Is Brand Licensing A Successful Game Plan For Real Estate?
Imagine living in a home inspired by a sportsperson you look up to or a cartoon character your children are fond of! Thanks to the grand entry of big names, such homes do not exist in your imagination alone; they are fast becoming a reality. Such projects are being launched in India as brand-licensed homes.
Now, how does this concept work?
What is brand licensing?
Under brand licensing, real estate developers collaborate with other brands to come up with projects that are designed in sync with the latter's ideologies and themes. The developer has to ensure that the project showcases the brand's most striking features, making it a win-win situation for the brand, the developer and the homebuyer. Typically, a developer is given the rights to use the name of a company for a certain number of years under brand licensing.
How does it benefit developers?
When a renowned developer is recognised by another well-known name in the industry, the outcome would naturally be good. This coming together of the two titans, however, may shoot up the project cost. Resultantly, apartments in such projects are priced a little higher than a regular project. This should not discourage developers from entering into such a pact because a good product and a big brand name would always find takers, previous examples show.
What can a brand earn?
From every licensing deal that a brand signs, it earns a royalty for every product that the vendor sells. In case of a brand-licensed real estate project, the developer gives a royalty ranging between 5-10 per cent for every unit it sells. So, for instance, if an apartment is priced at Rs 1 crore, the brand can earn up to Rs 5-10 lakh from each unit sold. All this for lending its name and brand aesthetics.
What's in for homebuyers?
Globalisation has made it easier for consumers to buy international brands that add value to their lifestyle. The adoption of luxury and living in sync with global standards is what drives them to brand-licensed projects. For those who love to live in an exclusive property that defines a brand or a celebrity, such projects are the choice. Brand-licensed projects are being planned or have already come up in some of the key locations of the country.
Here is a list of some of them:
Disney-theme projects: There are four such projects in the country at present that are designed based on the Disney theme. These projects have Disney-branded accessories, including fixtures, kitchenware, furniture, beddings, rugs, tableware, fans, wall coverings, ceiling paints, bath accessories and more. These projects are in different stages of construction and are located one each at Bengaluru, Chennai, Mumbai and Noida. For this Disney India has tied up with different developers.
Versace Homes in Mumbai: This project was announced in March 2016. Versace Home, a luxury interiors brand, collaborated with Mumbai-based ABIL Group to develop a project in the south of Mumbai. This project will have 10 mansions that will be designed by Donatella Versace with bespoke interiors.
The units will be available in 4BHK and 5BHK, each spread over 8,000 square feet or more. This project has everything luxury.
Trump Towers: Brand Trump is known worldwide for its luxurious commercial and residential towers. In India, this brand is leading the licensing chart in real estate with five projects. One project each in Mumbai, Pune and Kolkata and two in Gurgaon. For each project, the brand has tied up with different developers. In Mumbai, the project is called Trump Towers and is being developed by Lodha Group. It is a 75-storey 300-unit project likely to be completed in 2018.
In Pune, the brand has inked a contract with Panchshil Realty in Pune's Kalyani Nagar area. Actor Ranbir Kapoor and father Rishi Kapoor have both bought apartments in this project.
In Gurgaon, brand Trump will have two projects. The first is a 600,000-700,000-sq ft office building on the Golf Course Extension Road, to be built by IREO alongside. The second is a residential complex being developed in collaboration with M3M India.
The fifth project is in Kolkata. It will be a 38-storey project to be constructed by Unimark Group. The 400,000-sq ft residential project is located on the city's Eastern Metropolitan Bypass stretch.