Summer Internship Report

ON

“Diversification of “TheBricks” from Real Estate

Company to Publications sector

Submitted for the degree of the Degree

Bachelor of Business Administration (BBA) under

SUBMITTED TO : SUBMITTED BY:

MRS. MINAKSHI PRUTHI GOURAV
Lecturer of B.B.A Dept. BBA III
1360710012

UNIVERSITY ROLL NO.

PT. NEKI RAM SHARMA GOVT. COLLEGE

(ROHTAK)

MAHARISHI DAYANAND UNIVERSITY

1
 DECLARATION

I, GOURAV student of Bachelor of Business Administration from

PT. NEKI RAM SHARMA GOVT. COLLEGE (ROHTAK) hereby
declare that I have completed Summer Internship on “Diversification
of TheBricks from Real Estate to Publication”
as part of the course requirement.

I further declare that the information presented in this project is true

and original to the best of my knowledge.

GOURAV

2
 ACKNOWLEDGEMENT

I express my sincerest gratitude and thanks to hon’ble, Mr. Amit Singh, for
whose kindness I had the precious opportunity of attaining training at
‘TheBricks’. Under his brilliant guidance I could complete the project being
undertaken on the “Diversification of TheBricks from real estate firm to
publications” successfully in time. His meticulous attention and invaluable
suggestions have helped me in satisfying the problems involved in the work.
I would also like to thank the overwhelming support of all the people who
gave me the opportunity to learn and gain the knowledge about the various
aspects of the industry.

I would like to thanks MRS. MINAKSHI PRUTHI (Faculty Guide) for

their constant enthusiastic encouragement and valuable suggestions without
which this project would not been successfully completed.

GOURAV

3
 Executive Summary
The main objective of the project is to study the diversification of “THE BRICKS”, a real
estate company to publications with respect to the difficulties and the problems faced by
them during the diversification and also to study how they are tackling with all such
situations. The report consists of the brief summary of the company and apart from this it
clearly mentions the objective of the study and the research methodology used i.e. both
the primary as well as the secondary data. The data collection method used is structured
non disguised questionnaire in which the types of questions used are open ended,
multiple choice and close ended.

The report consists of a detailed view of the tasks, which we have been undertaken
to analyze the scenario of the real estate market and the buying behavior of the people
while purchasing the property. For the accomplishment of the task we had prepared
various set of the questionnaire so as to know the consumer buying behavior and also
how a real estate firm is diversifying itself to the publications. Besides this, the report
consists of the finding that Delhi an NCR region is the major attraction for the real estate
investors and has more scope to grow in terms of property market. The project helped me
to know more about the realty sector and also about the current scenario of the property
market in India.

With the help of questionnaire I was able to carry out the detailed analysis of my
project. The details of the methodology used by me for the accomplishment of the project
is stated as below:-

 AREAS COVERED: - Delhi, Noida, Greater Noida, Ghaziabad and Gurgaon.

 RESEARCH DESIGN: - Descriptive.

 SOURCE OF INFORMATION: - Primary and Secondary Data.

 DATA COLLECTION METHOD: - Structured and non disguised

questionnaire.


 SAMPLING METHOD: - Convenience sampling.

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 Table of Contents
CHAPTERS PAGE NO:

1. Introduction 6-24
Company Profile 7-9
An overview of real estate industry 9-20
Diversification Strategy 20-24

2. Literature Review 25-32

3. Research Methodology 33-39

Objective of Study 34-35
Research Problems 35-36
Data Collection 36-37
Research Technique 37-38
Sampling Technique 38-39

4. Data Analysis 40-53

5. Conclusion Recommendations 54-54

6 Limitations 55-55

7. Annexure-I 56-57

8. Annexure –II 58-59

9. Bibliography 60-60

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 Chapter 1

Introduction

6
Company Profile

'Bricks' has developed more than 300 properties within Delhi and the NCR
region alone and as a leader in the real estate development and consultation
domain has set standards in the industry with its Services Since 1983. It is
widely recognized as an authority in this niche segment and is seen as a first
choice partner in success by most clients.

With a presence in Delhi, the NCR, across India and abroad, Bricks
leverages its wide network and resource to maximize client benefit.

As a company Bricks urges Active Participation, it is a place that nurtures

and encourages innovation and maintains an environment of easy
approachability. This is a way of ensuring the best practices that have made
Bricks what it is today, percolate down to every level right from the top
management to staff at the site.

Our Phenomenal Success is often attributed to the absolutely transparent

way in which we do our business and the stress we lay on clear and open
deals with our clients.

Every property developed by Bricks is marked by its Distinct Sense of

Design Superiority and Maximum Utility-They stand apart from the rest.

The drive to excel that underlines every Bricks effort today continues to
propel the company towards new and unexplored areas creating greater
value for our clients.

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The company is into

Constructions

As a builder Bricks in its long engineering history has undertaken some of

the biggest constructions projects in India and abroad. With ample acquired
skills and hands on experience in construction of hotels, residential and
commercial complexes, hospitality
environments and work spaces, it is ideally equipped to rise up to any
challenge in this domain.

Renovations

Renovating an existing property can be a tricky task because it is not merely

complex but also involves a certain human element. Understanding the
client’s final picture of the property and the significance from the existing
property both from the engineering stance and the aesthetic stance is where
the sky lies. And people at Bricks know just how to rule earth.

We carefully understand the client’s renovation need and then

suggest realistic options before setting about executing it. Supported by
seasoned engineers and technicians, most renovations we do end up exactly
the way the client had dreamed of.

Architectural

As market leaders, Bricks is home to some of the most creative architectural

brains in the industry who have proved there mettle in projects that stand out
for there architectural excellence and safety. The evolved design sense,

8
advanced architectural soft wares we use and the passion of the people
behind it all come together to make the distinct Bricks difference.

Interior Designing

As value additions to the already sterling services that we provide, Bricks

offers interior design solutions that convert empty spaces into functional,
stylish and dynamic living or working environment. The spaces are designed
in keeping with your taste and the functionality.

