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A PROJECT REPORT
REVOLUTION
The Indian real estate sector is witnessing a quiet revolution, owing to a flourishing
economy and a positive government attitude, which includes a liberalized foreign direct
investment regime. The realty sector, which is growing at an amazing 35 per cent, is
estimated to be worth US$ 15 billion. It is also expected to grow at 30 per cent annually
over the next decade, attracting foreign investments worth US$ 30 billion. This double-
digit growth is mainly attributed to the off-shoring business, including high-end
technology consulting, call centres and software businesses. The IT and ITES sector is
estimated to require 150 million sq ft of office space across urban India by 2010. This
will have a domino effect since for every square feet of developed office area; around 10
sq ft of residential space needs to be developed for accommodation of the employees.
Almost 80 per cent of real estate developed in India is residential space, the rest
comprising of offices, shopping malls, hotels and hospitals. According to the Tenth Five
Year Plan, there is a shortage of 22.4 million dwelling units. Thus, over the next 10 to 15
years, 80 to 90 million housing dwelling units will have to be constructed with a majority
of them catering to middle and lower income groups.
After agriculture, the real estate sector is the second largest employment generator in
India and contributes heavily towards gross domestic product (GDP). Five per cent of the
country's GDP is contributed to by the housing sector. In the next five years, this
contribution to the GDP is expected to rise to 6 per cent.
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The real estate sector is also responsible for the development of over 250 other ancillary
industries such as cement, steel, paints etc. A study by rating agency ICRA shows that the
construction industry ranks 3rd among the 14 major sectors in terms of direct, indirect
and induced effects in all sectors of the economy. A unit increase in expenditure in this
sector has a multiplier effect and the capacity to generate income as high as five times. If
the economy grows at the rate of 10 per cent, the housing sector has the capacity to grow
at 14 per cent and generate 3.2 million new jobs over a decade.
ALL-ROUND DEVELOPMENT
Rising income levels of a growing middle class along with increase in nuclear families,
changing demographics of home buyers (the average age of a new homeowner in 2006
was 32 years compared with 45 years a decade ago), and easy housing finance has led to
a boom in the housing sector.
According to 'Housing Skyline of India 2007-08', a study by research firm, Indicus
Analytics, there will be a demand for over 24.3 million new dwellings for self-living in
urban India alone by 2015. Consequently, this segment is likely to throw huge investment
opportunities. In fact, an estimated US$ 25 billion investment will be required over the
next five years in urban housing, says a Merrill Lynch report.
Furthermore, a booming Indian economy has had a cascading effect on demand for
commercial property to help meet the needs of business, such as modern offices,
warehouses, hotels and retail shopping centres.
Growth in commercial office space requirement is led by the burgeoning outsourcing and
information technology (IT) industry and organized retail. For example, the organized
retail industry is likely to require an additional 220 million sq ft by 2010.
Moreover, growth is not restricted to a few towns and cities but is pan-India, covering
nearly all tier I and tier II cities. Market analysis pegs returns from realty in India at an
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average of 14 per cent annually with a tremendous upsurge in commercial real estate on
account of the Indian BPO boom. A significant demand is also expected as the
outsourcing boom moves into the manufacturing sector. Further, the housing sector has
been growing at an average of 34 per cent annually, while the hospitality industry has
been growing at around 10 per cent over the last couple of years.
Apart from the huge demand, India also scores on the construction front. McKinsey
report reveals that the average profit from construction in India is 18 per cent, which is
double the profitability for a construction project undertaken in the US.
SCOPE
With the economy surging ahead, the demand for all segments of the real estate sector is
likely to continue to grow. The Indian real estate industry is likely to grow from US$ 12
billion in 2005 to US$ 90 billion in by 2015.
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INTRODUCTION
The realty industry today has changed so much that each sector needs special skills to
make it work efficiently. All over the world, prices are fluctuating. Global agencies
monitor trends in the top influential cities. With many foreign investments in India and
NRIs returning, the Indian property market watch is on the top most of every big agency.
