1. Indian Real Estate IndustryIndian Real Estate Industry
Present….Present….
Future…..Future…..
OpportunitiesOpportunities
Summary Report
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2. Indian Real EstateIndian Real Estate
 India Real Estate Investment is a significant feature of the Indian realty
market under the initiation of the investors and developers, leading to
future real estate development in India. The development of private
ownership of property real estate in India has become a major area of
business with India Real Estate Investment playing the vital role. India Real
Estate Investment involves minimum risk for getting maximum return.
 India Real Estate Investment has rising demand in every sector like
commercial, residential, retail, industrial and hospitality. But maximum
demand is observed in the booming IT sector. The India Real Estate
Investment is facilitated by the liberal economic policies of the
government.
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3. Real EstateReal Estate
Current Scenario
Opportunities
Funding
Banks, NBFC, HNI, REITS, CMBS, LRD,
NCD & LC
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4. Current ScenarioCurrent Scenario
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5. Factors favoringFactors favoring
 Factors Favoring India Real Estate Investment:
1.Increasing growth in residential properties due to lower interest
rates, easy availability of housing finance, rising income, better job
prospects and increase of nuclear families.
2.Growth of retail market in India due to increasing demand from
retailers, higher disposable incomes and opening up of FDI in Retail.
3.Burgeoning IT and ITES industry
4.Growing commercial property market
5.Emerging hospitality or hotel industry due to the exceptional boom
in inbound tourism and the IT sector
6.Development of the special economic zones
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6. Government RoleGovernment Role
Role of Government in India Real Estate
Investment:
The Indian government has been playing a proactive role in the
India Real Estate Investment and thereby promoting investors
to invest in Indian real estate market. The different laws governing
real estate are -
1.Indian Transfer of Property Act
2.Indian Registration Act, 1908
3.Indian Urban Land (Ceiling And Regulation) Act, 1976
4.Stamp Duty
5.Rent Control Acts
6.Property Tax
7.Foreign Exchange Regulation Act, 1973
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7. Foreign RoleForeign Role
Foreign Role in India Real Estate Investment:
The liberal government policies have facilitated the expansion of the
foreign involvement in the India Real Estate Investment sector. At
present, the non-resident Indians have played a very important role in
transforming the Indian real estate market. Some of the important foreign
investors in the Indian real estate market are like-
 Emmar Properties
 Laing O'Rourke (LOR)
 Morgan-Stanley Real Estate
 Vancouver-based Royal Indian Raj International Corporation (RIRIC)
 Indonesia-based Siputra Selim group
 US-based Warburg Pincus
 Blackstone Group
 Broadstreet
 Columbia Endowment Fund
 California Public Employees' Retirement System (CalPERS)
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8. InvestorsInvestors
 India Real Estate Investors:
There are Indian institutions like HDFC, ICICI Venture and Kotak
Mahindra launching funds to invest in real estate market in India.
Indian Real Estate Investment Trust:
The Indian Real Estate Investment Trust will play significant role in the
investment in real estate helping the individual investors to own a
share of the profiting real estate market.
Currently in the Real Estate Investment World India there has been an
interactive discussion on the dynamic growth of the growing India real
estate market and the strong growth opportunities in rising sectors like
financial services, pharmaceuticals, telecommunications, and
biotechnology will further enhance the scope for India Real Estate
Investment.
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9. Real Estate Updates- 2014Real Estate Updates- 2014
 NDA government has decided a slew of measures to give a boost to the real
estate sector, including an allocation of Rs 7,060 crore for the development of
100 smart cities, a reduction in the size of projects eligible for FDI from 50,000
sq metres to 20,000 sqm and halving the minimum investment limit for FDI to
$5 million. Budget for developing 100 smart cities, redeveloping satellite towns
of major cities as well as other smaller cities. It also brought down the
minimum capital requirement to USD 5 million from USD 10 million.
 In case of development of serviced plots, the condition of minimum land of 10
hectares has been completely removed. NDA government has also decided Rs
4,000 crore to affordable housing for the urban poor through the National
Housing Bank (NHB) and plans to extend incentives for housing loans. Slum
development has been made part of corporate CSR activities.
