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1. Noah George - The Real Estate
Sector

2.  The Early human dwellings as pointed by
archeological evidences started in caves
 Zhoukbodian caves system near Beijing, China
dates at 500,000 years
 Chinese caves contain some of the earliest
evidence of human use of fire, approximately
400,000 years ago
 Easily inhabitants of Australlia, the Middle east and
the perusian Andes have also left remains in caves
 Gradually as agriculture became important to
people, some 4500 years ago, people established
villages of permanent houses and found new uses
for hunting and herding activities

3. Key Features
 The term ‘Real Estate’ is defined as land, including the air above it and the ground below
it, and any buildings or structures on it. It is also referred to as realty
 Real estate involves the purchase, sale, and development of land, residential and non-
residential buildings
 The activities of the real estate sector encompass the housing and construction sectors
also
 The real estate sector is a major employment driver, being the second largest employer
next only to agriculture
 About 250 ancillary industries such as cement, brick, steel, timber, building materials etc.
are dependent on the real estate industry

4. Impact of Real Estate Industry on
some other key industries
Retail(Malls)
Hospitality (Resorts, hotels, lodges, spa, inns)
Entertainment Industries(Multiplexes, Theatres, Recreation
centers )
Economic Services( Hospitals, school)
Information technology(IT) Enabled companies( call centers)

5. REAL ESTATE
RESIDENTIAL
NON-
RESIDENTIAL/CO
MMERCIAL
OFFICE
GOVT. OFFICES PRIVATE OFFICES
HOSPITALITY
INDUSTRIAL(SEZ)
RETAIL
MALLS AND
MULTIPLEXES
STANDALONE
OUTLETS

6. Physical Targets for Infrastructure in the Eleventh Plan
 Power
 Additional power generation capacity of around 78500 MW
 Roads and highways
 Six- laning 6500 km of Golden quadrilateral and selected National Highways
 Four laning 6736 km on North-South and East-West Corridors
 Four-laning 20000 km of national Highways
 Widening 20000 km of National Highways to two lanes
 Developing 1000 km of expressways
 Railways
 Constructing dedicated freight corridors between Mumbai-Delhi and Ludhiana-Kolkata
 8132 km of new railway lines: gauge conversion of over 7148
 Seaports
 Capacity addition of 485 million tones in major ports, 345 million tones in minor ports
 Airports
 Modernization and redevelopment of 4 metros and 35 non-metro airports
 Constructing 7 greenfield airports
 Constructing 3 airports in North-east region
 Telecom
 Achieving a telecom subscriber base of 600 million, with 200 million rural telephone connections
 Achieving a broadband coverage of 2-0 million internet connections
 Irrigation
 Developing 16 million hectares through major medium, and minor irrigation works 2.18 million
Source: Planning Commission

7. 98.90
%
1.10
%
FY06
83.50%
16.50%
FY10
Other FDI
Housing &
Real Estate

8.  Capital outflows
 Declining prices
 Lending curbs
 Low consumption
 High vacancies
Boom
Recession
 Increasing vacancy
 Slowing down
 Construction growth
 Property price starting to
fall

9. 1.58
23.33
Total number of vacant
censes houses
Total number of Occupied
census houses
Total number of Census houses(in crores)
Total number of houses: 24.91

10. 9.50%
12.40%
10.60%
9.70% 10.00%
9.20%
6.70%
5.90%
7.40%
6.50%
4.00%
2.00%
0.00%
6.00%
8.00%
10.00%
12.00%
14.00%
FY06 FY07 FY08 FY09 FY10
India’s Real GDP(at Constant 2004-05 Prices) Growth Rate
Trend
Growth rate
Gr
o
wt
h
rat
e
(
%
)

11. 75%
25%
Total share in real estate
sector
Residential Segment
Commercial Segment

12. 16
60
90
180
200
180
160
140
120
100
80
60
40
20
0
2006 2010 2015e 2020e
Real Estate Market Size(USD Bn)

13. 14.16 11.19 13.47 16.75
3.41
3.27
4.81
4.49
1.24 0.87
1.25
0.8
2.38
0.83
0.71
8.74
9.83
0.79
25.07
22.67
1.76
40.27 36.19
22.98
30.27
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY07 FY08 FY09 FY10
Others
Depreciation
Interest paid
Marketing expenses
Advertising expenses
Compensation to
employees
Raw material expenses

14. Major challenges faced
 Land availability and acquisition issue
 Lack of Transparency
 High stamp duty charges
 Variable prices of raw materials
 Absence of a centralized regulatory authority
 Constraints of funds

15. leading Real Estate Companies(as per
Total Income)
Sr. No Company Name Total Inco01me( Rs. Cr)
1 DLF Limited 3220.43
2 National Buildings Construction
Corporation Limited
2947.73
3 DLF Home Developers Limited 2469.78
4 Unitech Limited 2221.71
5 Housing Development and
Infrastructure Limited
1599.58
6 Ahluwalia Contracts (India) Limited 1573.43
7 DLF Retail Developers Limited 1501.89
8 True Value Homes(l) Private Limited 1400.00
9 Emaar MGF Land Limited 1172.35
10 Sobha Developers Limited 1119.28

