Regulatory requisites & development cost analysis are the two key components in the development cycle of a real estate project.This presentation covers these components and gives an insight to help key stakeholders throughout the project life cycle.

1. Wednesday
17th
April 2019
Regulatory Requisites and Development Cost
Analysis for Real Estate Projects in Bangalore
Webinar

2. There are two major costs
associated with development
of a real estate project:
• Land cost
• Development cost
DEVELOPMENT
COST ANALYSIS
This presentation summarises
Regulatory Requisites and
Development Cost Analysis for
residential and commercial
projects in Bangalore.
PURPOSE
INTRODUCTION
1
Statutory Authorities involved
with physical, legal and
regulatory aspects of land and
the list of key Government
documents associated with
land and development.
REGULATORY
REQUISITES

3. REGULATORY REQUISITES
2

4. STATUTORY AUTHORITIES
GOVERNMENT DEPARTMENTS
Issues documents related to:
• Property title
• Land-use
• Physical constraints
• Ownership of the property
REVENUE
DEPARTMENT
• Property extent
• Physical, geographical
constraints
SURVEY
DEPARTMENT
Deals with :
• Physical aspects of the site
• Geographical aspects of the
site
• Detailed development
guidelines
• Approvals & sanctions
for development
PLANNING &
DEVELOPMENT
AUTHORITY
Responsible for :
• Comprehensive
Development Plan (CDP) /
Master Plan
• Issuing required
development approvals
• Past & Current Ownership
• Title Documents
• Bifurcation / Amalgamation
• Special considerations /
amendment of geographical
constraints
3

5. DEVELOPMENT PLANNING AUTHORITIES
Kanakpura
Doddaballapura
To Chikkaballapur
To Tumkur
Magadi
Devanahalli
Anekal
Hoskote
To Bellari
SH9
SH74
NH44
To Hyderabad
NH
75
To Mumbai
To Mangaluru
NH
75
To Kunigal
SH 85
To Mysuru
NH 275
To Coimbatore
NH 948
SH 85
To Salem
SH 87
To Hosur
To Hosur
NH 44
To Chennai
NH 75
To Kolar
SH
82
Ramnagara
SH94
INDEX LOCAL PLANNING AREA
Anekal
Bangalore International Airport Area
Bangalore Mysore Infrastructure Corridor
Greater Bangalore – Bidadi Smart City
Hosakote
Kanakapura
Magadi
Nelamangala
Ramnagara and Channapatna
Satellite Town Ring Road
Bangalore Development Authority (BDA)
BruhatBengaluru Mahanagara Palika(BBMP)
Source:- Bengaluru Metropolitan Region Development Authority
4

6. APPROVALS FOR RESIDENTIAL &
COMMERCIAL DEVELOPMENTS
NOCs for Residential / Commercial Project
6 APPROVALS (+) 9 APPROVALS (+) 2 APPROVALS (+) 4 APPROVALS
1. Water & Sewerage System *
2. Ground Water Clearance
3. Electricity *
4. Pollution Clearance *
5. a) For Apartments / Villas /
Commercial : Building Plan
b) For Plots :Layout/Sanction
Plan & Relinquishment
for Roads, Parks & Open Spaces
6. Real Estate Regulatory
Authority (RERA) *
7. Height Clearance
2. Commencement Certificate
1. Labour License
Occupancy Certificate /
Release Order *
Permanent Water Connection *
Permanent Electrical Connection *
CFO (Consent for operation) *
8 Telecom
9. Fire
10. Environment
11. Development Plan
12. Defense
13. Metro Clearance
14. Railway Clearance
15. Explosives
PRE CONSTRUCTION CONSTRUCTION
NOTE :
MANDATORY NOC FOR ALL
DEVELOPMENTS
ADDITIONAL NOC FOR
BUILDING HEIGHT> 15m
ADDITIONAL NOC
FOR DEVELOPMENT SIZE > 50,000
SQ. M.
FOR PLOTTED, LAND AREA > 10
ACRES
ADDITIONAL NOC
FOR SITE AREA> 20,000 SQ. M. (RESIDENTIAL)/
12,000 SQ. M (COMMERCIAL)
ADDITIONAL NOC
FOR GEOGRAPHIC / PHYSICAL
CONSTRAINTS
* NOC APPLICABLE FOR PLOTS ALONG WITH
APARTMENTS, VILLAS AND COMMERCIAL
COMPLETION OF
CONSTRUCTION
COMPLETION OF
APPROVAL PROCESS &
COMMENCEMENT OF
CONSTRUCTION
COMMENCEMENT OF
APPROVAL PROCESS
A
A B C
NOCs/APPROVALS
TIMELINE OF APPROVALS
18 - 55 Months08 - 13 Months
B C
5

