Structural transformation of the realty sector is the need of the hour for its slow and steady revival; says CEO of AlphaCorp
The Coronarvirus pandemic or Covid-19 has impacted the economy of the world on a drastic scale, affecting all the sectors equilaterally. Not discriminating the real estate sector, it has caused massive hardships for the builders due to negligible cash inflow and labor problems. The rates of property rates in cities like Mumbai, Delhi has fallen to the tune of 10-15%. In this hour, Ashish Sarin, CEO of AlphaCorp has a positive outlook for the developing cities which favours the homebuyers in terms of rate/sq. meter and opportunities for Job, Health & Education. In an interview, he contended the following.
What has been the impact of the Covid-19 outbreak on the real estate sector? Between residential and commercial segments, which is more impacted?
The real estate sector was already impacted by high inventory overhang, liquidity crunch and market slowdown. The COVID-19 outbreak has further affected it adversely in terms of sales and purchase. It was earlier expected that sales would come down during the lockdown period from what they were in the pre-COVID period. However, with the revision in interest rates and a few favourable government policies, we are expecting the sales of ready-to-move-in homes to pick up pace.
The tier-II cities will now be a new destination for homebuyers because of affordability and better growth prospects in terms of business. On the other hand, the impact of the pandemic is most notable on the commercial real estate. That is because of disruption in the cash flow impacting the ability to pay rent, delay in leases, standstill expansions of office spaces, especially IT/ITES, and halt in sales due to the closure of malls during this period. Corporates are looking at fewer rental office spaces to prevent costs.
Since many migrant labourers have returned to their villages and their non-availability might be one of the many challenges to resume work in full swing — how are you planning to manage this?
Workers are the backbone of the construction industry. It is mostly labour-intensive and consequently had to face the maximum impact. A major hindrance to resume the construction activities is getting our labour back to work from their hometowns. We have only a handful of labourers at our sites. We are expecting the workers to return in their full capacity by the end of this year. Under the initiative of the UP government and the National Real Estate Development Council, AlphaCorp has registered to bring back the labourers. We hope to resume the construction work in full swing soon.
What will be the recovery roadmap for the real estate sector to survive in the future?
Structural transformation of the realty sector is the need of the hour for its slow and steady revival. With staggering recovery, the outlook of the real estate sector in the coming year is likely to be positive. The government has always extended support to the sector. The repo rate cut, extension of the various deadlines have given a ray of hope to the developers. Such announcements have pumped liquidity into the system, and improving the overall economic environment. The government is likely to announce more such beneficial packages which will help shift the customer sentiment towards investing in the realty market.
What has been the impact of lockdown on your business? Has you company adopeted any new strategy? What are your plans to expedite the construction and sales process?
Hoping for businesses “as usual” is no longer relevant and an entirely new mindset of moving forward during this unprecedented time is important. At AlphaCorp, we have spent hours planning and strategizing the reopening of our business. Tools like ERP and LMS (Lead Management system) have shown their capabilities of managing business remotely. With no further delays and a lot of caution to ensure that business reopens safely, we will follow the phased approach and are back with limited strength on our construction sites. Our team has ensured the sanitization of our project sites and practices social distancing regularly to ensure visitor safety. We are open to engaging our prospective buyers by accelerating efforts and using Omni-channel models. Our sales process is ongoing and has shown promising results especially in tier-II cities. Also, with the introduction of Atmanirbhar Bharat, we have witnessed good traction on industrial plots’ enquiry at the site in Amritsar.
Many developers are currently giving special discounts and offers to boost sales. Do you also have any such plans? If yes, can it create a significant impact on sales?
Developers have introduced lucrative payment plans which would impact their business in the long term. We are planning to come up with more self-dependent payment plans which would help homebuyers not to go for home loans. The plan is expected to be out by the end of July 2020. We have also rolled out expandable home options at MeerutOne and Alpha Residences, Noida, for people who are looking for extra spaces now. Our latest development Alpha Residences will have high-end home automation system options for additional safety and security. Such special offers are likely to impact sales optimistically.