16. leading Real Estate
Companies(as per net worth)
Sr. No Company Name Net worth( Rs. Mn)
1 DLF Limited 128036.0
2 Unitech Limited 79032.3
3 Housing Development and
Infrastructure Limited
70385.8
4 Emaar MGF Land Limited 46093.7
5 Anant Raj Industries Limited 34967.2
6 D B Realty Limited* 30967.2
7 DLF Home Developers Limited 24733.7
8 IVRCL Assets & Holdings Limited 22884.8
9 Parsnath Developers Limited 22174.7
10 DLF Commercial Developers Limited 20966.8

17. Year Building City Country Roof
2010 Burj Khalifa Dubai United Arab Emirates 828m
1963 KVLY-TV mast Blanchard United States 628.8
2011 Abraj Al Bait Towers Mecca Saudi Arabia 601m
2011 Tokyo Sky Tree Tokyo Japan 634 m
1962 BREN Tower Neveda Test Site United States 462 m
1962 Lualualei VLF transmitter Lualualei United States 458 m
1998 Petronas Twin Towers Kuala Lampur Malaysia 452 m
1997 Ekibastuz GRES-2 Power
Station
Ekibastusz Kazakhstan 419.7 m
2008 Dimona radar Facility Dimona Israel 400 m
1987 Kiev TV Tower Kiev Ukraine 400 m

18. Breakthroughs

19. Burj Dubai
 Tallest structure ever built, and
freestanding
 Highest elevators ever installed
 World’s fastest elevators at 64
km/hr.
 Worlds highest installation of
an aluminum and glass façade,
at a height of 512 meters
 Highest number of floors in a
building – 160, breaking 110 of
World Trade Center buildings

20. Stakeholders
 Constructing companies
 Developers
 Engineers
 Technicians
 Design consultants
 Landlords
 Foremen
 Clerical staff
 Skilled workers
 Unskilled workers
 Banks
 Insurance companies
 Tenants
 Suppliers of material( Electrical, Material, etc.)
 Buyers
 Government
 Licensing/ Registration offices( e.g. BMC)

21. Types of end
users
Investments
-Investors
-Speculators
-Specu-vestors
-Investor-occupiers
-Owner-occupiers
On the basis of size of
family
- Nuclear Family
- Extended Family
- Joint Family
Budget
 Small
 Medium
 Large
Type of occupation
 Service class
 Business class
 Labor class
Organizations
- Govt. owned buildings
- Organizations/companies
- Self rented

22. Value
Parameters(Residential)
 Slum in the area
 Quality of Amenities
Upcoming projects, infrastructural
developments
 Developing/ Ready to possess buildings
 Permissions by necessary Govt. bodies
 Investment/ Lease / Self occupancy
 Parking Space
Financial Aspects
 Cash/ Cheque component
 Home Loan Interest rates
 Property and other tax
 Terms of Payment
 Monthly outflow or maintenance cost
 Down payment
 Fixed/Floating
 Slab duration/
 Difficulty in getting Loan
 Affordability















 Price Location Connectivity
Neighbourhood
Access to facilities like hospitals,
schools, gardens, markets etc.
Future growth prospects Brand
name
Reputation of the builder Lifestyle
Quality of construction Legality of
construction Speed of
Construction
Space ( S/B area vs. Carpet Area)
Environmental friendliness
Earthquake Resistance
Security Parameters like distance
from the police station, fire station.

23. Comparative chart (on the basis of New worth)
34958.3
128036
46093.7
70385.8
79032.3
200000
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
Net Worth(Rs. Mn)
Net Profit(Rs. Mn)
EBITDA( Rs. Mn)
Total income( Rs. Mn)

24. Comparative chart (on the basis of New worth)
93.3
65 33.4 78.5 48
70.9
23.7 12.7 37.3 23.7
8.3
8.1 4.1 11.3 8.9
6.8
6 3.2 6.6
8.3
7.3 3.2
11.8
8.5
5.7
62.2
1.9 2.5 2.4 3.1
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Interest cover(times)
Debt-to-equity(times)
ROA(%)
RONW(%)
ROCE(%) NPM(%)
EBITDA Margin(%)

25. Distribution chain
 Portals like 99acres.com, Magicbricks.com, Indiaproperty.com
 Property exhibitions
 Newspaper ads
 Property magazines
 Leaflets
 Agents, brokers
 Leaseholders
 Government allotments( MHADA, Tata Housing)
 Neighbors, friends, colleagues
 Word of mouth
 Auctions
 Banks
 Investment Banks

26. Backend
supply chain

27. Backend Supply Chain
 Land
 Architects
 Cement Industry
 Steel Industry
 Sandstone
 Petrol Prices
 Electrical wiring and hardware fittings
 Flooring( Tiles, Marbles, Granites)
 Paints
 Heavy equipments(Cranes, Land movers, etc.)
 Glass Industry
 Bank and Insurance companies
 Road and Infrastructure
 Government agencies for plan approval, NOCs, DCRs