7. NOCs , APPROVALS & TIMELINES
List of Pre-Construction NOCs & Timelines Required For a Residential (Group Housing) / Commercial Project
Required NOC
1 2 3 4 5 6 7 8 10 11 12 139
Telecom NOC
Electricity
FIRE NOC
Development
Plan
Building Plans
Issuing Authority
No. of Months
Bharat Sanchar Nigam Limited
BDA/BMRDA
BDA/BMRDA/BBMP/
LPAs/KIADB/BIAAPA
KN-RERA
Bangalore Electricity
Supply Company (BESCOM)
Karnataka State Fire &
Emergency Services (KSFES)
Karnataka State Pollution
Control Board (KSPCB)
State Environment Impact
Assessment Authority (SEIAA)
RERA
Registration
Environmental
Clearance
Polluction
Clearance
Water Supply &
Sanitary NOC
Ground
WaterClearance
Height
Clearance
Airport Authority of India (AAI) /
Hindustan Aeronautics Limited (HAL) /
Defense/ nearest airport or aerodrome
Bangalore Water Supply &
Sewerage Board (BWSSB) /
Gram Panchayat
Central Ground Water
Authority (CGWA)
6
Mandatory NOCs for any development

8. APPROVALS FOR PLOTTED DEVELOPMENTS
7
List of NOCs & Timelines Required For Plotted Development Project
NOC Issuing Authority
1 2 3 4 5 6
No. of Months
Water Supply and
Sanitary
Electricity
BWSSB / Panchayat
BESCOM / KPTCL
KSPCB
BBMP / BDA /
BMRDA / LPAs
PWD & Local
Planning Authority /
Panchayat
KN - RERA
Pollution Control
Sanction Plan / Layout
Relinquishment towards
Roads and Parks &
Open Spaces
Real Estate Regulatory
Authority

9. SUMMARY - REGULATORY REQUISITES
9-159-15
Estimated cost for receiving
development approvals for
apartments and office buildings
NOCs/Approvals
6-126-12
Required during construction
and on completion
Months
66
Required during construction
and on completion
NOCs/Approvals
75-10075-100
Estimated cost for receiving
development approvals for
apartments and office buildings
INR per sq.ft. of
saleable area
10-2510-25
Estimated cost for receiving
approvals for plotted
developments
INR per sq.ft. of
saleable area
8

10. DEVELOPMENT COST ANALYSIS
9

11. DEVELOPMENT COST ANALYSIS
LAND COST
CONSTRUCTION COST OTHER COSTS
DEVELOPMENT COST
Apartment/ villa/ commercial :
30%-45% of the total project cost.
Plotted Development Projects :
65%-70% of the total project cost
•
•
Apartment/ villa/ commercial :
44%-55% of total project cost.
Plotted Development :
18%-19% of the total project cost.
•
•
• Consultant Fees
• Approval Costs
• Marketing Cost
• Finance Cost
• Administrative Cost
Apartment/ villa/ commercial :
8%-14% of total project cost.
•
Plotted Development :
11%-15% of the total project cost.
•
Other Costs consist of :•
10
PROJECT COST

12. DEVELOPMENT COST ANALYSIS
Estimated Development Cost (INR per sqft)*
^Construction Cost accounts for nearly 80% of the total development cost.
*Includes Villa / Villament & Rowhouse projects
Cost Heads
Luxury
Construction^
Cost
Consultant
Fees
Approval
Costs
Marketing
Expenses
Finance
Cost
Administrative
Expenses
Villa
Development*
Commercial
Development
Premium
Mid
Segment
Apartment Project
Affordable
Plotted
Development
2,700
50
80
250
140
110
2,350
50
80
200
125
95
2,150
50
80
150
110
85
1,350
50
75
100
70
50
1,950
35
30
200
100
80
207
20
15
75
15
12
2,700
50
80
40
155
110
3,330 2,900 2,625 1,695 2,395 344 3,135
Total Estimated
Development Cost
11

