The New Rich Are Building Bigger

By | July 1, 2007

The New Rich Are Building Bigger

Excerpts:

“In 1998, industrialist Ira Rennert decided to build a 29-bedroom mansion on 110,000 square feet of Long Island waterfront and ended up in the middle of a lawsuit.”

“As the rest of the housing market struggles, the very high end is thriving. The Dallas-based Institute for Luxury Home Marketing estimates that home sales at the $5 million-plus price range rose 11% in 2006, compared to a 8.4% decline in overall housing market sales. Between 1999 and 2005, the institute says, sales of homes for more than $1 million skyrocketed over 500%. Today, there are seven homes on the market priced at $100 million or more. In 2005, there was just one.”

“In the near future, there may even be a billion-dollar home. Almost a decade after the Rennert estate debate, Indian billionaire Mukesh Ambani is causing a stir in Mumbai, where he is building a 60-story, vertical palace that will include three floors of Babylon-inspired hanging gardens and three rooftop helipads. Ambani will reportedly spend $1 billion on the project, which is scheduled for completion in 2008. That’s $1 for almost every citizen of his native India.”

“But some believe Ambani’s desire to express his success as chairman of Reliance Industries (RELI.) with a 500-foot-tall home may be justifiable — and not just because he needs the room for his 168 cars and 600 servants.”

“Self-made millionaires and billionaires in particular are notorious for building or buying over-the-top homes. “It makes them more willing to make a statement,” Goodwin says. “Old money tends not to like to show off as much.” These trophy homes are usually “very large, very interesting, and not necessarily resellable,” in Goodwin’s words. But he wouldn’t call them tasteless. “We always joke about new money being garish, but I think that’s more of the old money being jealous that they can’t let go like that,” he says.”

“As Ambani’s tower home proves, more and more newly superrich foreigners are finding themselves in the ‘flamboyantly wealthy’ class. In 2004, Ambani’s fellow countryman, Arcelor Mittal (NYSE:MTNews) Chief Executive Lakshmi Mittal, spent more than $100 million on a mansion on London’s exclusive Kensington Place. Sheikh Hamad of Qatar recently took nearly $200 million of his petrodollars to London and bought a 20,000-square-foot penthouse overlooking Hyde Park. Canning Fok, managing director of Hong Kong-based holding company Hutchison Whampoa (huwhy.pk.PK), recently handed over $44 million for ‘Hong Kong’s Chateau de Versailles.’ And in the English countryside, Russian oligarch Roman Abramovich owns a modest $34 million, 450-acre property.”

“Today’s big-spending billionaires may have their pick of ultra-luxury properties, including Donald Trump’s $125 million Palm Beach property, a Versailles-inspired $125 million Los Angeles mansion, and a Turkish entrepreneur’s $99 million London creation.”

Leave a Reply

Your email address will not be published. Required fields are marked *