Arun Kumar_Casa Grande_ProjectsMonitorArun Kumar,
Founder and Managing Director,
Casa Grande Pvt. Ltd

Casa Grande Pvt. Ltd is a Chennai-based real estate developer founded by first-generation entrepreneur M. Arun Kumar in 2004. Under his leadership the company grew from a turnover of Rs.4.5 crore to Rs.280 crore in FY13. The firm operates in niche residential segments like luxury villas and apartments in Chennai, Bengaluru and Coimbatore. Arun Kumar gives his outlook on the real estate industry in an email interaction to Lalitha Rao.

The real estate sector in India is undergoing a phase of transition. What is your outlook on the industry and its prices?
Yes, the industry has been sluggish for a while and we see signs of recovery from this calendar year. Customers are evaluating real estate as an investment vehicle more seriously than ever and there are quite a few interesting opportunities available. Even though there has been a slowdown, the price of existing properties has not come down due to higher input cost. The newly launched projects, though, have been priced attractively.

Also, because of the high demand for ready-to-move-in residential properties in all major cities, there will be price increases to be seen in projects that are being delivered or are close to completion. The mid-end and affordable housing segments will record healthy appreciation in capital values in the short term because of the growing economy.

How do you look back at the journey of Casa Grande till now?
I started Casa Grande Pvt. Ltd in 2004 with a strong belief to corporatise how real estate business is done and we have been fairly successful till date. We have constructed 2.5 million sq. ft till date and have emerged as Chennai’s largest villa developer. We have also expanded to Coimbatore this year and planning to strengthen our presence in Bengaluru.

Casa Grande is known to offer great value to customers, be it in terms of product, price or quality. This has been proven over the years and we believe this is the way to go for the future also. Customer will always be our first priority.

Although the real estate market is expected to gain momentum in 2014, the industry is largely dependent on macroeconomics of the country.
We believe the election should do a world of good for the real estate industry. This will bring stability to the industry and probably new polices and decisions will fuel growth.

How do you look at Chennai’s real estate scenario? What are the challenges of operating in Chennai?
This is the right time to buy a home in Chennai. The prices are steady and are expected to rise further in the near future. Even though pockets of areas might have abundant supply, there is no major concern like other cities. Being an end user market, we are poised well for a steady growth. Today, we are the leaders in the villa segment and not much of a competition is faced in this segment.

Do you agree that in spite of a sluggish economy, there is rising economic prosperity among masses which has increased purchasing power?
Yes, the purchasing power of people has increased. But customers at across price levels of purchase have become extremely knowledgeable and are always looking for great value before they invest. Having said that, in this changing market dynamics it becomes imperative to understand customer needs and conceptualise products accordingly.

What are your views on FDI in the real estate segment?
The example of the tie-up with Disney by Mumbai-based developer itself speaks about the FDI in this segment. Corporates overseas has seen the opportunity in India and have started to invest in India. The minimum capital is restricted to only $5 million. As per the extant foreign direct investment policy, though 100 per cent FDI in the construction development sector is allowed through automatic route, the Department of Industrial Policy and Promotion is looking at relaxing the conditions for investment to boost the cash-strapped sector

Apart from metro cities is Casa Grande also developing properties in tier 2 & 3 cities?
Yes, Casa Grande this fiscal has ventured into Coimbatore region. We are definitely looking to strengthen presence in tier 2 cities as we believe we can add value to the client in terms of innovative products and quality. There is also an inherent opportunity in the region.

Considering that the luxury residential real estate market is facing tough times across the country, how are your luxury residential projects progressing?
We operate in this niche segment of premium housing. Chennai being a conservative region, customers look for safe investment and real estate is always perceived to be safe. The luxury segment here is a good potential market and the supply is less and demand is healthy. All our luxury housing projects have evoked good responses till date and we have been able to sell 70 per cent of the inventory.

What are your plans for redevelopment projects?
We constantly look out for good opportunities in terms of land acquisition. Any interesting proposition will be evaluated and planned accordingly.

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