You are on page 1of 55

INTRODUCTION OF REAL ESTATE SECTOR

India has experienced near-double-digit growth in the last several


years and stories of the Indian economic juggernaut fill newspapers and
bookstores. The commercial real estate market is no exception. The IT
boom has created a huge demand for quality office space that was
nonexistent a few short years ago. Several prominent Indian developers
have emerged, and more and more international investors and
developers are plunging into the country.

As with any local or regional market, there are many idiosyncrasies


that colour the business environment, and India is no exception. Below
is an introduction into the current conditions within the Indian real estate
market and what the future may hold as India quickly becomes a global
superpower.

1
Marco-economic Overview

The Indian economy currently stands among the world's fourth


largest growing economy in terms of purchasing power parity and holds
the distinction of being a key contributor to Asia's balance of payment
surplus. India's GDP is estimated to be the third largest in the world by
2020. India is also considered the second most attractive country in the
world for Foreign Direct Investment (FDI). Forex Reserves (excluding
gold and SDRs) stood at US$157.25 billion at the end of July 2006. India
now holds the fifth largest stock of reserves among the emerging market
economies and the sixth largest in the world.

2
The performance of the country has been consistent and steady
over the past three years with an average annual growth rate of 8%. The
growth trend is being led by positive movements across sectors in
agriculture, manufacturing and services.

In recent years, the broad based growth in services sector has


been a principle driver of the GDP growth. Business services (including
Information Technology (IT) and IT Enabled Services), communication
services, financial services, hotels and restaurants and trade
(distribution) services are among the fastest growing service sectors.
India’s share in the world market for IT software and services (including
BPO) increased from around 1.7% in 2003-04 to 2.3% in 2004-05 and
an estimated 2.8% in 2005-06.

3
The proportion of manufacturing in the GDP has remained stable
at around 25%, however, the growth rate of manufacturing has
increased over years, from 2.7% in 2001 to 9.0% in 2006 against the
growth rate of 2.3 % and 9.8% in agriculture and services respectively.
Manufacturing Industries like textiles, automobiles, cement, steel,
petrochemicals,

Infrastructure (civil aviation, roads, and ports), electronics,


beverages and tobacco products have been the prime drivers in India’s
Industrial growth.

4
REAL ESTATE SCENARIO IN INDIA

The size of the Indian real estate market is estimated at USD 12


billion and it is currently growing at rate of about 30% annually. Real
estate lending by banks has increased by 3.78 times in the last two
years, forming 18% of the total bank credit. Strong and improved
economic growth, proactive policy initiatives like relaxation of FDI in
construction and availability of finance (institutional and retail) has driven
the demand for real estate across all sectors - Commercial, Residential,
Retail and Hospitality. Also, there is an increased focus towards
development of Special Economic Zones (SEZ) in India.

5
The last few years have seen Indian market mature through
regulatory reforms (rationalization of stamp duties, reform of urban land
ceilings), improving products in terms of quality and technology,
changing tenant profile (MNCs, and respect for tenancy laws), and
improving management and maintenance models (enhanced product
life-cycles and sustained project / real estate yields). Although the initial
real estate boom was concentrated in places like Bangalore and the
National Capital Region of Delhi (including Gurgaon), more recently the
geographical spread has widened. There has been a significant shift in
real estate market from metros to its suburbs and to tier II and tier III
cities. Lease rentals and occupancies have been picking up steadily and
there is an increasing demand for quality infrastructure across various
segments of the real estate sector.

6
Commercial Real Estate

The demand for new office space in India has grown from an
estimated 3.9 million sq. ft in 1998 to over 16 million sq. ft in 2004-05.
70% of the demand for office space in India is driven by over 7,000
Indian IT and ITES firms and 15% by financial service providers and the
pharmaceutical sector. Cumulative demand for office space in India over
the next two years (2006-08) is estimated to be in excess of 45 million
sq. ft. The Indian IT-ITES Industry, estimated at USD 36.3 billion in 2006
has grown at a CAGR of 36% over the last decade and by 2008, is
expected to account for over 7% of India’s GDP and 30% of foreign
exchange inflows. In 2005 alone, IT/ITES sector absorbed a total of
approx 30 million sq. ft and is estimated to generate a demand of 150
million sq. ft. of space across major cities by 2010. South Indian cities
like Bangalore, Chennai and Hyderabad along with NCR (National
Capital Region) continue to attract the major share of IT/ITES and
business investment. However, secondary cities, like Pune, Chandigarh,
Indore, Kochi and Kolkata are now emerging as the new preferred
destinations for these companies due to their cost and infrastructure
advantages.

7
8
Residential Real Estate

The residential property market in India constitutes almost 75% of


the real estate market in terms of value. Low per capita housing stock,
rising disposable income coupled with easy availability of finance from
the housing finance companies and banks are driving demand in this
sector. Also, Average age of housing loan borrowers have decreased to
30- 35 years from 40- 45 years a few years ago, indicating a younger
buying threshold. The housing sector is currently growing at 30-35% per
annum. A proportion of demand is also being driven from investors who
view housing as an attractive investment option as compared to mutual
funds and stocks. The demand for housing is geographically widespread
with townships being built in both the metros and the tier II and III cities.
In India, there is a housing shortage of 19.4 million units out of which 6.7
million are in urban areas alone. This translates into very high
opportunities for investors in the residential sector.

