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The Economic Times presents                  Reifbs 2011Real Estate Investment Forum & Business Spaces              Panel ...
Contents• Evaluating the expanse of the Social Infrastructure Sector - Size, Potential,  Need Gap• Factors responsible for...
Evaluating the expanse of the Social Infrastructure Sector - Size,Potential, Need Gap• Social infrastructure in India : Ed...
Evaluating the expanse of the Social Infrastructure Sector - Size,Potential, Need Gap contd…• Social infrastructure in Ind...
Factors responsible for the surfacing of this sector on realestate radarProviding Quality healthcare, education and senior...
Factors responsible for the surfacing of this sector on realestate radar contd…                                           ...
Factors responsible for the surfacing of this sector on realestate radar contd… Senior Living: Senior living is the latest...
Factors responsible for the surfacing of this sector on realestate radar contd… Opportunities for Real Estate Sector 1. Ma...
Significance and Growth Indicators for the times to comeComponents of Social Infrastructure    CCRC- Continuous Care Retir...
Significance and Growth Indicators for the times to comeSource: JLL –US India Business Complex     HCC Real Estate        ...
Significance and Growth Indicators for the times to come Source: JLL –US India Business Complex   HCC Real Estate         ...
Significance and Growth Indicators for the times to come Source: JLL –US India Business Complex    HCC Real Estate        ...
Significance and Growth Indicators for the times to comeHealthcare – Growth ProjectionsIncreasing private sector participa...
Significance and Growth Indicators for the times to comeHealthcare – Market Size• The US$ 50 billion-a-year health care in...
Significance and Growth Indicators for the times to comeHealthcare – Medical Tourism• According            to   a   new   ...
The need for its differentiated Real Estate strategies as against theregulars Social Infrastructure Business in Real Estat...
The need for its differentiated Real Estate strategies as against theregulars contd… B. Structuring of business is very cr...
The need for its differentiated Real Estate strategies as against theregulars contd…D.    Managing costs and timelines – P...
The need for its differentiated Real Estate strategies as against theregulars contd… Difficulties in implementation of soc...
The need for its differentiated Real Estate strategies as against theregulars contd… Suggested Reforms 1. Administrative R...
The need for its differentiated Real Estate strategies as against theregulars contd… Suggested Reforms contd.. 3. Creating...
Annexure
Annexure  CCRC- Continuous Care Retiring Community  HCC Real Estate                            September 2011             ...
Annexure  CCRC- Continuous Care Retiring Community  HCC Real Estate                            September 2011             ...
Senior Living Projects   HCC Real Estate       September 2011                               February 2011   Page 25
Senior Living Projects   HCC Real Estate       September 2011                               February 2011   Page 26
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Real Estate Investment Forum & Business Spaces 2011

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The Economic Times presents REIFBS 2011
1. Evaluating the expanse of the Social Infrastructure Sector - Size, Potential, Need Gap
2. Factors responsible for the surfacing of this sector on real estate radar
3. Significance and Growth Indicators for the times to come
4. The need for its differentiated Real Estate strategies as against the regulars
5. Best practices and successful case studies from across the states

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Real Estate Investment Forum & Business Spaces 2011

  1. 1. The Economic Times presents Reifbs 2011Real Estate Investment Forum & Business Spaces Panel Discussion Social Infrastructure in India-Arrival at last
  2. 2. Contents• Evaluating the expanse of the Social Infrastructure Sector - Size, Potential, Need Gap• Factors responsible for the surfacing of this sector on real estate radar• Significance and Growth Indicators for the times to come• The need for its differentiated Real Estate strategies as against the regulars• Best practices and successful case studies from across the states• Annexure HCC Real Estate September 2011 February 2011 Page 2
  3. 3. Evaluating the expanse of the Social Infrastructure Sector - Size,Potential, Need Gap• Social infrastructure in India : Education, Heath Care and Senior Living• Reasons for exponential Growth of these sectors 1. Increase in Population: about 1.1 billion in 2009-2010 to 1.4 billion by 2026 2. Shift in demographics: 60 percent of the population in the younger age bracket and an expected increase of geriatric population from current 96 million to around 168 million by 2026 3. Rise in disposable income: Households in the above INR 200,000 per annum bracket can benefit from an increase in disposable income from 14 percent in 2009-2010E to 26 percent in 2014-2015P 4. Rising Literacy: Growing general awareness and demand for quality about healthcare and education as a result of increase in literacy rates HCC Real Estate September 2011 February 2011 Page 3
