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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.
financial
services,
hotels
and
restaurants
and
trade
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.
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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.
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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.
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real
estate
in
Mumbai
requires
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.
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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
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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."
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COMPANY PROFILE
Administrative Office:
Vashi Plaza, Ground Floor,
Sector 17, Vashi,
Navi Mumbai- 400705.
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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.
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Business Segments
Real
Estate
Management
consultancy
BUSINESS
SEGMENTS
Financing
Franchising
Approach
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Tadka, Moti Mahal, Caf Energise, Caf Bollywood, Kwality Swirls Juice
Zone, Namrata Cup Corn.Curries and Parathas.etc
Nice
Looks, Top Corn, Caf Coffee Day, Ameoba Game Zone, Stone age
Restaurant.
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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.
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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.
Residential
Office
Commercial
IT Park
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
Allied Services:
Valuation and Land Appraisal
Tenant / Purchaser Representation
Research & Feasibility Studies
Project Management
Bank Finance: Preparing project and feasibility report, Bank
b)
c)
2.
3.
4.
5.
6.
7.
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.
Projects Handled:
CENTURION COMMERCIAL
& SHOPPING COMPLEX
Plot No 88-91, Sector: 19A,
Nerul (East), Navi Mumbai.
HAWARES FANTASIA
BUSINESS PARK
Plot no.47, Sector-30A,
HAWARES VASHI
INFOTECH PARK
Plot No. 16, Sector 30A,
Vashi, Navi Mumbai.
LOAN DEPARTMENT
HDFC Bank
ICICI Bank
Deutsche Bank
2.
COLLECTION DEPARTMENT
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.:
2 photograph
Every bank has different criteria for different customer. Cooperative 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 banks 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 banks to banks. Cooperative bank have less interest compare to nationalised bank. Rate of
Interest for commercial loan is between 12.5% to 14.0 %. Banks 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.
Through www.iproperty.com.
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.
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 highend, 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 56%.
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.