 Foreign investors to exit on project completion or 3 years from the date of
final investment subject to the development of trunk infrastructure.
 Setting up of an institution called 3P India with a corpus of Rs. 500 crore same
will help in mainstreaming public-private partnerships (PPPs) in the sector.
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10. OpportunityOpportunity
Affordable Housing
High Street in Tier II & III cities
(Including Fun, Shopping, Entertainment and Food Zone)
Offshore Construction
Lease
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11. Affordable HousingAffordable Housing
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12. Affordable housingAffordable housing
 Affordable housing can be defined using three key parameters viz.
income level, size of dwelling unit and affordability. While the first two
parameters are independent of each other, the third parameter is
correlated income. Housing costs here include taxes and insurance for
owners, and utility costs. If the monthly carrying costs of a home
exceed 30–35 percent of household income, the housing is considered
2 unaffordable for that household.
EWS
LIG
MIG
< INR 1.5 Lacs per
annum
Up to 300 Sq.ft. EMI to Monthly Income
• 30 to 40 Percent
House Price to Annual
Income Rati
• Less than 5.1 (Deepak
Parekh Force)
1 Income Level1 Income Level
2 Size of Dwelling
Unit
2 Size of Dwelling
Unit
3 Affordability3 Affordability
INR 1.5 to 3 Lacs
per annum
INR 3 to 10 Lacs
per annum
300 to 600 Sq.ft.
600 to 1200 Sq.ft.
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13.  Is affordable housing and low-cost housing the same?
Affordable and low-cost housing are often interchangeably used, but are quite
different from each other. Low-cost housing is generally meant for EWS category
and comprises bare minimum housing facilities while affordable housing is mostly
meant for LIG and MIG and includes basic amenities like schools, hospitals and
other community facilities and services.
Affordable housingAffordable housing
Parameters Low-Cost Housing Affordable Housing
Amenities Bare minimum to none Basic
Target Income Class EWS & LIG LIG & MIG
Size of Dwelling Unit <=300 Sq. Ft. 300-1200 Sq. Ft.
Location Generally which city but can also be located on
city peripheries due to high cost of land
Within City
Project Developer Mostly Government agencies Private Developers and
Government
Most available source of finance Micro finance institutions Traditional banking system
EMI to Monthly Income Not exceeding 30 percent of gross monthly
income
Not exceeding 40 percent of
gross monthly income
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14. Role of PPP in Affordable HousingRole of PPP in Affordable Housing
Land Availability & Cost
Construction & Other Costs
Connectivity & Infrastructure
Credit delivery & Risk
Others
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15. Effective use of available Government land
 Land parcels currently in possession can be used for development, thereby reducing the cost of
land
 Government can enter into joint ventures with developers with land as equity
Land Banking
 Purchase of large strips by State Governments / Agencies
 Distribution of land to private developers through a transparent process
FSI
 Relaxation of FSI norms to reduce per flat land cost
 FSI is an effective tool to provide a cashless subsidy to builders
Cross Subsidization
 Joint development of MIG, LIG and EWS flats – MIG to subsidize others
 Built-up space covering LIG and EWS to be sold / rented by Government agency; developer can be
allowed to sell MIG flats at market rates
Redevelopment / Rehabilitation
 Increasing availability of prime land by redevelopment / rehabilitation
Role of PPP in Affordable HousingRole of PPP in Affordable Housing
• Land Availability & Cost
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16. Single window approval for projects
 Delays incurred in project approvals result in substantial cost overruns.