Safe, sturdy, stylish and maximized utility is how what we want our
interiors to be and we work diligently towards it. We provide comprehensive
design solutions so that
you don’t have to look elsewhere from your plumbing to color co-ordination
to electrification-we take care of every aspect of your dream design.

9
An Overview on Real Estate Industry

Introduction
All immovable properties including land, structures on it and other natural
resources can be classified as real estate. It is also referred as realty. All
types of residential, commercial and industrial properties fall under this
domain. Real estate involves the purchase, sale and development of land,
residential and non-residential buildings. The major players in this sector are
the realtors, builders, brokers, buyers and sellers. The activities of the real
estate sector encompass the housing and construction sectors also.

With its huge growth potential in the market, real estate sector has
emerged as a major field of business in recent time. The real estate sector in
India has assumed growing importance with the liberalization of the
economy. The consequent increase in the business growth opportunities and
migration of the labor force has, in turn, increased the demand for
commercial and housing space, especially rental housing. The development
and expansion in the real estate sector is influenced by the developments in
the retail, hospitality and entertainment (e.g., hotels, resorts, cinema theaters
) industries, economic services (e.g. hospitals, schools ) and information
technology (IT) enabled services (like call centers ) etc. and vice versa.

The real estate sector is a major employment driver. It is the second

largest employer next only to agriculture. All this is due to the chain of
backward and forward linkages that the sector has with the other sectors of

10
the economy, especially with the housing and construction sector. About 250
ancillary industries such as cement, steel, brick, timber, building materials,
etc. are totally dependent upon the real estate industry.

The real estate sector in India is flourishing rapidly and widely with a
growth rate of about 30 percent each year. The division is like - about 80
percent of the real estate
development in India has been in the field of residential housing and the
remaining 20 percent includes office, shopping malls, entertainment centers,
hotels, multiplexes and hospitals. India’s booming outsourcing business
industry and consumption-led growth are contributing significantly to its real
estate growth. The outsourcing business houses including call centers,
technical consultancy services, and medical transcription units and
programming houses constituted around 10 million square feet of real estate
growth in India till 2003. In last couple of years the share of commercial
sector in the overall real estate growth has been more prominent.

Considering the advantages of significantly lower cost of operations in

India, several multinational companies across the globe are expressing their
willingness and desire to shift their operations to India. According to a 2003
estimated records, the demand for office space by the over expanding IT and
IT- enabled service sectors in India would be around 66 million square feet,
in the next five years. These multinational companies have realized the fact
that in order to expand and flourish their business, the skilled Indian work
force can be of great use to them. So they need to provide the Indian
professionals with all the facilities of modern life starting from housing to
entertainment, so that they can give their best in the work place and at the
same time be happy with their standard of living. This trend has set off the
11
development of world class entertainment centers and business centers,
across the country, thereby bringing a radical change in the lives of urban
population in India. The growing demand of sky scrapers in all the
metropolitan cities across the country has changed the image Indian skyline.
There is an estimated requirement of 80 million housing units over the next
15 years and 2000 sq. ft. of office space over the next five years. For the
purpose of increasing the investment required to plug the aforementioned
supply deficits, the government, has allowed the Foreign Direct Investment
(FDI) up to 100% in the specified real estate projects including townships,
built-up infrastructure and construction development projects. In December
2007, The Security and Exchange Board of India (SEBI), which is the
domestic stock market regulator has issued the draft regulations clearing the
way for introduction of Real Estate Investment Trusts in India. This
beneficiary step taken by the government is expected to favorably serve the
booming real estate market, by functioning as an alternative source for
satisfying the capital needs of the sector.
The relatively crucial development potential of real estate industry, coupled
by the encouraging and favorable FDI regulations and increasing focus from
the private equity sector has created substantial investment and significant
growth opportunities for the real estate companies.

As this springing up realty sector is getting on into a stable and

sustainable economic sector, three key trends, which are likely to shape its
future, are emerging:

a) Increased focus on execution risks

b) Increased investments in mixed-use development projects with a view to

extract the maximum synergic benefit

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c) Syndication among real estate developers on execution of “big- ticket”

development projects, i.e., shift from competition to partnership.

The sustainability of growth in the real estate sector is due to its strong
and intensive demand by various other sectors like:

i) Rapid expansion of IT and IT-enabled services and also the business

outsourcing industry including both the knowledge process outsourcing and

the clinical testing outsourcing.

ii) Extensive development and acceptance of shopping malls as “one stop

destination” for the consumers.

iii) Growing popularity of the special economic zones as preferred

destinations for both the manufacturing as well as service industries.

Government Initiatives

The introduction of many progressive reform measures by the government to

unlock the potential of the sector and also to meet increasing demand level
has provided a better exposure and also helped this sector to emerge as a full
fledged grown up player among all the other sectors in the market. The
government has announced a stimulus package.
coupled with the Reserve Bank of India’s move has allowed banks to
provide special treatment to the real estate sector, which is likely to impact
the real estate in a more positive way. RBI has decided to extend exceptional
concessional treatment to the commercial real estate which was restructured
on 30th June 2009.

13
  100% FDI is allowed in the realty projects through automatic routes.

 In case of integrated townships, the minimum area which could be

developed has brought down to 25 acres from 100 acres.

 Urban land (Ceiling and Regulation) Act, 1976 (ULCRA) repealed by

increasingly large number of states.

 For the wholly- owned subsidiaries and joint ventures, the minimum
capital investment stands at US $10 million and US $5 million,
respectively.

 Minimum lock-in period of three year is there for the full repatriation
of the original investment.

 For the single brand retail outlets and for the cash-and-carry through
the automatic route, 51% and 100% of the FDI is allowed
respectively.

For the better development of the realty sector, government has

provided sops to the real estate sector as stated in the 2009-10
budgets. The developers of housing projects (units of 1000-1500 sq.
ft.) have been granted a tax holiday on profits from projects initiated
in the financial year 2007-08. Such project must be completed before
March 1, 2012.

