Second Annual Convention of NAR

A Real Estate firm Embassy Developers is expected to generate over 513 million US Dollars as
said by their Prospectus which was filed today. This will be done through an initial public
offering of shares.
The draft is available on the Edelweiss website. The lead running managers for the issue are
Nomura, UBS, Local Investment Bank and Citi.
The prospectus included that Embassy property is looking at pre-IPO placement of around 57
million shares for up to 11.75 billion rupees with certain investors. The retail investors may be
offered a 5% discount on the issue price.
Though the time line is not yet been set.
The Indian companies have raised a lot of money through share sales by mid-June of FY10 from
56 issues which is higher than last year, as shown by the data collected by Thomson Reuters.
India has also asked bids to appoint 4 banks for managing a follow-on public offering in state-
run Power grid Corp of India.
By Pakhi Kshitij | Posted in Property News | Tagged Banks, developers, Edelweiss, India, Initial
Public Offering, Investment Bank, IPO, Money, Nomura, Power Grid, Prospectus, Real Estate
Firm, Retail Investors, Reuters, Rupees, Share Sales, Shares, Thomson, Time Line, Ubs |
Comments (0)
Second Annual Convention Of NAR

July 11, 2010 – 10:49 pm
Photo by respresThe Real Estate Agents Association of Chennai is all set to host the annual
convention of the Indian National Association of Realtors. This will be the second year of the
meet.
It will be a two day event that will take place on July 16 and 17 at the seaside Radisson Resort
temple bay at Mamallapuram. The town is situated 45 km from Chennai.
The participation of around 400 delegates from around the globe is anticipated.
They will discuss on matters related to the developments in real estate as well as the
opportunities and the challenges. Some other topics of discussion will be legal aspects of
transactions and case studies, retail, industrial and warehouse marketing.
The event will include a seminar which will be addressed by an expert panel on a wide range of
topics and also a workshop by Mr. Marcus Wally from UK on Marketing Real Estate for Profit.
It will be a good opportunity for people of the trade to exchange cards and information.
By Pakhi Kshitij | Posted in Property News | Tagged Association of Realtors, Case Studies,
Chennai, Delegates, Expert Panel, Globe, Legal Aspects, Mamallapuram, Marketing Real Estate,
mr Marcus, National Association of Realtors, Participation, Radisson Resort, Real Estate, real
estate agents, Temple Bay, Wally | Comments (0)
Realty Prices To Further Shoot Up

July 9, 2010 – 8:31 am
nIt is very likely that the Real Estate prices in the country will shoot up further with the Finance
Ministry’s decision of not withdrawing 2.5% service tax. This move was proposed by the Urban
Development Ministry in the budget of FY10-11.
The budget had earlier proposed this tax on all under-construction projects. And it is common
knowledge that eventually the customers will have to bear the burden and not the developers.
The declination came as no less than a shock to the Urban Development Ministry. Its Minister
Mr. S Jaipal Reddy argued with the Finance Minister Mr. Pranab Mukherjee in the favor of the
move in April this year but it could yield no results evidently.
The ultimate sufferers will be the Indian middle class who already has to bear the burden of
inflation in almost all other spheres but also dreams of owing a home of their own!
By Pakhi Kshitij | Posted in Property News | Tagged Budget, Common Knowledge, Construction
Projects, Declination, developers, Development Ministry, Dreams, Finance Minister, Inflation,
Jaipal Reddy, Middle Class, Pranab Mukherjee, Real Estate Prices, Shock, Spheres, Urban
Development | Comments (0)
Mondon’s Indian Partner Goes Bankrupt

July 6, 2010 – 10:37 pm
Photo by bartmaguireIn a recent development the local partner of Mondon Investment Ltd. went
bankrupt. Following the event Indian banks initiated a foreclosure proceeding against Fishman
Holding’s Indian development arm project.
They were to construct a mall in Ludhiana, Punjab.
The project company ended up in violation of their financial covenants to banks after Mondon’s
partner violated their covenants financially.
The loan was not repaid by the end of May through the joint venture as a result of which bank
had to open up legal procedures.
Mondon plans to take legal action against its partner on the account of breach of contract for
damage to the firm because of the joint venture.
They had bought 121-hectare site for the mall for NIS 26 million two years back.
By Pakhi Kshitij | Posted in Property News | Tagged Arm Project, Breach of Contract,
Development Arm, Financial Covenants, Fishman, Foreclosure, Hectare, Indian Banks, Indian
Partner, Investment, Joint Venture, Ludhiana, Mondon, Proceeding, Punjab | Comments (0)
RBI Tighten Ropes On Real Estate

July 6, 2010 – 9:10 am
sIn a recent development the Reserve Bank of India along with the Department of Industrial
Policy and Promotion are working to streamline and regulate the access and use of Real Estate
Firms regarding the External Commercial Borrowings (ECBs). This will be done through a
monitoring mechanism which will ensure stricter norms from now on.
RBI took this step in lieu of Real Estate Companies planning to raise ECBs worth Rs.4000 cr in
the future and using this money for activities that cannot be funded through ECBs which will
eventually adversely affect our economy.
Presently, Real Estate Companies that are only into developing integrated townships of various
sizes are allowed to make use of these ECBs provided it is being used only for activities that are
related to the construction of the townships. Now even this window will not be available by the
end of this year.
By Pakhi Kshitij | Posted in Property News | Tagged Bank Of India, ECBs, Economy, Estate
Planning, External Commercial Borrowings, Money, Norms, Real Estate Companies, Real Estate
Firms, Reserve Bank Of India, Ropes, Townships | Comments (0)
Indian Realty Sector And Overview

July 4, 2010 – 8:53 am
PtIndian Real Estate Market has grown with time. The main reason for the accelerated growth
can be contributed to the fact that the industry is very flexible in nature.
The development has caused higher aspirations for better standards of living and a good quality
of life.
The rapid increase has been because of the relaxed policies of our government regarding Foreign
Direct Investment which favors economic development of the country as well as easy Home
Loan terms and conditions with an increase in the income of people, degree of urbanization, and
their purchasing power. All this has helped shape up the Indian realty sector.
Some of the factors that have given a boost to the Indian Real Estate Market are the FDI policies
have increased the amount of Foreign Investment in India. Owing to this our country ranks
second most preferred location for Real Estate Investment in the world.
After Agriculture Industry, Real Estate has become the second highest employer.
Real estate whether Residential, Commercial, Retail is being developed on full scale in many
different cities of the country.
The large number of people getting education in India will demand over 100 million sq feet of
office and industrial spaces.
More so, India has been a host to Fortune 500 companies which in turn attract more companies
to make this country their operational base which will also require more office space in future.
Thus it is evident that the Real estate Industry in India will see a lot of work in the years to come.
By Pakhi Kshitij | Posted in Property Articles | Tagged Agriculture Industry, Business/Finance,

Economic Development, Economy Of India, Education in India, Fortune 500 Companies, India,
Industrial Spaces, Operational Base, Preferred Location, Real Estate, Real Estate Investment |
Comments (0)
RICS Plans To Reform Indian Realty Sector

July 2, 2010 – 1:09 pm
anIndian Real Estate Developers have fastened their

seatbelts to come at par with their counterparts in other parts of the world. This has been started
by the formation of new boards and committees which will include leaders from the Real Estate
and Infrastructure sector of the country.
The move was initiated by RICS (Royal Institution of Chartered Surveyors) India.
The persons in the committee will mainly focus on developing standards and practices in the
Indian Realty Market to increase the level of professionalism and transparency among
professionals as well as bring reforms in policies for the benefit of people at large and overcome
barriers obstructing the growth of industry.
The various challenges that have to be met are the currently fragmented and old legal system
including the current laws on land acquisition, problems associated with Rent control laws,
providing infrastructure facilities keeping pace with the speed of urbanization, lack of skilled
professionals in the industry, among others.
As said by Sachin Sandhir, MD, RICS India, “As the mark of property professionalism
worldwide, RICS aims to develop professional knowledge and standards in India and protect
public interest through best practice regulation. We are pleased to be represented by India’s most
established and respected professionals in this industry and are confident our new Boards and
Committees will enable us realize this goal”.
An Agenda-driven conference on the issue saw participation from various Government bodies
such as SEBI, National Housing Bank, Ministry of Corporate Affairs. Matters that were
discussed were the need for valuation reform and the directions for future practices for the Real
Estate Industry.
By Pakhi Kshitij | Posted in Property News | Tagged Acquisition Problems, Infrastructure

Facilities, Infrastructure Sector, Institution of Chartered Surveyors, National Housing Bank, Real
Estate Developers, Royal Institution of Chartered Surveyors | Comments (0)
Asia Invest More In UK Than UK Itself!