  4. 4. Evaluating the expanse of the Social Infrastructure Sector - Size,Potential, Need Gap contd…• Social infrastructure in India : Critical Success Factors for Business 1. Identifying the need (Target Audience) 2. Providing Delivery mechanism (Made-to-order solutions) 3. Accessing affordable financing (Innovative means of Financing) 4. Understanding the business operations & Structure (Innovative Structuring) 5. Working out a Scalable Business Model (Expansion) 6. Putting together systems, processes and Management (Operations) HCC Real Estate September 2011 February 2011 Page 4
  5. 5. Factors responsible for the surfacing of this sector on realestate radarProviding Quality healthcare, education and senior living is becoming the responsibility of the real estate developer on account of• Changing Scale and complexity of Real Estate Business- From Single building to Residential complexes to integrated Townships to Special Economic zones to privately developed Cities• Establishments of New Concepts - Walk to work – walk to learn – walk to play – walk to healthcare• Preference to Private Service Provider over Government Service Provider in healthcare and Education• Increasing Specialization in healthcare and Education- from Nursery to Doctoral programme are run by different institutions specialist and healthcare is provided by speciality and super- speciality institutions often on franchisee model• Emergence of new businesses such as Wellness and preventive medical care in healthcare and vocational courses in education• Unique Structuring of Education Project requires an association between a not-for Profit player like a trust to own the institution and a separate company to own and manage the infrastructure HCC Real Estate September 2011 February 2011 Page 5
  6. 6. Factors responsible for the surfacing of this sector on realestate radar contd… Source: CRISIL Research HCC Real Estate September 2011 February 2011 Page 6
  7. 7. Factors responsible for the surfacing of this sector on realestate radar contd… Senior Living: Senior living is the latest entrant on residential real estate front, Cities like Pune, Bangalore and Chandigarh were called as “Pensioner‟s Paradise” and constructing your own bungalow was the only alternative but now senior living/ assisted living/ group living alternatives are provided by real estate developers or trusts/ foundations/ NGOs. Locations with salubrious climate, scenic beauty and good connectivity are chosen for these projects with following basic needs fulfilled 1. Shelter 2. Service and assistance in daily chores 3. Quality healthcare support 4. Safety and Security 5. Company of similar age group 6. Passive and active recreation facilities 7. Entertainment and communication facilities HCC Real Estate September 2011 February 2011 Page 7
  8. 8. Factors responsible for the surfacing of this sector on realestate radar contd… Opportunities for Real Estate Sector 1. Making effective use of reservations and amenity spaces in a large layout (value addition to the project) 2. India has favourable demographics (larger working age population) coupled with growing income levels has created a huge market for quality healthcare and education solutions with ability to pay. Healthcare insurance penetration is also picking up increasing affordability 3. Providing healthcare and education enhances the positioning of the real estate projects as a lifestyle destination 4. Generating different income streams – product + service charges (continuous income) 5. Availing Taxation benefits 6. Creating a new entrepreneurial venture 7. Fulfilling Corporate Social Responsibility Motives 8. Enhancing cross-selling opportunities 9. Branding and marketing advantage 10. Improving business for commercial & retail real estate occupants HCC Real Estate September 2011 February 2011 Page 8
  9. 9. Significance and Growth Indicators for the times to comeComponents of Social Infrastructure CCRC- Continuous Care Retiring Community HCC Real Estate September 2011 February 2011 Page 9
  10. 10. Significance and Growth Indicators for the times to comeSource: JLL –US India Business Complex HCC Real Estate September 2011 February 2011 Page 10
  11. 11. Significance and Growth Indicators for the times to come Source: JLL –US India Business Complex HCC Real Estate September 2011 February 2011 Page 11
  12. 12. Significance and Growth Indicators for the times to come Source: JLL –US India Business Complex HCC Real Estate September 2011 February 2011 Page 12
  13. 13. Significance and Growth Indicators for the times to comeHealthcare – Growth ProjectionsIncreasing private sector participation inhealthcare services is stimulating change inthe Indian healthcare industry. According toan ICRA industry report on Healthcare, Indiaspends 5.1 percent of its GDP on health. Thehealth market is estimated at Rs.1, 408billion ($30 billion) and includes retailpharmaceutical, healthcare services, medicaland diagnostic equipment and supplies.While India‟s overall expenditure on health iscomparable to most developingcountries, India‟s per capita healthcareexpenditure is low due its large billion pluspopulation and low per capita income. HCC Real Estate September 2011 February 2011 Page 13
  14. 14. Significance and Growth Indicators for the times to comeHealthcare – Market Size• The US$ 50 billion-a-year health care industry has grown rapidly and is now the second-largest service- sector employer in the country, providing jobs to about 4.5 million people directly or indirectly. The Indian healthcare sector will double its size to US$ 100 billion by 2015, according to ratings agency Fitch.• By 2020, the Indian healthcare industry is estimated to be worth US$ 275.6 billion. Currently, 8 per cent of India‟s GDP is spent on healthcare.• According to another report „Healthcare Opportunities in India‟ by UK Trade and Investment (UKTI), India‟s healthcare industry is estimated to reach US$ 75 billion by 2012 and US$ 150 billion by 2017.• The health insurance penetration in India is currently low at 5% vs. ~80% in countries such as the US, China and Singapore. HCC Real Estate September 2011 February 2011 Page 14