Along with this, the Finance minister allocated US $ 207

million to grant a 1% interest subsidy on home loans up to
14
 US $ 20,691, provided, the cost of the home should not be
more than US $ 41,382. This subsidy is expected to provide a
better and a further boost and hike to the housing sector.

With the boom in the property market spreading in all

directions, the real estate sector is touching new heights of success.
However, this growth in the realty sector is also due to the various
policies adopted by the government to facilitate investments mainly in
the economic and industrial sectors. Also the new stand adopted by
the Indian government regarding the foreign direct investment (FDI)
policies has been encouraged and appreciated by increasingly large
amount of countries to invest in Indian Real Estate and in Indian
Properties.

India preempted USA as the second-most favored destination for FDI

in the world. With the changing trends in the current Indian
investment scenario, India is able to attract more than three times
foreign investment at US $ 7.96 billion during the first half of 2005-
06 fiscal, as against US $ 2.38 billion during the corresponding 2004-
05, making India one of the most prominent player among the
dominant host countries for the FDI in Asia and the Pacific (APAC).

FDI in Real Estate on The High Growth Path

15
 Foreign direct investments (FDI) in Indian real estate market are
currently on the high growth path. Study on future of real estate
investments in India is brought out by The Associated Chambers Of
Commerce and Industry of India (ASSOCHAM) says real estate
market is growing at the rate of 30 %p.a.

According to the industry expert’s view, FDI’s share in domestic

real estate market is up to 10% by March 2007 and has touched about
26% level from 16% of fiscal 2005-06. This is of great importance for
the global real estate players in the Indian real estate market and
increasing demand of the office space particularly in the IT and BPO
sectors.
The forecast of ASSOCHAM’s Study on the Future of the Real Estate
Investment in India was estimated to be about US $ 60 billion future
market size of real estate business in India, the share of foreign
investments will be within the range of US
$25-28 billion for the year 2010 .The overseas investment is also
having larger space in Indian SEZs and the widely increasing numbers
of the shopping malls is naturally fatting their share in the real estate
market.

In 2003-04, India received a total amount of about US $ 2.70

billion FDI inflow, out of this about 4.5% was committed to the real
estate sector. In 2004-05, this data had increased up to US $ 3.75
billion FDI inflow, of which the real estate share was about US $
10.6%. However, for the year 2005-06, the estimated FDI inflow was
found to be US $ 5.46 billion, out of which around 16% was

16
 contributed to the real estate sector. The study further projects that in
2006-07, the FDI inflow had touched US $ 8 billion in which the real
estate contribution was about 26.5%. And for the upcoming years the
prediction for the FDI inflow is estimated to be increasing and the real
estate market share will also fatten by this.

Why Invest in Indian Real Estate

Flying high on the wings of booming real estate, property in India has
become a dream for every potential investor looking forward to dig profits.
Everybody is eyeing on the Indian property market for a wide variety of
reasons:

 Real estate sector in India is witnessing tremendous boom. It’s ever

growing economy is on a continuous rise with 8.1% increase
witnessed in the last financial year. The smashing growth in the
economy has increased the purchasing power of the people and
creates demand for the real estate sector.

 Every year approximately 2 million or more new graduates are

produced from the various Indian Universities, thereby creating
demand for about 100 million sq. ft. of the office and industrial space.

 Presence of large number of reputed companies will attract more

companies to initiate their operational bases in India thus creating
more demand for corporate space.

 Huge amount of dividend is yielded by the real estate investments in

India. Around 70% of the foreign investors are making profits and
other 12% are breaking even.

17
  Apart from IT, ITES and Business Process Outsourcing (BPO), India
has shown its expertise in other sectors also, like, auto-components,
chemicals, apparels, pharmaceuticals and jewellery where it can
match the best in the world. This kind of positive attitude of India is
surely going to attract more and more foreign investors in the nearby
future.

The concession provided by the Indian government in the FDI rules has
invited more foreign investors and real estate in India seems to be one of the
most lucrative grounds at present. The revised investor’s friendly policies
have proved to be quite economic and productive for the investors, apart
from this have allowed foreigners to own properties, and dropped the
minimum size for housing estates built with foreign capital to 25 acres (10
hectares) from 100 acres (40 hectares). With these relaxing and changed
policies of the investment, the overseas firms can now put up the
commercial buildings as long as the projects surpass 50, 000 sq. mt.
(538,200 sq. ft.) of floor space.

Opportunities for Investors in Indian Real Estate

In the recent time, India has become a potential goldmine for investors all
over the world. With the flourishing and expanding economy and liberalized
government policies, investors from all over the globe are choosing India as
their business destination. As Indian real estate rules the economic vibes of
the country, the most important beneficiary of the recent boom in this sector
is the investors. Driven by the positive growth in the real estate scenario and
the Government of India’s decision to allow 100% foreign direct investment

18
(FDI) under the ‘automatic rule’ in the construction and development there
has been a significant rise in the number of Indian as well as foreign
investors in the realty sector.

Developers like DLF, Ansal, Omaxe, Ambuja, Unitech, Vatika and Sahara
Infrastructure are among a few that have initiated large scale real estate
developments in the residential sector catering to all segments of the society.

Real estate sector is much more professionally managed with a number of

big players including both developers and corporate, entering into the
business. The real estate market is not the monopolistic market, as there are
more and more players entering into this development game.

In the residential sector, with the increase of disposable incomes and easy
availability of home loans, most builders tries to woo the investors with the
lucrative features and the latest inclusions of premium luxury apartments
and condominiums fitted with the most modern accessories in home luxury.

Apart from the residential segment, the commercial venture includes

office spaces, sprawling malls, multiplexes and retail outlets. As per the past
reports, around 200 or more new malls with a combined retail space of about
Rs.2.5crore/ sq. ft. and an estimated investment of around Rs. 12.5 crore are
expected for the upcoming year.

