Amitabh exits ultra-luxury property with 168% return; premium real estate rules: Magicbricks

By E Jayashree Kurup

Amitabh Bachchan, along with his son Abhishek, has been one of the biggest investors in housing in the Mumbai market since 2021. However, what caught my attention was the duplex apartment he purchased in 2021 in Oshiwara for Rs 31 crore and which was sold recently for Rs 83 crore, a return of 168%. Property transactions have yielded big returns historically, especially over the past few years.  

However, this one stood out for many reasons. One, it was in the ultra luxury segment. It found a tenant who paid a deposit of Rs 60 lakh and a monthly rental of Rs 10 lakh, which  made it a paying proposition. Finally, in just under four years, it yielded a return of 168%, according to a Square Yards press release.

via Magicbricks Research

Almost 40 major property transactions were concluded in Mumbai in 2024 by a host of celebrities, mostly from the film industry (see chart), in the range of Rs 2 crore to almost Rs 60 crore each, according to information released by Square Yard. Almost 75% of the transactions were in the Rs 2 crore to Rs 10 crore band and the rest were between Rs 10 crore and Rs 60 crore. 

via Square Yards Research

So, I decided to dig deeper. Historically, the best returns on property have not been in the premium, luxury or ultra-luxury segments, but in the more mundane middle-income, two-bedroom versions, which demand smaller investments and therefore better rate of return. The number of potential tenants was also higher. However, in his discussion with Urban Insights podcast, Sudhir Pai, CEO of Magicbricks singled out premiumisation of the Indian housing market as a distinct trend in the past few years. (watch complete podcast here)

According to a Magicbricks analysis, sizes of luxury properties worth Rs 2 crore to Rs 10 crore showed a tendency to shrink, even as the prices rose to an annual high of 58% and a CAGR of 16.7%. In short, homes shrank in area but values continued to soar. Mumbai’s three-year price rise was about 23.12% with a CAGR of 7.18%. 

So, why did Amitabh Bachchan’s property sell way above this mark? One, it was bought in 2021 and the apartment was over 5,000 sq ft in area. This made him one of the earliest to hit the premium luxury segment as an investor. Second, it was in a premium location,  Oshiwara. Third, it was in the ultra-premium segment and gave a regular rental return of Rs 10 lakh per month, making it a paying asset. Historically, a well-tenanted property gives better yield. And the premium location made it that much more valuable. 

The Bachchans have also invested in about 10 smaller 1000 sq ft properties. By investing just over Rs 2 crore each in 10 properties and also choosing a less premium but in-demand area such as Mulund, they hedged their bets.

via Magicbricks Research

Values rose in Mumbai from Rs 24,000 per sq ft to over Rs 30,000 per sq ft, between OND 2021 and OND 2023 in the up to Rs 10 crore property segment, making the city the most expensive residential property market in the country, according to Magicbricks data. (see chart). 

In the National Capital Region, however, price rises have been more difficult to explain. Greater Noida, which was the most affordable in the NCR, was flush with deals at Rs 8,000-11,000 per sq ft, premium rates for that locality. Clearly, it has shed its affordable tag and today aspires to be counted as a premium location. 

Gurugram, NCR’s poster city, posted a CAGR of 16.4% and Noida of 16.1%, making them the fastest growing premium locations in the country, according to Magicbricks data. Those who bought in the beginning of the trend in 2021, got bigger, better houses, better tenant profiles and are today able to sell at a premium, even if the original price was in the ultra-luxury space. 

Matching Mumbai’s celebrities were Gurugram and Noida’s professionals and businessmen, who could afford the rising prices. According to Pai of Magicbricks, only 40% of the buyers were buying as end-users. Almost 60% of the premium buyers were buying as an investment or making a statement with their purchase. 

The third of this triumvirate of metros, Bengaluru, showed a much more steady and moderate growth in prices with a CAGR of just 6.5%. Led by well-earning professionals in a city that has plenty of land and suburbs sprouting in every direction, it posted a much more temperate growth in premium property prices. 

Follow our analysis of premiumisation of Indian property markets over the next few weeks. 

E Jayashree Kurup is a writer and researcher in real estate and city governance. She runs the Urban Insights Podcast