Amidst COVID-19 pandemic, this Chennai-based real estate firm is building projects worth Rs 6,500 Cr
At a time when the COVID-19 pandemic is reducing buyer interest and number of property visits, Chennai-based real estate business Casagrand has launched a new project. Casagrand Utopia at Manapakkam in Chennai is a kids-themed housing project with 673 apartments.
It features amenities for children such as VR games, 3D rock climbing, learning centres, mini hockey rinks, water slides, smart tuition kiosks and more.
But why launch it when real estate companies are losing projects, labour is hard to find, and cash flows are affected?
In an exclusive interview with SMBStory, Arun MN, founder and managing director at Casagrand, explains the logic behind a move that seems counterintuitive.
“People have started realising the importance of owning a home during the pandemic. In fact, the situation has created a beneficial environment for home buyers to invest. This is due to the attractiveness of lowest home loan interest rates, amazing deals, and secured investments in a low-risk sector. Real estate is unexpectedly bouncing back to normalcy,” he says.
According to a survey by real estate classified platform 99acres.com, 60 percent of prospective homebuyers are still keen to buy within the next 12 months.
Casagrand founder and MD Arun MN
Innovation in real estate sector
Arun and Casagrand aren’t alone in making the most of the opportunity. Many real estate businesses in India are finding new ways to innovate, despite large amounts of unsold inventory, rising NPAs in construction finance, high leverage, and tight liquidity.
To sell spaces during these times, Delhi-based Gulshan Homz is reaching out to customers digitally and giving them virtual tours of its sites. The firm believes this helps realtors reach their target audience and close substantial sales even during the pandemic.
Mumbai-based developer S Raheja Realty is also going digital. The well-diversified business had to find a way to keep its teams and departments connected amid the COVID-19 crisis. It leveraged various digital platforms to ensure this and tapped into social media to connect with existing and potential customers.
Like these developers, Casagrand is fully aware of the digital opportunity - it is increasing its ad spend in the digital and social media segments.
“We have currently planned 60 percent of our ad spend in the digital space and the remaining 40 percent will be spread across various other channels,” Arun says.
Ever since Arun started Casagrand in 2004 with Rs 5 crore investment, his priority was to meet project deadlines on time.
But during COVID-19 times, it is easier said than done for all real estate developers. Those looking to do something about their unsold inventory are finding that there is fear among customers about project delivery being postponed.
However, Arun remains steadfast in his vision to deliver on time.
“We understand the pain of a home buyer, and so, our main objective is to deliver all our projects on time. The criteria are non-negotiable and all our operations are geared towards meeting the deadline. This helps us avoid any increase in the overall cost, thereby benefitting customers,” he explains.
Casagrand is also buoyed by the fact that apartments in existing projects are being modified to include space for working from home. The firm feels the demand for smaller houses is giving way to the desire for larger homes which can accommodate a custom workstation.
Arun’s vision to provide end-to-end solutions across the real-estate spectrum has led to setting up of companies in allied sectors such as interior solutions (DoMyHome), facilities management (Casagrand Prop Care), online property solutions (RealtyCompass) and warehousing and industrial parks (Casagrand DistriPark).
He handed over each entity to professional entrepreneurs to manage operations. In the pipeline is Casagrand Tranquil, which will develop facilities for retired people. Arun also started Laundry Boy, an on-demand laundry service based in Chennai, with plans to expand across India.
Casagrand Royale in Chennai
Growth StoryArun’s customer-centric, product-focussed, and digitally-driven approach has helped Casagrand become a leading real estate firm of south India.
Casagrand has developed over 20 million square feet of residential real estate across Chennai, Bengaluru, and Coimbatore. It has over 15,000 families as customers across its 90 properties.
Explaining the company’s rise, Arun says:
“When we started, we adopted a unique approach - we did a lot of villa projects. We focussed our strategy on developing quality builds and ensured they were delivered on time. Our on-time delivery set us apart in the industry and earned us credibility and goodwill.”
Earning the customers’ trust was key for Casagrand when it was new. Its focus on consistent performance also helped it overcome challenges with joint venture real estate deals that cropped up because Casagrand did not have a history in the real estate segment.
In 2006, it delivered its first big project - Casagrand Rivera. In 2012, it entered Coimbatore with Casagrand Eternia, a luxury villa project.
“We then expanded to Bengaluru in 2014 with Casagrand Luxus - another villa project. Since then, we have launched three more projects in Bengaluru, and they have all contributed to the firm’s remarkable growth,” Arun says.
He claims that in 2016, Casagrand became one of Chennai’s largest developers.
“We currently operate in the residential real estate sector, developing prime residential apartments and villas. We also sell plots. We are present across segments, right from the affordable and mid-sized home segments to the luxury and even ultra-luxury segments,” he says.
Over the years, Casagrand has seen plenty of traction for homes in the Rs 50 lakh to Rs 70 lakh price band. On an average, 70 to 80 percent of Casagrand’s inventory falls in this price range.
It primarily targets middle-class and upper-middle-class families and some customers in the upper-class as well.
“We have adopted various strategies across marketing campaigns, print ads, TV, radio, channel partners, etc. to reach out to customers. We also built a robust, on-ground sales team,” he adds.
The way forward
Despite the COVID-19 pandemic, Arun aims to further expand Casagrand’s presence across south India. He has 10 residential project launches planned this year across Chennai, Bengaluru, and Coimbatore.
“In 2018-19, our turnover was Rs 1,800 crore. Now, we have projects worth Rs 6,500 crore in the pipeline for the next fiscal year. We plan to become a Rs 3,000 crore turnover company by 2021,” he says.
At present, Casagrand has over 1,500 employees. Arun wants to hire more - the firm has planned to onboard 250 employees soon.
Without naming his competitors, Arun believes there are established developers present across south India, operating in the affordable, mid-sized and luxury residential segments.
“All our projects are designed to be affordable. Compared to other players, our pricing is competitive. We design our homes to offer maximum space, natural light, and ventilation. We use only branded products and materials, which give an aesthetic look to the apartments and also last longer,” he claims.
With many projects in the pipeline, Casagrand is aiming to become a pan-south India player and build a position of dominance and relevance. “We want to continue being a preferred employer and a trusted real estate company in the years to come,” Arun says.