Future of Real Estate Market in India

One question that arises in everybody’s mind is that whether the property
prices in India will fall or not in the nearby future? The answer to such
question will eventually decide whether to invest in the real estate of India
now or rather wait for the property prices to fall.

19
 According to the real estate experts and the investment Gurus, “the Indian
real estate sector will definitely going to have a smashing rise in the nearby
future.” Thus people are more interested in investing in the real estate of
India. According to the market experts, the Indian real estate sector has a
tremendous potential and have a bright future in the upcoming years.
With the relaxed FDI norms for the Indian real estate market and a
tremendous boom in this sector, has made the property investment in India
to be at a safer side. This is also supported by the fact that the Indian
Government has liberalized its foreign direct policies to attract higher
foreign investment.

It’s not at all true that there is a sudden rise in the property prices. It could
be witnessed for the last couple of years that the prices of the property in
India whether it is residential or commercial has continued to rise. For
example, some of the better developed cities like Noida and Gurgaon,
property prices have increased up to five times within a few years. It’s not
the case that only these cities are experiencing an appreciation in the real
estate prices, property prices have been continuously raising across all parts
and sectors of the country.

According to a recent survey, India stands fourth among the top four
Asian destinations for the foreign direct investment. India being the largest
democracy with excellent democratic governance and transparent property
laws attracts more and more people to invest in the Indian realty market.

Looking to the above facts, it can be concluded that as far as the Indian
realty sector is concerned, it is going only in one direction, that is, upward.
And this current scenario will lead more and more investors to invest in the
Indian real estate market.
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Diversification Strategy

Diversification may be defined as the process in which a company or a firm

tries to get into different lines of business from its current business
operation. Basically diversification strategies are opted for expanding firm’s
operations by adding markets, products, services, or stages of production to
the existing business. The main purpose of diversification is to allow a
company or a firm to get into a new line of business which is totally
different from the current or existing business operation.

Basically diversification may be defined as a form of growth strategy.

The main aim of these growth strategies are to have a significant increase in
the performance objectives usually sales or market shares, which are
compared beyond the past levels of performance. Different organizations
follow different kinds of growth strategies to attain their goals. Many
organizations go for more than one type of growth strategy. One of the
primary reasons for such is that many of the investors and executives are of
the view that, “bigger is better”. Growth in the sales is often used as a
primary measure to calculate the
performance level. Even the profit level increases or decreases but if the
growth curves of sales is going upward, this satisfies many people. This
assumption has often led to believe that if sales increases, profit will
eventually follow it.

If a firm is following a well planned and well designed strategy

according to their goals and aims, it is beneficial for everyone associated
with it. Rewards are there if the firm is pursuing the growth strategy. Based
on the sales, managers are provided with commission. Higher the growth

21
level of sales, higher the amount of commission received.

Basically there are two types of diversification. These are:-

i) Concentric Diversification

ii) Conglomerate Diversification

i) Concentric Diversification: - This type of diversification occurs

when the new venture of the firm is strategically related to the existing
business operations. In such type of diversification the firm adds somehow
related products or markets to the current line of business. The main aim of
such type of diversification is to achieve a strategic fit. Through the strategic
fit, an organization is able to achieve synergy. In essence, synergy is defined
as the ability of two or more parts of the organization to achieve greater total
effectiveness together than that achieved by the effort of the independent
parts. Synergy can be attained by combining the firms with complementary
marketing, financial, operating and management efforts. For e.g., Financial
synergy can be achieved by combining the firm having the stronger financial
resources but limited growth opportunity with that of the firm having lesser
financial resources but maximum growth opportunity.

ii) Conglomerate Diversification: - In such kind of diversification,

there is no linkage between the old and the new businesses, i.e., both are
unrelated to each other.
When a firm tries to get into a new venture which is completely different
22
from the current one, it is defined as a conglomerate diversification. In this
type of diversification, synergy can be achieved through the application of
management expertise or financial resources, but the main function of this
diversification is the improved profitability of the acquiring firm.

One of the foremost reasons for pursuing the conglomerate

diversification is that opportunities in a firm’s current line of business are
limited. So as to find an attractive investment opportunity, the firm is
required to consider the other types of business alternatives.

The other reason for following a conglomerate diversification is to

increase firm’s growth rate. Growth in sales attracts more and more people
to invest in the company. Apart from this growth may also increase the
power and prestige of the firm’s executive. This type of diversification is
effective if the new area has growth opportunities greater than those
available in the existing business line.

The biggest disadvantage of the conglomerate diversification is the

increase in the administrative problems associated with operating unrelated
business. Managers having different background face many problems in
operating the task and unable to work together effectively and efficiently.
Competition between the strategic business units for resources may entail
shifting resources from one division to another. Such a move may create
rivalry and administrative problems between the units.

 On the basis of direction, diversification may be classified as:-

i) Vertical Integration

23
 ii) Horizontal Integration

i) Vertical Integration: - Vertical integration occurs when firms

undertake operations at different stages of production. This type of
diversification can be divided as-

a) Backward Diversification

b) Forward Diversification

The steps that the product goes through in being transformed from raw
material to the finished good in the possession of the customer constitute
various stages of production. Suppose the firm decides to diversify at the
steps closer to the sources of raw materials in the process of production, and
then such a diversification can be called as backward vertical diversification.

E.g. AVON ‘S primary line of business has been the selling of cosmetics
from door-to- door. AVON followed the backward form of vertical
diversification by entering into the production of some of its products.

Similarly, if the firm decided to diversify when the product is about to

manufacture or when the firm moves closer to its customers in terms of the
production stage, then the diversification is known as forward vertical
diversification.

E.g. LEVI STRAUSS & CO., traditionally deals in the manufacturing of

clothes, has diversified forward by opening up new retail stores to market its
own products rather than producing them and then selling to the other firms
to retail.

