Alpha Corp plans Rs 3,500 cr capex in real estate projects

Real estate developer Alpha G Corp today said it plans a capital expenditure of Rs 3,500 crore in its upcoming residential and commercial projects in various parts of the country in next five years and eyeing revenue of Rs 5,000 crore from them.

"We are expecting revenue generation of Rs 5,000 crore from real estate projects which are coming up at various locations in next five years," company's CEO and Director SK Sayal told reporters here today.

The company, in which Morgan Stanley has 14 per cent stake, has plans to develop over 1,000 acres of land for setting up of commercial and integrated township projects at various places including Ludhiana, Amritsar, Meerut, Gurgaon, Jaipur, and Gujarat, in next five years.

"The total capital expenditure on these projects is estimated at Rs 3,500 crore," he said.

The company's one of the biggest real estate projects is coming up in Ludhiana for developing integrated township at an area 200 acres of land which would entail investment of Rs 1,000 crore.

"The revenue realisation from this project will be to the tune of Rs 1,500 to 1,800 crore," he said.

Barring a few ones, majority of the company's projects are done through Real Estate Asset Management (REAM) model, whereby the bulk of the investments are made by the land owners.

"Under the REAM model, landowner retains complete ownership of the project wherein Alpha G Corp executes role of developer," he said, adding, "the company gets 8 to 10 per cent of the topline of the particular project in return of development".

However, the company is also developing its own projects in Jaipur and Karnal with its own capital.

Alpha G Corp is expecting revenue of Rs 200 crore in current fiscal as against Rs 80 crore in last fiscal.

Asked about any impact of hike in lending rate, Sayal admitted that the sales of real estate projects have started slowing down because of rise in interest rates.

"The signs of slowdown in sale of high value properties have started appearing. But there will not be any impact on pricing of the projects as of now," he said.