Fairpro exhibition has become a regular feature in the RE calendar of Chennai over the last 4 years or so. It is a very well organised real estate exhibition for the discerning buyers. CREDAI works with various developers and comes out with some attractive prices for this show.
As usual, this year show was also at Chennai Trade Centre, Nandambakkam. Over the years, the number of developers participating may have gone down, as compared to the heydays of 2007/08, but the quality of the builders participating has definitely improved. I should say, this year, it was organised well with well laid out stalls for each of the 54 participating builders with ample space for discussion. On top of it, they have even arranged for proper drinking water facilities and first aid. Most of all, they had neat and clean rest rooms!! A very rare phenomenon in our country.
My observations from the visit:
- Coming to the availability of the properties, I should say there is nothing new for a person who regularly follows on the big RE launches in Chennai.
- As far as the prices, it has definitely gone up in the last 1 year or so, in my opinion, by 12-20% across the entire spectrum.
- Most of the properties are on the fringes of the city in the newly developing areas like Oragadam, Guduvanchery and Siruseri.
- The innovative (not sure, if it is really, but I guess for the first time in RE) is the concept promoted by Inno-City at Oragadam. If you pay them 75% of the cost of the property in advance, they commit to pay an interest with a yield of 12.25% or so. Though it sounds interesting, there are associated risks with regard to execution and the credit-worthiness of the builder. I think, the promoter has PE funds participation in this project but that should not be the panacea for all the risks of paying in advance. Nevertheless, its innovative in RE!
- On the housing loan front, you have the usual suspects like LIC HFL, Axis Bank and ICICI Bank. The notable entity missing was that of SBI. Heard that they are having a separate exhibition in another 2 weeks time.
- Few interesting projects like the XS Real's La Celeste, RC's Blossoms which attracted my attention over the last 15 months or so, has been sold out. Honestly, I didn't expect them to be such a hit.
- I would have been happier to see more properties from the Tier II and Tier III cities as there is a big migrant population which wants to buy in their hometowns. Of course, there are few properties from Coimbatore but other places like Trichy or Salem or Madurai was not there. Guess, there is no penetration by the organised players in these cities which itself in my opinion is a big opportunity for players.
Overall, my expectation of bullishness returning to the RE space was evident during this exhibition. There was a steady flow of visitors and the entire car parking lot at the Trade Centre was full. The car park is quite big which can take at least 500 cars. So the turnout was good and CREDAI expects to close the exhibition with committed bookings of Rs200 crores. I think it is definitely achievable.