24
ii) Horizontal Integration: - It occurs when the firm enters into the new
business either related or unrelated. It may be at the same stage of
production as its current operations.

E.g. AVON’S move to market jewel through its door-to –door sales force
involved marketing new products through existing channels of distribution.
An alternative source of marketing opted by AVON for its products are
selling them through mail order and through retail shops.

25
 Chapter 2

Review of Literature

26
Article 1: ASSOCHAM’s report: reality check on real estates

The forecast of ASSOCHAM’s Study on the Future of the Real Estate

Investment in India was estimated to be about US $ 60 billion future market
size of real estate business in India, the share of foreign investments will be
within the range of US $25-28 billion for the year 2010

Source:, http://www.assocham.org/arb/real_estates_reality_check.php

Article 2: India for Property Investment

It is not without reason that more and more domestic as well as international
investors are considering India for property investment. Real estate studies
India shows that India has the right environment that offers maximum
benefits to the investors. India is the largest democracy with exemplary
democratic governance and institutions, has strong and transparent legal and
accounting system and most of all has legal protection for intellectual
property rights. Fundamentals of the Indian economy also have become

strong and sustainable. All these factors together make India the hotspot for
investment in every sector. According to an UNCTAD (United Nations
Conference on Trade and Development) report, India is among the top four
Asian destinations for foreign direct investment.

Invest in a profitable business in any sector - raw materials, power supply,

fuel, tourism or commercial ventures. Property investments in India include
everything from lands, land services, commercial real estate to residential
property. Invest in commercial land, agricultural land, land for schools,
27
hospitals or resorts, land for houses, shopping malls and more. Select your
spot from the large geographical expanse that is India. Settle for India’s
commercial capital Mumbai, or other metros such as Chennai, Kolkata or
Bangalore or smaller cities such as Indore, Jaipur, Ahmedabad or
Coimbatore. Make revenue from tourism by investing in hotels, guesthouses
or resorts in Kochi or Goa. The possibilities are many!

It makes sense to consider India for property investment, if you want to

make your business or any other venture profitable. No other country offers
you all the ingredients in the right measure to make any venture profitable
and successful. With a growing middle class, India offers the ideal market
for making great profits, in any venture. The higher buying power of the
average Indian translates to the success of shopping malls, tourism and
product sales, be it the smaller consumer goods or bigger items such as cars.

As an investor, however, you need to have all the facts straight before investing.
And Realty Plus may be the knowledge powerhouse you may be looking for.
Read Realty Plus to know the best spots in India for property investment.
Realty Plus is India's first real estate monthly magazine packed with hundred
pages of in-depth reports, surveys, analyses and expert views on a variety of
real estate issues. Learn everything about properties in India for sale, buying,
selling, renting and leasing out. Find also latest hot property in India, which
you can buy at amazing prices.

Property investments in India attract investors from every corner of the

globe. But when it comes to investing, knowledge is power. And, only
28
Realty Plus gives you the knowledge and confidence to make the right
investment decisions in India.

Source: http://www.realtyplusmag.com/content1.html

Article 3 Real Estate Studies in India

Indian real estate companies have picked up really fast in the last few
years. As per recent Indian Real Estate research, the average growth rate
returns is 30%, which tells the tale of this booming industry. Latest Real
estate research India has estimated a revenue increase to $102 billion
from $14 billion in the next decade. As per real estate studies India, there
has been an increase in the mass consumption, the trends are changing the
consumption pattern of luxury goods and corporate houses with great
purchasing power are also entering into the retail field of real estate.

The RPG Spencer has the largest presence with Music World, Food
World, Health & Glow in south India. Other major players such as
Tatas, Birlas and Reliance are also following the same line, explaining
the rapidly increasing shopping malls and other retail projects. The need
for fun, entertainment and leisure has given rise to
various Indian real estate sites like hotels and multiplexes. As per Real
Estate Research India, the country has not only intellectual workforce, but
also cost-effective labour, the factor which has welcomed hundreds of
telecomm, IT and ITES offices to build up in the country.
According to Real estate studies in India, the country is extremely

29
experienced when it comes to raising and lending capital as compared to
other countries. Foreign investors, brands and realtors have been attracted
to invest in the country, keeping in mind its liberalization policies, free
market and open policies of the FDI. The Bombay Stock Exchange has
recently experienced a rising boom, encouraging global players such as
Morgan Stanley to invest $68 million in Indian real estate market. As a
conclusion of

real estate studies in India, we can see that as far as real estate is
concerned, the bar of investment has significantly raised. India has
immense scope for building infrastructure, in addition to increase
investment returns by 50%. The commercial real estate yield in India is
larger than any other country, thus making it one of the most popular
destinations for real estate investment.

As per real estate studies in India, the lucrative market of real estate in the
country are also attracting interest of the NRI’s to buy properties for
themselves or for their family members or to just make an investment and
reap benefits. The great demand has convinced builders to come up with
apartments and townships especially designed for NRI’s, endowed with
five star luxuries and all the modern amenities. For more information on
real estate studies in India, log on to www.realtyplusmag.com.

Source: http://www.realtyplusmag.com/content6.html

International Research Journal of Finance and

Economics ISSN 1450-2887 Issue 24 (2009)

30
© EuroJournals Publishing, Inc.
2009
http://www.eurojournals.com/finan
ce.htm

Abstract

The present paper entitled as “Prospects and Problems of Real Estate in

India” is an attempt to reveal the issues concerned with the real estate
investment sector in India. This paper is concerned with the real estate
investment and the emerging trends in the real estate market. The paper
has been divided into three sections. First section talks about the real
estate sector, its type and the features of the real estate market. Apart from
this it deals with the fundamental factors affecting the real value like
demand, supply, property, restrictions to use and site characteristics.
Second part explains the causes for the present real estate boom. It
includes the foreign direct investment in the realty sector and the exposure
of the banks to this sector. It also deals with the price variations in the
realty sector with reference to per capita income and the GDP. Lastly,
third part deals in the constraints in real estate investment which includes
various laws to be considered, inflation rate and the barriers in the GDP
growth.

