returns for investors, said a developer.

Neeta Lal is a Delhi-based editor and journalist. She tweets at @neeta_com.

Asia Sentinel

Newly Rich Indians Look for Overseas Luxury