Super-rich eye far shores: Kochi’s pain is Armenia’s gain

KOCHI: The demolition of Maradu flats and DLF imbroglio has forced ultrahigh-net-worth individuals (ultra-HNIs) from Kerala, fed up with the uncertainty in state’s realty market, to explore other real estate investment destinations within India and abroad.
Their immediate destination is the familiar overseas turf of Dubai, but some are also exploring countries like Vietnam, Malaysia, Armenia and Georgia.This is not a mass exodus of usual apartment buyers fleeing Kerala, but a handful of ultra-HNIs, who can afford multiple homes in a part of the globe.
“Pune, Bengaluru and Hyderabad are preferred by wealthy Keralites. Outside India, it is Dubai and Kuala Lumpur. A small group of HNIs are going to Singapore too. The interesting thing is that Malayalis have started investing in Vietnam’s realty sector and are exploring markets in Armenia and Georgia due to the uncertainty in Kerala,” said former treasurer of National Realtors’ Association Abjo Joy.
Director of Barjeel Geojit Securities LLC KV Shamsudheen said Maradu incident has marred Kerala’s real estate sector and blames the officials for the fiasco. Sitting in Dubai, Shamsudheen said he regularly gets calls from well-heeled Malayalis looking for real estate investment opportunities in Dubai. Dubai is perhaps the international location where there is a high density of Malayali investors in real estate. “Recently, I sold a villa worth Rs 25 crore to a client from Kochi, who was settled in Texas, US,” said managing director of Town Square Global, Dubai Saju MV.
Though Kuala Lumpur has a small Malayali community, it is developing as another destination for HNIs. Two years ago, when M101 Skywheel, a Malaysian apartment project designed by Porsche was marketed in Kerala, two NRKs bought flats there. “One was from Dubai and the other was from Qatar. These apartments (650 sq ft each) were worth Rs 2.2 crore,” Joy said.
It is not just for Maradu alone that ultra-HNIs are leaving Kerala. Impetus Wealth Management (Mumbai) MD PR Dilip said: “The overall appreciation from residential properties in India over the past five years has been minuscule and the rental yield at sub 2%/ annum, residential properties are no more a hot choice for investment among HNI investors.” Rental yields of Kuala Lumpur and Singapore is in the range 2.3% to 5.4%, he added.
One of the pioneering explorers entering unchartered territories, Babu Mathew, the MD of Kochi-based Mathewsons Group, has started operations in Armenia, where he runs a facilitation service for possible investors, mainly Malayalis.
However, there is a different viewpoint too. Chairman of Dubai-headquartered transnational law firm Musthafa & Almana, Musthafa Zafeer said that despite Maradu incident, Kochi remains their favourite destination considering its commercial importance. He said, a small percentage has turned to Bengaluru, Hyderabad and Pune, within India, due to Maradu.