The real estate sector in India has been under the shadow of black money, shady deals, illegal parking of wealth by political wheeler-dealers, and lack of regulation and monitoring by the authorities. In this scenario, Friday Gurgaon asked some difficult questions to Dr. Prodipta Sen, Executive Director, Aplha G Corp, a company that has pioneered concepts like Real Estate Asset Management (REAM), built a reputation by making good their promises to buyers, and developed some classy properties across the country – including ‘Gurgaon One’ in the Millennium City.
Dwelling on some of the burning issues that are faced by the real estate sector, Sen says, “Most of the problems related to this sector would be resolved if the government gives it an industry status, which has been in the pipeline for long. Real Estate is the second highest generator of employment in the country, and is a major contributor to the GDP, yet it is not trusted by the banks, the government, and even the consumers,” asserts Sen. If the sector gets industry status, Sen says, it would be easier to get loans, banking transactions would become seamless, licensing would become easier, and industry parameters will get defined.
Unlike the majority of the real estate community, Sen also welcomes the proposed Real Estate Regulatory Bill, saying that it would help in bringing more accountability and responsibility into the system. “In our country we like to have someone watching over us, and only then we work as per plan, and are more vigilant and careful,” says Sen. He adds that it would also help in improving relations between buyers and sellers.
His own company, Alpha G Corp, he says, believes in serving the buyers, and delivering the goods as promised. “We have always delivered our projects in time, and build quality has been as per the agreement,” asserts Sen. Incidentally he also owns an apartment in the Gurgaon One complex, built by the company in Sector 22. “The money collected from buyers of a particular project is spent on that project, and never diverted. We use the money to build and deliver,” he says. Sen says that Alpha G Corp fully understands that the time of one-sided agreements is over. “If the real estate industry is to survive, then good harmonious relations with the customers is a must. A good regulator body will hasten this process, and industry status will boost our appetite for business,” says Sen.
In the Gurgaon One complex, where Sen was elected as the President of the condominium for four years, the company handed over the maintenance of the building to the RWA within the stipulated time. “There is always a grouse among apartment residents that builders are holding on to common areas. But this never happens in our case; we construct the building and hand it over to the rightful heirs, and move on to the next project,” he says. The Company has also transferred the Interest Bearing Security Deposit, collected from the buyers, to the RWA. This transfer has often been a bone of contention in most of the gated complexes in Gurgaon today. “We follow the rules in letter and spirit. Being customer centric has also helped in building a great rapport with our customers,” he says.
When asked about what process they followed in building the EWS homes that have to be mandatorily built by a developer, Sen informs that in case of Gurgaon One they invited applications from the BPL population of the State, and for allotment an open draw of lots was conducted in the presence of a HUDA official.
Alpha G Corp also believes in the pan India growth story, and has extended its presence to tier II and III cities, such as Amritsar, Meerut, and Ahmedabad, “The aspirations in these cities are rising, people are becoming more demanding, and have also started to earn more. This motivated us to move to other cities,” he says. The Company, he says, has managed to win the confidence of buyers across India, and this is the reason their property offerings are oversubscribed. “The buyers know that we will deliver, and maintain the right quality,” he asserts. In addition, the documentation system, builder-buyer agreement, and other requisite legalese has been standardised by the company. “These are fair and transparent documents, and adequate care is taken to safeguard the interests of the buyers,” he asserts.
To ensure that investors, who are often said to be the primary drivers of real estate industry in Gurgaon, do not overpower the end users, Alpha G Corp does not sell more than one property to a single individual. “This is done to ensure that mainly end users get the property, and speculation is avoided. We accept payments through cheques, thus making it more transparent,” he says.
On the expansion of the City under GMUC 2031, Sen says that the Gurgaon story is stable. “The City has the muscle and the ability to absorb much more expansion than what is being planned, but the key to this will be the building and sustenance of adequate infrastructure – particularly with reference to water and power,”
says Sen.
He also opines that both residential and commercial projects in Gurgaon will have to adopt environmentally sustainable measures like rain water harvesting, judicious use of power, and zero discharge of waste water. The new project of the Company in Sector 84 has accommodated every such measure, to ensure that the effect on the environment is minimum, and the development
is sustainable.
In his opinion the developments on NH8 and Southern Peripheral Road could prove to be game changers for the City. They could also shift the locus of commercial activity away from MG Road. “It is likely that a new City Centre of Gurgaon could emerge in this new development, but the key criteria would be infrastructure,” says Sen. He predicts that by 2015-16 we could see major development along these roads, but it needs to be matched with internal sector roads, power, and
basic amenities.
On whether the builders and government have learnt from their mistakes from current Gurgaon, Sen says that the Gurgaon Manesar Urban Complex Plan 2031 is a positive document, that takes a holistic view of development in the Millennium City. He asserts that sustainable growth should have been the basic principle of every one in the City, but this did not happen. “Now we have a chance to make amends in Gurgaon II, by adopting practices that put the least pressure on resources,”
says Sen.
Despite half of the residential complexes in Gurgaon being empty, why are new properties being sold at even higher prices than the past? Sen says that while demand and supply are key variables, one cannot ignore cost. “Look at the variables that go into making a building, such as land, cement, steel and labour. The cost of all these products has multiplied, and this is the primary reason the prices are rising,” he asserts, while not discounting the role of investors in this process.
When asked about any price correction expected, particularly in Gurgaon, he informs that a slight correction has already taken place in commercial real estate. Rentals have also stabilised. FDI in Real Estate, as and when it materialises, will help the commercial real estate sector in the City, he believes.
As far as the residential sector is concerned, the prices have gone up because of pent up demand, and further increase will depend on the delivery schedules. If the properties are delayed the prices will go up. “I think certain areas in the City, including Sohna Road and Southern Peripheral Road, will see appreciation in both kinds of property,” he predicts.
Sen feels positive on the City, as he feels that all the major stakeholders—including the government and the civil society—have demonstrated that they are ready to contribute to making the millennial aspirations of Gurgaon
a reality.
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