Sanjay Sachdeva, Managing Director, Advance India Projects Ltd
Forty-seven projects in 22 years and a simple thought: "What matters is that, every year, I add 1,000 happy faces to my balance sheet." For Sanjay Sachdeva, Managing Director, Advance India Projects Ltd (AIPL), transparency, quality and consistent delivery have always been the prime focus. In conversation with SHRIYAL SETHUMADHAVAN, Sachdeva elaborates upon the company's projects and plans and the business scenario.
In a JV with Ambuja Realty, AIPL has formed AIPL Ambuja Housing and Urban Infrastructure Ltd...
Yes, it is a 50:50 JV to introduce different types of townships in North India. For instance, we have developed two townships in Punjab. The 148-acre Dream City in Amritsar is already complete with 95 per cent sold. It is based on a different concept of architectural control where all houses are identical. Also, we have independent floors and commercial buildings that are constructed and handed over instead of just handing over plots. India's first Walmart is in this township. Here, the intent was to develop a high-end township for NRIs as well as local residents who want to move out of congested cities. Built on a similar concept is our second township in Gobindgarh Khanna, which is spread over about 90 acre.
What is the nature of this partnership and why did you choose Ambuja?
For over 15 years out of 22 years of existence, AIPL was a purely commercial company. The requirement was value addition in terms of knowledge and expertise to execute and develop a residential township. Ambuja has done many such projects in West Bengal. The company was also looking forward to expand in northern India. While Ambuja will play a major role in controlling the financial, technical and management aspects, AIPL will look into land acquisition and consolidation, statutory approval, marketing, media and construction management.
Does the real-estate scenario in northern India lend itself to the development of townships?
It depends from city to city. A township may not be ideal for Bahadurgarh or Bhiwadi, but may suit Amritsar and Jalandhar. However, people are willing to adopt the concept, and in these cities, townships will continue to be popular if developed properly. In some parts of northern India, townships are sold but there are no provisions for a comfortable living. AIPL offers a complete programme in the form of a help desk and division that encourages people to move and make their lives comfortable. As long as big developers implement the quality of life promised in brochures, the concept will be successful. Otherwise, townships will continue to be vacant for the next 10 years.
AIPL is also developing the Celebration Mall in Nagpur, Maharashtra and other cities.
We have acquired the land and will start development in Nagpur. Two Celebration Malls are already operational in Udaipur and Amritsar, and the third, which is under construction in Gobindgarh-Khanna, will open by the end of this year. The fourth is in Nagpur and the fifth in Jalandhar. We are building our retail portfolio by creating a chain of malls.
How lucrative is retail development in India vis-a-vis commercial development?
Prior to 2008, it was a lucrative business. From 2009 to 2011, retail was not looking up at all. But since 2012, with FDI opening up, the business is back in form. So, if malls with the right concept are developed over the next two to three years, the business will flourish. Initially, India was not an expert in building and managing malls. Hence, we opted for a JV with CapitaLand. It is a 65:35 JV, with AIPL at 65. Retail is a great business if you can design, build and manage properly.
In a scenario where several malls have closed down, what is your strategy?
The first is to tie-up with the best partner in the region. The second is to build on lease models. We apply this to all our malls and the key is professional management. For instance, our Amritsar mall is being managed by Star Center and Udaipur mall by CapitaLand. The third is to ensure that the mall is designed properly.
Do you believe that FDI in retail may cause unemployment?
Ultimately, this will lead to employment creation. For example, companies like Walmart and Metro have come to India and generated employment. They have not taken away employment. Walmart opened in Amritsar and not even a single small retailer has closed down.
Kindly highlight the role of building green in your activities.
All our projects, including residential townships in Amritsar, Gobindgarh-Khanna and Gurgaon, are focused towards being green. As per the norms, we have created rainwater harvesting and sewage treatment plants. As Gurgaon faces water shortage, we have employed drywall technology, which saves 75 per cent of water in a building.
Has the current global economic scenario facilitated access to countries that were earlier inaccessible?
Definitely! Companies in America and Europe are far more amenable to coming to India. This is because their own economy is soft at the moment and they are eyeing the Indian economy, which itself lags behind its projections. However, the Indian market is better than a 1 per cent growth.
Building on a brand image has been the focus for many real-estate companies. Your comments.
Having an international brand endorse your projects is a very short-term strategy to create a buzz. Indians also want value for money. For instance, the Hyatt Apartment launched in Gurgaon or Fortune Residence launched in Noida provides services like housekeeping and maintenance. These are value-added services for which the customer will pay a higher price. A brand can definitely have value in terms of legacy. For instance, what we deliver is drawn from our legacy and the brand value comes from the satisfaction derived from our clientele of over 3,000. Our philosophy says, 'Do not look at what we are going to give you, look at what we have delivered.'
What are your reactions on the sector's call for an industry status?
This certainly cannot be ignored. After agriculture, real estate is the second largest employer. The sector contributes a great deal to India's GDP and granting it industry status is not a choice but something that has to happen. It is only a matter of time.
Do you see any industry trends emerging at present?
Intense competition prevails. If real-estate developers are born every day, they are also dying at the same speed. As per the trend, quality will emerge and leaders will stay. If new players are unable to sustain quality and commitment, they will have to leave. Regulation will come and compel developers to be more responsible; this will also lead to social responsibility. Today, you can commit something and not perform. The enforcement contract in India ranks 184th out of 185 countries. So, in the future, developers will be more organised and structured, supported with some quality. International brands will come in and the consumer will become more demanding and discerning.
How was the previous year for AIPL and what are your strategies for this fiscal?
Whether it was the 2007 boom or the 2008 recession, for AIPL every year has been consistent because we are a zero debt company. We do fewer and smaller projects and focus on delivering value. The last fiscal was steady for us and this year too we will grow by about 10-20 per cent.
Year of establishment: 1991
Top management (promoters): Rachpal Singh, Daljeet Singh, Harinder Singh
No. of employees: Over 200
Centre of operation: Gurgoan
Ongoing projects: DreamCity and The Celebration Bazaar, Gobindgarh Khanna; The Peaceful Homes, Gurgoan;
Upcoming projects: The Celebration Mall, Jalandar; The Celebration Mall, Nagpur; DreamCity Club, Amritsar; AIPL Business Centre, Gurgoan
Completed projects: DreamCity, Amritsar; The Masterpiece, Gurgoan; The Celebration Mall, Udaipur; The Celebration Mall, Amritsar; Greenfort Noida; Various commercial projects in Okhla