July 2, 2010 – 1:02 pm
dAccording to a study conducted by a Global Property Consultancy Firm Asia is the biggest
investor in UK’s Realty Sector particularly Central London. This has been possible because of
decreased value of pound and strong Asian economies.
The report showed, Asians spent around 761 million pounds in fresh properties in London for
gains in the current fiscal year. Surprisingly they accounted for 49% of total purchase in the
country while only 36% was constituted by the locals.
Asians are expected to put 20% of their money on new build residential properties also.
The report marked a change in the priorities of buyers as now they prefer more high class quality
properties than in the last year.
Asia is on roll for sure even as the effects of recession start to wear off of other countries.
By Pakhi Kshitij | Posted in Property News | Tagged Asian Economies, Asians, Bedroom
Apartments, Central London, Current Fiscal Year, Exhibitions, Global Property, International
Investment, Investment Demand, Investment Team, Knight Frank, Locals, Market Quality,
Property Consultancy, Quality Properties, Residential Investment, Residential Properties,
Sebastian, Singapore | Comments (0)
Real Estate Invesment Trusts In Asia To Rise

July 2, 2010 – 1:00 pm
The number of Real Estate Investment Trusts (REITs) in the Asian Continent is going to swell
over the coming 3 to 4 yrs according to HSBC. It will be because of increasing call for
investments in more risk disinclined properties.
REITs invest in commercial properties mainly and pay rent collected from their properties to
shareholders as dividend. This is why some investors see them as safer investments than property
stocks.Another advantage is that they usually offer returns that are higher than yields of
government bonds.
The increased activity in the REIT IPO market this year especially in the Asian continent is due
to successful listing of Cache Logistics Trust in Singapore. Also Sunway City plans to list its
REIT in Malaysia come July.
Kern anticipates Singapore to witness most of the activity with more than 20 to be listed there in
the coming years from companies all across it’s continent. It already has more than 20 listed
REITs such as Fortune, Saizen from Hong Kong and Ascends from India.
This Trend is only to bring fortune to our Country as well.
By Pakhi Kshitij | Posted in Property News | Tagged Asia Pacific, Asian Continent, Dividend,
Global Real Estate, Government Bonds, Growth Patterns, HSBC, India Australia, Investments,
Ipo Market, Logistics, Managing Director, Proliferation, Property Stocks, Real Estate
Investment, Real Estate Investment Trusts, REITs, Reuters, Saizen, Shareholders | Comments (0)
Real Estate Collaborates With Education Industry

July 2, 2010 – 9:41 am
nRealty and Infrastructure firms like GMR and Hindustan Construction Company, HCC have
announced to set up university campuses and other educational institutes within India. They
mainly aim to ride high on the huge returning education industry.
The education industry in India is worth more than 10 bn US dollars with continuous growth
rate. Because the Real Estate market is on a low these days developers are looking at alternate
assets such as education.
Partnerships of such kind are increasing day by day in every other township or SEZ as
educational institutes bring more revenue.
Chintan Patel, Associate Director, Transaction Advisory Services, E&Y said, “Access to social
infrastructure such as schools and colleges serve as attractive features that make it easier for a
developer to sell projects.”
Further he had to say that partnerships between a developer and international institution benefits
society and develops retail, office and residential spaces around.
The tie ups usually work on build-and-rent business model. While a developer acquires the land
and builds the infrastructure for the educational facility, the institute runs the school or college. It
either pays rent or works on a revenue-share model.
The companies which are laying out plans in education are HCC who have bought 500 acres for
institutes at Lavasa, its hill city project close to Pune, Maharashtra.It has tied up with Symbiosis,
Bangalore-based Christ University, Institute of International Business Relations of Germany,
Switzerland-based hospitality Management Institute Ecole Hoteliere de Lausanne and Educomp,
and more.
Global infrastructure player GMR, too, has collaborated with Canada-based Schulich School of
Business to build a campus in Shamsabad, Andhra Pradesh, The Company will construct the
physical infrastructure for the institute, and in return, earn management fee on the maintenance
of residences and hostel facilities.
By Pakhi Kshitij | Posted in Property News | Tagged Ecole Hoteliere de Lausanne, Education
Industry, Education Partnerships, Educomp, Global InfraStructure, Hospitality Management,
International Business Relations, Physical InfraStructure, Residential Spaces, Schulich School of
Business, Social InfraStructure, Transaction Advisory Services, University Campuses |
Comments (0)
Yatra Capital To Invest More In India
June 29, 2010 – 9:11 am
Photo by thinkpanama
Euronext-listed company, Yatra Capital managed by Saffron Capital Advisors, an Indian Real
Estate Private Equity fund has announced to invest around 20 million Euros in India in FY10.
The company plans to invest the Rs 115 cr in two deals in the domestic sector of real estate. The
company has as of now invested about Rs 916 cr in 13 projects which include 2 entity-level
details.
The weighted average Yatra Equity Fund covers 27 million square feet spread over nine cities.
They have sold or pre let over 3 million square feet across various projects.
The chairman and Co-Founder, Yatra Capital, Mr. Christopher Wright said, “In India, one needs
to be very careful on Real Estate investments as the market is volatile. After a drop in 2008-09,
the realty sector is now moving up. The Indian economy is growing well making people more
confident on future investments. We have invested 44% in residential projects, which would be
our focus area in future. We always look at investing in affordable residential projects in tier I
and II cities.”
Yatra has invested in 90 cr Residential Project and 97 cr Market City Retail Project at Pune, 115
cr in Riverbank Holdings, 91 cr in forum IT parks and 23 cr in Taj gateway at Kolkata, 160 cr in
market city at Bangalore and 57 cr at Nashik.
It has entered partnership with Phoenix Mills for 5 various projects across Bangalore, Pune and
Mumbai.
A presentation by Yatra to investors in March this year said, “Most markets have seen positive
traction due to price cuts. However, developers have now started raising prices especially in
Mumbai and the National Capital Region which has led to a slowdown in sales. Projects where
pricing is realistic continue to enjoy healthy absorptions. The monetary environment tightening
may impact the fund raising environment for many real estate companies still out to raise money.
Investor enthusiasm for participation in realty IPOs remains muted.”
By Pakhi Kshitij | Posted in Property News | Tagged Absorptions, Capital Advisors, Domestic
Sector, Euronext, Focus Area, Indian Economy, Investor Enthusiasm, Kolkata, Level Details,
Nashik, Phoenix Mills, Private Equity Fund, Pune, Real Estate Investments, Real Estate Private
Equity Fund, Residential project, Residential Projects, Retail Project, Riverbank, Weighted
Average | Comments (0)
IL&FS Increase Investments In Realty Sector

June 26, 2010 – 11:05 pm
Photo by Photos8.comIL&FS private equity is planning to increase its investment in

infrastructure and Real Estate sector by the end of FY10.
They announced to increase their investment from 660 million US dollars to 1 billion US dollars
in the infrastructure sector. In the realty sector they already have investments of 1.6 billion US
dollars. They are planning to take deals in both the sectors as well.
Mr Shahzad Dalal, Vice Chairman of IL&FS Investment Managers Ltd said, “We will invest
close to a billion dollars in infrastructure as well by about the end of this financial year.”
In the realty sector the firm has spent 1.2 billion US dollars from the total investment on over 30
deals. It is said that they are now looking at 10 more. The left over amount is expected to be
deployed by the end of this year mainly in residential space along with commercial.
The company recently bagged a deal in the real-estate segment through IL&FS Milestone Fund
in HCC’s Real-Estate project ‘247 Park’ for Rs 575 cr for a 74 per cent stake.
Mr Dalal further added, “The outlook is fairly bullish on both Real Estate and infrastructure. We
believe there are a lot of opportunities. There may not be many good projects, but because of our
reach and reputation, we do see some really good projects.”
By Pakhi Kshitij | Posted in Property News | Tagged 1 Billion, Billion Dollars, Hcc,
Infrastructure Sector, Investment Managers, Investments, Milestone, Private Equity, Real Estate,
Real Estate Project, Real Estate Sector, Reputation, Residential Space, Sectors, Segment, Stake,
US Dollars, Vice Chairman | Comments (0)
Provogue India Enters Real Estate

June 26, 2010 – 7:33 pm
One of the leading apparels brand in India Provogue India announced to enter Real Estate on
Friday. Provogue India with it’s joint venture Prozone enterprises has planned to build 300,000
sq. feet of Real estate property in Aurangabad. The project is stated to go on floor in October
2010.
The Managing Director Mr. Nikhil Chaturvedi said that the mega project will be a mix of
residential projects and malls.
Also they are planning to launch three residential projects in Coimbatore, Nagpur and Indore by
the end of this year.
Provogue also plans to construct 75 stores across the country in financial year 2011 with an
investment of 35 cr.
Similarily Century textiles, Alok Industries and Bombay Dying are some other firms planning to
develop or sell Real Estate as land rates rise in the buoyant economy.
By Pakhi Kshitij | Posted in Property News | Tagged Bombay, Buoyant Economy, chaturvedi,
Cr, Indore, Joint Venture, Malls, Managing Director, Mega Project, Nagpur., Nikhil, Provogue
India, Real Estate One, Real Estate Property, Residential Projects, sq feet, Textiles | Comments
(0)
India’s First BOP Studios

June 16, 2010 – 9:49 pm
PA very ambitious and unique project has been announced by a Better Option Propmart(BOP) a
Delhi based Real Estate Management and Advisory firm. They are set to launch 15 Real Estate
‘boutique’ across the Northern India.
These will be first of its kind boutiques and will be known as ‘BOP Studio’. The idea is based on
the model of any walk-in-store for property consultancy and purchase. It will have sit –in-
consultants who will provide detailed and free counseling to every customer. The ambience will
be of any high class store and will have the database of various projects in North India.
The Managing Director of the company, Mr. Amit Mavi said on the occasion, “You could walk-
in, avail yourself of our free real estate consultancy and still not buy any property being
showcased. Our aim is to bring the ‘consumer durable shopping experience’ to real estate buyers.
We expect people to perceive BOP as a real estate advisory service provider rather than a mere
property seller.”
The initial investment in the project is said to be huge that of at least 60 lacs per studio on the
infrastructure alone. The firm plans to open 2,000 square feet street outlets at most of the hot
spot destinations for Real Estate like Agra, Amritsar, Chandigarh, Jaipur, Lucknow, Kanpur,
Noida, Meerut and others.
The studios will yield profit if they handle at least 10 projects every year and achieve sales of Rs.
150 cr per city. The financial engagement looks tough more so for Tier II cities as the average
realization from residential projects there is lower than that in metro cities.
Will this idea become successful, only time will tell?
By Pakhi Kshitij | Posted in Property News | Tagged Advisory Firm, Advisory Service, Amit,
Amritsar, Free Counseling, Initial Investment, Lacs, Lucknow, Mavi, Meerut, Metro Cities,
North India, Northern India, Property Consultancy, Real Estate Consultancy, Real Estate
Management, Residential Projects, Shopping Experience, Street Outlets, Tier Ii | Comments (0)
Southern Province Picks Up