9
Retail Real Estate

The Retail industry in India continues to be dominated by individual


small format stores with floor space of less than 500 sq.ft. Total number
of retail outlets is estimated to be around 12 -15 million, indicating a
retail density of 12-14 outlets per 1,000 people, which is one of the
highest in the world. The retail sector in India is currently estimated at
USD 230 billion. The current size of the organized retail activity is USD 7
billion, which is a mere 3% of the total retail market. The retail sector is
witnessing a growth of 5-7% per annum; however the organized retail is
poised to grow at a rate of 25% - 30% per annum and is expected to be
worth over USD 30 billion by the year 2010, thereby increasing the share
of organized retail activity from the current level of 3% to 15% in the
coming decade.

10
Hospitality Real Estate

Hospitality industry in India is growing at an annual rate of over


8%. The number of foreign tourists’ arrivals (a major driver of hospitality
industry) in the country increased to approx. 4 million in 2005. Over 55%
of the total demand for hotels in the country is generated by foreign
leisure tourists and business travellers (domestic and foreign). A large
proportion of lodging demand in commercial cities such as Bangalore,
Mumbai, Delhi etc. comes from business travellers.

This category also accounts for the major proportion of demand for
five star or five star deluxe hotels. However, against the total current
supply of 96,000 rooms, five star category accounts for just a quarter of
the supply. With the expected growth in demand for rooms at 18%,
another 65,000 – 80,000 hotel rooms will be needed till 2010. This
demand – supply gap is expected to result in high level of activity in
construction of hotels. The established brands in this sector such as
Asian Hotels, Indian Hotels, ITC, Le Meridian etc are in expansion mode
with many new players such as Accor Group, Marriot, Choice, IHG
Group keen to establish their footprint.

11
Special Economic Zones

The upcoming realty trend in India after multiplexes and mega


housing projects are the Special Economic Zones (SEZ). Currently, 28
SEZs are operational in the country, including those converted from
Export Processing Zones (EPZ) to SEZ. Approx. 189 proposals have
already been granted approval since the SEZ Act, 2005 came into force.
These include SEZs in various segments such as multi-product,
Information Technology, Bio-technology, Gems and Jewellery, Textiles
and technology intensive industries. Both developers and corporate
have shown tremendous interest in developing SEZs in the country.
Reliance Industries, for instance, is planning a 25,000 acre SEZ in
Gurgaon and is also the main partner in twin SEZs coming up at Navi
Mumbai and Maha Mumbai, with a combined size of 35,000 acres.

The Adani group is also setting up an SEZ at Mundra, covering


30,000-35,000 acres, and it proposes to invest Rs 7,300 crore on
infrastructure. Other corporate who are in process of setting up SEZs
include TCG Refineries of the Chatterjee Group (SEZ refinery at Haldia
in West Bengal), Suzlon Infrastructure (hi-tech engineering products and
services near Coimbatore in Tamil Nadu, Udupi in Karnataka and
Vadodara in Gujarat), Hindalco (aluminium SEZ at Sambalpur in Orissa),
Genpact (IT SEZ at Bhubaneshwar in Orissa, Jaipur in Rajasthan and
Bhopal in Madhya Pradesh), Vedanta Alumina (aluminium SEZ at
Orissa). Seeking the permission for SEZs are also a number of real
estate developers, including DLF, Ansals, Omaxe, Parsvnath, Shipra
Estate and Sunny Vista Realtors.

12
FDI in Real Estate

With the opening of the sector for 100% FDI under automatic route, the
real estate sector is estimated to capture about 18-20% of the total FDI
coming to India in 2005-06. The FDI in Real

Estate is expected to have a favourable multiplier effect on the economy.


As an indicator, for every rupee spent on construction, an estimated 75-
80% gets added to the GDP. The spill-over effect of

this initiative can also be witnessed in important sectors like the cement
and construction industries, where the key players are expanding
capacity to meet the soaring demand.

With the relaxation of the FDI limit, the country saw an influx of global
real estate developers like Dubai-based Emaar Properties (the largest
listed real estate developer in the world) – which enetered

India in a joint venture with Delhi based MGF Developments.

Growth and leverage to higher India growth

The real estate sector is developing rapidly in India. The demand side
has robust and sustainable macro drivers across all segments.

13
Residential:

Accounting for more than 70% of the sector in terms of space,


residential segment growth is driven by urbanization and the migration of
households up the income curve. According to the National Council of
Applied Economic Research estimates, the number of urban households
earning more than INR 500,000 (about US$12,000) should more than
double to 7.6m in 2006-10.

Commercial:

Rapid growth in IT/ITES services (manpower in the sector has doubled


in the past three years

to 1.6m) is the main driver of Grade A commercial office space demand.


