1. The Real Estate
Sector

2.  The Early human dwellings as pointed by
archeological evidences started in caves
 Zhoukbodian caves system near Beijing, China
dates at 500,000 years
 Chinese caves contain some of the earliest
evidence of human use of fire, approximately
400,000 years ago
 Easily inhabitants of Australlia, the Middle east and
the perusian Andes have also left remains in caves
 Gradually as agriculture became important to
people, some 4500 years ago, people established
villages of permanent houses and found new uses
for hunting and herding activities

3. Key Features
 The term ‘Real Estate’ is defined as land, including the air above it and the ground below
it, and any buildings or structures on it. It is also referred to as realty
 Real estate involves the purchase, sale, and development of land, residential and non-
residential buildings
 The activities of the real estate sector encompass the housing and construction sectors
also
 The real estate sector is a major employment driver, being the second largest employer
next only to agriculture
 About 250 ancillary industries such as cement, brick, steel, timber, building materials etc.
are dependent on the real estate industry
 India Still has a shortfall of 2.47 crores as on 2007
Source: http://planningcommission.nic.in/

4. Impact of Real Estate Industry on
some other key industries
 Retail(Malls)
 Hospitality (Resorts, hotels, lodges, spa, inns)
 Entertainment Industries(Multiplexes, Theatres, Recreation
centers )
 Economic Services( Hospitals, school)
 Information technology(IT) Enabled companies( call centers)

5. REAL ESTATE
NON-
RESIDENTIAL RESIDENTIAL/CO
MMERCIAL
OFFICE HOSPITALITY RETAIL
INDUSTRIAL(SEZ)
MALLS AND STANDALONE
GOVT. OFFICES PRIVATE OFFICES
MULTIPLEXES OUTLETS

6. Physical Targets for Infrastructure in the Eleventh Plan
 Power
 Additional power generation capacity of around 78500 MW
 Roads and highways
 Six- laning 6500 km of Golden quadrilateral and selected National Highways
 Four laning 6736 km on North-South and East-West Corridors
 Four-laning 20000 km of national Highways
 Widening 20000 km of National Highways to two lanes
 Developing 1000 km of expressways
 Railways
 Constructing dedicated freight corridors between Mumbai-Delhi and Ludhiana-Kolkata
 8132 km of new railway lines: gauge conversion of over 7148
 Seaports
 Capacity addition of 485 million tones in major ports, 345 million tones in minor ports
 Airports
 Modernization and redevelopment of 4 metros and 35 non-metro airports
 Constructing 7 greenfield airports
 Constructing 3 airports in North-east region
 Telecom
 Achieving a telecom subscriber base of 600 million, with 200 million rural telephone connections
 Achieving a broadband coverage of 2-0 million internet connections
 Irrigation
 Developing 16 million hectares through major medium, and minor irrigation works 2.18 million
Source: Planning Commission

7. FY06 FY10
1.10
%
16.50%
Other FDI
Housing &
83.50% Real Estate
98.90
%

8. • Increasing vacancy
• Slowing down
• Construction growth
• Property price starting to
fall
Boom
• Capital outflows
• Declining prices
• Lending curbs
• Low consumption
• High vacancies
Recession

9. Total number of Census houses(in crores)
1.58
Total number of vacant
censes houses
Total number of Occupied
census houses
23.33
Total number of houses: 24.91
Source: www.indiastats.com

10. India’s Real GDP(at Constant 2004-05 Prices) Growth Rate Trend
14.00%
12.00% 12.40%
10.60%
10.00% 9.50% 9.70% 10.00%
9.20%
Growth rate (%)
8.00%
7.40%
6.70%
6.50%
6.00% 5.90%
4.00%
2.00%
0.00%
FY06 FY07 FY08 FY09 FY10
Growth rate
Source: MOSPI