13. DEVELOPMENT COST ANALYSIS
Project Cost Breakup (%)
APARTMENT / VILLA / COMMERCIAL PLOTTED DEVELOPMENT
LAND COST CONSTRUCTION COST OTHER COST
38 %
50 %
12 %
68 %
19 %
13 %
12

14. FACTORS IMPACTING CONSTRUCTION COST
13
Construction Cost Varies due to :
No of floors Other factorsDifferent specifications
Plots Villas Apartments
2700
2400
2100
1450
2250
1950
1750
298
207
126
0 500 1000 1500 2000 2500 3000
Luxury
Premium
Mid Segment
Affordable
Construction Cost (INR / sq.ft.)
Affordable Mid Segment Premium Luxury
Number of Floors
1300 1450
1900
2100
2250
2400
2550
2500
2700
2900
0
500
1000
1500
2000
2500
3000
3500
5-8 8-15 >15
ConstructionCost(INR/sq.ft.)
8-10 %
4-6%
Mid segment
Premium
Luxury
Affordable
Mid segment
Premium
45% >
11-14% >
13-15% >
5 - 8
Floors
More than
15 floors
8 - 15
Floors<
4 - 6%
<
8 - 10%
Construction Cost for Various Residential Products Variation in Construction Cost as per No of Floors

15. FACTORS IMPACTING CONSTRUCTION COST
IN HOUSE
Construction Cost :
INR 2,150 – 2,200 per sq.ft.
OUT SOURCED
Construction Cost :
INR 2,500 – 2,600 per sq.ft
RESIDENTIAL
68% 32% 24% 76%
COMMERCIAL
Labour Cost
Material Cost
Labour Cost
Material Cost
6% Increase in construction cost in ASF
technology compared to conventional method
15% reduction in delivery timeline
10 – 15% is increase in construction
cost in case of outsourced construction
Labour Cost accounts for 23%-33% of the
total construction cost,
CONVENTIONAL METHOD
Construction Cost :
INR 2,550 per sq.ft.
Timeline:
55-60 months
ASF TECHNOLOGY
Construction Cost :
INR 2,700 per sq.ft.
Timeline:
48-52 months
Note : * Above data points are for Premium Apartments of size 6 – 10 Lakh sqft Premium Apartments are largely multi-storied buildings with superior specifications and elaborate
amenities. The projects are largely developed by Class A/ B+ developers and are located in Central, Off-Central or plush residential locations within suburban / peripheral locations.
Typically selling price of the apartments ranges between: INR 5,800-15,000 per sqft based on the location.
14

16. 82%
Construction Cost is
Of the Total Development Cost
28%28%
Labour Cost is
Of the Total Construction Cost
45%45%
Construction Cost for a
Mid Segment Apartment is
Higher than
Affordable Segment
12%12%
Construction Cost for a
Premium Apartment is
Higher than Mid Segment
Construction Cost for G+15
Floors is
Higher than G+8 Floors
And
4%4%
Construction Cost for a building
with more than 15 Floors is
Higher than G+8 Floors
12.5%12.5%
SUMMARY- DEVELOPMENT COST ANALYSIS
15
82%

17. About Us
Meraqi is a strategic real estate advisory firm. We transform ideas and possibilities into reality for our clients. With us clients get a wide range of alternatives,
curated solutions and experience absolute convenience in the process. For discerning investors, owners and developers we offer end to end services which include :
• Investment Management
• Capital Markets
• Transaction Services
• Advisory, Valuation & Due Diligence Services
We offer services across real estate asset classes including Residential, Commercial, Hospitality, Warehousing and Alternative Assets (Student Housing,
Rental Housing and Senior Housing). Meraqi is a trusted name when it comes to Real Estate Services for UHNIs, Corporates, Private Equity/ Institutional Funds,
Family Offices, Developers and Landowners.
16
Please mail your queries to
dhara@meraqiadvisors.com
Sumathi@meraqiadvisors.com

18. THANK YOU