Jones Lang LaSalle,

a property consultancy, estimates that the absorption of office space in


the top seven cities in

India was 31.1m square feet in 2006.

Retail:

According to CRIS INFAC, the penetration of organized retail into the


overall market will increase from 3.5% in 2005 to 8% in 2010, thereby
driving the demand for mall space.

Hospitality:

According to CRISIL, the number of 5-star rooms is expected to grow by


60% in the next four years with foreign tourist arrivals growing at 10%
CAGR.

14
Structure Of Real Estate

The real estate industry has historically been fragmented and


opaque, but this is changing:

Penetration of mortgage finance:

Mortgage disbursals grew by 38% in FY2001-06 and have become


an integral part of the buying process. This has helped reduce the
unaccounted “cash component” of transactions.

Entry of foreign capital:

Regulations governing foreign capital in the sector have been


relaxed, motivating developers to become transparent and improve
corporate governance.

Change in legislation:

In many states, strict laws like the Urban Land Ceiling Act (which
defines ceiling of land holdings in urban areas) have been repealed or
modified.

Consumer preferences:

Consumers are now willing to pay premium prices for better


amenities and a good brand. In response, most of the bigger developers
are scaling up geographically, which necessitates rigorous systems and
processes.

15
MUMBAI REAL ESTATE
Mumbai is no way behind when it comes to a talk on property. The
Mumbai real estate is in its growth orbit and attracts investors from major
multinationals in the recent times. Such is the potential of the city's
infrastructure that it is known to be spearheading most cities as far as
property market is concerned. With Mumbai serving as the entertainment
city, even the organized retail sector here is fast flourishing.

Purchasing real estate in Mumbai requires a significant


investment, and each piece of land in the city has unique features, so
the property market in Mumbai has evolved into several different fields.

Having the potential to leverage high returns, a large number of


real estate projects are financed everyday in Mumbai. NRIs can shop for
property in the city with the expectation of attaining an investment good,
or with the purpose of utilizing it as a consumption good, or both.

Mumbai is also the fashion capital of India, so it is one of the


foremost cities to be hit by the retail buzz. With the opening up of the
retail market, there has been a growing demand for retail properties in
Mumbai. This has created a viable market for mall space and other retail
stores and showrooms. These retail stores and malls are either owned
by a business group or leased for hefty prices as the demand is high.

16
The property prices as well as the increase in rental values in
Mumbai owe much of its credit to the large scale investments in the
commercial sector. Mumbai has always been the hot favorite for most of
the corporate sector to have their headquarters in the city. And with
increasing investments by MNCs in the IT, ITES and the BPO sector,
there has been a growing demand for office space; which have
consequently created an imbalance in demand and supply for residential
properties. The rental values in Mumbai have also in high corresponding
to that in other metros.

17
Navi Mumbai- Emerging Commercial Hub

Even India’s leading conglomerates have taken up commercial


space here. The state administration has already shifted wholesale
commodity markets to Navi Mumbai. So, you have endorsements from
different segments that Navi Mumbai’s commercial real estate is much
sought after,” he says. Suresh Haware, MD, Haware Builders concurs.

“Even at the ‘nano’ end of the commercial real estate spectrum,


demand is high,” he says. It is the small offices and shops’ segment that
have witnessed the highest demand at Haware Builders’ commercial
projects in Navi Mumbai, he reveals.

Today, industrial units in Navi Mumbai are relocating to locations in


Raigadh district and commercial is the latest buzzword in Navi Mumbai’s
real estate scenario, says Vijay Gajra of the Gajra Group. “Commercial
options in Navi Mumbai span a huge price band. Growth of the
residential segment in Navi Mumbai, prior to that of the commercial
segment, actually works out in favour of the end-user today, as
manpower resources are easily available,” he points out. “Commercial
real estate in Navi Mumbai comes at competitive prices vis-à-vis other
options in the Mumbai metropolitan region (MMR), with the added
advantage of being located in a well-planned city,” adds Gajra.

IT/ ITeS SEZs and businesses that have anything to do with


rail/road transport and logistics or shipping, are proving to be the next
big segment in Navi Mumbai’s commercial spectrum, shares Mayur
Shah, honorary secretary, MCHI. Ramneek Bakshi, principal of global
property consultants, LJ Hooker, points out that MNCs view India within
the parameters of the ‘Brazil, Russia, India, China’ (BRIC) equation.

18
“When they look at India as a business entity, Mumbai takes prime
position. When they start looking out for space, Navi Mumbai, which
forms the third level of real estate pricing, is attractive for MNCs looking
to set up shop in the Mumbai region,” he explains. At the Norwegian
consulate in Mumbai, George Mathew, honorary consul general,
concurs, “If you look at real estate pricing trends in the MMR, Navi
Mumbai fits the bill on many counts. However, the clincher is the price
efficiency and developed infrastructure that Navi Mumbai provides,” he
concludes.

19
Appreciations
The hike in demand as well as supply and appreciation in capital
values are attracting good attention from overseas investors. The
Mumbai real estate has become a reflective of the high growth in Indian
property market. There has been an increase in real estate value across
micro markets in Mumbai as well.

