The onset of destination points is still in the nascent stage but has tremendous scope for growth over the years. The government’s five year tax relief for opening shopping malls and multiplexes will boost this trend to a great extent.

The number of shopping malls mushrooming across the country's landscape may have made you wonder where they will find so many shoppers and tenants. The fact is the mall culture is still in nascent stages in the country when compared to the developed and other developing countries.

In the last couple of quarters, retailers across India have resized stores, renegotiated rentals and exited unviable locations. Professional developers on their part saw the need to improvise in order to take their unique offerings closer to their consumers. The right retail mix, revenue sharing arrangements, professional CRM, collaborative marketing initiatives and wise zoning choices combined together to distinguish the successful destination points from among the mass of shopping malls.

India still has very few super malls, with at least 11.2 lakh sq. ft. in size, while the US had 50 of them and even South Africa had 21 way back in 2005, while Australia has 75 regional malls besides 15 super malls.

According to a study done by Asipac, a Bangalore-based real estate development consultancy, only the country's largest 12 malls qualify as regional malls (5-11.2 lakh sq ft), AlphaOne, Amritsar is ranked as the 9th Largest Mall in India besides being listed among the Top 25 Best Malls of India in Retailer Magazine and as per a survey powered by Franchise India Property.

The term ‘window shopping’ was coined due to the huge spur in shopping malls and the notion that it is made up of expensive stores. With the concept of ‘one-stop-shop’ coupled with entertainment options and comfortable shopping experience hoteliers, retailers and brands grabbed this opportunity with both hands. Even individual retailers found shopping malls a beneficiary prospect. All this combined has taken the idea of shopping malls to the next level of being destination points, what with shopping, food, entertainment, professional CRM and hospitality all coming together to provide the perfect outing for families, groups and individuals.

On the other hand, of the 200-odd malls that have mushroomed in the last five years, a majority are grappling with high vacancies and low footfalls. Some have shut shop and others are converting themselves into commercial spaces. Over 6.57 million sq. ft. of mall space is lying vacant in India across 8 top cities. Post meltdown, retail sales dropped by 11% and rentals by over 40%.

Jones Lang LaSalle Meghraj (JLLM), a global property consultant, says that out of 17.3 million sq ft supply of retail space across the country in 2010, only 9.3 million sq ft is expected to be absorbed. According to Real Estate Intelligence Service (REIS), a division of JLLM, there are 123 malls under construction in seven Indian cities – Mumbai, NCR, Bangalore, Chennai, Hyderabad, Kolkata and Pune -- encompassing 53.9 million sq ft of retail space. Another 42 malls having 32.8 million sq ft of retail space are under planning stages and have been announced for completion by 2013.

Internationally, malls and shopping centres are treated as assets and are owned by real estate investment trusts (reits). These reits own and manage the property and earn returns for its investors through lease rentals. While this should have been the case here as well, most developers in India treated it like any other real estate business and sold spaces before exiting. With rentals going up by 15% every two years, the model spelt disaster for most tenants.

Malls are fast learning that in order to have a healthy mix of retailers, differential rates have to be offered to a multitude of tenants. This attitude to be flexible in a nascent market will go a long way in ushering the much-awaited renaissance in large format retail. As a result of AlphaOne’s architecture, planning, facilities, location in Amritsar and most of all, the retail, entertainment and zoning mix that offers continuous luxury and delight in shopping, hospitality and entertainment options, this landmark development has received several awards and accolades. The technical aspects comprising of both civil and the services plans are all designed in consultation with the retailers while keeping the requirements of end-customers in mind. Advanced and planned facilities for parking, all-round accessibility and strategic zoning are fundamental to our retail mix as are choices in price points, customer relationship management; interesting marketing schemes and promotions in partnership with retailers, besides constant customer research and focus group discussions.

The industry in India estimates the size of organized retail to grow from the current $6 billion to $17 billion in the next 4-5 years. Indian retail industry is going through a period of rising sunshine! India is fast becoming the retail destination of the world and is ranked as the most attractive emerging market for investment, as well as the fifth largest retail destination globally. It is regaining strength with incomes of major retail players expected to grow consistently to more than 30% by the end of current fiscal according to an Assocham Financial Pulse Study.