11. Total share in real estate sector
25%
Residential Segment
Commercial Segment
75%

12. Indian Real Estate Market Size(USD Bn)
200
180 180
160
140
120
100 90
80
60
60
40
20 16
0
2006 2010 2015e 2020e

13. 100%
90%
22.98
80% 30.27 Others
40.27 36.19
70% Depreciation
60% 1.76 Interest paid
50% Marketing expenses
25.07
22.67
40% Advertising expenses
8.74
9.83
0.83
30% 2.38 0.71 0.8
1.24
0.79 1.25 Compensation to
0.87 4.49
3.41 4.81 employees
20% 3.27
Raw material expenses
10% 14.16 13.47 16.75
11.19
0%
FY07 FY08 FY09 FY10

14. Major challenges faced
 Land availability and acquisition issue
 Lack of Transparency
 High stamp duty charges
 Variable prices of raw materials
 Absence of a centralized regulatory authority
 Constraints of funds

15. India’s leading Real Estate Companies(as
per Total Income)
Sr. No Company Name Total Inco01me( Rs. Cr)
1 DLF Limited 3220.43
2 National Buildings Construction 2947.73
Corporation Limited
3 DLF Home Developers Limited 2469.78
4 Unitech Limited 2221.71
5 Housing Development and 1599.58
Infrastructure Limited
6 Ahluwalia Contracts (India) Limited 1573.43
7 DLF Retail Developers Limited 1501.89
8 True Value Homes(l) Private Limited 1400.00
9 Emaar MGF Land Limited 1172.35
10 Sobha Developers Limited 1119.28
Source : India’s leading Real Estate Companies 2010

16. India’s leading Real Estate
Companies(as per net worth)
Sr. No Company Name Net worth( Rs. Mn)
1 DLF Limited 128036.0
2 Unitech Limited 79032.3
3 Housing Development and 70385.8
Infrastructure Limited
4 Emaar MGF Land Limited 46093.7
5 Anant Raj Industries Limited 34967.2
6 D B Realty Limited* 30967.2
7 DLF Home Developers Limited 24733.7
8 IVRCL Assets & Holdings Limited 22884.8
9 Parsnath Developers Limited 22174.7
10 DLF Commercial Developers Limited 20966.8
Source : India’s leading Real Estate Companes 2010

17. Year Building City Country Roof
2010 Burj Khalifa Dubai United Arab Emirates 828m
1963 KVLY-TV mast Blanchard United States 628.8
2011 Abraj Al Bait Towers Mecca Saudi Arabia 601m
2011 Tokyo Sky Tree Tokyo Japan 634 m
1962 BREN Tower Neveda Test Site United States 462 m
1962 Lualualei VLF transmitter Lualualei United States 458 m
1998 Petronas Twin Towers Kuala Lampur Malaysia 452 m
1997 Ekibastuz GRES-2 Power Ekibastusz Kazakhstan 419.7 m
Station
2008 Dimona radar Facility Dimona Israel 400 m
1987 Kiev TV Tower Kiev Ukraine 400 m

18. Breakthroughs

19. Burj Dubai
 Tallest structure ever built, and
freestanding
 Highest elevators ever installed
 World’s fastest elevators at 64
km/hr.
 Worlds highest installation of
an aluminum and glass façade,
at a height of 512 meters
 Highest number of floors in a
building – 160, breaking 110 of
World Trade Center buildings

20. Stakeholders
 Constructing companies
 Developers
 Engineers
 Technicians
 Design consultants
 Landlords
 Foremen
 Clerical staff
 Skilled workers
 Unskilled workers
 Banks
 Insurance companies
 Tenants
 Suppliers of material( Electrical, Material, etc.)
 Buyers
 Government
 Licensing/ Registration offices( e.g. BMC)

21. Investments
-Investors
-Speculators
-Specu-vestors
-Investor-occupiers
-Owner-occupiers
Organizations On the basis of size of
- Govt. owned buildings family
- Organizations/companies - Nuclear Family
- Self rented - Extended Family
Types of end - Joint Family
users
Type of occupation Budget
• Service class • Small
• Business class • Medium
• Labor class • Large