Mumbai is looked upon as one of the most organized and


transparent property market in India. With cash components and
transactions shooting up in the last two years, the city has gained much
popularity among the investors, both domestic and international. The
investment market has been thriving with excellent returns going high
over the past few years. The real estate boom and an upsurge in
development activities in major parts of Mumbai have led to a rise in
investment prospects in commercial and residential sector.

Known locations like Bandra-Kurla Complex (BKC) and Lower


Parle have seen appreciations in commercial spaces falling under the
category of Grade A. The occupancy levels in other preferable locations
like Andheri West and Nirman Point also increased in the current year
and are believed to have marked the rise by 90-95%. Another mark
appreciation is in regard to commercial properties in Mumbai, and is
prevailing in the city's micro markets barring a few exceptions.

20
NRI Real Estate trends
Major property developers in Mumbai, underpinned by the
vastness, scope, success and scale of progress in the city are now
transforming developing properties into strong retail bases. Then of
course, the government permitting foreign direct investment (FDI) up to
51% in retail trade has also brought about major moves in retail industry.

The demand for property whether commercial or residential, is


very high in Mumbai. There has been steady demand for consecutive
years and has resulted in an increase in the yield rate. New real estate
projects in Mumbai are always in queue to be launched by private as
well as by government. This encouraged overseas investors especially
Non resident Indians (NRIs) to make significant investments in Mumbai
properties.

With an excellent accessibility across the globe, the city of dreams,


Mumbai has emerged as an ultimate destination for most people. As per
property surveys, one can sell any property and get a price which is fairly
good. Within the real estate industry, it is believed that such periods
come in cycles and bring an apt time to cash upon.

What makes real estate in Mumbai so exciting are an ongoing


demand and the proposed projects that are to be executed in
approaching years. Builders always have special offers and attractive
schemes in store for end consumers. Capital Values of quality
apartments, in well-maintained old buildings and upcoming projects, in
South and South Central Mumbai, have gone through the roof

21
Agency

Agency is that branch of the real estate business which engages


the attention of the greatest number of persons who are concerned with
the business, and in that respect it is of prime importance. It is divided
into two parts, brokerage and management.

A broker is a person who for compensation, usually proportioned


to the value of the subject-matter, brings about transactions between
principals.

Brokerage has two divisions according to the kinds of business


which usually engage the attention of the broker.

The sales broker is a broker who devotes his time and attention to
the bringing about of the sale or exchange of real property.

A loan broker is one who gives his attention to the obtaining of


loans upon the security of real property.

One man may practice both branches of the business, or a


specialist may devote himself to either of these branches.

Management, the second branch of agency, is the operation of


deriving income and caring physically for real estate structures. It
concerns itself not only with the deriving of income, but with the keeping
down of expenses and the care in making expenditures. It is popularly
known as "Agency."

22
COMPANY PROFILE

ALLIANCE PROPERTY SERVICES PVT. LTD .

Regd Off: 20/3, Vandana Bldg,

R.A. Kidwai Road, Wadala,

Mumbai-400031.

Administrative Office:

Vashi Plaza, Ground Floor,

Sector 17, Vashi,

Navi Mumbai- 400705.

23
VISION
“Benchmarking our services in terms of People, Pace & Passion to
be the best in the Industry.”

MISSION
“To provide creative solutions, by customizing our services to suit the
requirements of our clients. To encourage & facilitate our team to
reach its optimal potential combining its diverse strengths to provide
total customer satisfaction.”

Background

They started as a journey by a single individual with a desire to


excel has now become an organization which is serving the needs of the
real estate industry in the country today.

Alliance today has the best talent on its board of directors who are
professionals in real estate, finance, accounting and taxation striving to
render the best of services to its clients. Alliance today has given shape
to and has structured some of the most complex and landmark
transactions for reputed clients.

They add value to your properties through their experience and


expertise, with their wide network of clients and contacts all over India
and global arena. They assist everyone in identifying opportunities and
the right partners to compliment their capabilities.

24
Business Segments

Real
Estate

BUSINESS
Management SEGMENTS Financing
consultancy

Franchising
Approach

Our services help clients to achieve value addition by turning


assets into dynamic assets and realize the best potential of each
asset and try to optimize by putting each asset to its best possible
use.

25
Projects Handled-

Little World Mall:

They had sole mandate to lease the mall which started in October
2007 in Kharghar. Complete project was completed by them with good
anchors and brands as listed below:

Aditya Birla more, Archies, Levis, Levis Signature, Max Lifestyle,


Adlabs, The Raymond Shop, Reid & Taylor, Welspun,Thomas Scott ,
Connexions, Koutons, Planet M, The Mobile Store, Homes & Apparels,
Lilliput, Carmicheal House, Kittens, Thomas Scott, Gini & Jony, La
Diamond, Nice Looks, Dosa Plaza, China Land, Chopking, Indian
Tadka, Moti Mahal, Café Energise, Café Bollywood, Kwality Swirls Juice
Zone, Namrata Cup Corn.Curries and Parathas.etc

City Center Mall:

They have leased Operational Mall on Palm Beach Road, Vashi. The
list of brands which we introduced to this mall are:

Levis, Roop Sangam, Kittens, Gini& Jony, La Diamond, And Design,


Adora, M&B Shoes,Black berry, Weekender, Infancy,Timex, GKB
Opticals, Black Berry, ITC John Player, Unistyle, Addidas, Nike, Spykar,
Lee Cooper, Ruff Kids, L effect, Live In, Lovable, Dominoes, Nice
Looks, Top Corn, Café Coffee Day, Ameoba Game Zone, Stone age
Restaurant.