The major factors fuelling the growth are:

-Increase in disposable income of people
-Improving lifestyles
-Increasing international exposure
-Growing aspirations among customers
-India has a large middle class that is considered to be major potential customer groups
-The Indian youth is perceived as trend setters and decision makers and also as large contributors to the retail phenomenon
-Tourist spending in India is increasing, which also contributes to the retail boom

A number of changes have taken place on the Indian retail front such as exponentially increased availability of international brands, increasing number of malls and hypermarkets as a result of easy availability of retail space. For the customer, the emphasis has shifted from reasonable pricing to convenience, efficiency and ambience. With the Indian government having opened up the doors for FDI, the entry of foreign retailers into the country has become easier.

Food and grocery are the two categories in the Indian retail sector which offer the most promising opportunities. Apart from this, the other areas where there are vast possibilities for Indian retailers are family entertainment, jewellery, apparel, electronics and consumer durables. Indian retailers are also trying to create a sustainable niche for themselves in areas such as books, gifts and music with strong branding and lifestyle connotations.

AlphaOne Amritsar

Let’s face it: when it comes to high fashion, fine food, and fun family entertainment, Punjab’s newest attraction, the AlphaOne in Amritsar, has it all - and then some.  So it’s not surprising that the stunning retail and entertainment complex attracted over 250,000 eager visitors since its March 5 grand opening, which, by the way, saw total sales of over 2 crore rupees! In fact, some noted dignitaries like Col. RS “Pickles” Sodhi MD, AlphaG:Corp and his wife, Mrs. Nafisa Ali Sodhi, as well as some top retailers and traders in Punjab joined the throngs of eager shoppers to enjoy the over 2 million square feet of pure retail bliss.

With 170 stores, including United Colors of Benetton, Tommy Hilfiger, Levi’s, The Body Shop, Adidas, Nike, Puma, Catmoss, and Beverly Hills Polo Club to name a few, shoppers found a mix of regional, national and international brands.

In addition to the top-notch retail stores, AlphaOne pays homage to the true spirit of Punjab with the Amritsari Bazaar – a replication of the world-famous Hall Bazaar of Amritsar – that boasts an impressive 51 stores. Here, shoppers will find a customer-friendly, convenient place to buy exquisite handicrafts and specialties of Punjab. 

But die-hard shoppers weren’t the only ones who enjoyed themselves at AlphaOne. Foodies found plenty to indulge in at one of Asia’s largest food courts, which offered hungry shoppers assorted cuisines at over a dozen counters. Entertainment junkies found excitement at Orama Krazy Kingdom – a family entertainment center that includes a gaming arcade, bumper cars and a 4D theater. And moviegoers enjoyed the Fun Cinemas - a state-of-the-art 5-screen multiplex movie theater that is home to the Magnum Lounge, a gold standard theater that features 100% recliner seating and a dedicated snack bar and lounge area.

Ms.Nafisa Ali at AlphaOne Amritsar

Although there are many forms of taxes in India like income tax, sales tax, etc, yet the property tax is the single largest source of revenue for the Government. The tax paid is utilized to make roads, sewer systems, maintenance of parks, developments in infrastructure, et al. India’s property tax rates have been rationalized in the last 10-15 years as the entire taxation system has undergone a change. These changes have evolved the system and raised it to prevailing international standards as the tax rates have been rationalized and tax laws simplified resulting in better compliance, ease of tax payment, better enforcement and most of all, collections.

The revenue that can be generated from property taxation depends directly on the two main components of a property tax: the tax base (assessed value of real property interests on reserve) and the tax rate. The rate of taxation is applied to the assessed value of real property to arrive at the amount of tax levied. The rates bylaw determines the rate at which each class of interests on reserve is to be taxed. 

India with a growing population and a workforce will always have increasing requirements in real estate, be it residential, commercial, industrial, retail or entertainment and as such the Indian Government encourages investments in properties with ever-evolving measures.  