28. Basis of questionnaire
 Current trend
 Expected trend
 Profit margins
 Overall market growth overview

29. Runwal Symphony,
Vakola, Santacruz(east)
Project
 16 floors
 2 wings
 2, 3 bhk

30.  Total area- 10000 sq. ft.
 Construction cost- Rs. 2500 per sq. ft.
 Land cost – Rs. 2500 per sq. ft.
 Other expenses- Rs. 600 per sq. ft.
 Considering 30% area sold while booking or bhoomi poojan.
 Interest = around 10-12%
 Therefore total cost= 10000 * 5600= 5.6 cr
 Total sales cost = 9800* 11000= 10.78 cr(avg out)
 Booking sales= 4200(30%) * 8000= 3.36 cr[Construction cost
averages out]
 Total sales revenue= 10.78 + 3.36= 14.14 cr
 Total profit % = 152% profit

31. Laws Governing Real Estate Market In India
Indian Transfer of Property Act
Indian Registration Act, 1908
Indian Urban Land (Ceiling And Regulation) Act, 1976
Rent Control Acts
The Town & Country Planning Acts

32. No specific tax incentives for real estate sector, however
the
following incentives will boost the real estate.
 Excise duty rates on bulk cement and packaged cement
brought on par; bulk cement to attract excise duty of Rs.400
per Metric Tone or 14 per cent ad valorem, whichever is higher
 Cement clinkers excise duty at Rs.450 per Metric Tone.
 General CENVAT rate on all goods reduced from 16 per cent
to 14 per cent to give a stimulus to the manufacturing sector.
 Reduction in the excise duty from 16 per cent to 14 per cent.
 Reduction in customs duty from 5 per cent to nil on steel and
aluminum melting scraps

33. Regulations from Primary survey
 Under the Income tax Act:
 Valuation of the property is done as per three
values:
 Fair Valuation
 Municipal Valuation
 Market Valuation
 Valuation can be done on the basis of any of
the above three but the registration and stamp
duty cannot be paid at a rate lesser than the
Municipal Valuation, better known as Ready
Reckoner rate of the property.

34.  (CLIS) Change of land Use
 NOC – At least in 2 stages
 Plan verification
 Registration
 NOC post completion
 As per new rule an additional Service tax of 2.5% will be levied on
the registration value

35. Stamp Duty Rates
 Non-residential Properties – Flat 5%
 Residential Flats in a housing society and buildings covered under Article
25(d) of schedule I of Bombay Stamp Act 1958 attracts concessional rates
depending upon the market rates depending upon its market value as
follows:
 Below 100000 - Nil
 100000- 250000 - 0.5% of the value
 250000- 500000 – 1250 + 3% above 500000
 Above 500000 – 8750 + 5% of the value above 500000

36. Registration
Post January 2010 the
registration fees of a property
in Maharashtra has gone up to
1% of the ready reckoner rate.
Earlier this rate was Flat Rs.
30000.

37. TRENDS

38.  A large number of projects that have come up in the
past decade have placed a lot of importance on
additional amenities like swimming pool, gymnasium, etc
thereby increasing the maintenance cost for thee
projects.
 A lot of developers are now considering moving to the
construction of 1BHK and BK apartments in prime
locations because of growing demands for this particular
format by the lower-middle and middle income groups

39.  Some of the builders that I visited have now gone on to make
apartment sizes much larger than the ones prevalent for that particular
segment. E.g. A normal 3 BHK should be between 1500-1700 sq. ft.
RNA Builders are now coming up with areas like 2400 and 2800 sq. ft.
These flats are brought over by a lot of investors
 Builders too are looking forward to developing compact houses with
reduced space. For e.g. 3 BHK usually having 1500 to 1800 sq. ft are
reducing their floor size to 1000 and 1200 sq. ft. catering majorly to the
people with limited budget and higher requirement
 Concept of satellite cities like Amby valley and Lavasa too is
experiencing a boom. Urban crowd are slowly moving from cities like
Delhi to Gurgaon and Noida. This trend can also be seen in Mumbai in
the past decade.

40. NEED
GAPS

41. Medical
Travelers
 North Carolina has over 5 lakh patients travelling every
year for medical purpose
 People from abroad travel to India for
 Orthopedic surgeries like hip/knee replacement
 Birmingham hip resurfacing
 Cardiac surgeries like cardiac bypass
 Valve replacement
 Pediatric heart surgeries for congenital heart disease

42. Prevalent Long term illnesses
 Cancer – GIT(Gastro Intestinal Track)
 Cancer – Hepatocellular Carcinoma
 Bone Marrow Transplant( Leukemia, Hodgkin's)
 Brain Cancer
 Pancreatic Cancer
 Terminal Stage of HIV( Full Blown AIDS)
 IVS( In vitro fertilization)

43. SATELLITE
CITIES
 Development of satellite cities unlike Amby valley and
Lavasa catering to the need of the lower-middle and middle
age group.
 Basic Requirement of this particular segment being
affordable houses with basic amenities and safety.