26
Other Individual Projects Handled :

Brokerage deals:

¤ Crystal Mall- Bandra & Mumbai Times Café


¤ Reliance & Maithili Signet at Vashi.
¤ Kstar Mall –Chembur Aditya Birla More
¤ Fantasia Mall-Inox (Multiplex)
Bank Finance:

¤ Arrangement for Akshar Developers from Axis Bank


¤ Arrangement for Wellwisher Constructions from Axis Bank
¤ FDI investment for Little World Mall.
¤ Etc,.

Quality Objectives
 Continuous improvement in the quality of services.
 Prompt response to customer complaints
 Strong property data bank.
 Aggressive follow up & due diligence.
 Panel of associates for legal, finance, market research,
investments and other allied subjects.
 Handling properties in all metros and all other cities across the
country.

27
An Overview

Alliance Property Services is professionally managed company


having presence in Mumbai, India in the following activities:

1. Real estate –Sale and lease.


2. Lease of retail outlets in malls and High street.
3. Joint ventures with developers.
4. Leasing and sale of entire properties with High Value clients.
/Builders/Investors/Private equity /Venture capital /Foreign Direct
Investors.
5. Franchising in retail and other spheres.
6. Arranging attractive investment proposals/ideas for investors.
7. Holding real estate/franchising /retailing /financing expositions and
exhibitions in all towns and cities.
8. Finding investors for local developers and Builders.
9. Underwriting entire projects for marketing ,investments and
execution.
Corporate Real Estate Services

Transactions for all kinds of properties across the country including:

 Residential
 Office
 Commercial
 Retail & Shopping Malls
 IT Park
 BPO/ Call centre
 Hotel & Resorts
 Leisure & Entertainments
 Hospitals
 Multiplexes
 Industrial
 Institutional.

Advisory Services:

 Investment Advisory Services

 Third Party Due Diligence & Service Management

 Feasibility Analysis

 Lease & Utility Audits

 Relocation Studies

 Property Valuation & Tax Consulting

 Site Selection Modeling Analysis & Strategic Planning

 Merger and Acquisitions

 Joint Venture, Collaborations, Franchise


 Foreign Direct Investment (FDI)

Allied Services:

 Valuation and Land Appraisal

 Tenant / Purchaser Representation

 Research & Feasibility Studies

 Project Management

 Bank Finance: Preparing project and feasibility report, Bank

Turnkey Financing Solutions

Value added Services

1. Turn Key Projects : Lessoning for Approval

a) Central Govt. of India

b) State Govt. of India

c) Local Govt. and Municipal Corporations

2. Joint Venture with Best Indian Realtors for Multinational


Companies.

3. Office Buildings and Houses for Company Management.

4. Project Management Consultancy Services.

5. Design, Architect, Marketing, etc.

6. Local Assistance for Site Development / Construction.

7. Global Partnership with leading realtors overseas for Indian


Realtors.

After achieving a reasonable success in Mumbai and Navi Mumbai, they


are now planning to have branches and associate offices in all cities and
Tier 1, 2 and 3 towns of India as well as all the parts of the world. They
would be willing to start a no commitment tie-up with organizations.

MY PROFILE IN ALLIANCE PROPERTY SERVICES PVT. LTD.

Projects Handled:

CENTURION COMMERCIAL
& SHOPPING COMPLEX

Plot No 88-91, Sector: 19A,

Nerul (East), Navi Mumbai.

HAWARE’S FANTASIA
BUSINESS PARK

Plot no.47, Sector-30A,


Vashi, Navi Mumbai.

HAWARE’S VASHI
INFOTECH PARK
Plot No. 16, Sector – 30A,
Vashi, Navi Mumbai.

HAWARE INFOTECH PARK


Plot No. 39/3, Sector – 30A, Opposite
Vashi Railway Station, Vashi, Navi
Mumbai.
LOAN DEPARTMENT

As centurion shopping complex is a vast project, it consists of


more than 500 shops and offices. The customers come for the
investment as well as to start up their own business. The customers are
basically heterogeneous in nature. Out of which few of the customers
were willing to give the total cost of the shop/office as their 100% own
contribution within the specified time period. But when analyzed that the
customers were not financially stable after going through their
documents, they were given the option of commercial bank loan
according to their requirements.