June 15, 2010 – 11:35 pm
.The Southern Province of India has shown a demand in Real Estate properties over the last few
months which is a good news for the people in the realty.
The Realty sector in Hyderabad, Andhra Pradesh has shown sudden upsurge after the recent
political turmoil it went through. The demand for both, commercial as well as residential
properties have registered a rise.
The trend is more evident in Tier I and tier II areas specifically; making them a high demand
market.
Even the prices of the realty sector have improved as the customers feel Hyderabad is the right
place for investment which has contributed to increase in the sales.
Raj Kumar, Marketing Manager in a Real Estate firm puts forth, “NRIs, Doctors and Information
Technology (IT) people are coming forward for the investment and even some of the central
government employees are also coming forward. As you know, now a days comparing with the
facilities what we are giving on what rates we are giving, people are seeing benefits and on this
basis they are coming forward for investments and showing interest.”
The sector is one of the biggest in terms of number of employees working in the country. It is
anticipated that in the next decade the realty sector will grow at a rate of 30% every year. This is
bound to attract foreign investors with as many as 30 bn US dollars along with a number of IT
parks as well as residential townships being constructed across our country.
Real Estate Investors have one more city to eye for.
By Pakhi Kshitij | Posted in Property Articles | Tagged Andhra Pradesh, Central Government,
Doctors, Foreign Investors, Government Employees, Information Technology, Investments,
Marketing Manager, Next Decade, outer ring road, Political Turmoil, Real Estate Firm, Real
Estate Properties, Real Estate Sales, Residential Properties, Right Time, Southern India,
Southern Province, Tier Ii, Townships | Comments (0)
Bangalore- The Silicon Valley Of India

June 14, 2010 – 10:40 pm
Bangaluru has over the years gained immense popularity as the hub for IT industries in India.
With great opportunities like world class education, working environment, living standards it is
not wrong to mention it as the “The Silicon Valley of India”.
Many non-Bangaloreans now call the city their home. It is interesting to note that over 10,000
dollar millionaires and about 60,000 super rich people are currently living in the city with huge
investments to make. All these have made Bangalore a hot spot for Real Estate Market, both
Residential and Commercial.
Residential market has seen some significant action with many developers like Prestige and
Sunil Mantri, Sobha, rolling out new projects in micro market segment. Some of the key areas in
Bangalore, where the residential demand has picked up, are Sarjapur Road and Whitefield,
Doddakanenahalli and, Jayanagar.
The supply is growing in line with the revived commercial real estate demand. Latest report from
Cushman & Wakefield implores that the total projected supply for the current year is 12.42
million square feet of office space, more than twice the supply delivered in the year 2009.
Photo by CarbonNYCIndian Market Research Bureau (IMRB) conducted a survey among 5

cities, amongst individuals aged between 25-39 yrs, stated that Mumbai and Bangalore are the
most preferred places to live as the cities provide the best quality of life as well as the most
courteous people. Bangalore is also identified as a city which is in the process of development on
multiple counters – numerous projects have been initiated in areas of Infrastructure, Power,
Water, and Sanitation.
All this indicates that this will be a good investment destination, hence attracting FDIs and NRIs
fund flows as time goes.
By Pakhi Kshitij | Posted in Property Articles | Tagged Bangaluru, Commercial Real Estate,
Cushman, Fdis, Hot Spot, Immense Popularity, Investment Destination, Key Areas, Living in
The City, Mantri, Market Segment, Millionaires, New Projects, Power Water, Preferred Places,
Residential Market, Silicon Valley, Whitefield, Working Environment, World Class Education |
Comments (0)
Times Property Hosts Home Affairs

June 13, 2010 – 12:11 am
The Times of India brings a reason to rejoice for people looking to buy Real Estate properties as
the prices in the realty industry are beginning to rise.
Photo by nancyarora2020Times property, an initiative by the Times of India has brought the
fourth edition of its yearly mega property bonanza at Bangalore.
The expo titled HOME AFFAIRS is a 2 day event which kicks off on June 12 and is expected to
showcase more than 5,000 apartments, independent villas as well as gated communities over the
time. Over 50 developers are said to participate in the huge event including Confident Group,
Artha Property, Sobha Developers, Sunil Mantri Realty, HM Group, LGCL, Shriram Properties,
Salapuria & Sattva Group, Nitesh Estates, Century Real Estate, Hiranandani Upscale, Kumar
Properties, S N Builders, Reddy Structures, Krishna Enterprises, Sowparnika Projects, Radiant
Structures, J R Housing, Vaishnavi Group and D S Max.
The expo is organized in the light of guiding customers to get the best deals. Surely it’s a one
stop destination for Real Estate enthusiasts.
By Pakhi Kshitij | Posted in Property News | Tagged Amp, Best Deals, Bonanza, Century Real
Estate, Confident Group, Enthusiasts, Expo, Gated Communities, Hm, Home Affairs,
Independent Villas, Krishna, Max, Nitesh Estates, Property Hosts, Realty Industry, Sattva,
Shriram Properties, Times of India, Vaishnavi | Comments (0)
India Realty Expo’10 in Dubai

June 12, 2010 – 9:03 am
The 13th India Realty Expo 2010 organized by the Maharashtra Chamber of Housing
Industry (MCHI) in Dubai was a great success. The exhibition held from June 3, 2010 to June 5,
2010 saw a presence of total 2847 NRI’s. The event’s success can be contributed to the fact that
the exhibitors were offering ready properties or possessions between 3-6 months.
The Exhibition was inaugurated by his Excellency Mr. Naresh Mehta, Consul Commerce of
India, Consulate General of India, Dubai-U.A.E on June 3, 2010.
Eighteen leading developers and builders from India including Acme Housing (India) Pvt Ltd.,
Akar Creations Pvt ltd., Ashiana, Delta Group, Everest Developers, Godrej Properties Ltd,
Hiranandani Constructions Pvt Ltd, Kolte-Patil Developers Ltd, Marvel Realtors, Nahar Group,
Nirmal Lifestyle, Nyati Group, Our Town, Pathy Housing, Prathmesh Construction Pvt Ltd,
Runwal Group, Rustomjee, Uma Constructions- represented by United 4 realtors participated in
the exhibition.
Mr. Sunit Mantra, President MCHI said on the occasion, “Looking at the factors such as
attractive prices of Indian Real Estate as compared to Dubai coupled with a lackluster trend in
local markets there, turned out a bonanza for the Indian realtors exhibiting their properties in the
Dubai exhibition with investors and genuine buyers visiting in large number this year.”
The Hon. Secretary, MCHI, Mr. Deepak Goradia said, “We have seen tremendous response and
turnout for the exhibition this time. Projects in Andheri, Powai, Navi Mumbai, Kandivali,
Borivali, Bandra, Ghatkopar, Thane from Mumbai and other cities such as Bangalore, Goa and
Pune received a lot of enquires for residential flats. Quality of visitors was good and mostly they
were affluent, focused and high end consumers. Moreover visitors showed interest in 2/3 BHK
flats ranging from 60 lacs to 1 cr.”
This was the 9th year of the India Realty Expo in Dubai which provides a one stop solution to all
the needs of NRIs intending to purchase properties in India.
The Indian Real Estate Industry has only reasons to cheer.
By Pakhi Kshitij | Posted in Property News | Tagged Ashiana, Borivali, Construction Pvt,
Consulate General of India, Consulate General of India Dubai, Delta Group, Excellency Mr,
Expo 2010, Genuine Buyers, godrej properties, Hiranandani Constructions, India Consulate,
India Pvt Ltd, Ltd, MCHI, navi Mumbai, properties, Residential Flats, Runwal Group, Sunit,
Time Projects | Comments (0)
RE/MAX Forms Alliance

June 11, 2010 – 8:21 am
One of the world’s largest Real Estate franchising networks RE/MAX has formed an alliance
with a Bhopal based firm, Vision Advisory Services. RE/MAX proudly boasts off more than
seven thousand open offices in 74 countries. This is the first time a company as big as RE/MAX
has taken a step towards building a network of Real Estate community on a national level.
The director of Vision Advisory Service, Pradeep Karambelkar said, “We look forward to being
a vibrant part of the RE/MAX community and playing an important role in the real estate
transactions in Bhopal.”
Vision Advisory Services focuses on ethical and transparent business practices, customer-first-
attitude, research-based value investing, implementation of cutting-edge technology and respect
for professionalism which has enabled them to create an impact in over 40 cities till date.
Vision Advisory Bhopal has been awarded with many felicitations by almost all major bigwigs
of the Investment Industry. Vision advisory well supported by top notch professionals having
expertise in well diversified financial services in the areas of Life and General Insurance,
Financial Education, Training Manpower, Stock Broking, Real Estate, Mutual Funds and
Resource Management.
It’s a first of a kind initiative taken by RE/MAX India which aims to bring organizing and
professionalism in the unorganized real estate market of the country. RE/MAX India is also
planning to open Franchisees in major towns and regions of the country.
By Pakhi Kshitij | Posted in Property News | Tagged Advisory Service, Advisory Services,
Alliance One, Attitude Research, Bigwigs, Cutting Edge Technology, Diversified Financial
Services, Felicitations, Financial Education, Firm Vision, Forms Alliance, General Insurance,
Industry Vision, Investment industry, Kind Initiative, max india, Notch Professionals, Pradeep,
Real Estate Transactions, Stock Broking | Comments (0)
RBI Proposes Change

