Bengaluru: Realty firm Alpha Corp. Development Pvt. Ltd, which sold its mall portfolio to Blackstone Group Lp for a little less than Rs1,000 crore in 2015, plans to enter Mumbai with an investment of up to Rs2,000 crore, a top company executive said on Wednesday.
Focused on North India so far, with projects across Gurgaon and smaller markets such as Karnal and Amritsar, it will also enter Bengaluru as a third property market. Alpha Corp. has not specified a timeline for the entry.
In Mumbai, the firm is actively looking at joint development opportunities, with an area sharing arrangement and other options, and will raise Rs1,500-2,000 crore from its own accruals, banks and private equity funds to invest in projects.
Last year, Alpha Corp. sold two malls—AlphaOne in Amritsar and AlphaOne in Ahmedabad—to global investment manager Blackstone, as part of divesting its retail mall portfolio. Initially, the mandate was a larger one, and included a complete sale of the company, but later it was trimmed to just the two shopping malls. Following the sale, the developer plans to focus on expanding its residential portfolio and moving beyond North India.
“As a strategy, we want to build a large portfolio and become a pan-India developer. We hope to go public in a few years. Though real estate is a regional play, we have the operational and delivery ability to overcome any geographical constraint. We will also look at smaller cities alongside Mumbai and Bangalore,” Ashish Sarin, director and chief executive, Alpha Corp. said in an interview over the telephone.
Currently, the developer has six ongoing residential projects—two each in Gurgaon and Karnal, and one each in Fatehabad and Meerut. It also has an office project in Gurgaon and a large 135-acre industrial park in Amritsar.
In the National Capital Region (NCR), Alpha Corp. plans to launch a new residential project in Gurgaon’s Sector 15, where apartments will be priced at Rs1.5-2 crore each. In Karnal, where the firm has around 330 acres, of which around 141 acres have been developed and delivered, it has plans to do a 60-acre affordable, plotted development project, where plots will be priced at Rs12-15 lakh.
In October, Mint reported that Alpha Corp. planned to invest around Rs600-700 crore in distressed assets in NCR.
Over the last few years, with the kind of challenges the real estate sector has experienced, most developers have confined themselves to their core geographies and have not risked entering new locations.
A professionally managed company such as Mumbai-based Godrej Properties Ltd is one of the few realty firms that has been an exception and entered new property markets such as Noida and Greater Noida in the midst of a slowdown.
“It’s very challenging, in the current market conditions, for any real estate developer to venture into new territory. Most developers today are only focusing on the market they know best and many have closed down operations in non-core property markets. But as the real estate regulatory bill starts getting implemented, and the approval process becomes easier, it will also pave way for developers to easily enter a new market again,” said Santhosh Kumar, chief executive, India operations, at property advisory JLL India.