NRIs/foreigners are permitted to own property in India in most of the categories. However, there are certain categories like agricultural land, land for housing project wherein NRIs/foreigners are specifically not entitled to own property. The laws applicable to NRIs would be Income Tax Act, Wealth Tax Act, Gift Tax Act, Transfer of Property Act and FEMA among others and the implications would depend upon the facts of each case.

Important Taxes levied by Central and State Governments:

  Capital Gains Tax: Capital gains tax is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of property.

  Stamp Duties: Stamp duty is a tax, much like the sales tax and income tax that are collected by the Government. If you want to know the market value of your property and the stamp duty amount on it, you need to find out the stamp duty amount applicable to you as per the market value. For example, 3% stamp duty plus additional 5% duty in form of surcharge under the Delhi Municipal Corporate Act, 1957.

  Rental Income: Rental income has to be taxed under the head 'Income from house property’. Deductions are available under Section 23 and Section 24 of the Act. It may be noted that a deduction is available for repairs, whether incurred or not. Actual expenses are deductible, except for municipal rate.

  Goods and Service Tax: The goods and services tax (GST) is likely to result in a reduction in property prices. The 13th Finance Commission has recommended levying GST on all newly constructed property for first sale, allowing credit to the developer for input tax (incurred on construction material) paid at the time of construction and including stamp duty under GST to facilitate input credit. In case the stamp duty is subsumed into GST, the developers would be able to claim credit of the stamp duty paid on the purchase of land to be used for development of real estate. The developer would also be able to claim credit of the taxes paid on inputs and input services used for construction of real estate for payment of stamp duty thus reducing the cascading effect and improve liquidity.

In case of immovable property being sold within a period of 36 months from the acquisition, the gain arising from there would be short-term capital gain and liability for taxation would be at 30%. In case the immovable property that has been held for more than 36 months, the gain would be long-term capital gain and the tax thereon would be at the rate of 20%.

The Finance Minister, Mr. Pranab Mukherjee besides announcing an interest subsidy of 1% for one year on housing loans of up to Rs. 10 lakh for properties worth less than Rs. 20 lakh also allowed developers of housing projects a tax holiday under section 80 IB (10) of the Income Tax Act on profits from projects approved between April 1, 2007 and March 31, 2008, provided the projects are completed on or before March 31, 2012. He also conveyed to the developers that the benefits of this tax break must pass on to the consumers. Accordingly, stamp duty value in case of immovable property and fair market value in case of movable property too will be computed to encourage healthy movement in this most crucial sector.

This is done through an efficient balance of landlord/tenant relations, budgeting, operating expense analysis and control, real estate tax and insurance reviews, capital improvements, energy management programs, lease analysis and market awareness and expertise. Broadly, Asset Management is focused on a portfolio of properties rather than a single property.

This is analogous to the role of managing events in any industry. REAM is the operation of commercial, industrial and/or residential real estate and akin to the role of management in any business. It ensures that the day-to-day property management functions are efficient and that the property is producing a good rate of return given its current use. Special attention is also given to landlord/tenant laws and legal subjects. Therefore, it is a necessity to have a thorough working knowledge of applicable municipal and state laws.

We at Alpha G:Corp undertake projects through real estate asset management (REAM), joint venture development as well as acquisitions. REAM also offers the much-needed structured approach in handling real estate assets considering all the factors that accompany investing in real estate. A lot of factors are considered when managing real estate assets including the location of the property, the soundness of the existing structures and the cost of maintaining the structure and even the lot appreciation or the structure depreciation. Aside from these, ideal real estate asset management considers property taxes that owners pay. REAM, besides managing real estate assets, is also a source of relevant information regarding real estate properties and the constantly monitored potential of these properties to earn higher returns in the future in consonance with government policies in real estate.

Our work culture is best portrayed through our mission statement – “Expect the Finest”. We are one of the fastest growing professional companies in the Indian real estate industry with projects spread across the country including Ahmedabad, Amritsar, Delhi NCR, Fatehabad, Gurgaon, Goa, Karnal, Jaipur, Meerut and other cities in Gujarat, Punjab and Rajasthan. These developments encompass an area of more than 30 million square feet.

