Guiding Realty Investors for Better Yields
CHENNAI: For investors in real estate, multiple options are available to get competitive yields on investment. However, land investment in the right location is one option where the yields to investor sometimes soar to 300% or even more. At the same time, the ground realities should be observed while investing in such options. Location, planning, project execution and maintenance are determinants for any land developer to ensure appreciation.
For A Siva Sankar, MD, Ashok Nandavanam Properties, guiding investors to get maximum value for money is of prime importance and towards that end, he ensures that ground realities are strictly adhered to. He explains their strategy, which has ensured better yields for investors. Excerpts follow...
What are your areas of focus while implementing land development projects?
Our focus has always been within a 25-km radius of the city, predominantly on CMDA and DTCP jurisdictions. We believe that price appreciation will predominantly happen in CMDA areas followed by DTCP jurisdictions.
Are there instances where investors have gained by investing in your projects?
Yes. Land investment has never let down anybody if ground realities have been observed while investing. Those who invested in 2010 in Perungalathur at `1,000 per sq ft are now watching the land prices go up to `2,500 per sq ft. Investors in the Trivellore project, at `250 per sqft in 2007, are seeing the price appreciation at `1,000 per sq ft today. The Madhavaram project saw prices go up from `100 per sq ft in 2008-09 to `1,000 per sq ft today. In the Avadi project, the price appreciated from `250 to a whopping `2,500 per sq ft within nine years.
What factors are instrumental in driving your business, especially at a time when the real estate market is facing a down turn?
Our in-house team takes care of the entire exercise in development, right from land procurement to legal procedures, planning and marketing. This enables us to control operational costs better. Lifetime maintenance enables investors to give overriding priority to invest in our projects.
What is your advice to investors in plotted development projects?
Never invest in panchayat-approved layouts as they do not have the requisite authority to approve the layouts. There are only two types of approvals that ensure hassle-free investment and price appreciation in layouts — CMDA and DTCP. Even in case of land acquisition later by the State government, investors will be entitled to compensation from the appropriate authorities.
At a time when people are migrating to other cities and countries, how do you ensure that investors benefit by investing in your projects?
We have a full-fledged property management services cell that takes care of investors’ needs for hassle-free maintenance. This is one reason for the surge in demand from NRIs and others to invest in our projects.
Is the current slowdown temporary and is the market poised for a turnaround in the coming months?
I don’t accept that the market is sluggish as our sales have been consistent so far. Location and pricing play a key role in decision making and today’s consumers are well aware of the market scenario.
How many projects have been completed so far and what are your future plans?
Since 1984, we have completed 64 projects, comprising 60 residential layouts and five industrial layouts covering over 500 acres of land. We implemented a number of projects in and around Poonamallee. Our focus on area-specific development resulted in substantial yield to investors, which is a reason for our priority to focus on CMDA and DTCP jurisdiction areas. A number of our projects were successfully implemented in and around Tambaram and the proud investors are sitting pretty now to reap rich dividends. Initially, we planned to diversify into tier II and III cities, but have now realised that Chennai alone has huge potential, which necessitates our focus for some more time..