With the cascading impact of demonetisation, RERA and GST taking a heavy toll on realty sector, property developers are devising innovative strategies for a turnaround in development. VGN Property Developers is by no means an exception. With the group’s multidimensional strategy and all-round efforts, V Pratish Devadoss, Managing Director of VGN group, is leaving no stone unturned in his relentless pursuit to take his group’s march towards progress. The group’s annual turnover rose from Rs 100 crore to Rs 900 crore under his dynamic leadership and management. In an interview with the New Indian Express, Pratish shares his multipronged strategy to overcome the challenges and his vision for the group’s future. Here are the excerpts from the interview.
What are the strategies proposed and planned to meet the growing challenges faced by VGN in the current market scenario?
In the current market scenario, VGN is focusing on completion of projects in hand and utilising capital on existing assets rather than going for fresh acquisitions.
Do you think the challenges are insurmountable?
Not at all. Anything that comes in your path will have to be countered and managed.
How do you plan to boost your exclusive property management services for NRIs who are relying on such services for investment in India?
Most of our projects are located well within the city or close to the city. Renting out is not at all an issue. We have tied up with such service providers who will facilitate and we have a certain time period from delivery where property management services are handled by us.
Are you planning to diversify into commercial segment as the demand for office space is picking up all around especially with the co-working sector gaining momentum?
Not at the moment. We will wait and watch and decide at an appropriate time.
What has been the response to luxury apartment project?
It is picking up. It is a mature market. Customers who see progress and value in the project will buy. We have sold more than 70% in our Nungambakkam project.
Are you planning to expand your operations to other cities in the near future?
Not immediately.
In a market dominated by pan India players in Chennai, what do you consider as your exceptional features that will continue to drive demand for your projects?
Real estate is a much localised game. People tend to associate with brands more locally. As in any business, if the customer sees value and quality, he will buy.
What is your advice to the budding entrepreneurs planning to make an entry into realty sector?
I would say that this is the time to introspect, wait, watch and then take a decision.
What is the current real estate scenario in Chennai?
Real estate market is on the upswing mode in Chennai and will take a couple of quarters to see a visible change in speed of construction and delivery of homes to end users. Real estate is always a great investment option for investors in the city. With growing appreciation in the value of property, developing areas are always on the rise and there are apartments, plots and villas for sale throughout the year. Besides, the implementation of RERA and GST has resulted in a transparent and organised sector generating confidence among homebuyers. Buyer sentiments are changing and the genuine developers/builders are also adhering to the transformation which is good for the real estate sector. New project launches have come down.
What has been the reason for unsold built units in Chennai?
There is an oversupply in a few locations due to demand and supply mismatch and also slowdown in growth on the IT and other sectors. However, there is a scope to exhaust the unsold stock as Chennai is a growing metropolitan city and there is a constant flow of people into the city thereby increase in demand as the times goes by. The inventory overhang is reducing quarter on quarter.
Do you think that RERA will increase today’s buyer’s confidence?
The RERA Act will improve the governance; bring more transparency and accountability into the realty sector. The RERA Act is aimed at addressing the grievances of property buyers who at times are affected due to delay in delivery of under-construction properties, execution of said project plans, legitimacy of properties, etc., and is being touted as consumer friendly. Hence, the RERA will certainly boost the buyers’ confidence to go for investing in homes since there is a governance committee to resolve the buyer’s issues, if any.
What has been VGN’s project record so far in terms of delivery and completion?
We have completed and handed over more than 6,500 homes till December last year and around 10,000 homes are under construction and planning stage.
What are the factors you attribute as VGN’s inherent strengths on which homebuyers repose confidence?
Established in 1942, VGN brand has been making progress in real estate for more than 76 years and so far developed over 20 million square feet in Chennai. Hence, people invariably prefer VGN when it comes to property buying. Besides, all the properties are owned by us which are located close to city and surrounded by schools, colleges, hospitals, supermarkets and departmental stores with connectivity to roads, rail and buses. VGN group always maintains high-quality standards in construction and deliver on time with the required amenities.