June 10, 2010 – 8:21 am
The Reserve Bank of India on Wednesday clamped restrictions on Urban Co-operative Banks
(UCBs) to exposure on realty sector up to 15% of their total deposits.
Photo by Telstar LogisticsSpecified in the circular issued by the Reserve Bank of India , it said
the total exposure of UCBs to realty sector, including individual housing loans and commercial
real estate, should be restricted to 15% of total deposit resources of any bank.
It further mentioned that the loans granted against the security of any immovable property should
be classified as Real Estate Loans. The source of repayment will determine whether the exposure
is against commercial real estate. Moreover, the ceiling of 15% is to be reckoned on total
deposits of a bank based on the audited balance sheet as on March 31 of the fiscal year 2009-10.
Only time will tell what this change has in store for the real estate industry.
By Pakhi Kshitij | Posted in Property News | Tagged Balance Sheet, Bank Of India, Banks, Co
Operative, Commercial Real Estate, Fiscal Year, Housing Loans, Immovable Property, Real
Estate Loans, Reserve Bank Of India, UCBS, Urban Co | Comments (0)
Tips To Make Property Buying Easy

June 8, 2010 – 2:31 pm
Here are some tips that will make your dream of owning a property and the journey involved
easier.
1. Choosing The Right Property
Try and get all the information about the builder and the price of the property you are willing to
buy in the market along with other general information.
2. Buying a Pre-Launch Property
Many times developers build properties according to the need of the market within a limited
time. This is called soft or pre-launch. This property is cheaper than others by 10-15%.
3. Broker’s Fees
If you plan on buying a property through some broker then his fees will be decided by the
property. His fee is to be paid, first, when giving the token money and second, at the time of
registration.
4. Token Money
Once you have decided to buy a property, token money is to be paid at that time. According to
the price of property token money can vary from Rs.50, 000-5, 00,000. It can vary according to
the agreement.
5. Preparing The Budget
Actual price is often known as the Base rate. There are some other prices like car parking,
society or club membership, electricity and water. Add all these up and then finalize your budget.
Other than this you will have to pay for stamp duty and registration charges.
6. Down Payment
Under-construction or ready flats have different down payment schemes. After giving the token
money this comprises of 10-20% of the actual property cost in case of under construction flats
where as for ready made property down payment is all the money minus token money.
7. Bank Loan
All procedures regarding bank loan must be completed before giving the token money. Bank
decides the credit limit after checking property papers and your income details.
8. Property Registration
After giving down payment and receiving letter of approval from the bank, you must get your
property registered.
9. Flat Possession
After the work is finished developer gets a certificate and thus he hands over the property
possession to the customer. Customer should check all the details and clear all payments at this
time.
10. Facilities Provided By The Builder
After the possession has been given to the customer, builder has the maintenance responsibility
of 18 months.
11. Housing Society
After the completion of maintenance period the developer makes the housing society. They get a
bank account in the name of the society. This society chooses its representative’s and continue
the maintenance work throughout.
Have a happy and safe property buying experience.
By Pakhi Kshitij | Posted in Property Articles | Tagged Bank Loan, Budget, Buying A Property,
Car Parking, Club Membership, Electricity, Income Details, Journey, Letter Of Approval,
Limited Time, Money Bank, Pre Launch, Property Broker, Property Developers, Property
Possession, Property Registration, Registration Charges, Rs 50, Stamp Duty, Token Money |
Comments (0)
Beary’s Group Wins Runner Up Award

June 4, 2010 – 10:16 am
A Bangalore based residential project has won the runner up award by the International Real
Estate Federation (FIABCI). ‘Bearys Lakeside Habitat’, a twin tower residential project was
awarded the prestigious award on May 27 at Bali, Indonesia.
The ceremony was held in the presence of the President and the First lady of the Republic of
Indonesia along with many other renowned developers and dignitaries especially flown in from
around the world.
The project promoted by the Bearys Group, ‘Lakeside Habitat’ that welcomes you to the city as
you drive into it from the airport is the only Indian project to win this award this year. This is not
the first time that Lakeside Habitat has won an award; it has been recognized on many previous
occasions also.
There were fifty-four projects chosen from across 11 countries to compete for the coveted Prix d’
Excellence award 2010.
The award was received by the Director of Beary’s Group, Mr. Siddique Beary.
Indian Real Estate has once again a reason to rejoice.
By Pakhi Kshitij | Posted in Property News | Tagged Bali Indonesia, Bangalore, Beary,
developers, Dignitaries, Excellence Award, First Lady, Habitat, Indian Real Estate, International
Real Estate, Occasions, Presence, Prestigious Award, Republic Of Indonesia, Residential project,
Siddique, Twin Tower, Wins | Comments (0)
Launch Of The Square In Sholapur

June 2, 2010 – 7:24 pm
The textile capital of India Sholapur has a reason to rejoice. Sunil Mantri Group, a leading real
estate development company with pan-India presence in association with Kumar Yashraj Group,
a leading Sholapur-based developer, has announced its new project “The Square” with an aim to
set new bench marks in the western zone.
The project will incorporate top of the line amenities, security and design aspects and is the first
of its type in Sholapur that will encompass residential, commercial and retail real estate segments
creating a unique neighborhood in the center of the city where residents of the city can relax,
shop, and enjoy fine dining in a modern setting. The Square will be spread across 27,000 sq.
meters.
The Square, a juxtaposition of Residential & Retail, constitutes flats of 2 , 2.5 and 3 bedroom
configuration and more than 180 shops, a major anchor retail outlet, and a hyper mart on a total
area of 2,81,000 sq feet. Situated on the main road, it gives easy accessibility, luring consumers
to the premises. The Square also introduces a modern food court with fine dine facilities and a
shopping arcade for a totally relaxing environment to chill out in.
Mr. Sunil Mantri, Chairman, Sunil Mantri Group said on the occasion, “Tier II and Tier III cities
in India have tremendous potential. We see great opportunity in smaller cities and we are
confident about the success of our Sholapur project. At The Square, we look forward to making
available premium lifestyle offerings in southern Maharashtra. Our experience has lead to a
greater understanding of the demands of ultra-modern living and we are committed towards
creating landmarks of exemplary design, comfort and quality that benchmark the highest
standards of urban living.”
The plush arrangements for the club house and modern gymnasium, box cricket, children’s play
area, swimming pool and landscape grounds studded across The Square creates a self-contained
world of extravagance and indulgence for all its residents and offers them all the amenities and
facilities of modern living within its premises.
The Square promises to be a combination wherein nature and urban living co-exist with modern
and premium amenities in the center of the city.
By Pakhi Kshitij | Posted in Property News | Tagged Bench Marks, Capital Of India, Club
House, Contained World, Design Aspects, Exemplary Design, Extravagance, Food Court,
Juxtaposition, Leading Real Estate, Mantri Group, Play Area, Retail Outlet, Retail Real Estate,
sq feet, Sq Meters, Swimming Pool, Tier Ii, Western Zone, Yashraj | Comments (0)
Steel Prices Drop

June 2, 2010 – 10:53 am
The steel authority of India ltd(SAIL) cut its product prices on Tuesday by rs.1000-1,500 per
tone. This step was taken keeping in line with the global price movement as global steel prices
have declined nearly 15 per cent over the last month owing to poor demand in the wake of
European financial crisis. Mr. Atul Chaturvedi, steel secretary had earlier said on Monday that
the steel prices had been falling and would continue to drop in the next month too.
Photo by tochis
The company spokesperson said ““We have brought down prices of various products in the
range of Rs 1,000-1,500 a tone to align with the global trend”.
An official from JSW steel said it was also likely to announce a price cut later on Tuesday.
The company’s Joint Managing Director M.V.S Seshagiri Rao said.”Spot prices for long
products are volatile and we change them several times a month. For flat products, there is likely
to be a reduction in prices this month because of a decline in international prices.” Mr. Rao
further added, “However, there are no signs of tapering in the domestic demand,”
Steel prices are likely to cool further in the coming months as demand from realty and
construction sector usually slows down during monsoon.
Shares of SAIL closed at Rs 198.60 on the NSI, down 3.8% from previous close. JSW Steel
closed at Rs 1,054, down 4.9%.
By Pakhi Kshitij | Posted in Property News | Tagged atul, chaturvedi, company spokesperson,
Construction Sector, decline, Financial Crisis, global price, global steel, global trend, jsw steel,
Managing Director, nsi, rao, rs 1, several times, Signs, steel authority of india ltd, Steel Prices |
Comments (0)
Jaypee Greens New Project-Kasa Isles

May 16, 2010 – 12:18 am
Jaypee Greens recently launched “Kasa Isles”. This is an anomalous project which has taken
inspiration from the Mediterranean style architecture. This project will introduce high rise flats
and is located at Sector 129, Jaypee Greens, Wish Town, Noida.
There will be somewhere 2000 apartments in “Kasa Isles”. These flats fill you with delight and
make your living worth. These luxurious flats are in the reach of common man and thus have the
potential of attracting individuals. Studio apartment, Duplex Penthouses and 2/3/4 BHK
apartments in sizes ranging from 550-3100 sqft will be offered in this project.
This project is highly influenced by the Mediterranean style architecture, especially its ambience
and landscaping. The green parks guarantee hi-quality lifestyle for its residents with its large
range of recreational facilities like central club and with low-height stone fountains. Some more
facilities are Italian style swimming pool, sports facilities for Tennis, badminton court, jogging
tracks, Card room, Mediterranean cuisine restaurant and many more.
The price list has a BSP of Rs 3390/- per sqft.
The most attractive feature of Kasa Isles is the club it is offering to the residents. In order to give
its members a warm welcome, it has soothing interiors created with terra cotta walls blended
with stacked stones in the club. A complete home is offered with wide & low windows, arched
entrance opening to wide sitting areas, a stone fireplace, and beautiful hardwood floors.
By Anchal | Posted in Property News | Tagged Arched Entrance, Attractive Feature, Badminton
Court, Italian Style, Jaypee Greens, Kasa Isles, Mediterranean Cuisine, Mediterranean Style
Architecture, noida, Penthouses, Quality Lifestyle, Rise flats, Sports Facilities, Stone Fireplace,
Stone Fountains, Studio Apartment, Wishtown | Comments (0)
Eco-friendly building concept catches up with housing board