Marketing executives were appointed to approach different banks


and were asked to give the detailed view of our shopping complex.
Every week a meeting would be held between the trio to discuss the
various factors and schemes regarding the particular bank. As to know
what are the different rates of interest been levied , and many other
factors. Most of the banks do not support the commercial loan as it
involves very high risks and suspicions. Whereas there are banks with
whom we had tie-ups. They are:-

• Mahanagar Co-Operative Bank


• HDFC Bank
• ICICI Bank
• Saraswat Co-Operative Bank
• Deutsche Bank
• Abhyudaya Bank, etc….
We as the intermediary would collect the required document from the
customer. The bank then verified the documents and declared whether
the customer is liable to repay the loan taken by them. Within this period
we had to follow up with the bank and customer for paying 40% of their
agreement value. Customer should pay their 40% and complete with
registration before bank proceed. Banks are able to provide up to 60%-
70% loan according to customer profile.

At the time of registrations we are required to provide instruction to


customers regarding registration. Following instruction were to be
provided by us :

1. Customer have to bring Rs.3500 with them at the time of


registration for printing and stamp duty chargers.

2. Customers current 2passport size photocopy with pan card Xerox.

3. It Requires 2 witnesses also from the client’s side.

4. 5% stamp duty 1%registration paid by customer on Agreement or


Market value whichever is higher.

5. The agreement is to be done on agreement or market value


whichever is higher. Market value is to be calculated by following
formula:

Build up Area = Carpet Area + 20%

Market Value = Build up Area X Rate Per Square Feet


COLLECTION DEPARTMENT

The collection department is the main hub in this business unit,


wherein the money is collected from the customer after the booking is
done. The customer can officially book the shop only after paying the
token amount. The token amount varies with respect to place and
project. The customer details are jot down in the booking advice. This is
done in order to ensure that the follow up of the particular customer is
done and also to keep a check i.e., that customer should pay the latter
half of the remaing amount within the time limit. The follow up mainly
helps in maintaining essential records which is in Microsoft Excel format.
It is made sure that the database is up to date at any given point of time
so as to maintain the flow of the various activity related financial
transaction. If the customer fails to repay the amount on time, as a
penalty he/she liable to pay the interest on the remaining amount. We
are there to keep keen observation on every individual account. We had
to report to Mr.Haware about the full weeks detailed data in order to
give him the current scenario of his project.
Example:

Mr. A came to the site for seeing the shop and buying it to start his
own business. We gave him a fair view of all the shops available with us,
the cost and size of the shop varied differently. The cost of the shop was
dependent upon floor wise also. We had G+3 floors. Among which
ground floor was the most expensive one.

After going through our shops Mr .A decided to purchase shop at


first floor. Then we took out our booking advice which had to be filled by
us which carried all the information pertaining the client which was of our
great use. After filling the booking advice we took the token amount
which had to be more than Rs.11000/-. Suppose Mr.A purchases shop
in Centurion project, Nerul on first floor. First process is to fill booking
advice.

Booking advice includes:

Name of customer :

Address:

Date of booking:

Mobile number:

Office Number:

Residential Number:

Sq Ft.:
After filling booking advice, booking advice will go to Haware head
office,Vashi for confirmation. When that booking goes to head office at
that time shop is confirm for that customer till registration. After
registration legally that shop will transfer to Mr.A’s name.

At the time preparing booking advice Mr.A decided to pay their


50% amount within 15days as per their requirement and their condition,
for remaining they required bank loan. So we have to keep contact with
Mr.A and remind every time about payment, recorded all payment detail
in excel sheet wherever payment is made by Mr.A . Within 15 day Mr.A
paid their 50% amount.

Mr.A Purchased on 9 May2009, 212 sq. Ft., on first floor as per


demand at that time per square rate was Rs.6,000. Therefore total cost
for Mr.A’s shop is Rs.12, 61,000/-. While booking, Mr.A gave Rs.11000/-
as a token money in cheque.

Following is the excel sheet which is prepared and maintained


daily if any customer paid any amount that will added into total received
column every time. There is one more sheet was their is which
PDC(Post Dated Cheque) is to be maintained. If Mr.A gave PDC of
Rs.1,00,000 for 12th may 2009 then it will recorded in PDC sheet, and on
12th May when cheque will clear we have to added that Rs.1,00,000 into
Mr.A account after conformation.
Mr.A completes their 50% payment within 15days. If it could not
possible from Mr.A then they are eligible to pay interest on their
remaining amount. Mr.A required loan on remaining 50%. So within
15days when Mr.A was paying their part of payment we contact with our
bank and fulfil all requirement of bank.

Firstly bank required following document from customer’s side :

 If business man then 3 years Income tax returned filed,if


service men then form no.16 from and 3 years salary slips.

 Last 1 years updated bank pass book copy.

 Residential proof :- Electricity bill, Pan card Xerox,

 2 photograph

 Agreement and register document.