  15. 15. Significance and Growth Indicators for the times to comeHealthcare – Medical Tourism• According to a new report published by RNCOS, titled "Booming Medical Tourism in India" India‟s share in the global medical tourism industry will reach around 3 per cent by the end of 2013. The report states that medical tourism is expected to generate revenue around US$ 3 billion by 2013, growing at a CAGR of around 26 per cent during 2011–2013. The number of medical tourists is anticipated to grow at a CAGR of over 19 per cent during the forecast period to reach 1.3 million by 2013. HCC Real Estate September 2011 February 2011 Page 15
  16. 16. The need for its differentiated Real Estate strategies as against theregulars Social Infrastructure Business in Real Estate need a different strategy as A) Structuring of business is very critical on account of : i. High initial investments ii. Lower short term returns iii. Longer payback period iv. Low capacity of shareholders for capital investment & rental payments v. Revenue share / profit share model adoption is essential vi. Risk distribution becomes critical vii. For profit– Education Institute are still not permitted, trust – based structure is required HCC Real Estate September 2011 February 2011 Page 16
  17. 17. The need for its differentiated Real Estate strategies as against theregulars contd… B. Structuring of business is very critical on account of partnership with different stakeholders: i. Financial debt / equity ii. Operations & maintenance iii. Management iv. Technical C. Regulatory Environment Management i. Development stage ii. Management & operations stage HCC Real Estate September 2011 February 2011 Page 17
  18. 18. The need for its differentiated Real Estate strategies as against theregulars contd…D. Managing costs and timelines – Price sensitive projects i. Material procurement ii. Techniques iii.Consultants iv.Operations & maintenance techniquesE. International & domestic collaborations and tie-ups i. With Universities for Educational Hub ii. With International Medical Care Institutions for Medical Tourism Hub taking advantage of our low costs and lack of congestion iii.With United Nations & other Development Bodies like UNDP, ADB, etc. for special finance schemes iv.With Management Institutions for Healthcare and Education Management considering the special nature of business HCC Real Estate September 2011 February 2011 Page 18
  19. 19. The need for its differentiated Real Estate strategies as against theregulars contd… Difficulties in implementation of social infrastructure projects i. Access to affordable land parcels ii. Delay in License and Permissions iii. Access to Soft Finance iv. Shortage of skilled manpower and specialized management personnels v. Operations & maintenance techniques vi. Lack of matching physical infrastructure vii. Low investment in social infrastructure viii.Low Penetration of Health Insurance ix.Lack of effective Public-Private partnership Models HCC Real Estate September 2011 February 2011 Page 19
  20. 20. The need for its differentiated Real Estate strategies as against theregulars contd… Suggested Reforms 1. Administrative Reforms i. Clear responsibility of division under Central, State & Local Self Government Level ii. Social Infrastructure & Services Commission & its Report on Need & Gaps iii. Improvement of Insurance Sector 2. Integrating Social Infrastructure in City / Regional Planning with focus on space earmarking & regulations framework. i. Higher FAR ii. Low Development Premium iii. Self Certification for building plan approval iv.Single window clearance system v. Providing matching physical infrastructure – such as transportation, water supply vi.Property Tax Rebate vii.Funding provisions through integration of various schemes HCC Real Estate September 2011 February 2011 Page 20
  21. 21. The need for its differentiated Real Estate strategies as against theregulars contd… Suggested Reforms contd.. 3. Creating a sound institutional framework for effective Public Private Partnership i. Provide technical, legal & financial assistance to State & Local Self Government for effective participation of Private Sector ii. Encourage projects under PPP through model concession agreement / database knowledge sharing iii. Facilitate collaboration between foreign universities / medical colleges / institutions & large Corporations iv. Provide various incentives, concessions and tax rebates to social infrastructure projects through PPP. v. Unlocking land value by tapping land – based financing sources such as : • Public hospitals • Government Colleges & Universities • Health care centers vi. Provide clear policy guidelines for user charges & revenue sharing for responsible business conduct. HCC Real Estate September 2011 February 2011 Page 21
  22. 22. Annexure
  23. 23. Annexure CCRC- Continuous Care Retiring Community HCC Real Estate September 2011 February 2011 Page 23
  24. 24. Annexure CCRC- Continuous Care Retiring Community HCC Real Estate September 2011 February 2011 Page 24
  25. 25. Senior Living Projects HCC Real Estate September 2011 February 2011 Page 25
  26. 26. Senior Living Projects HCC Real Estate September 2011 February 2011 Page 26
  27. 27. Thank You

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