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JYOTSNA JALALI
Posted: May 27, 2010 at 0007 hrs IST
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Chandigarh All upcoming projects to be equipped with water and power conservation methods
Keeping in tune with growing global concern for the environment, the Chandigarh Housing
Board (CHB) also plans to go green and construct ‘eco-friendly’ buildings.
In all upcoming projects, techniques of rain water harvesting, water recycling, solar power heating
and groundwater recharging will be put to use.
The CHB housing project in Sector 63 will be the first where the Board will be testing waters.
CHB Chairman Mohanjeet Singh said, “It is the moral responsibility of every citizen to conserve
resources. Introducing these changes in the building designs is the first step towards saving the
environment. Techniques to conserve water and electricity will be implemented in all upcoming
housing projects. We have already introduced solar heating facility in the recently constructed
one-bedroom flats in Sector 40 and it is quite successful.”
Following Sector 63, the Board has plans afoot for general housing projects in sectors 53, 54 and
55. Though the layouts are being prepared, sources claim it would take another two years for
work to start on these projects.
Once ready to move in, the flat residents shall also given an insight into using the ‘green’
facilities and shown how they are resourceful and useful to them.
“The southern sectors already face shortage of water and long powercuts as compared to other
parts of the city and therefore steps like water recycling as well as rain harvesting would be of
great advantage,” added Mohanjeet.
The six-storeyed housing society in Sector 63 is a unique venture with a CHB project having as
many floors for the first time. Besides having a ‘green’ design, the society is also different as the
ground floor is dedicated for parking space. Under the scheme, there are 304 three-bedroom
flats, 836 two-bedroom flats, 532 one-bedroom flats and 304 houses are under the EWS scheme.
The approximate price of a three bedroom flat with an area of 1,424 square feet is Rs 39.57 lakh, if
the payment is made upfront. The cost of a Category B house — two-bedroom flats with an area
of 1,075 square feet— has been fixed at Rs 29.14 lakh at present. Meanwhile, it is Rs 17.2 lakh
for a one-bedroom flat and Rs 5 lakh unde
Real estate giants will be roped in for green houses
fe Bureaus
Posted: Friday, May 14, 2010 at 2319 hrs IST
Updated: Friday, May 14, 2010 at 2319 hrs IST
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New Delhi: With a view to reduce carbon emissions, the government will soon rope in major
real estate developers for voluntary adoption of a set of new guidelines on building low energy
consuming green housing complexes. The move is part of the government's national action plan
on climate change.
The ministry of new and renewable energy (MNRE) has asked an expert agency set up by it in
partnership with The Energy & Resources Institute (Teri) to evolve a set of guidelines on how to
build large housing complexes in the most environment friendly and energy efficient way. The
new guidelines would include requirements such as meeting about 5% of the energy
requirements through renewable sources.
While development of townships is the mandate of the ministry of urban development and partly,
the housing ministry and urban poverty alleviation, the proposed green rating for housing
complexes is an initiative of MNRE because it is an extension of the projects it is already doing.
Officials from other ministries are part of a technical panel of MNRE dealing with green
infrastructure for large development. The expert agency—the Association for Development and
Research of Sustainable Habitats or ADARSH—which now gives green ratings for individual
buildings, will evolve the new norms for large residential complexes. ‘‘The rating called Griha
would be voluntary for builders in the initial few years, after which it could be made
compulsory,’’ the rating agency’s CEO Siva Kishan told FE.
The idea is to rope in top five real estate developers to voluntarily adopt the guidelines, which
would then set the benchmark for others. The rating agency is now in talks with various
developers and the first partnership with a real estate developer may be announced soon, he said.
The rating agency is also talking to various state governments for giving incentives to developers
to adopt the new norms that would reduce energy consumption and the impact of construction on
ground water levels and the environment.
Shiva Kishan said the Maharashtra government is open to reducing property tax for green
buildings as an incentive, while some other states are open to let builders construct more floors if
they follow green building norms. This would allow them to recoup the rating fee as well as the
extra initial cost of environment-friendly construction.
The ministry now allows some incentives for individual buildings to get green rated. These
include reimbursement of 90% of the rating fee and rewards for the architect.
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The present paper entitled “Prospects & Problems of Real Estate in India” is an
attempt to reveal the issues concerned with real estate investment sector in India. This
paper is concerned with the investment on real estate in India and the trends in the
concerned industry. The paper has been divided into three sections. Section one deals with
the fundamental factors affecting the real value like demand, supply, property, restrictions
to use and site characteristics. Section two and three explains the causes and the constraints
to the present real estate boom respectively in India. The paper also presents the
suggestions and future prospects of real estate in the country
Independent Variables
Prices, features of flat, material used and advertising.
Dependent Variables
Customer awareness, presences and their perception about property.
Introdection
Real estate or immovable property is a legal term (in some jurisdictions) that encompasses land
along
with anything permanently affixed to the land, such as buildings. Real estate is often considered
synonymous with real property (also sometimes called reality), in contrast with personal property
(also
called personality). However, in technical terms, real estate refers to the land and fixtures
themselves
and real property are used primarily in over real estate. The term real estate and real property are
used
primarily in common law, while civil law jurisdiction refers instead to immovable property. In
law, the
word real means relating to a thing as distinguished from a person. Thus the law broadly
distinguishes
between real property (land and anything affixed to it) and personal property (everything else
e.g.
clothing, furniture, money).
Real Estate Business Includes: With the development of private property ownership, real estate
has
become a major area of business. Purchasing real estate requires a significant investment and
each
parcel of land has unique characteristics, so real estate industry has evolved into several distinct
fields.
Some kind of real estate businesses include-
• Appraisal – Professional valuation services
• Brokerage – Assisting buyers and sellers in transactions
• Development – Improving land for use by adding or replacing buildings
• Property Management – Managing a property for its owner(s)
• Real Estate Marketing – Managing the sale side of the property business
• Relocation Services – Relocating people or business to difficult country
Types of Ownership Interests: Real property (immovable property) can refer to the real estate
itself or to various types of ownership interests in real estate, including:
• Freehold: Provides the owner the right to use the real estate for any lawful purpose and sell
when and to whom the owner wishes.
• Life estate: An interest in real estate which is granted to a life tenant until that person dies. The
interest terminates upon the death of the life tenant.
• Estate for years: Similar to life estate but term are a specified number of years.
• Leasehold: The right to posses and use real estate pursuant to the terms of a use.
• Reversion: The right to posses the free interest in real estate after the expiration of a life estate,
estate for years or leasehold.
• Concurrent or co-tenancy: The ownership of an interest in real property by more than one
party. Rights of any single party may be limited in various ways depending on the jurisdiction
and type of concurrency.
Participants of Real Estate Market: The main participants in the real estate markets are
International Research Journal of Finance and Economics

