Indian Real Estate Sector


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Indian Real Estate Sector

  1. 1. India Realty – Still a RealityIndia Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality India Realty – Still a Reality
  2. 2. <ul><li>In 1991, our then Finance Minister Manmohan Singh had concluded his maiden budget presentation with these words </li></ul><ul><li>“ No power on earth can stop an idea whose time has come .” </li></ul><ul><li>And the time has come for </li></ul>
  3. 5. Agenda <ul><li>Introduction </li></ul><ul><li>Current Scenario </li></ul><ul><li>Environmental Factors </li></ul><ul><li>Growth Drivers </li></ul><ul><li>Comparisons </li></ul><ul><li>Major players </li></ul><ul><li>Future: Reality-2020 </li></ul>
  4. 6. Current Scenario <ul><li>Second largest employer next only to Agriculture </li></ul><ul><li>USD 12 billion industry </li></ul><ul><li>Growing at 30% year on year </li></ul><ul><li>5% share in country GDP </li></ul>
  7. 12. URBANISATION <ul><li>According to the United Nations Population Fund (UNFPA) </li></ul><ul><li>By 2030 more than 40.7% of Indian population would be urbanised. </li></ul><ul><li>Presently, more than 28.7 per cent of India’s area is urban as against the global average of 48.7 per cent. </li></ul><ul><li>India’s ‘Mega-Cities’ of Mumbai and Delhi would be the </li></ul><ul><li>world’s 2nd and 3rd largest cities by 2015. </li></ul>
  8. 13. GROWTH IN PER CAPITA INCOME India’s per capita income is expected to be US$ 693 this year and is further expected to grow by 8-13 per cent in the next five years, particularly due to growth in the services sector
  9. 15. Following in CHINA’S footsteps? <ul><li>In 2000 FDI in china – USD 40 billion and India USD 2 billion (according to IMF USD 8 billion). </li></ul><ul><li>Half of China’s FDI in real sector while it was negligible in India. </li></ul><ul><li>China outperforming India by a long way. </li></ul><ul><li>India is better placed than China in the democratic, financial and business sectors. </li></ul>
  10. 16. NO DESCRIPTION CHINA INDIA 1 Population (billion) 1.276 1.029 2 Urban Population (%) 37 33 3 GDP (Billion $) 1121 440 4 Per capita income ($) 990 440 5 Exports (billion $) 250 44.1 7 Savings (% of GDP) 39 22 8 Labor Laws More flexible Less flexible 9 Corporate Tax (%) 15 36.75 12 Power Generation (billion KW) 1,166 417 13 Electricity Tariff ($/100KW) 4.3 (Rs 1.97/unit) 7.53 (Rs 3.80/unit) 14 Sea Freight (million tonnes) 922.37 (17 ports) 251.73 (12 ports) 15 Roads (million km) 1.7 3.0 16 Railways (thousand km) 68.0 81.5 17 People per telephone 12 46 18 Percent FDIs from non residents 65 10
  11. 17. India urban population was 28% in 2000, grew to 29% in 2007 and is forecast to reach 34% by 2020 Urban population in thousands
  12. 18. Key Players(INDIA) Name Service Profile Presence DLF Accredited to be largest real estate developer in India, DLF City is a township spread over 3,000 acres in Gurgaon, Haryana, Asia’s largest private township Pan-India footprint Unitech Residential, Commercial, SEZ development, Retail and Hospitality Integrated townships at a number of cities Pan-India foot print Parsvnath Developers Residential, Retail, IT Parks and Commercial Plans to develop 12 SEZs across the country Pan-India footprint with a focus on National Capital Region K Raheja Corp. IT office, SEZ, Hospitality, Retail and Residential Developing 15 self-contained townships and 10 hotels Major presence in Mumbai, Bangalore
  13. 19. Key Players(GLOBAL) Name Country Presence Emmar Group DUBAI Mainly Hyderabad Singapore Housing Board Singapore Hyderabad/Chennai Salim Group Indonesia Kolkata Kontur Bintang/Westport Malaysia NCR
  14. 20. Temporary Glitches <ul><li>Over dependence on IT/ITES </li></ul><ul><li>Affordability has taken a hit </li></ul><ul><li>FSI: too little, too late </li></ul>
  15. 21. It's tangible, it's solid, it's beautiful. It's artistic, from my standpoint, and I just love real estate
  16. 22. Reality-2020 <ul><li>(A) 100% infrastructure in RE projects </li></ul><ul><li>This means that all projects would have quality access roads, water, </li></ul><ul><li>Electricity, connectivity, safety and security. </li></ul><ul><li>(B) SRZs </li></ul><ul><li>Special Residential Zones must become a reality. </li></ul><ul><li>The SRZs are like SEZs, only the development caters to housing for </li></ul><ul><li>the masses. </li></ul><ul><li>SRZs are to be free of government levies and taxes, </li></ul>
  17. 23. <ul><li>(C) Green mantra </li></ul><ul><li>Green and sustainability will be consumer driven and not </li></ul><ul><li>necessarily developer driven. </li></ul><ul><li>(D) Land would have uniform laws the nation-wide </li></ul><ul><li>The simple concept of replicating ‘best practices’ </li></ul><ul><li>from town to town across the country. </li></ul>
  18. 24. <ul><li>(E) A single window for all NOCs and clearances </li></ul><ul><li>Eliminate current unpredictability, enhance efficiency and </li></ul><ul><li>ultimately pass on cost benefits to end users as risks of delay </li></ul><ul><li>significantly decrease. </li></ul><ul><li>(F) Efficient land records </li></ul><ul><li>Only efficient and reliable land records can make the sector bereft of risk </li></ul>Courtesy HT Estate 26 th July 2008