The new age real estate developer has envisioned a dream – a dream of housing every family in the country. ‘Affordable housing’ is a term that possesses the potential to transform this dream, also harboured by millions of households, into reality. In fact, the main reason for increase in absorption of new launched products is the drop in per sq. ft. rate and the reduction in the size of units, which brought their prices within the affordable range of many more buyers. Most of these units were launched at a price almost 40% lower than the average pricing of apartments that were available in the first quarter of 2008. The average unit size of these apartments was also lower by almost 35%. The cost effectiveness or affordability factor contributes to the ever-increasing attraction of suburban areas.

Huge segments of untapped space, especially in tier-2 and 3 cities and towns with large scope and potential for expansion will ensure a steady trend. The trend of expanding Megapolises will be stronger in 2010 and give far more flexibility in designing townships, commercial complexes and city centres.

These encouraging trends are indicative that the markets are poised for recovery if proactive measures are adopted by the real estate community to offer the right product at the right price to the consumers. There is a need to develop innovative ways to reduce construction costs without compromising on the quality of construction apart from harnessing new methods in the use of newer, energy efficient, environment friendly materials and innovative construction technologies that minimize skilled inputs and deliver faster results at affordable prices. Paving the way for such trimming in construction cost is the use of ‘pre-fabricated materials’, or ‘systems technology’. The use of these practices can bring down construction time by as much as 50%, reduce costs by 10%-15% and also avoid employment of a large and skilled work force. At the same time, these practices help in delivering a quality end product.

The government should consider tax sops, including cuts in duties and levies for the real estate sector in a bid to promote affordable housing in the country besides actively encouraging the adoption of appropriate technologies and suitable building materials to enable construction of safe, durable, comfortable and sustainable dwellings and commercial areas.

The recent slowdown in the economy resulted in buyers constituting more 'end-users' segment than investors and speculators. Since the new class of buyers are more aware of legal documentation, approvals and due diligence, we have seen the advent of professionalism and accountability in the industry. As a result, the real estate sector in India has at last become more professional and customer-centric.

 
In the coming years, Indian real estate sector will witness a high growth path again. This is due to the following factors:
• Government initiatives and reforms for realty sector
• Growing Indian economy
• Growth of IT/ITES segments
• Facilitation of foreign direct investments in real estate sector
• Corrected market rate valuations
• Growing urbanization. Rapid expansion in Tier-I, Tier-II and Tier-III cities and the emergence of Megapolises and of integrated townships projects as a consequence
• Forthcoming SEZ projects and other industrial establishments
• Drop in home loan interest rates
• Increasing income levels of rapidly rising middle class + approximately 2 million graduates are produced every year in India, and that in turn creates a demand for  real estate, especially in the affordable housing segment
• Expansion of organized retail and growth of mall culture
• Emergence of 'Green Buildings' concept

In particular, projected growth of the IT sector @ 14% per annum and the growth of urbanization @ 2-2.5% per annum are the 2 key factors that will generate additional demand. This is apart from the existing shortage of 24.7 million houses and related infrastructure in the country. Better infrastructure, enhanced job opportunities and an accountable and responsible real estate industry would bring sustainable growth to the business.

We believe that our business associates are ambassadors and spokespersons of our company’s values not only with buyers but also with the public at large. Along with the VABA program, we also orient our workforce to greater sensitivity towards addressing inequities in the basic needs of communities near our projects. Our continued growth depends on factors such as recognition and remuneration of talented co-workers and associates in a work culture that promotes teamwork and innovation.

Research points to a growing awareness within the real estate sector that the business is essentially people-driven and dependent on fair business practices and common goals. The academic and practitioner literatures emphasize the need for innovation to address the ever-challenging task of delivering projects beyond expectations consistently. Companies need people to turn new ideas into products as well as transform technology into usable, everyday tools. The complexity of customer needs, coupled with the speed that accompanies the emergence of new customer needs call for customized, transparent and prompt responses that are primarily people driven.

