Slide 1

Indian Real Estate Sector

BY:-PRIYAM GUPTAPRIYANKA CHATTERJEE PRIYANSHA YADAVPULKIT KHURANAPUNEET SARAN ContentsIntroductionReal estate classificationPie ChartDistributionStakeholdersEnd UsersLaws and RegulationsKey PlayersLeading CompaniesRecessionBest PracticesEmerging TrendsUnethical PracticesFuture Prospects

IntroductionThe 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.In India the real estate sector is a major employment driver, being the second largest employer next to agriculture.About 250 ancillary industries such as cement, brick, steel, timber, building materials etc. are dependent on the real estate industry.

Distribution chainPortals like 99acres.com, Magicbricks.com, Indiaproperty.comProperty exhibitionsNewspaper adsProperty magazinesLeafletsAgents, brokersLeaseholdersGovernment allotments( MHADA, Tata Housing)Neighbors, friends, colleagues Word of mouthAuctionsBanksInvestment Banks

StakeholdersConstructing companiesDevelopersEngineersTechniciansDesign consultantsLandlordsForemenClerical staffSkilled workersUnskilled workersBanksInsurance companiesTenantsSuppliers of material( Electrical, Material, etc.)BuyersGovernmentLicensing/ Registration offices( e.g. BMC)

Laws Governing Real Estate Market In IndiaIndian Transfer of Property ActIndian Registration Act, 1908Indian Urban Land (Ceiling And Regulation) Act, 1976Rent Control ActsThe Town & Country Planning Actshttp://www.indialawoffices.com/pdf/realestate.pdfRegulations from Primary surveyUnder the Income tax Act:

Valuation of the property is done as per three values:Fair ValuationMunicipal ValuationMarket 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.

(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 valueKey PlayersDLF Ltd- track record of 64 years, DLF is Indias largest real estate company in terms of revenues, earnings, market capitalization and developable area Only listed real estate Company included in the BSE Sensex, NSE Nifty, MSCI India Index and MSCI Emerging Markets Asia Index.

UNITECH- Established in 1972, Unitech is Indias leading real estate developer in IndiaKey Players contdAnsal API-Established in 1967 as a family business, Ansal API today is clearly amongst the real estate leaders of India.Ansal API has till date, developed and delivered more than 190 million sq ft

Parsvnath Developers Ltd - First real estate Company to have integrated with ISO 9001, 14001 and OHSAS 18001.

Indias leading Real Estate Companies(as per Total Income)Sr. NoCompany NameTotal Inco01me( Rs. Cr)1DLF Limited3220.432National Buildings Construction Corporation Limited2947.733DLF Home Developers Limited2469.784Unitech Limited2221.715Housing Development and Infrastructure Limited1599.586Ahluwalia Contracts (India) Limited1573.437DLF Retail Developers Limited1501.898True Value Homes(l) Private Limited1400.009Emaar MGF Land Limited1172.3510Sobha Developers Limited1119.28Source : Indias leading Real Estate Companies 2010ChallengesLand 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

High capital inflowsHigh construction activityHigh occupancy ratesHigh property pricesRelaxes credit norms

Capital outflowsDeclining pricesLending curbsLow consumptionHigh vacanciesBoomRecession

Increasing vacancySlowing downConstruction growthProperty price starting to fallRecoveryFalling vacancy rateIncreasing construction activityBest Practices

Clearances from district Administration, Municipal Corporation, Pollution Control Board, Electricity Board, etc. should be exchanged with the prospective buyer before entering into the deal.not violate government regulations on provisions of building height, parking space, basement, floor area, emergency exit, etc. Maintain the quality of construction as promised. title of the sale deed must be clear and legally valid, from both ends government's white paper has suggested introduction of tax deduction at source (TDS) on sale-purchase of properties.Emerging TrendsFuture Cities : A PerspectiveRegulatory Environment: the changing dynamicsManaging risks for a long term sustainibilityTechnology: the game changerSmart homes: intelligent buildingsPre- fabrication: the fast catching trendGreen practices: an option and a necessity

Unethical PracticesWhite Paper on Black Moneyblack money rolling percentage is around 30%NEW GOLD RUSH - almost 300% appreciation of investment across all major markets in the countrylack of stringent laws and a regulator for the sector, made it a haven for parking unaccounted money

Unethical Practices contd.The GRAVY TRAINThe landlordContractors, SuppliersLocal politiciansGovernment officials

Enter The BUYER cash vs. cheque in paymentFuture ProspectsIt is one of the fastest growing sectors of the Indian economy and contributes about 5 per cent to India's gross domestic product (GDP)India has huge potential to attract large foreign investments into real estate doe to its strong economic fundamentals and demographic factorsInvestments in Indian real estate will fetch higher returns for investors as compared to other global markets

Demand for residential space is expected to grow at a CAGR of 19% between 2010 and 2014 - Tier 1 metropolitan cities are expected to account for about 40% of this.The top three cities - Mumbai, the NCR and Bengaluru account for 46 per cent of total demand for office space in India.