 A single window will help reduce delays and contain costs
 Reduction in approval related costs
Subsidizing construction costs
 Reduction / exemption / deferment of taxes and duties on construction
materials
 Subsidy to developers for R&D in new low cost materials and technologies
 Subsidy to developer in view of employment generated
 Lower cost of borrowing for development of affordable housing projects - can
be achieved if Government
 agencies have a participatory interest in the project and guarantee the loans
Sales Tax and Stamp Duty
 Exemption from sales tax and reduction in stamp duty
• Construction & Other Costs
Role of PPP in Affordable HousingRole of PPP in Affordable Housing
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17. Development of urban infrastructure
 PPP projects for accelerated urban infrastructure
 Metro rail, Inter-city highways, Mono rail
 Increase budgetary focus on urban infrastructure
 Increase support to State Governments to engage in PPP projects
Integrated Townships
 Joint developers with private players
 Development of infrastructure and residential space
 Planned expansion of city limits
Development of Satellite Towns
 Upfront infrastructure development around major cities a pre-requisite for planned
development of
 satellite towns
 Mumbai and NCR have successfully developed satellite towns, which other cities can
emulate
Role of PPP in Affordable HousingRole of PPP in Affordable Housing
• Connectivity & Infrastructure
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18. Access to lower cost of capital
 Relaxation of ECB norms for housing companies
 Increase in income tax ceiling on housing loans will reduce
post tax cost of capital for borrowed
 Increase support to State Governments to engage in PPP
projects
Housing as a priority sector
Increase current limits on interest subsidies from INR 2 million
to INR 4 million
Role of PPP in Affordable HousingRole of PPP in Affordable Housing
• Credit delivery & Risk
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19. Profitability of developers and housing finance companies
80 IB benefits for all approved affordable housing projects and
developers.
Extension of 80 IB benefits for housing finance companies lending to
LIG and EWS lenders.
Special focus on EWS segment
Significantly higher Government involvement and subsidiaries are
required to provide equitable housing for EWS segment.
Innovative cross-subsidization schemes, extensive subsidies and suitable
credit delivery mechanisms needed to address the specific challenges of
EWS segment.
Role of PPP in Affordable HousingRole of PPP in Affordable Housing
• Others
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20. High Street- Tier II & IIIHigh Street- Tier II & III
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21. High Street in Tier II & III CitiesHigh Street in Tier II & III Cities
(Including Fun, Shopping, Entertainment and Food Zone)(Including Fun, Shopping, Entertainment and Food Zone)
 Ideal Location: Tier II & Tier III cities,
◦ Population: 2-5Lacs
◦ Identified location should be In the vicinity of population
◦ Within 5 kms of the City periphery, and/ or within city premises
◦ Preferably on the link road (highway connectivity) of two/ three towns/
cities
◦ Preferable location - A destination for Religious Tourism, and/ or Medical
set ups, and/ or Educational set ups, and/ or Industrial set up.
 Land Cost: Max. 50 Lacs per acre
 Land Parcel : 5 - 7 Acres
 Total development: 1.75Lacsq.ft. - 2 Lac sq. ft.
 Land Use: Mix Use Development
 Architecture: Horizontal Structure, with lots of Greens, and open parking
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22. UEPs-UEPs- Unique Emotional PropositionUnique Emotional Proposition
◦ Multiplex
 2-3 screen Multiplex of 100-150 seats
 50 seater 3-D to 7-D Screen
◦ Theme Park/ Entertainment Zone
 Kid’s Gaming Zone/ Rides
 Water Park
◦ Food Court
 Kiosks serving a mix of World Cuisines
 Fine Dining/ Lounge
◦ Hotel
 Should project ‘MICE’ concept
 Approx. 40 Room Budget Hotel
 Marriage/ Party Lawn
◦ Nursing Home
◦ Festivals of India
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23. Offshore ProjectOffshore Project
23

24. Offshore ProjectOffshore Project
China- Housing, Resort & Commercial
Malaysia- Housing, Resort & Commercial
Thailand - Housing, Resort & Commercial
India- Housing, Resort & Commercial
South Africa-Housing & Commercial
UAE- Housing & Commercial