Brokers are identified as per special norms drawn up in this regard and some are subsequently selected for this program. They are trained as per our value systems and overall objectives and subsequently allotted the status of VABA. Kits to enhance their skills and perception are designed to optimally enhance the ‘win-win’ factor of this program. Crucially, VABA facilitates and enhances the process of building and strengthening the bridge between our delivery system and the aspirations of current and prospective buyers, inhabitants and investors.

For more information on the VABA program, you may write to us at info@alphagcorp.com or get in touch with us at :
Alpha G:Corp Development Private Limited
Wing A, Golf View Corporate Tower
Sector-42, Near DLF Golf Course
DLF - Phase-5
Gurgaon - 122002
Phone: +91-124-4831111
Fax: +91-124-4831100

The recent downturn in the economy resulted in buyers constituting the 'end-users' segment rather than investors and speculators. Since the new class of buyers is a relatively younger set of customers, more aware of legal documentation, approvals and due diligence, we have seen the much-needed professionalism and accountability become more prevalent in the industry.

Today, the amount of money that a city dweller spends on rent is roughly the same, or only slightly less than the amount he pays as the EMI (Equated Monthly Installments) on a housing loan. Home loans are made available by financial institutions to both Indian and NRI applicants at floating or fixed rate of interest and also at attractive EMI options:
• For construction or buying a new home
• For purchase of plots for construction of house
• For home repairs and renovations or extension of an existing house or flat
• Against mortgage of property
• Purchase of home consumer durables and furnishings as included in the project cost

The buyers should try to take loan from established banks and financial institutions that screen the entire project before approving a loan for an apartment or plot in that project. In the course of approving a project, these institutions ensure that the developer has all the requisite approvals and sanctions. The government has recently announced interest rate subsidy of 1% for housing loans up to Rs. 10 lakhs and earmarked Rs. 1,000 crores for the scheme. The subsidy of 1% will be available for the first 12 EMIs on loans up to Rs. 10 lakhs for houses costing less than Rs. 20 lakhs.

For those planning to take a loan to buy a house, there is good news. The prevailing home loan rates from nationalized banks and housing finance companies are fairly reasonable:

• State Bank of India (SBI): 8% – 8.5% for Rs. 30-50 lakhs loan for 20 years (8% fixed for 1st year and 8.5% fixed for the next two years)
• Punjab National Bank (PNB): 8.5% for Rs. 30 lakhs and 9.25% for Rs. 30-50 lakhs loan for 20 years (fixed for three years)
• Life Insurance Corporation (LIC): 8.75% for Rs. 30-50 lakhs loan for 20 years (floating home loan rates)
• HDFC: 9% for Rs. 30-50 lakhs loan for 20 years (floating home loan rates)
• ICICI: 9.25% for Rs. 30-50 lakhs loan for 20 years (floating home loan rates)
• Dewan Housing Finance Corporation Limited (DHFL): 9.25% for Rs. 30-50 lakhs loan for 20 years (floating home loan rates)

Further, various banks and finance companies are coming up with schemes ahead of Diwali. Deals include low, adjustable introductory rates for initial years, with some lenders giving the option to shift to either fixed or floating rates in subsequent years. Lenders like Canara Bank, Bank of Maharashtra and Dena Bank are offering fixed-rate loans for the first 5 years, and subsequently, linking the loans to their prime lending rates. While others like Bank of India are offering fixed-rate loans for the first 2 years. India’s largest bank SBI is offering fixed rates for the first 3 years. Development Bank of Credit introduced a fixed rate of 7.95% for the first year, the lowest, at least, for the first year.

Moreover, in order to attract investors, Housing Finance Companies are offering incentives like:
• Free accident insurance & property insurance
• Waiving of pre-payment penalty & processing fee

My advice to all prospective home buyers: Be diligent, be bold and fulfill your dream as it is a buyers’ market at present. Just one word of caution; check the credentials and track record of the Developer you are buying from. 