ISSN 1450-2887 Issue 24 (2009)
© EuroJournals Publishing, Inc. 2009
http://www.eurojournals.com/finance.htm
Prospects & Problems of Real Estate in India
Vandna Singh
Head-MBA Department
Seth Jai Prakash Mukand Lal Institute of Engeenring &Technology (JMIT)
Radaur, Yamunanagar
Komal
Lecturer, Institute of Technology & Management (ITM), Gurgaon
E-mail: komal29m@rediffmail.com
Abstract
The present paper entitled “Prospects & Problems of Real Estate in India” is an
attempt to reveal the issues concerned with real estate investment sector in India. This
paper is concerned with the investment on real estate in India and the trends in the
concerned industry. The paper has been divided into three sections. Section one deals with
the fundamental factors affecting the real value like demand, supply, property, restrictions
to use and site characteristics. Section two and three explains the causes and the constraints
to the present real estate boom respectively in India. The paper also presents the
suggestions and future prospects of real estate in the country.
Keywords: Real estate, property, prices, market, investment, income etc.
Objectives
The paper aims to examine the present scenario of real estate in India. In this broader framework,
an
attempt has been made to achieve the following specific objectives:-
1. To study the fundamental factors affecting the real estate value.
2. To examine the present factors of real estate boom.
3. To present the future constraints of real estate investment in India.
Sample Size
Out of the total companies working in India in the field of real estate 50 major players have been
selected for the purpose of the study.
Research Methodology
The present study is of analytical and exploratory nature. Accordingly the use is made of
secondary as
well as primary data. The secondary data is collected mainly through various newspapers,
magazines,
Internet and RBI review. To supplement the secondary data, some primary data has also been
used
which is collected through interviews and personal visits to the various companies to know the
present
situation of the market.
International Research Journal of Finance and Economics - Issue 24 (2009) 243
The present study is dependent more on secondary data. Primary data is not used due to the
reliability of the data. The factors in the present paper are the Macro Economic factors for which
the
secondary data is more suitable and reliable. The collected in the aforesaid manner have been
tabulated
in condensed form to draw the meaningful results. To analyze the data tables, percentage and
graphs
were used.
Independent Variables
Prices, features of flat, material used and advertising.
Dependent Variables
Customer awareness, presences and their perception about property.
Introdection
Real estate or immovable property is a legal term (in some jurisdictions) that encompasses land
along
with anything permanently affixed to the land, such as buildings. Real estate is often considered
synonymous with real property (also sometimes called reality), in contrast with personal property
(also
called personality). However, in technical terms, real estate refers to the land and fixtures
themselves
and real property are used primarily in over real estate. The term real estate and real property are
used
primarily in common law, while civil law jurisdiction refers instead to immovable property. In
law, the
word real means relating to a thing as distinguished from a person. Thus the law broadly
distinguishes
between real property (land and anything affixed to it) and personal property (everything else
e.g.
clothing, furniture, money).
Real Estate Business Includes: With the development of private property ownership, real estate
has
become a major area of business. Purchasing real estate requires a significant investment and
each
parcel of land has unique characteristics, so real estate industry has evolved into several distinct
fields.
Some kind of real estate businesses include-
• Appraisal – Professional valuation services
• Brokerage – Assisting buyers and sellers in transactions
• Development – Improving land for use by adding or replacing buildings
• Property Management – Managing a property for its owner(s)
• Real Estate Marketing – Managing the sale side of the property business
• Relocation Services – Relocating people or business to difficult country
Types of Ownership Interests: Real property (immovable property) can refer to the real estate
itself or to various types of ownership interests in real estate, including:
• Freehold: Provides the owner the right to use the real estate for any lawful purpose and sell
when and to whom the owner wishes.
• Life estate: An interest in real estate which is granted to a life tenant until that person dies. The
interest terminates upon the death of the life tenant.
• Estate for years: Similar to life estate but term are a specified number of years.
• Leasehold: The right to posses and use real estate pursuant to the terms of a use.
• Reversion: The right to posses the free interest in real estate after the expiration of a life estate,
estate for years or leasehold.
• Concurrent or co-tenancy: The ownership of an interest in real property by more than one
party. Rights of any single party may be limited in various ways depending on the jurisdiction
and type of concurrency.
Participants of Real Estate Market: The main participants in the real estate markets are244
International Research Journal of Finance and Economics - Issue 24 (2009)
Owner/User: These people are both owners and tenants. They purchase houses or commercial
property as an investment and also to live in or utilize as a business.
Owner: These people are pure investors. They do not consume but rent out or lease the property
to
someone else.
Renter: These people are pure consumers.
Developers: These people prepare raw land for building which results in new product or the
market.
Renovators: These people supply refurbished buildings to the market.
Facilitators: This includes banks, real estate grocers, lawyers and others that facilitate the
purchase
and sale of real estate.
The owner/user, owner and renter comprise the demand side of the market, while the
developers and renovators constitute the supply side. In order to apply the simple demand and
supply
analysis to real estate markets a number of modifications need to be made to standard
microeconomic
assumptions and procedures.
Real estate can divided into three categories: These are
• Commercial
• Residential
• Agricultural
We can invest into all the given areas and can make return by capital appreciation, rental
income, agricultural produce, lease and commercial use.
The following factors influence the price and cost of the real estate:
1. The physical characteristics of the property
2. The property rights
3. The time horizon of holding the property
4. Geographical area
5. The development rate
Features of Real Estate Markets: In particular, the unique features of the real estate market
must be
accommodated. These include:
• Durability
• Heterogeneous
• High transaction costs
• Long time delays
• Both an investment good and consumption good
• Immobility
PART-1: Fundamental factors determining the value of real estate
These factors includes
Demand
Demand refers to people’s willingness and ability to buy or rent a given property. In part demand
stems
from a market area’s base. In most real estate markets, the source of buying power comes from
jobs.
Property values follow an upward path when employment is increasing. The real estate market in
India
has seen remarkable changes in the past few years. The rapid expansions of information
technology,
especially BPOs, spurt in the middle class income and 8% growth in GDP are the potential key
factors
for the growth.
India is the 4th largest economy in the world, and has the 2nd highest GDP among the
developing countries based on purchasing power parity. IT and IT enable services sector in India
is still
in its growing stage due to increasing demand for business processing units in India and is
estimated to
grow by 107% to $583 million in revenue. This could lead to a space requirement of 20-25
million sq.
ft. per annum, according to a Merrill Lynch report. Taking this factor into consideration, the
Total
value of real estate created by the IT and ITES sector in the next three years will be Rs.132000.
Supply Analysis
Supply analysis means sizing up the competition. Nobody wants to pay more for a property than
the
price they can pay for competing property. An integral part of value analysis requires identifying
sources of potential competition and then inventorying them by price and features. An analysis
of
supply should not limit potential competitors to geographically and physically similar properties.
In
some markets, for example, low priced single family houses might compete with condominium
units,
manufactured homes and even with rental apartments.
The Property
In real estate the property itself is also a key ingredient. The price that people will pay is
governed by
their needs and the relative prices of the properties available to meet those needs. To try to
develop a
property’s competitive edge, an investor should consider five things:
1. Restrictions on use
2. Location
3. Site characteristics
4. Improvements
5. Property management
The Property Transfer Process
In efficient markets, information flows so quickly among buyers and sellers that it is virtually
impossible for an investor to outperform the average systematically. As soon as something good
or bad
occurs, the prices of the affected company’s stock adjust to reflect its current potential for
earnings or
losses. Real estate markets are no as efficient as stock markets.
Rental Trends in India
Recent trends of rental properties in India are conspicuous by the immense potential that is being
realized today. Rental values in cities like Delhi and outskirts are witnessing an increase of 20-
25%.
Real estate agents are devoting themselves to negotiations for rented homes than ever. Though
the
interest rates on home loans, continued tax exemptions on such prompts people to buy property,
those
with the ability to buy a flat among the middle-class are thinking twice.
In residential segment, the capital value or cost of flats has almost doubled in cities like
Gurgaon where prices went up to Rs. 45 lakhs from Rs. 15 lakhs a couple of years back. The
demand
for more capital appreciation in the wake of rising prices coupled with home loan rate hike has
dampened the buying spirit. This has in ways propelled demand for rental property in India.
Increased
demand for independent houses or paying guests occurs mainly in the metros like Delhi,
Gurgaon, and
Mumbai etc. where the corporate sectors rent independent houses for their senior executives. A
paying
guest or PG accommodation in India is a convenient arrangement. Even PG hostels and working
women’s hostels, are considered safe and can be availed of on an individual or sharing basis
mean big
business.
The real estate rental trends in commercial sector are momentous as the key tendency among
the investors is to rent a commercial space instead of buying. It will facilitate low risk and less
worry
on maintenance. Commercial rentals including corporate office space, BPO spaces, mall space,
shops
and showrooms are an integral part of the commercial rentals in India. Buying good space in
highquality
development and leasing it to a good brand is a wise investment decision. Usually, commercial
lease agreements specify a 15% escalation in the real estate rental in every three years which is a
good
enough yield. For those considering regular rental returns rather than capital appreciation, mall
space
246 International Research Journal of Finance and Economics - Issue 24 (2009)
has the distinction to be an excellent option. It gives returns higher than that received with office
space
and much higher than the rental returns from residential space.
PART-2: Causes for Present Real Estate Boom
Foreign Funds
The Government has allowed FDI in the real estate sector with certain caveats. Recently the
Cabinet
Committee on Economic affairs has decided to permit 100% FDI in forms of housing, hotels,
resorts,
commercial premises, educational institutions, recreational facilities, hospitals and city and
regional
level infrastructure in order to attract higher investments. Earlier, restrictive norms were imposed
on
foreign investments with their presence permitted only in the integrated townships. They invest
in
urban infrastructure like hotels, shopping malls, large scale residential complexes in new
townships,
InfoTech parks and special economic zones. Over a half a dozen domestic realty funds have been
setup
so far with a corpus of over Rs. 3,500 crore.
Figure 1: FDI in Indian Real Estate
4.5%
10.6%
16.0%
26.5%
0%
5%
10%
15%
20%
25%
30%
2003-04 2004-05 2005-06 2006-07
Real Estate Exposure of Banks
Commercial banks exposure to the real estate sector almost doubled in the first 10 months of
2005-06
over the March 31, 2005 level. In real estate, banks advances for 2005 were Rs. 26,600 crore
against
Rs. 17,355 crore the year before. The total outstanding loans to real estate rose by 84.4% as on
January
20, 2006, according to RBI’s report on macroeconomic and economic developments in 2005-06
released. In the meantime, the housing finance industry started to expand rapidly, making home
loans
easily available to everyone. The supply increased enormously and the demand remained steady,
as
prices had gone beyond the realistic levels.
Figure 2: Loan Disbursement
4500 5700 7500 9821 12626
26500
39750
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
1996-
1997
1997-
1998
1998-
1999
1999-
2000
2000-
2001
2001-
2002
2002-
2003
Loans (Rs. in crore)
Shortage of Land for Special Economic Zone
In the great rush to developing special economic zones a schism have emerged between the
companies
that posses land for the projects and those that don’t. As many as 125 projects for over 2,13,023
acres
(86,208 hectares, which is more than half the area of the national capital) were considered at a
meeting
to a massive 1,48,290 acres or 70% of the projected land size these SEZs. For instance Mahindra
Realty does not have the 2,500 acres land for it s proposed SEZ as yet. Out of the 23 multi
product
SEZ projects for which the data is available, only three were in possession of a total of 30,250
acres of
land a month ago. Of this, Reliance Industries accounted for 25,000 acres. Another seven
projects had
managed to get a portion of the 27,510 acres of the total land they sought. The remaining thirteen
projects did not have land totaling 1,35,000 acres available. Of this Adani Exports Limited did
not
have the 75,000 acres if land available at that stage. The companies are not having the required
land for
their projects making the prices of land very high.
Investment by IDFC
The Infrastructure Development Finance Company (IDFC) plans to invest Rs.1,000 crore every
over
five years on township projects, InfoTech parks, hotels, retail and transport sectors.
Commercial Boom
According to an expert to a real estate consultancy, there are currently 18 malls in New Delhi,
Gurgaon, Nodia and Faridabad, with approximately built up space of 3 million sq. ft. While 66
new
mall projects have been announced, the crush in the meantime is on the existing space. Abhijit
Das,
head, Ansalplaza Mall Management Company, confirms the rental increase. Shops on the first
and
second floors of the mall, he says which were being leased at rates between Rs. 175 and Rs. 225
per sq.
ft. two months ago are now being out at a minimum of Rs. 250 per sq. ft.
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. Mainly there are
two
causes for the same:
Per Capita Income
Figure 3: Per Capita Income
19592 21543
23240 25000
0
5000
10000
15000
20000
25000
2002-03 2003-04 2004-05 2005-06
Income (in Rs.)
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
Figure 4: GDP
2463324
2760224
3121414
3529240
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
2002-03 2003-04 2004-05 2005-06
GDP at Market Price (in Crore Rs.)
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 fig.
3 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
Figure 5a: Price variations in Mumbai
Mumbai (in Rs. Per Sq. Ft.)
Mar-04 Mar-05 Mar-06 Mar-07 Mar-08
Cuffe Parade 11500 18000 25000 35000 42000
Malabar Hill 15000 22000 28000 38000 46000
Worli 8500 12000 18000 26000 32500
Bandra (W) 8500 10000 13500 21500 26500
Navi Mumbai 1800 2300 2800 3500 5500
Figure 5b: Price variations in Mumbai
Delhi/NCR (in Rs. Per Sq. Ft.)
Shanti Niketan 11500 15000 18000 22500 27000
Vasant Vihar 11000 14500 17000 21000 26500
Friends Colony 6000 8000 10000 13500 18000
Gurgaon 2000 2500 3700 4850 6100
Nodia 2000 2800 3700 4900 6850
Figure 5c: Price variations in Chennai
Chennai (in Rs. Per Sq. Ft.)
Baoat Club Road 7750 8500 10000 12500 16000
Poes Garden 6200 7500 8500 11000 14800
Mylapore 3000 4500 6000 8500 11200
Tnagar, Adyar 2000 3000 4000 5800 7500
Anna Nagar 2300 2800 3500 6500 8500
Vadapalani 1900 2000 2250 3800 5200
Figure 5d: Price variations in Banglore
Bangalore (in Rs. Per Sq. Ft.)
White Field 1000 2000 5000 8900 12500
Richmond Town 5000 6000 7200 11000 15500
Palace Orchards 5300 6000 7500 11000 13500
Indira Nagar 3200 3700 4200 6500 9200
Kanamangala 3100 3500 4000 6500 8500
Figure 5e: Price variations in Hyderabad
Hyderabad (in Rs. Per Sq. Ft.)
Banjara Hills 2000 2500 3000 4800 6500
Jublee Hills 2000 2500 3000 4600 7500
Himayatnagar 1500 1700 2000 3200 4800
West & East Marredpally 1500 1700 2000 2800 4200
Secunderabad 1500 1700 2000 3100 4500
Figure 5f: Price variations in Kolkata
Kolkata (in Rs. Per Sq. Ft.)
Allipur 2850 3000 3400 5400 7800
Allygunj 3000 3200 3575 6200 8500
London Street 2975 3100 3575 6250 8000
Rajarhat 1100 1200 1550 2800 4200
Salt Lake 1875 1950 2075 3600 5250
Figure 5g: Price variations in Pune
Pune (in Rs. Per Sq. Ft.)
Karegaon Park 3000 3500 4000 5800 7250
Aungh 2000 2500 3200 5500 7000
Banger 1600 2000 2500 4500 6200
Wakad 1300 1800 2000 3500 5800
Kalyani Nagar 1800 2500 3500 5400 7500
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.
PART-3: Constraints in the Real Estate Investment
The various constraints are as under-
Urban Land Ceiling Regulation Act (ULCRA)
The central government has replaced this archaic law in 1999-2000, but the state government has
not
followed the lead. Some states like Punjab, UP, MP, Rajasthan, Gujrat and Orissa are yet to act
on it.
This law has been failed and this is the right time to act on it and to release more land into the
market.
This will definitely lower the price of land, which accounts for about 50% of the price of real
estate
property in India, unlike the developed countries, where it is much less. Distribution of cost of
Housing
in India and USA:
Figure 6: Housing Cost in India & US
49%
24%
28%30%
18%
3% 5%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Land
Costs
Material
Costs
Labor
Costs
Prof it
India
US
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.
Rental Laws
Obsolete tenancy and rental control laws keep a large part of the urban properties off the market.
The
rental laws must be revised to protect the owner and his/her property from the tenant. The tax
laws
must be revised to make renting of properties a financially viable option. Some states like
Maharashtra,
Goa, Bengal and Karnataka have already made amendments to the rent act.
Foreclosure Laws
Though the level of foreclosure for the housing finance companies are relatively low at around
1.5 to
2%, these must be revised and made up-to-date to suit the current context. The laws for non-
payment
of Equated Monthly Installments (EMIs) and consequent foreclosure and repossession of the
property
law must be revised so that the financing companies have the final rights on the property, which
is
collateral for the housing loan.
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. Inflation rate is touching the heights as shown by the figure given below:
Inflation rate in India
Figure 7: Inflation rate
Date Inflation rate
Feb 5, 08 3%
Mar 22, 08 6.68%
April 4, 08 7%
April 26, 08 7.61%
May 10, 08 7.82%
May 24, 08 8.24%
June 7, 08 11.05%
June 14, 08 11.43%
Inflation rate is increasing continuously in India making the market unstable.
Barriers in GDP Growth
The present contribution of the housing construction industry in India is small when compared to
developing and developed countries. This sector contributes only 1% of the GDP in India, as
compared
to 3 to 6% in other developing countries. If the above issues are addressed and the economy was
to
grow at 10% a year, the housing sector would grow at 14% a year and create over new3.2 million
jobs
over the next 10 years. The problems are numerous, the solutions are obvious and clear, but the
choices
are difficult and few. The advantages of implementing these changes will overcome all the
negative
and political issues, which have kept the problems dormant for so long. India does not have
option, but
to act strongly and immediately. This will provide the impetus to get Indian economy back on
the track
for a double digit growth. Figure 8 shows the various barriers, keeping the GDP growth in India
at
5.5% in 2000, and the resulting GDP growth of 10.1% with the complete reforms by 2010.
Figure 8: Barriers in GDP
Status Quo
Growth, 5.50%
Product M kt
Barriers, 2.30%
Land M kt
Barriers, 1.30%
Privatizatio n,
0.70% Labor M kt
Barriers, 0.20%
Lack of
Infrastructure,
0.10%
Findings
Findings of the paper are as under-
• 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 by this paper-
• Due to high prices the lower income group is not able to purchase the land, so govt. should take
measures 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 govt. should steps for the same.
• The investors should analyze the type of land 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 govt. 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 13-14%.
• 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.
References
[1] Seiler, J. Michael (1999), “Diversification Issues in Real Estate Investment”, Journal of Real
Estate Literature, Vol. No. 07, Page 163 to 179.
[2] Jackson, O. Thomas (2001), “The Effects of Environmental Contamination on Real Estate”,
Journal of Real Estate Literature, Vol. No. 09, Page 91 to 116.
[3] Benjamin, D. John (2003), “The Environment and Performance of Real Estate”, Journal of
Real
[4] Malpezzi, Stephen, ````The role of Speculation in Real Estate Cycles”, Journal of Real Estate
Literature, Vol. No. 13, Page 141 to 164.
[5] Focke, Christian, “The Development of German Open-Ended Estate Funds”, Journal of Real
Foreign Direct Investment:

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outsourcing and Information Technology Industry. The leaders of the IT/ITES world have set
up or are setting up their centers in India. Estimated demand from IT/ITES sector alone is
expected to be 150mn sq.ft. of space across the major cities by 2010.
In residential sector there is housing shortage of 19.4 million units out of which 6.7 million are
in urban India.
The increase in purchasing power and exposure to organized retail formats has redefined the
consumption pattern. As a result the country has experienced mushrooming of retail projects
across the cities.
The main growth thrust is coming due to favorable demographics, increasing purchasing
power, existence of customer friendly banks & housing finance companies, professionalism in
real estate and favorable reforms initiated by the government to attract global investors.
Foreign Investment (FDI) in Real Estate Sectors

in India
Foreign Direct Investment is encouraged and permitted, subject to certain
conditions, in the following real estate sectors in India:
 Hotel Development
 Tourism
 Hospitality
 Township development
 Developing Commercial Real Estate
 Built-up infrastructure
 Housing and construction projects
 Building Resorts
 Building Hospitals
 Building Educational institutions
 Building Recreational facilities
 Infrastructure projects: regional and local level
 Special Economic Zones (SEZ's)
Conditions for Foreign Investment in Real

Estate Sector in India
Foreign Direct Investment in some of the aforesaid areas (not all) is subject
some conditions, some of which are as follows:
 Develop a minimum land area of 10 hectares for serviced housing plots, and a
minimum built-up area of 50,000 sq m in case of construction projects. The policy
does not clearly define ‘built-up’, though FSI (Floor Space Index)/FAR (Floor Area
Ratio) could be used as a basis for the same.
 Fulfill the minimum capitalization norm of $10 million for a wholly-owned subsidiary
and $5 million for JVs. The funds would have to be brought in within six months of
commencement of business (which needs to be defined) of the subsidiary or JV.
 Complete at least 50% of the integrated project within five years from the date of
obtaining all clearances.
 Do not sell undeveloped plots (with no infrastructural backup). Provide infrastructure

and obtain the completion certificate from the concerned local body before disposal.
This clause needs amendment because certificates are sometimes not issued for
months on end, even years, an uncertainty which tends to raise project cost, often
beyond viability.
 Do not repatriate original investment before three years from completion of minimum
capitalization. Early exits require prior approval of the Foreign Investment and
Promotion Board.
 Conform with all applicable local and state laws, and abide by all regulations and
norms.