31
ANALYSIS OF THE RECENT TRENDS AND THE
EFFECT OF THE FINANCIAL CRUNCH ON
CONSTRUCTION INDUSTRY
Abstract

This paper deals with the challenges faced by the present generation due to
the current crises in the world’s financial system. The current global
economic recession is neither the first nor the last to rear its head in the
economy. An economic and the financial crises provide a golden opportunity
to the country and its private sectors to review its policies and programme
that are aimed at improving the productivity and the competitiveness. In this
fast and changing global scenario, each and every company is required to
constantly improve and renew their programmes and policies so as they are
well prepared to face any financial and economic crisis. This paper pays
more emphasis towards the recent

trends and effects of financial crunches on the real estate sector. Besides this,
it also indicates how the ongoing financial crisis is affecting the construction
industry by reducing its growth, trade and investment flow, employment,
remittances. Apart from all these, the findings reveals that although the
financial crunches has a deep impact on the real estate sector but still it has a
great opportunity to overcome all such kind of issues by analyzing and
reviewing its reforms and issues and by providing its best service to its
customers at a lower price than its competitors. Finally, the paper also
suggested various issues that a private sector can follow in order to cope up
with such situations and conditions and by which they can take advantage in
their nearby future.

32
 Chapter 3

Research Methodology

33
Objectives of study

The broad objective of the project is to study the diversification of a real

estate company to the publications.

i) To study how a real estate company is diversifying itself to the publications.

- potential advertisers

ii) To study general buying behavior of people’s while purchasing a

property and perception of peoples about Delhi and cities of NCR.

Research is a growing need in any organization of the present world. It is

helpful in identifying the consumer needs and wants so as to launch a
product or to bring about improvements in the existing products. This is
done to gain competitive edge over others. Success of the research depends
upon the methodology adopted. The study was based on descriptive
research.

 The research methodology deals with the

1. Research problem

34
 2. Data collection
3. Research technique
4. Sampling methods
5. Analysis and Interpretation of research work.

Research Problem:
 TheBricks is diversifying its business from Real Estate to Publication
and the company wants to know about the current status of the
business of advertisements in real Estate sector.

 The company wants to know about the general buying behavior of

people’s while purchasing a property.

35
Factors and Parameters
The questionnaires as shown in annexure 1 and annexure 2 were prepared in
order to get all the information needed by the company to diversify its
business as well as to know the general buying behavior of the people and
perception of the people about various cities while buying a property

In questionnaire designed to know general buying behavior of people and

their perception about Delhi and cities of NCR parameters taken were

1. Location - This parameter includes all the location factors such as

proximity to central business district, to schools, to hospitals,
existence of huge shopping malls, etc.

2. Business Opportunities – These parameters helps in analyzing the

perception that people have about the job opportunities and
business prospects available in different cities included in NCR.

3. Quality of Living – This parameter helps in analyzing what people

think about the style of living prevalent in the 5 cities included in
NCR.
4. Law and Order – This parameter helps in analyzing what people
about the safety and security situation prevalent in the 5 cities chosen
for the survey.
5. Infrastructural Development – This parameter helps in analyzing how
respondents rate 5 different cities chosen for the survey, on the basis of conditions
of road and highways, availability of public transport, etc.

External Factors

1. Price Range
2. Connectivity to Public transport
3. Proximity to workplace
4. Availability of loan
5. Easy Payment Plans
6. Rate of Interest
7. Resale Value
8. Clear title of property
9. Proximity to School
10. Proximity to Hospitals
11. Proximity to Entertainment Centers
36
DATA COLLECTION:

Data is collected from two sources:

1. Primary Data
2. Secondary Data

PRIMARY METHOD

1) Face to Face interview

2) Questionnaires
3) Telephonic Survey

SECONDARY METHOD

1) Magazines on Property
2) Internet sites on Property
3) Internet websites of popular property developers of India

1. Primary Data :
a. Primary Data is collected by using Depth Interviews with the property
dealers, Builders and peoples living in societies in Delhi and NCR region.
b. This helped in finding out the factors for the Research problem.
c. Structured Questionnaire is used as the major tool for primary data
collection.

2. Secondary Data:

o The Secondary data consists of information that already exists somewhere

having been collected for another purpose and researcher begins the
research work by first going through the secondary data.
o Here Secondary data is collected from various property journals and
property sites like www.makaan.com and www.9acres.com.

37
 Research Technique

Basically techniques for marketing research can be broadly classified into two
parts:

 Qualitative techniques – comprise of providing insights & understanding of

problem setting.
 Quantitative techniques – seeks to quantify the data & typically applies some
form of statistical analysis.

Also research can be divided as:

1. Exploratory Research
2. Conclusive Research
o Descriptive
o Causal
The research design used here are:

Descriptive research (quantitative research) –

The major objective of this research is to describe various market

characteristics & consumer behaviour. It is conducted for following
reasons:

 To estimate the percentage of units in a specified population

exhibiting a certain behaviour.
 To determine the perception of product category.
The instrument used for descriptive research was questionnaires & technique
used was door to door survey.

38
Sampling Technique

Population: i) Property dealers and builders in Delhi and NCR region

ii) Peoples living in Delhi and NCR region.

Sample Size

i) 213(For Property Dealers and

Builders) Area Covered Deepali

Peetampura

Rohini

Dwarika

Kohat

eclave

ii) 70(For Customers)

Area Covered Kalindi Apartments(Delhi)

Anand

Apartments(Ghaziabad)

Sai Apartments(Noida)

The Sampling Technique that is used in the project:

 Convenience Sampling

39
 Convenience Sampling:

o Convenience sampling attempts to obtain a sample of

convenient elements.

o It is a non probability sampling technique.

40
 Chapter 4

Data Analysis

41
 Analysis of dealer’s data:-

How do you maintain your sales?