 Estimated 5 years projected balance sheet some bank


required

Every bank has different criteria for different customer. Co-


operative bank like Mahanagar Co-Operative Bank, Abhyudaya Bank,
Saraswat Co-Operative Bank provided loan only to businessmen not for
servicemen and not NRI person. Only businessmen are eligible for their
requirement. And bank’s like ICICI, HDFC etc. provide loan to
businessmen as well as NRI and Servicemen. Servicemen should have
net salary more than Rs.30000.
Rate of Interest is also differing from bank’s to banks. Co-
operative bank have less interest compare to nationalised bank. Rate of
Interest for commercial loan is between 12.5% to 14.0 %. Bank’s also
charger processing fees and charger for pre-payment. Processing fees
also differ from bank to bank between 0.5% to 1.0%.

It took 15days to provided loan to Mr.A after providing every


document which is required.
SELLING & MARKETING DEPARTMENT

The ultimate aim of the Real Estate Marketing is to increase the


demand for a particular type of property and to increase the price so that
the seller of the property owns the highest amount of profit for himself.
The Real Estate marketing is needful also to make the Real Estate
project work and make it familiar among the public as much as possible.
Most of the Real Estate sellers keep an amount intact just for their Real
Estate Marketing and on that basis they choose certain Real Estate
Marketing Agents and give them the responsibility to sell their property
off with as much profit as possible. If the seller’s budget is big enough
then he can go for renowned Real Estate Marketing agency and for
those with small budgets the smaller agencies are also available. Most
of the big Real Estate owners who want to sell their properties prefer to
go for big marketing agencies as they have better ways to promote one's
properties and have able agents who can find the right kind of agents
working for them who have better contacts and have better ways to
popularize the real estate property.

A good Real Estate Marketing Agency always puts special


emphasis on the right kind of information that one needs before starting
Real estate Marketing and for that the agency normally conducts some
kind of survey to gather the right kind of information. Later the Real
estate marketing Agency depending on that report develops their ways
of marketing.
Nowadays a lot of Real estate marketing is done through the help
of the Internet. One can have various websites that do marketing for
different real estate properties for a certain amount of money. One also
needs to make the website precise and filled with to the point
information. The Real estate Internet Marketing is a very simple process
and is cheaper in nature as well. Although one needs to keep the
demands and the reasonable amount of price in mind.

I was functioning under operational projects of Alliance Property


Services for Haware’s Commercial Projects namely -

 Centurion Commercial & Shopping Complex, Nerul

 Vashi Infotech Park, Vashi

 Haware Infotech Park, Vashi

 Fantasia Mall, Vashi

In marketing, Promotional strategies were used namely -

 News paper advertisements,

 Visual media ads in local cable channels

 Direct Marketing(door-to-door) in commercial complexes and

 Through www.iproperty.com.
Business cards can either by a waste of paper or an effective bridge
between a prospect and their potential as a long-term client. So, follow-
ups of all the business cards that were dropped in at the site office were
done on a daily basis.

Brokers & agents were also approached to get their clients for the
deals. Telephone & Email follow-ups also formed a part of my job. There
was face-to-face interaction with the customers for the sale of
shops/offices by convincing them to buy.

Customer Database was also maintained considering various heads


like- Date of purchase, Shop/Office no., Name of the customer, Area of
the shop/office in sq.ft., Total value of Shop/office in Rupees, Total
Received(cash/cheque) and Balance amount.
ADVANTAGE FOR REAL ESTATE AGENT :

10-Year Tax Holiday

The finance Ministry has announced a 10-year tax holiday for


developers of Industrial parks set up from April 1, 2006 to March 31,
2009. According to the Industrial Park Scheme 2008 notified by the
Central Board of Direct Taxed (CBDT), the industrial park developers will
be eligible for 100% tax deduction which is to be provided for 10
consecutive assessment years out of 15 years after the commencement
of operations of such units. The developers will be free to choose the 10
consecutive years for the purpose of availing themselves of the tax
holiday.

Price Variations in India


There are unbelievable variations in the prices of real estate sector in
the past. Which mainly affect to the sale of business. Mainly there are
two causes for the same:

 Per Capita Income


 GDP at Market Price
Per Capita Income
As depicted by fig. 2 per capita income is increasing in India, which has
increased the purchasing power of the people. Due to this over the last
year (2006-07) houses prices have raised by 10-90% and commercial
property prices by 10-30% in different area of India. Correlation .996 is
found between PCI and real estate prices. Thus there is a positive
correlation between per capita income and real estate prices.

GDP at Market Price


GDP, the indicator of the national growth, from the past 2-3 years is
increasing by 6.5% to7.5%. Every rupee spend on the construction add
to nearly 60% of GDP. As shown by the figure the GDP has increased
from the 2463324 crore to 3529240 crore from 2002-03 to 2005-06, so it
indicates that how the spending on the construction sector helps the real
estate prices to increase.
Price Variations in Different cities:

Price variations in Mumbai

Price variations in Delhi


Price variations in Pune

Price variations in Kolkata

It is clear from the above tables that in real estate prices are touching
heights. In some areas the prices are increased by 90-100%. In
Gurgaon and Noida prices has jumped by as much as 200%. The
cheapest DLF apartment in Gurgaon costs Rs. 1 crore.
Clear Title
90% of the lands in India do not have clear title. The ownership is
unclear, thereby creating a scarcity of land. This is due to poor record
keeping and outdated complaint processes. All updated records must be
computerized to increase transparency in land ownership. And special
fast track courts must be set up to clear all legal land disputes in a short
period of time.

