Pen Airport Village – Big projects, bigger worries?

Pen Airport Village, Kochi is a large-scale residential real estate project of about 400 housing plots in 60 acres lying adjacent to the Kochi International Airport, Nedumbassery. The promoter of the project is Pen Properties, a subsidiary of Pen Group (Pen Books fame) led by an influential Aluva based businessman, Poli K Ayyamballi. About 300 odd individuals (self included) had booked one or more residential plots paying anywhere between 50% to full price of the plots in advance. Advance was collected and “agreement for sale” was entered into between these individuals by Mr. Poly Ayyamballi, on condition that the land would be registered in their respective names within nine months. As per the agreement, land development would be fully complete (including foundation for compound walls and access roads) within this time.

The project was launched in August 2006 with wide media publicity. Per the agreements, property registrations were to be completed by April 2007. Here we stand in 2008 and Pen Properties is yet to lift a little finger towards fulfilling their promise. I visited the site of the proposed project a month ago and there were no signs of any filling work in any part of the site. On the contrary, the green grass that covered the grounds and the grazing cows assured me that there had been nothing going on for quite some time.

Whenever any customer calls Pen Properties, the courteous staff are promptly assures that “work is all set to start soon”. But nearly two years have gone by and nothing has happened. The customers who have paid out handsome sums of hard earned money are very, very worried, and rightfully so. Fortunate or unfortunate, I happen to know few other individuals who are also disgruntled customers of Pen Airport Village. One of them has already made enquiries with well-informed sources and has started legal proceedings against Pen Group. During our conversations about Airport village, I have heard several potential reasons for the delay in land allocations. One of them seems to merit quite some validity and deserves the urgent attention of anyone who has invested his/her hard earned money in the project.

The story goes like this…….

Since the days when project was kicked off, the land prices at Nedumbassery have increased many fold. The current going prices in this area is in the upwards of Rs. 2 Lakhs/cent depending on the location. Mr. Ayyambilly had executed the agreements to sell the land at prices starting from Rs. 40,000/cent with the clause that the customers could withdraw from the agreement and be fully reimbursed for the amount they paid as advance. The shrewd business man, Mr. Ayyambilly realizes that if he irresponsibly delays the project, at least few of his helpless customers will take their money and leave. He can then just turn around and sell the same land at a much higher price in tune with the current market value. In short, Pen Group and Mr. Ayyambilly wants to use us customers as cheap source of finance.

A part of me would likes to believe that the above line of reasoning is false. The most important reason why I invested in Pen Airport Village was because of the belief that I was dealing with a reputed business run by a decent individual. But may be I was wrong, or so thinks the skeptic in me. What really raise my doubts are all the different projects that Pen Group is launching at once (see below for some of their new projects). After all they may be using us for some cheap financing!

If you are an investor in Pen Airport Village, this is my advice for you. Don’t leave the money on the table or let Pen Group take advantage of you. Our strength is in our numbers, so we need to unite together. I am really interested in hearing from you. Please contact me at penvillage@gmail.com. I will help organize us customers as a group, so that we can fight for our rights through collective action.

Other planned projects of Pen Group:

1) Holiday villas at popular tourist centers like Vagamon, Munnar, Thottapalli and Cherai beach.
2) A retirement home, 'Saayanthanam', at Manjapra, 10-km from the Nedumbassery Airport
3) A chain of 30 'Treasure Hunt' retail showrooms across Kerala in Kochi, Kozhikode, Thiruvananthpuram, Thrissur and Aluva.