Here are some of the key findings of the research:

 The current scenario:

• The chief wage earner of the household, which in most cases is the man of the house, is the key decision maker when it comes to shopping.

• Although most respondents confessed that they like to dress fashionably, the awareness about brands is fairly limited, given the kind of brands they have been exposed to till now. Surprisingly, the respondents believe that all brands are available in Amritsar.

• A split has been observed in peoples’ attitude towards brands & the role they play in life. Branded apparels thus get restricted as a choice only for special occasions.

• Shopping with family is the second most preferred leisure time outdoor activity after eating out, for the people of Amritsar.

• A desire to shop for all items in one go has been observed. This desire is primarily driven by the intent to save on time and travel costs. Therefore, most people prefer to shop for groceries, toiletries and maintenance products in one go.

• The regular Amritsar shopper still does not understand the mall concept completely, given their limited exposure. However, need for a good mall that offers more brands, more styles and more options has been voiced by most respondents.

Expectations & Aspirations:

• Accessibility and hygiene are the basic expectations that the people of Amritsar have while shopping.

• Further, good range and variety, assured quality and reasonable prices have been mentioned as desirable, for a good shopping experience. However, the shopping experience becomes delightful only if the destination offers options for eating out, fun for kids and entertainment for the whole family.

• When it comes to a shopping mall, consumers expect the mall to be an imposing structure with great ambience, located in an open area, a little away from the city.

• Additionally, they feel the mall should have food courts, games and other entertainment options.

• Along with top national and international brands, the mall should house local Amritsari specialties as well.

• Last but not the least, the mall should run offers and discounts and have reasonably priced products.

If one were to closely study these findings and map the expectations to the key features and highlights promised by AlphaOne Amritsar, one would realise that it fits the retail aspirations of the people of Amritsar very well. Therefore, the above findings reinforce our belief that AlphaOne Amritsar will emerge as the one point destination for retail, entertainment and hospitality that will revolutionize the way the people of Amritsar shop, eat and entertain themselves.

We will be the first developer in India to attempt this manner of interactive collaboration with our retailers and brand partners at AlphaOne, Amritsar. AlphaOne has the best mix of International, National and Regional brands and many among them will attend the 1st Brand Partners’ Meet.

While the recent times have seen several crises in shopping centre projects across the country, we have enhanced our belief in focusing on the real requirements and desires of customers. AlphaOne, Amritsar is designed by leading international architects, ARCOP who are also architects of other ahead-of-times landmark developments. This, our biggest and most ambitious project to date will offer renowned national and international brands to the people of Amritsar and surrounding areas. We will of course, retain the unique and bold Amritsari spirit in the specially designed Amritsari Bazaar where local retailers will sell their wares on the top floor at AlphaOne.

With AlphaOne, we aim to set in motion the renaissance of retail operations in India. This soon to be launched mega retail and entertainment destination point of 2 million sq. ft., under the signature brand name, ‘AlphaOne’ – Ithhe aao happy ho jao …Be here be happy! Will establish a rational and practical business model where optimum customer delight is the unconditional priority in all business decisions, promotions and operations. This work culture we believe will prove to be the foundation of success of this development.

In order to make it a win-win experience for every shopper and retailer, we set up innovative systems and procedures based upon sustained research from the time this mega project was finalized. This spirit and its result will be evident at the 1st Brand Partners’ Meet, especially during the exchange of ideas, dialogue and feedback between the retailers and our team to collectively drive footfalls into AlphaOne.

AlphaOne would make a discernible impact on the socio-economic fabric of Amritsar and surrounding areas. We will provide our shoppers with constant happy experiences while raising the bar for sustainable Destination Point models in India. We see AlphaOne as not only a business opportunity but also as a great way of building and strengthening relationships.

You would perhaps be aware that as a result of AlphaOne’s architecture, planning, facilities, location and most of all the retail and entertainment mix, this landmark development received the honor of ‘Highly Commended Certification’ and ‘Seal of Distinction’ in the category of Mixed-Use Development at the 2009 edition of the Cityscape Asia Real Estate Awards held in Singapore in May 2009.