One step ahead?

Alpha G:Corp is bringing in foreign investment as well as quality processes into its township and retail projects across north India.

When Alpha Buildtech was announced in 2004, with its first project "" a residential condominium in Gurgaon "" real estate market buoyancy had just set in. Anyone who owned a piece of land, or was developing something, knew there was money for the asking.

Which is why no eyebrows were raised when Gurgaon One sold rapidly, almost through word of mouth, and based on the management team's previous experience at Mahindra Gesco where it had worked on such pathbreaking projects as the Great Eastern Centre and the Motorola Centre for Excellence.

Two years later, there seems no end to the roller-coaster ride that the real estate market seems to have boarded, and the highs keep coming at shorter intervals. It should make the market nervous, but isn't. The market seems driven by the trend towards increasing luxury and prices are escalating to a dizzying spiral where quality matters above all other considerations.

That could be the reason why S K Sayal, CEO and director, is in Chandigarh, to meet the chief minister of Punjab, Amarinder Singh, who has given the group (now renamed Alpha G:Corp) mega-project status with automatic licence facilitation and tax waivers.

And also the reason why Prodipta Sen, VP, marketing and sales, has chosen to go tearing across the countryside of Karnal in his Scorpio, only to get stuck in the mud (blame it on the rains) and summon a tractor to the rescue.

Alpha G:Corp has also signed up with overseas financiers for large tranches of foreign direct investment in its ventures. Typically, the group undertakes either comprehensive development managament projects (for a fee), or joint ventures, or picks up land to develop with local partners.

In Karnal, where it is putting in place its first integrated township (Rs 500 crore), the group is upbeat about the 250 acres of plotted development it has undertaken. With a draw of plots scheduled for this evening, it is looking at a launch in September/October with confirmed allotments within a year.

The difference, says Sen, is in the way they approach the township concept, not just as built up facilities, but as the basics that many tend to ignore.

Therefore, the first priority for the Alpha International City won't be the hospital, school, multiplex or convenience centre (all of which will be a part of it) but the more pivotal infrastructure of "sewage and waste water management, and power connections". "When we hand over a plot, it will be complete," says Sen, "the way they do it internationally."

International best practices is one of the reasons the Alpha One retail project in Amritsar won the state government's mega-project status. Being developed over 25 acres, the 6,00,000 sq ft city centre project on G T Road is being developed keeping not just the residents but the inevitable opening of the Wagah border in mind.

"Visitors from Pakistan will want to come to a destination mall for their shopping needs," says Sen, and with its anchors already in place (Shoppers Stop, Arvind, Provogue, Pepe, Kapa), Fun Republic has been signed on as the multiplex partner on the project.

As a mega-project, Alpha One Amritsar is eligible for an entertainment tax waiver for 10 years, automatic licences for all F&B outlets through one window, a power waiver of 50 per cent (benefitting the leasees) and the opportunity to operate 24x7.

It's something the group might be wishing for in the case of Ahmedbad, where a similar mixed use development in the catchment area of Vastrapur is being planned. In both cities, a hotel is part of the overall development with Ashok Khanna who is launching his chain of Ishita business hotels.

Both sites have overcompensated car park slots (keeping in mind the requirement for the cineplex screens). And, again, in both cities, the group is doing its due diligence for residential development "" a 135-acre township in Amritsar for which an MoU has just been signed, and a condominium in Ahmedabad.

It's worth noting that Gurgaon One was launched in February 2004 and will be delivered in December 2006. Made available for Rs 1,700 per sq ft, prices have already escalated to Rs 2,900-3,200 sq ft, and it's a given that they would double by the time of delivery.

This in itself is hardly surprising, prices on new projects have inevitably doubled for most builders, but where Alpha G:Corp prides itself is in sticking to deadlines, and in containing all escalation in prices. It has also started work on Golf View Corporate Towers' tower B (it inherited tower A from another developer).

"We're comfortable operating in tier II cities,"says Sayal, not least because the metros have a problem with availability of land. Not that other cities don't have competition "" Ahmedabad has a number of existing malls, and in Amritsar, eight malls have been announced (among them DLF, Ansal's, Omaxe, Advance).

In Amritsar, Alpha One will have two basements (for parking) and four levels, of which two will be retail, one dining and the last (or highest) will be entertainment.

Building work will commence in June 2006, fitouts for the anchor stores will be in September 2007, and delivery of the project is slated for March 2008. In Ahmedabad, work will commence in August/September 2006, fitouts will be in March 2008, and operations will start in September 2008 (simultaneously with the hotel).

Alpha G:Corp's agenda is clearly north India (G:Corp already handles the regions of south and west India, where it has projects in Bangalore, Chennai, Thane and Pune).

In the north, therefore, it is exploring the possibility of comprehensive development in Ropar, and is exploring similar projects in Jalandhar, Kota, Bhopal, Bhubaneswar and Jaipur (for a 125-acre international city on the national highway short of Amber).

In Dehra Dun too, it has land on Rajpur Road, but since the masterplan is still to be gazetted, no plans for the city have been announced yet.

'There's all-round buoyancy'

S K Sayal, CEO, Alpha G:Corp, says the track record of the management team spread over 14 years (earlier in Mahindra Gesco) has been unimpeachable.

Why have you renamed Alpha Buildtech as Alpha G:Corp?

Two years back when the corporate team of Mahindra Gesco set up Alpha Buildtech, an NRI family subscribed the initial equity, with Ghanshyam Sheth and Sachin Mulji. Mr Sheth had Gesco South, which he changed to G:Corp.

When he changed the name, we took the opportunity to rename ourselves too, since G:Corp has a very strong presence in the south and west. Structurally, though, there has been no change, and Alpha G:Corp remains committed in north India.

What do you think of overall developments in the realty market?

There's all-round buoyancy, stocks are up, it's a happy time. In real estate too, newcomers are trying to take advantage of the boom. But in time filtration will happen, even though prices will continue to rise, including in the tier II cities.

With foreign players and venture funds coming in "" and they will adhere to strict due diligence "" many of these newcomers will not be able to deliver.

A corporatisation of real estate will occur, the unorganised sector will disappear, ethics will improve, and the survivors will have to compete against such players.

Where does FDI figure in your scheme of things?

Lots of Indians settled abroad want to participate in the development of their country, and they will do it through the FDI route. And Alpha G:Corp is in an advantageous position because our practices are similar to those in developed countries.

We have FDI participation in Ahmedabad for our retail project, and in Karnal for our integrated township. The FDI in Karnal is over $100 million, and in Ahmedabad it is close to $80 million.

What gains does the "mega-project" status imply in Amritsar?

This is a scheme by the Punjab government that is intended to provide hassle-free approvals to investors in projects of Rs 100 crore and over. It implies express approvals and exemptions on taxes and duties. Our Amritsar city centre (retail + hotel) project is one such mega-project with a financial size of $100 million.

What sets you apart from your competitors?

We do not sell anything till we have 100 per cent titles and licences with us. You do not speculate with us. For other developers, their time frames are dependent on their money flows, unlike us where the whole project is planned and sold on strict time compliance. Even our architects, fee modes and processes are different "" no one else has our mindset.

What about future plans?

We're in the process of identifying land banks and players in all tier II cities for developing integrated townships and mixed use retail and entertainment centres.