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25. ComparisonComparison
Building Type Beijing,
China
Kuala
Lumpur,
Malaysia
Mumbai,
India
Bangkok,
Thailand
Jo’burg,
South
Africa
Residential
Average Multi Unit- High Rise 685 515 415 875 840
Luxury Unit- High Rise 1050 1165 550 1225 1460
Individual Prestige Houses 810 1045 650 1010 1470
Commercial/Retail
Average Standard Offices-
High Rise
975 825 495 790 1100
Prestige Office- High Rise 1300 1210 590 1035 1420
Major Shopping Center 1080 995 550 985 1100
Industrial
Light Duty Factory N/A 480 435 630 380
Heavy Duty Factory N/A 570 670 N/A 530
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26. ComparisonComparison
Building Type Beijing,
China
Kuala
Lumpur,
Malaysia
Mumbai,
India
Bangkok,
Thailand
Jo’burg,
South
Africa
Hotel(Including FF&E)
3 Star/Budget 1205 1625 1580 1410 1690
5 Star/Luxury 1950 2485 2760 1980 2230
Resort Style N/A 1760 1480 2345 2670
OTHER
Multi Storey Car Park N/A 310 215 370 410
District Hospital N/A 1080 690 N/A 1110
Primary & Secondary School N/A 320 530 N/A 760
Exchange Rates CNY RM INR THB ZAR
USD $ 1 6.46 3.14 54.58 31.58 8.93
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27. ComparisonComparison
Building Type Beirut,
Lebanon
Riyadh,
KSA
Doha,
Qatar
Manama,
Bahrain
Muscat,
Oman
Abu
Dhabi,
UAE
Residential
Average Multi Unit- High Rise 1200 1500 1500 1300 N/A 1360
Luxury Unit- High Rise 1700 1800 2100 1600 N/A 1700
Individual Prestige Houses 2100 1600 1900 1700 1690 1250
Commercial/Retail
Average Standard Offices-
High Rise
1250 1500 1800 1170 N/A 1500
Prestige Office- High Rise 1600 2000 2050 1280 N/A 1770
Major Shopping Center 1300 1300 1250 1230 1300 1350
Industrial
Light Duty Factory 750 1700 2050 1800 1820 1900
Heavy Duty Factory 1000 900 1100 700 910 890
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28. ComparisonComparison
Building Type Beirut,
Lebanon
Riyadh,
KSA
Doha,
Qatar
Manama,
Bahrain
Muscat,
Oman
Abu
Dhabi,
UAE
Hotel(Including FF&E)
3 Star/Budget 1700 1700 2050 1800 1820 1900
5 Star/Luxury 3000 2650 3350 2620 2925 2800
Resort Style N/A 3200 3750 3200 2665 3400
OTHER
Multi Storey Car Park 600 600 760 620 650 820
District Hospital 2700 2000 3590 2450 2340 3158
Primary & Secondary School N/A 1100 1250 1510 1235 1430
Exchange Rates LBP SAR QAR BHD OMR AED
USD $ 1 1.507 3.75 3.64 .37 .38 3.67
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29. Funding OptionsFunding Options
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30. 30
• Banks,
• NBFC,
• HNI,
• CMBS,
• REITS,
• LRD,
• NCD & LC
Funding OptionsFunding Options

31. CMBS TransactionsCMBS Transactions
 What are Commercial Mortgage Backed Securities (CMBS)?
 CMBS are debt securities using commercial assets as collaterals
 Incomes generated from the property assets are used to service debt
obligations
 CMBS structures have no or limited amortisation during the tenure
thus relying on full/partial refinancing
 Rating is enhanced using the structural features such as maintenance
of DSRA, pledge of shares, cushion between indicative and final legal
maturity, etc
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32. Structure of CMBSStructure of CMBS
32

33. Real Estate Investment TrustReal Estate Investment Trust
Vehicle for owning and operating income producing real
estate assets
Structured like a Mutual Fund
Utilises pooled capital to deploy across real assets
Portfolio includes commercial office space, shopping
malls, warehouses and mortgages
Established market participant in the developed
economies
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34. Salient Points of SEBI (REIT) Regulations 12Salient Points of SEBI (REIT) Regulations 12
Sponsors Raising Funds InvestmentsSponsors Raising Funds Investments
Sponsors:
–Maximum three sponsors collectively holding minimum of 25% of the
REIT units for first three years and 15% thereafter
–Minimum of five years of experience in real estate industry on an
individual basis
–Minimum net worth of Rs. 20 crore on a consolidated basis
Raising Funds:
–Initial fund raising through an initial offer, thereafter through follow-on
offer, rights issue, QIP
–Minimum initial offer size of Rs. 250 crore with at-least 25% public float
–Minimum value of REIT assets of Rs. 500 crore
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35. Salient Points of SEBI (REIT) Regulations 12Salient Points of SEBI (REIT) Regulations 12
Sponsors Raising Funds InvestmentsSponsors Raising Funds Investments
Investments:
–Minimum 80% in completed and revenue generating properties
–Balance in other assets like developmental properties, MBS,
Debt/Equity of real estate entities, government securities & money
market instruments
–Maximum 10% in developmental properties
–Shall invest in at least 2 projects with not more than 60% of value of
assets invested in one project
Others:
–Minimum 90% of income to be distributed on a half yearly basis
–Assets to be valued on an annual basis with a six monthly update
–NAV to be declared at least twice in a year
–Borrowings and deferred payments at a consolidated level shall not
exceed 49%; in case borrowings exceed 25%, credit rating shall be
required
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36. Structure of a REITStructure of a REIT
36
Investors
(Minimum subscription size
of Rs. 2 Lakh)
REIT
Trustee
(Hold assets in the name
of the REIT)
Sponsor(s)
(Holds minimum 25%
units of REIT to start with
Real Estate Assets (SPVs/Properties)
(Minimum asset size of Rs. 500 crore;
80% of investment in operational
revenue generating assets)
Income
(Return/Dividend)
Pooled Capital
Minimum
commitment
Monitoring
Income
(Return/Dividend)
Capital
Income (Rental,
Capital Gains)

37. Lease Rental DiscountingLease Rental Discounting
37

38.  NCDs are fixed income debt instruments issued by a company wherein
a company agrees to pay a fixed rate of interest on your investment for
a specified period in order to raise money from market for business
purposes. As the name suggests, these debentures cannot be converted
into shares of issuing company unlike convertible debentures. Interest
on NCDs is paid at different time period like quarterly, semi-annually
or annually. They also have an option of cumulative interest in which
case interest is cumulated & paid on maturity
 An NCD can be secured or unsecured. Secured NCDs are backed by
the issuer company's assets to fulfill the debt obligation unlike
unsecured NCDs. The NCD issues are rated by credit rating agencies
like CRISIL, ICRA, FITCH, and CARE to ensure the company's ability to
service the debt on time & lower default risk.
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Non Convertible DebentureNon Convertible Debenture

39. What is a Debenture?What is a Debenture?
39
• A Debenture is a type of a debt instrument used for asset allocation
which helps diversification of your portfolio
TType Of Debentures?Debentures?
• Convertible Debenture Convertible debentures are unsecured bonds
that can be converted to company equity or stock.
•Non-convertible Debentures (NCD) Nonconvertible debentures are
unsecured bonds that cannot be converted to company equity or stock.

40.  Client profile to be prepared for being in International Trade
 Owner of the Property (Converted land) to be inducted as partner/director in the firm/
company
 Recognised International trade consultant to be appointed by the firm/ company to be as
consultant
 The complete profile to be given to the bankers for processing of limits.
 Bankers would sanction limits to the tune of 80 to 85 percent and rest to be arranged as
Cash margin
 On approval of limits, the company/ firm will get the LC usance issued in favour of the
exporter identified by us.
 On issuing of LC usance, goods will be exported from foreign destination to the firm/
company in India. The firm/ company in India would in turn sell the same to a pre-
identified customer in India on immediate cash basis (High Sea Sale).
 At the end of 180 days, another LC would be opened, issued and payment received in
cash and would be used to settle the first LC. All pre-agreed cost i.e. Financing charges
will have to be paid to the respective parties (i.e. Exporter, bankers etc) by the client.
This would be rolled over every 6 months till the time the client wishes and wants to
make use of the money. Once the client is in a position to return the principal, the same
would be paid to the bank and property released.
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Letter of CreditLetter of Credit

41.  Payment of financing charges at half yearly intervals
 No principal repayment till the tenure of roll over
 All cost like LC discounting charges, Bank charges and exporters
margin amounting to less than 13 percent per annum
 Funding against converted land being a non bankable asset, can be used
to raise the funds through this model.
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Letter of CreditLetter of Credit