22. Value Parameters(Residential)
 Price  Slum in the area
 Location  Quality of Amenities
Upcoming projects, infrastructural
 Connectivity developments
 Neighbourhood  Developing/ Ready to possess buildings
 Access to facilities like hospitals,  Permissions by necessary Govt. bodies
schools, gardens, markets etc.  Investment/ Lease / Self occupancy
 Future growth prospects  Parking Space
 Brand name
 Reputation of the builder Financial Aspects
 Lifestyle  Cash/ Cheque component
 Quality of construction  Home Loan Interest rates
 Property and other tax
 Legality of construction
 Terms of Payment
 Speed of Construction
 Monthly outflow or maintenance cost
 Space ( S/B area vs. Carpet Area)  Down payment
 Environmental friendliness  Fixed/Floating
 Earthquake Resistance  Slab duration/
 Security Parameters like distance  Difficulty in getting Loan
from the police station, fire station.  Affordability

23. Comparative chart (on the basis of New worth)
200000
128036
180000
160000
140000
120000 79032.3
100000 70385.8
80000
46093.7 Net Worth(Rs. Mn)
60000
40000 34958.3 Net Profit(Rs. Mn)
20000 EBITDA( Rs. Mn)
0 Total income( Rs. Mn)

24. Comparative chart (on the basis of New worth)
100% 1.9 2.5 2.4 3.1
7.3 3.2 11.8 5.7
90% 62.2 6 3.2 8.5 6.6
80% 8.1 4.1 11.3 8.9
8.3
70% 6.8 8.3 23.7 12.7 37.3 23.7
60%
50% 70.9 Interest cover(times)
40% Debt-to-equity(times)
30% 65 33.4 78.5 ROA(%)
48
20% 93.3
10% RONW(%)
0% ROCE(%)
NPM(%)
EBITDA Margin(%)

25. Distribution chain
 Portals like 99acres.com, Magicbricks.com, Indiaproperty.com
 Property exhibitions
 Newspaper ads
 Property magazines
 Leaflets
 Agents, brokers
 Leaseholders
 Government allotments( MHADA, Tata Housing)
 Neighbors, friends, colleagues
 Word of mouth
 Auctions
 Banks
 Investment Banks

26. Backend
supply chain

27. Backend Supply Chain
 Land
 Architects
 Cement Industry
 Steel Industry
 Sandstone
 Petrol Prices
 Electrical wiring and hardware fittings
 Flooring( Tiles, Marbles, Granites)
 Paints
 Heavy equipments(Cranes, Land movers, etc.)
 Glass Industry
 Bank and Insurance companies
 Road and Infrastructure
 Government agencies for plan approval, NOCs, DCRs

28. Top 10 Cement Companies
Name of the Company Annual Turnover Production Installed
Capacity
1. ACC Ltd. 9339.64 17902 18640
2. Ambuja Cements Ltd. 7998.55 15094 14860
3. Ultratech Cement Ltd. 13980.35 13707 17000
4. India Cement Ltd. 3667.16 14649 14115
5. Shree Cement Ltd. 3558.64 8434 8810
6. Rain Cement Ltd. 4965.76 6174 6680
7. Prism Cement Ltd. 3456.03 6316 6531
8. Madras Cement Ltd. 2644.71 6636 6300
9. Birla Cement Ltd. 2264.35 4550 5470
10. JK Cement Ltd. 2119.35 5150 5113
http://business.mapsofindia.com/cement/top-10-cement-companies.html

29. Brief about the industry
 Indian Cement Industry is the Second largest in the world with
236.16 MT as on September 2011.
 With the government of India giving boost to various infrastructure
projects, housing facilities and road networks, the cement industry
in India is currently growing at an enviable pace
 Most of the cement Industries are located close to Madhya
Pradesh, Andhra Pradesh, Rajasthan, Gujarat and Tamil Nadu
because of the availability of Limestone, Gypsum and Coal.
 Although this Industry got a boost post reforms in 1992 but the price
of the Cement is still controlled by the government and due to
economies of scale 95% of the sales come from the top 10 players.
SOURCE: http://business.mapsofindia.com/cement/