FDI in Real Estate in India

Previously, only NRI's and PIO's were allowed to invest in the housing and the real estate
sectors. Foreign investors other than NRIs were allowed to invest only in development of
integrated townships and settlements either through a wholly-owned subsidiary or through a
joint venture (JV) company along with a local partner.
India fully opened FDI in real estate in 2005. However, norms issued later made a minimum
capitalization of $10 million for wholly-owned subsidiaries and $5 million for joint ventures
mandatory. The government also imposed a minimum area requirement.
The department of industrial policy and promotion had in March 2005 allowed FDI in real
estate in projects in a minimum area of 25 acres.
The finance ministry has allowed external commercial borrowing (ECB) in realty projects
involving integrated townships of 25 acres or 50,000 sq m. However, the Reserve Bank of
India has not yet notified it.
At present, the government allows FDI in real estate, but does not permit foreign institutional
investment. It is, however, considering a proposal not to view FDI and FII as distinct
investment flows while specifying an overall limit.
It is yet to permit foreign venture capital investors (FVCI) in the realty sector. To ensure that
the concept of special economic zones (SEZs) did not distort the realty market, the RBI has
classified lending to SEZs on par with commercial real estate, according it higher risk weight
and provisioning.
The RBI allows ECB in real estate projects involving integrated townships of 100 acres or
more. In real estate projects, a large portion of money is required for land acquisition, which is
classified as working capital. But end-use restrictions like not allowing ECB money to be used
for working capital take away its attractiveness.

Real Estate Laws in India
Investing in real estate in India require compliance with various laws which
run into dozens, some of them more than 100 years old and some very new.
In addition to federal laws of India, there are many state laws governing real
estate transactions and investment. The federal laws governing real estate
include:
Indian Transfer of Property Act
The Transfer of Property Act governs the transfer of property by various

means. Sales, mortgages (other than by way of deposit of title deeds) and
exchanges of immovable property are required to be registered by virtue of
the Transfer of Property Act. Therefore, all the above documents must be in
writing and registered.
Indian Registration Act, 1908
The purpose of this Act is the conservation of evidence, assurances, title,

publication of documents and prevention of fraud. It details the formalities for
registering an instrument. Instruments which require mandatory registration
include:
(a) Instruments of gift of immovable property;

(b) other non-testamentary instruments which purport or operate to create,
declare, assign, limit or extinguish, whether in present or in future, any right,
title or interest, whether vested or contingent, to or in immovable property;
(c) non-testamentary instruments which acknowledge the receipt or payment
of any consideration on account of instruments in (2) above.
(d) leases of immovable property from year to year, or for any term exceeding
one year, or reserving a yearly rent
Sales, mortgages (other than by way of deposit of title deeds) and exchanges
of immovable property are required to be registered by virtue of the Transfer
of Property Act. Evidently, therefore, all the above documents have to be in
writing.
Section 17 of the Act provides for optional registration. An unregistered
document will not affect the property comprised in it, nor be received as
evidence of any transaction affecting such property (except as evidence of a
contract in a suit for specific performance or as evidence of part-performance
under the Transfer of Property Act or as collateral), unless it has been
registered. Thus the doctrine of part performance dealt with under Section 53
A of the Transfer of Property Act and the provision of Section 49 of the
Registration Act (which provide that an unregistered document cannot be
admissible as evidence in a court of law except as secondary evidence under
the Indian Evidence Act) together protect the buyer in possession of an
unregistered sale deed and cannot be dispossessed. The net effect has been
that a large number of property transactions have been accomplished without
proper registration. Further other instruments such as Agreement to Sell,
General Power of Attorney and Will have been indiscriminately used to effect
change of ownership. Therefore, investors in real estate have to be careful in
their due diligence.
Indian Urban Land (Ceiling And Regulation) Act, 1976
This legislation fixed a ceiling on the vacant urban land that a 'person' in
urban agglomerations can acquire and hold. A person is defined to include an
individual, a family, a firm, a company, or an association or body of
individuals, whether incorporated or not. This ceiling limit ranges from 500-
2,000 square meters. Excess vacant land is either to be surrendered to the
Competent Authority appointed under the Act for a small compensation, or to
be developed by its holder only for specified purposes. The Act provides for
appropriate documents to show that the provisions of this Act are not attracted
or should be produced to the Registering officer before registering instruments
compulsorily registrable under the Registration Act.
This legislation was repealed by the federal government in 1999. The Repeal
Act, however, shall not affect the vesting of the vacant land, which has
already been taken possession by the State Government or any person duly
authorized by the State Government in this regard under the provisions of
Urban Land Act. The repeal of the Act, it is believed, has eliminated the large
amount of litigation and released huge chunks of land into the market.
However the repeal of the Act has not been carried out in all states. Initially
the repeal Act was applicable in Haryana, Punjab and all the Union
Territories. Subsequently, it has been adopted by the State Governments of
Uttar Pradesh, Gujarat, Karnataka, Madhya Pradesh and Rajasthan. Andhra
Pradesh, Assam, Bihar, Maharashtra, Orissa and West Bengal have not
adopted the Repeal Act so far.
Stamp Duty
Stamp duty is required to be paid on all documents which are registered and
the rate varies from state to state. With stamp duty rates of 13 per cent in
Delhi, 14.5 per cent in Uttar Pradesh and 12.5 per cent in Haryana, India has
perhaps one of the highest levels of stamp duty. Some states even have
double stamp incidence, first on land and then on its development.
Rent Control Acts
Rent legislation in India has been in existence for a very long time. Rent
control by the government initially came as a temporary measure to protect
the exploitation of tenants by landlords after the Second World War. However
these rent control acts became almost a permanent feature. Rent legislation
provides payment of fair rent to landlords and protection of tenants against
eviction. Besides, it effectively allows the tenant to alienate rented property.
Property Tax
Property tax is a levy charged by the municipal authorities for the upkeep of
basic civic services in the city. In India it is the owners of property who are
liable for the payment of municipal taxes. Generally, the property tax is levied
on the basis of reasonable rent at which the property might be let from year to
year. The reasonable rent can be actual rent if it is found to be fair and
reasonable. In the case of properties not rented, the rental value is to be
estimated on the basis of letting rates in the locality.

Foreign Funds Investors in India: RBI puts
curbs on FII entry in real estate IPOs

The foreign portfolio investment in real estate in India has come under
regulatory glare. The Reserve Bank of India (RBI) has thrown in a caveat on
FII subscription to public equity offerings by real estate companies. The RBI is
of the opinion that such firms can sell their initial or follow-on public stock
offerings to FIIs, only if the real estate projects being developed fulfill the
conditions for foreign direct investment. The central bank, which has the last
word on cross-border fund inflow, has indicated this to investment bankers
and advisors of real estate firms planning to tap the capital market. One of the
companies planning an issuance has already dropped the idea of marketing
shares of its forthcoming equity issue to FIIs; while another firm has
positioned itself as a construction company (one which doesn't own the land
as distinct from a real estate company) to sidestep the restriction. The issue
has boiled down to subtle differences between FII and FDI.
The facts are: real estate projects can attract FDI up to 100 percent, subject to
certain conditions which were spelt out by the government in April '05. These
conditions include minimum area to be developed, minimum capitalization, no
repatriation of original investment
before 3 years and ban on sell of
under-developed plots. If a project
A
meets these conditions, the concerned
company can attract FII subscription
up to 24 percent equity, and later
proper legal advise
revise it to the sectoral FDI cap, which regarding corporate planning and
is 100 percent in this case. tax planning should be sought by
foreign investors the real estate
However, for a company not willing to sector in India.
meet the stringent project conditions, _____****_____
the FII route could be used to
overcome the rules and bring in
foreign investment. All the company
needs to do is get FIIs that are registered with SEBI to invest in the IPO. This
is what the RBI is possibly objecting to. Interestingly, the regulator is not
averse to FIIs buying shares in the secondary market. In other words, even
though FIIs cannot subscribe to a real estate firm's IPO (if the project
concerned is non-FDI compliant), they can buy shares through a registered
broker once the company gets listed.
Madaan & Co. believes that further clarifications are required by the RBI in
order to clear the contradictions in various policies of the Government of India.
The foreign Investors should also be careful in investing in real estate in

India. A proper legal advice is highly recommended before investing in
this sector. In a nutshell: INVESTORS BE WISE

For More details see FDI in India Sector wise Guide
SEBI Norms for Real Estate Mutual Funds

Securities and Exchange Board of India (SEBI) has issued guidelines on real
estate mutual funds (REMFs). Once these investment vehicles see the light of
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Second Annual Convention of NAR

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A Real Estate firm Embassy Developers is expected to generate over 513 million US Dollars as

Though the time line is not yet been set.

Second Annual Convention Of NAR

Realty Prices To Further Shoot Up

Mondon’s Indian Partner Goes Bankrupt

They were to construct a mall in Ludhiana, Punjab.

RBI Tighten Ropes On Real Estate

Indian Realty Sector And Overview

By Pakhi Kshitij | Posted in Property Articles | Tagged Agriculture Industry, Business/Finance,

RICS Plans To Reform Indian Realty Sector

anIndian Real Estate Developers have fastened their

By Pakhi Kshitij | Posted in Property News | Tagged Acquisition Problems, Infrastructure

Asia Invest More In UK Than UK Itself!

Real Estate Invesment Trusts In Asia To Rise

This Trend is only to bring fortune to our Country as well.

Real Estate Collaborates With Education Industry

IL&FS Increase Investments In Realty Sector

Photo by Photos8.comIL&FS private equity is planning to increase its investment in

Provogue India Enters Real Estate

India’s First BOP Studios

Will this idea become successful, only time will tell?

Southern Province Picks Up

Real Estate Investors have one more city to eye for.

Bangalore- The Silicon Valley Of India

Photo by CarbonNYCIndian Market Research Bureau (IMRB) conducted a survey among 5

Times Property Hosts Home Affairs

India Realty Expo’10 in Dubai

The Indian Real Estate Industry has only reasons to cheer.

RE/MAX Forms Alliance

RBI Proposes Change

Tips To Make Property Buying Easy

1. Choosing The Right Property

5. Preparing The Budget

10. Facilities Provided By The Builder

11. Housing Society

Have a happy and safe property buying experience.

Beary’s Group Wins Runner Up Award

Indian Real Estate has once again a reason to rejoice.

Launch Of The Square In Sholapur

Steel Prices Drop

Jaypee Greens New Project-Kasa Isles

The price list has a BSP of Rs 3390/- per sqft.

Eco-friendly building concept catches up with housing board

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