Table 1
Cumulati
Frequency Percent Valid ve
Percent Percent
Valid Depends upon walk- 35 16.4 16.4 16.4
in
Advertisements 75 35.2 35.2 51.6
Contact Based 103 48.4 48.4 100.0
Total 213 100.0 100.0

42
 Fig. 1

Inference: Answering the question “How do you maintain you sales?”

about 48.36 percent of the respondents answered that they maintain their
sales on contact bases whereas about 35.21 percent of the respondents said
that they advertise about their company and the properties available with
them for sale. Now the company can target these 35.21 percent of the
respondents for advertisement in their magazine.

Which medium will you prefer for advertisement?

Frequency Percent Valid Percent Cumulative Percent
Valid Magazine 58 27.2 27.2 27.2
Newspaper 93 43.7 43.7 70.9
Internet 47 22.1 22.1 93.0
TV/Radio 15 7.0 7.0 100.0
Total 213 100.0 100.0
Table 2
43
 Fig.2

Inference: The Company is diversifying itself into magazine publication

whereas the advertisements in magazine will also be available on company’s
website so in this way a real estate agent or builder can advertise his
property through magazine as well as through internet.

The answer to the question “which medium do you prefer for

advertisement?” 27.23 percent of the total respondent said that they prefer
magazine whereas 22.07 percent of the people said that they prefer internet
for advertisement. So about 50 percent of the total respondents said that they
will go for magazine or internet for the advertisement of their property.

Now ‘The Bricks’ is going to advertise through magazine as well as through

internet so the company can target these 50 percent of the respondents for
advertisements.

44
 Do you want to expand your business from current state?
Frequency Percent Valid Percent Cumulative
Percent
Valid yes 189 88.7 88.7 88.7
no 24 11.3 11.3 100.0
Total 213 100.0 100.0

Fig. 3

Inference: On asking the question weather the property dealers and builders
wants to expand their business from current level, 88.73 percent of the
people responded that they want to expand their business from current level
whereas only 11.27 percent of the people said that they are satisfied with
their current level of business and they don’t want to further expand their
business.
45
 Table 4

Do you want to expand your business from current state * which medium will you prefer
for expansion of your business?

Cross tabulation
which medium will you
prefer for expansion of
your business
Relatio Openi
n ship n g Adverti Collabor
buildin new se at Total
g office ments ions
s
do Yes Count 16 55 107 11 189
you % within do you want to expand your 8.5% 29.1% 56.6% 5.8% 100.0%
wa business from current state
nt 100.0% 100.0 99.1% 100.0% 99.5%
% within which medium will you
to %
prefer for expansion of your business 8.4% 56.3% 5.8% 99.5%
exp
a % of Total 28.9%
nd
you
r
busi Count 0 0 1 0 1
No % within do you want to expand your .0% .0% 100.0% .0% 100.0%
ness business from current state
.0% .0% .9% .0% .5%
from % within which medium will you
curre prefer for expansion of your business
.0% .0% .5% .0% .5%
nt % of Total
sta
te
Total Count 16 55 108 11 190
% within do you want to expand your 8.4% 28.9% 56.8% 5.8% 100.0%
business from current state
46
% within which medium will you 100.0% 100.0 100.0% 100.0% 100.0%
prefer for expansion of your business %
% of Total 8.4% 28.9% 56.8% 5.8% 100.0%

Inference: The result for the crosstab between “Do you want to expand you
business?” and “which medium will you prefer for expansion of your
business?” shows that out of
88.73 percent people who wants to expand their business from current level
56.3 percent of the respondents wants to go for advertisement for the
expansion of their business. It shows that there is a good number of property
dealers and builders who wants to advertise their business through
advertisements.
Table 5

How do you see real estate sector in terms of opportunities?

Frequency Percent Valid Percent Cumulative

Percent
Valid very good 115 54.0 54.0 54.0
good 64 30.0 30.0 84.0
average 26 12.2 12.2 96.2
Poor 8 3.8 3.8 100.0
Total 213 100.0 100.0

47
 Fig. 4

Inference: Asking the question “How do you see current status of Real
Estate Sector in terms of opportunities?” 53.99 percent of the total
respondents said that the sector is really good and there are lots of
opportunities of growth in this sector. 30.05 percent of the people responded
the sector as good, 12.21 percent of the respondents said that its is average
whereas only 3.76 percent of the respondents considers it as poor in terms of
opportunities, which shows that the sector is on a boom in terms of
opportunities

48
 Table 6

On given a chance will you go for collaboration with other firms

Frequency Percent Valid Percent Cumulative
Percent
Valid yes 44 20.7 20.7 20.7
no 169 79.3 79.3 100.0
Total 213 100.0 100.0

Fig. 5

49
Inference: The response to the question “on given chance will you go for
collaboration with other firms” nearly80 percent of the total respondents
answered as NO where as only 19.72 percent of the total respondents
answered that YES that can work in collaboration with other firms. The Bar
charts above shows the result shows that the Real Estate sector is a highly
unorganized sector where different property dealers and builders do not want
to work in collaboration with each other.

4.2 Analysis of Consumer feedback

Table 7
What was the factor that affects the most on purchasing decision in this complex?

Frequency Percent Valid Percent Cumulative

Percent
Valid Brand name of developer 3 4.3 4.3 4.3
Location 27 38.6 38.6 42.9
Affordability 40 57.1 57.1 100.0
Total 70 100.0 100.0

50
Fig. 6

Inference: While purchasing a property the factor that effects buying

decision of a customer the most is “Affordability” 56.34 percent of the total
respondent said that they look for affordability firs while purchasing a
property. After affordability the second most prominent factor is location of
the property, about 38.03 percent of total respondents responded in favor of
Location.