30. Indian Steel Industry
 India is the 8th largest producer of steel with a production
capacity of 35MT.
 There has been a significant growth in the production and
consumption of steel in the domestic market.
 The consumption of steel in the Country is a significant
indicator of the development in the country owing to the
use of steel in the infrastructure, housing and Industry
SOURCE: www.cci.gov.in/images/media/.../Indicussteel_20090420151842.pdf

31. Top 5 Steel companies in India
(on the basis of production)
 Tata Steel
 Steel Authority of India Ltd.
 Bhushan Power and Steel
 Jindal Steel and Power Limited.
 Essar Steel

32. Petrol/Diesel
 A Price of Crude oil has a huge impact in the Realty market
because of the rise in price of other raw materials.
 Highly regulated market with top leaders being IOCL, HPCL
and BPCL

33. Glass Industry
 The topmost glass manufacturers in India are Asahi India
Glass, NSG Group, Saint-Gobain, Guardian Industries and
Hindustan National Glass.
 A strong demand and growth of infrastructure, liquor & other
beverages, boom in building and construction will see the
glass industry at its best in the coming years.
 The industry is estimated at 5500 crores by the end of FY
11-12
Source: www.niir.org/.../glass...glass...glass...glass...glass...glass-glass...glass...

34. Paint Industry
 Indian Paint Industry is valued at Rs. 11000 Crores by FY
2009-10.
 The Ratio of the organized and unorganized sector is 65:35
with the unorganized sector’s involvement being more in the
distemper coating
 Top leaders are Asian Paints, Nerolac, Berger, Jenson and
Nicholson, Dulux.
Source: http://www.managementparadise.com/forums/publish-upload-project-download-reference-project/72869-paint-industry-analysis.html

35. Basis of questionnaire
 Current trend
 Expected trend
 Profit margins
 Overall market growth overview

36. Runwal Symphony, Vakola,
Santacruz(east)
 Project
 16 floors
 2 wings
 2, 3 bhk

37. • Total area- 10000 sq. ft.
• Construction cost- Rs. 2500 per sq. ft.
• Land cost – Rs. 2500 per sq. ft.
• Other expenses- Rs. 600 per sq. ft.
• Considering 30% area sold while booking or bhoomi poojan.
• Interest = around 10-12%
• Therefore total cost= 10000 * 5600= 5.6 cr
• Total sales cost = 9800* 11000= 10.78 cr(avg out)
• Booking sales= 4200(30%) * 8000= 3.36 cr[Construction cost
averages out]
• Total sales revenue= 10.78 + 3.36= 14.14 cr
• Total profit % = 152% profit

38. Laws Governing Real Estate Market In India
 Indian Transfer of Property Act
 Indian Registration Act, 1908
 Indian Urban Land (Ceiling And Regulation) Act, 1976
 Rent Control Acts
 The Town & Country Planning Acts
http://www.indialawoffices.com/pdf/realestate.pdf

39. No specific tax incentives for real estate sector, however the
following incentives will boost the real estate.
 Excise duty rates on bulk cement and packaged cement
brought on par; bulk cement to attract excise duty of Rs.400
per Metric Tone or 14 per cent ad valorem, whichever is higher
 Cement clinkers excise duty at Rs.450 per Metric Tone.
 General CENVAT rate on all goods reduced from 16 per cent
to 14 per cent to give a stimulus to the manufacturing sector.
 Reduction in the excise duty from 16 per cent to 14 per cent.
 Reduction in customs duty from 5 per cent to nil on steel and
aluminum melting scraps
http://www.indialawoffices.com/pdf/realestate.pdf

40. Regulations from Primary survey
 Under the Income tax Act:
 Valuation of the property is done as per three
values:
 Fair Valuation
 Municipal Valuation
 Market Valuation
 Valuation can be done on the basis of any of
the above three but the registration and stamp
duty cannot be paid at a rate lesser than the
Municipal Valuation, better known as Ready
Reckoner rate of the property.