Stamp Duty & Registration


The cost of transferring land titles must be reduced from rates of 10%
stamp duties to reasonable levels of 3 to 5%; similar to prevailing rates
in developed countries. This will encourage sellers to pay stamp duties,
instead of trying to cheat the government, thus increasing the revenue
for the country. The high duties have also encouraged unaccounted
money being used in most real estate transactions in India. The
registration procedure should also be made transparent and simple so
that corruption can be minimized.

Building Codes, Standards & Permissions


There are several building guidelines and standards in various cities and
states, however they are neither followed by the developers nor
implemented by the authorities.
Development and Planning
In India development and planning concerned with real estate sector is
not up to the mark. The city or state authorities must use professionals
to plan and execute all development plans for cities and towns, with
future development in mind. This must be done without political
compulsions. This will allow proper zoning within cities and towns, green
areas and other infrastructure systems to fall into place as the
development plans unfold.

Present Scenario in India


Up to the end of 2007 real estate sector in India was growing at a very
high rate. There was a situation of boom in this sector. The home loans
were easily available and RBI was following very liberal policies
regarding the interest rates. But in 2008 the things are changing due to
the high rate of inflation in the Indian economy. There is uncertainty in
the market as share market is showing depression and the RBI is also
increasing the Bank rate leading to the increase in the interest rates. So
the buying power is reducing. The major reasons for this downfall are
inflation and the low rate of GDP.
Findings
• As the GDP increases the real estate prices also increases because
there is a high degree of positive correlation between the real estate
prices and GDP.
• Real estate prices also increases with increase in the per capita
income as there is high degree of positive correlation between these two
also.
• The infrastructure of India is also growing day by day so it adds to the
better facility to different sectors which affect the real estate prices.
• The FDI into the country affects the real estate FDI and real estate
having a positive correlation leads to the boom in this sector. Increase in
FDI from 2006 to march 2007 is 10%. Earlier it was 16% and now in
2008 it is 25%.
• The interest rate also affects the real estate prices because it affects
the lending and borrowing by the investors.
• The growth in the real estate sector is between 25-30% in a residential
sector, 10-15% in commercial sector and agriculture sector.
• Housing sector constitute 80% of real estate in terms of value and 20%
by commercial sector.
• In residential segment, availability of easy home finance and rising
purchasing power has driven the growth. Builders are launching high-
end, life style residential products to cater to the growing bunch of high
net worth individuals.
• In 2008 the growth of real estate sector is going down due to high
inflation and hike in home loan rates by the banks following the increase
in bank rate and SLR by the RBI
• The outsourcing and IT/ITES industry have contributed to the demand
for quality office-space. The estimated demand from IT/ITES sector
alone is expected to be 150mm sq. ft. of space across the major cities
by 2010.
Suggestions

The following recommendations are made this paper-


• Due to high prices the lower income group is not able to purchase the
shops, so company should take kept in mind to protect the lower income
group.
• The agriculture land covered into the commercial and residential
purpose. But the population is also increasing day by day. So company
should steps for the same.
• The investors should analyze the type of project in which they are
going to invest and the potential returns from it.
• Privatization of Airports and ports needs to be speed up.
• There is a lack of proper data and management of the real estate
sector so company should take the corrective steps in this regard so that
the proper estimation and management of the real estate can be made
possible.
• Commonwealth is scheduled for 2010. Hotels, sport stadiums and
other infrastructure to have successful games need to be expedited.
This is another great opportunity for foreign developers and investors to
step in India. Thus more and more encouragement should be given to
foreign investors.
• Stamp duty is extremely high and must be rationalized and brought
down to 2-3% as per global practice, which is now in India varies from 5-
6%.
• Due to lot of investment avenues in real estate in India, fraud cases are
also increasing day by day like in Delhi deconstruction of buildings. Thus
careful measures and laws should be enacted to deal with these types of
situations.

Conclusion
After studying all the factors of the real estate it can be concluded that
the Real Estate is a very wide concept and it is highly affected by the
macro-economic factors like GDP, FDI, per capital income, Interest rates
and employment in the nation. The most important factor in the case of
Real Estate is location which affects the value and returns from the Real
Estate. India needs a stronger capital market base for property
financing. The debate on the potential introduction of REITs and real
estate funds points in the right direction. The introduction of REIT s in
2007, will give international investors in particular a familiar investment
vehicle. Private investors could also enter into indirect investment in real
estate. Although interest in new projects is most likely to come primarily
from institutional investors, the rising middle class is likely to seek new
instruments aside from direct property investments in the medium term.
So, in the end we can say that the investment in Real Estate in India is a
very good investment opportunity. But one should be very careful while
taking decision in this direction due to rising inflation and interest rates.
Legal issues should also be kept in mind while choosing a property.