51
 Table 8
Descriptive Statistics
N Mean Std.
Deviation
Upto What extent price Range affects 70 6.100 .68419
your 0
choice of society(Rate on a scale of 1-
7)
Upto What extent connectivity to 70 2.200 .80937
public 0
transport affects your choice of
society(Rate
on a scale of 1-7)
Upto What extent proximity to 70 2.942 .84931
workplace 9
affects your choice of society(Rate on
a
scale of 1-7)
Upto What extent Availability of loan 70 5.185 .70798
7
affects your choice of society(Rate on
a
scale of 1-7)
Upto What extent Resale value affects 70 2.328 .63065
your 6
choice of society(Rate on a scale of 1-
7)
Upto What extent Clear title of 70 4.142 .85611
property 9
Affects your choice of society(Rate on
a
scale of 1-7)
Upto What extent infrastructure 70 5.671 .92817
Affects 4
your choice of society(Rate on a scale
of 1-
7)
Valid N (list wise) 70
52
Inference: On asking to rate the factors affecting the choice of a society to
purchase the property Price Range were the first and foremost factor that
effects the decision. On a scale of 1-7 the mean for this factor comes out to
be 6.1 which is very high. This shows that how price range effects the
decision while purchasing a property in a society.
The second factor that affects the most is Infrastructure of the property and
the ambience of the society.
Very close to Infrastructure factor is Availability of loan for the purchase of
that property. This shows that people to a large extent believes in availing
loan for the purchase of their property and hence the factor “Availability of
loan affects the buying decision of a person to large extent.

Perception of people about Delhi and cities of NCR.

Fig. 7

Inference: Here opinion of the people about Delhi and various cities of
NCR were taken on various attributes like Location, Business Opportunities,
Law and Order, Quality of Living, Infrastructural Development and the
following inference can be drawn.

Location: Delhi was considered to be the best place to live as far as location
53
is considered. Whereas giving it a competition next to Delhi is Noida. It is
chosen as the best location to live in entire NCR. Noida is located close to
the Capital of India and is also very closely located to Indirapuram, another
upcoming city.

Business Opportunities: As far as Business opportunities are concern Delhi

is again at number but according to the opinion of the respondents all the
NCR cities including Ghaziabad is giving it a good competition. So in terms
of Business Opportunities both Delhi as well as the cities of NCR has scored
well.

Quality of living: Delhi is again the first choice of the people on the
parameter of Quality of Living following it is Noida.

Law and Order: considering law and order as the parameter Delhi and all the
taken cities in NCR region lies almost at the same level with Delhi leading
again and Noda just following the lead.

Infrastructural Development: Delhi is again top in the list as far as

Infrastructural development is concerned whereas on second place in the list
is greater Noida.

54
 Conclusion
 There is a good portion of property dealers and builders who wants
to advertise themselves or property available with them either
through magazine or through internet, company can target these
property dealers and builders as their potential advertisers.

 The small companies in major don’t want to work in collaboration.

 The major external factors which people consider while purchasing

the property are price, availability of loan and proximity to
workplace.
 In Peoples perception Delhi is considered to be the best

place on all the parameters and Noida is the second choice.




Recommendations

 Apart from the real estate agents and dealers, the company
should approach architects and interior designers also.

 The company has limited its research to the Delhi and NCR region
only, it should go for other regions also.

 A follow up should be there for the dealers to whom the contact in

first meeting is not successful.

55
Limitations

 Study was restricted to some parts of Delhi and NCR region only.

 Study was restricted to property dealers and builders only

whereas we could consider architects and Interior designers also.

 Analyzing the perception of people about different cities of NCR was

little difficult as some respondents didn’t have much knowledge about

the other cities in NCR

 Denial of many Property Dealers and Builders to provide the

information about the properties they deal in.

56
 Annexure 1
Questionnaire

Respondent’s Name

Name of Apartment

Self owned property Rental

If rental, have you invested in any other housing complex

Yes No

What is the most important factor that affect your buying decision while purchasing
property in this apartment?

Brand name of developer Location

Attractive and frequent ads Affordability

To what extent do the following factors influence your choice of a housing

complex(Rate on a scale of 1-7)?

Not at all very large extent

Price range / / / / / /

Connectivity to / / / / / /
Public transport

Proximity to / / / / / /
Workplace

Availability of / / / / / /
loan

57
Resale value / / / / / /

Clear title of / / / / / /
Property 1 2 3 4 5 6 7

Give preference among the cities on the bases of given parameters

Gurgaon Noida Greater Noida Ghaziabad Delhi

Location

Business Hub

Quality of Living

Law and Order

Infrastructural
Development

58
 Annexure 2
Questionnaire

Q. 1. Which category you best fit in:

1 Financer 2 Agent / dealer

3 Registered company 4 Builder /constructor

Civil contractor
Are you in Construction?

Yes No

If Yes, Then site details

How do you manage your business/projects?

1 Category of personnel employed 2 Contact

Based

3 Advertisement 4 Area specific

Contacts

Do you want to expand your Coverage area of business?

Yes No

If yes, how:-

1 Relationship building 2 2 Opening new

Offices
3 Advertisements 4 Channel Partners

59
 How much network is important in this sector?( plz tick)

1 2 3 4 5

No use Most important

what do you feel about current status of real-state in terms of opportunities?

1 Very good 2 Average

3 Good 4 Poor

Which medium will you prefer for advertisement of your property?

1 Magazine 2 Newspaper

3 TV/Radio 3 Internet

Given a chance will you go for collaboration with other firms?

Yes

No

Q. 8 any suggestions:-

Personal details:-
Name & Organization ……………………………………………………

Address: ……………………………………………………

…...………………………………........................

Contact No:.………………… E- mail: …..…….………………………

Date: / /2010

60
 BIBLIOGRAPHY

www.makaan.com

www.magicbricks.com

www.ansalspropertiesltd.com

www.eros-group.com

www.eldecogroup.com

www.omaxe.com

www.parsvnath.com

www.ashianahousing.com

www.gurgaonproperties.net

www.realestatencr.com

www.gurgaonrealestate.com

www.estatedeveloper.com

61