41.  (CLIS) Change of land Use
 NOC – At least in 2 stages
 Plan verification
 Registration
 NOC post completion
 As per new rule an additional Service tax of 2.5% will be levied on
the registration value

42. Stamp Duty Rates
 Non-residential Properties – Flat 5%
 Residential Flats in a housing society and buildings covered under Article
25(d) of schedule I of Bombay Stamp Act 1958 attracts concessional rates
depending upon the market rates depending upon its market value as
follows:
 Below 100000 - Nil
 100000- 250000 - 0.5% of the value
 250000- 500000 – 1250 + 3% above 500000
 Above 500000 – 8750 + 5% of the value above 500000

43. Registration
 Post January 2010 the
registration fees of a property
in Maharashtra has gone up to
1% of the ready reckoner rate.
 Earlier this rate was Flat Rs.
30000.

44. TRENDS

45.  A large number of projects that have come up in the
past decade have placed a lot of importance on
additional amenities like swimming pool, gymnasium, etc
thereby increasing the maintenance cost for thee
projects.
 A lot of developers are now considering moving to the
construction of 1BHK and BK apartments in prime
locations because of growing demands for this particular
format by the lower-middle and middle income groups

46.  Some of the builders that I visited have now gone on to make
apartment sizes much larger than the ones prevalent for that particular
segment. E.g. A normal 3 BHK should be between 1500-1700 sq. ft.
RNA Builders are now coming up with areas like 2400 and 2800 sq. ft.
These flats are brought over by a lot of investors
 Builders too are looking forward to developing compact houses with
reduced space. For e.g. 3 BHK usually having 1500 to 1800 sq. ft are
reducing their floor size to 1000 and 1200 sq. ft. catering majorly to the
people with limited budget and higher requirement
 Concept of satellite cities like Amby valley and Lavasa too is
experiencing a boom. Urban crowd are slowly moving from cities like
Delhi to Gurgaon and Noida. This trend can also be seen in Mumbai in
the past decade.

47. NEED
GAPS

48. Medical Travelers
 India has over 5 lakh patients travelling every year for
medical purpose
 People from abroad travel to India for
 Orthopedic surgeries like hip/knee replacement
 Birmingham hip resurfacing
 Cardiac surgeries like cardiac bypass
 Valve replacement
 Pediatric heart surgeries for congenital heart disease

49. Prevalent Long term illnesses
 Cancer – GIT(Gastro Intestinal Track)
 Cancer – Hepatocellular Carcinoma
 Bone Marrow Transplant( Leukemia, Hodgkin's)
 Brain Cancer
 Pancreatic Cancer
 Terminal Stage of HIV( Full Blown AIDS)
 IVS( In vitro fertilization)

50. Top Hospitals In Mumbai
 Tata Memorial
 Jaslok Hospital
 Hinduja Hospital
 Amla Cancer Hospital
 KEM
 Fortis
 Bombay Hospital
 Leelawati
 Breach Candy
 Wockhard
 Asian Heart Institute

51. Proposal for Medical Tourism
 Setting up of medical service apartments
 These service apartments should be within the boundaries of the city
because of our capacity to charge more
 Other business facilities like internet service, fax should be made to
encourage them to stay with us
 Tie-Ups with the above mentioned hotels for this purpose should be a
good idea
 Tie-Ups with people who are involved in medical tourism

52.  Recommend to construct and set up apartments in the vicinity of the
city dedicated specially to cancer patients or long-term residential
patients termed as ‘Medical Service Apartments’
 24 Hour Ambulance service in case of any Mishap
 Modern Pathology Laboratory to be set up for time to time examination
 Tie-Ups with Hospitals for the marketing of these Apartments

53. SATELLITE CITIES
 Development of satellite cities unlike Amby valley and
Lavasa catering to the need of the lower-middle and middle
age group.
 Basic Requirement of this particular segment being
affordable houses with basic amenities and safety.

54. SEGMENTATION
MATRIX