Mumbai is the costliest city to live in Asia. To understand real estate marketing one
should at least have the minimum knowledge required to step into the complex industry.
Out there, plenty of smart operators are looking for suckers. They may not be dishonest
but will technically confuse you to pay higher price and outsmart you. Therefore, if you
know your onions and the deep layers beyond the skins it helps to get the best.
The purchasing power of the new generation of Indians has increased. They are investing
in real estate in a big way- in terms of investment and assets. People have acquired
refined tastes in housing needs and become professional in dealing with builders.
Financial companies and banks have given a boost to real estate marketing as well. To
add to this the government has allowed foreign investors also to test the market
conditions here have helped. Every area of real estate be it industrial, retail space, malls,
office complexes, residential colonies, hospitals, clinics and other healthcare units have a
vast potential for growth.
As more opportunities grow for people to work they also wish to invest in places close by
to live in. Builders or developers in various regions are now separately marketing each
space. Even home loan companies and banks are independently marketing the properties
they are giving loans. This helps them to guide their dedicated clientele and ensure the
marketing trends remain closely monitored for future development.
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They generally have customer relationship executives who are assigned (usually area
wise) to assist customers in making decisions. They do have good knowledge, are
professionals on the job and customers do benefit if they are not very familiar with
various technicalities. Each company has its own marketing device and portfolio to
attract customers.
However, on the other side everyone or every other executive does not feel the real estate
sector in India is being well marketed or managed. Yes, there are some gray areas, which
need to be covered up. For instance, foreigners who wish to invest or firms who are
looking at Indian partners are feeling the crunch of bureaucracy and familial ways of
working. This obviously makes it difficult for them to do business.
Rising predatory competition in some locations
In some locations supply might rise faster than demand, as a result of rising predatory
competition. This could occur shortly in the suburbs of the larger cities. For example, in
Gurgaon near Delhi, in addition to the existing six shopping centres in the Mall Mile, a
further 17 are planned. These locations are intended to cater to the middle- and upper
middle classes, so that they can shop near to where they live. Locations that are currently
well-accepted could also suffer from competition in the future, from new sales formats in
tram and underground stations. The city downtown areas are already in competition with
the (out-of-town) shopping centres, as it is hardly possible to realise new layout concepts
in existing buildings. In addition to shopping centres, increasing numbers of
hypermarkets are being built. As a result of growth potential in the grocery sector, the
supply should increase substantially. Shopping centres have only been built in the last
few years, starting in the major cities, as a result of the high demand for modern retail
space. Since then they are also to be found in many other cities. As there is only limited
space for large-scale retailing in the city
Massive future demand
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India possesses the elements of very strong demand growth on the housing market in the
coming decades. In a very conservative (and unlikely) scenario in which the average
household size remains constant at the present-day level, the backlog of demand cannot
be unwound and no shifts in quality take place, each year some 4.7 million housing units
would have to be completed up to 2030. This figure is based on additional demand of
roughly 2.7 million housing units and annual replacement demand of roughly 2 million
dwellings.
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OBJECTIVE OF THE PROJECT
The prime objective of this project is to take a look over to building REAL ESTATE
MARKETING and various factors that affect the private firms from real estate industry.
Other objectives that completes the subject:
Analyzing the various marketing research techniques for the better promotion of
any real estate firm.
To study the present scenario considering every aspect of real estate sector i.e.
houes
Ensuring customer satisfaction as well as maximizing returns from them.
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RESEARCH METHODOLOGY
The information collected for this project is both:
PRIMARY
Since the project is based on action research it was necessary to build rapport to collect
maximum information from the Client. Hence the research spent considerable time with
the people who reside in nearby encompassing city. The main focus was to do with the
assessing the satisfaction level of investors and explore the possibility of more sound
arrangement of disseminating outlook information system.
SECONDARY
The most of the information is secondary in nature and is collected from secondary
resources such as
Print media like:-
Books
Magazines relating to the topic
Articles from newspapers
And electronic media like:-
Internet
Television
Based on the information obtained from the above sources concepts were developed on
which analysis could be made.
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Conclusions have been thereby given after a thorough evaluation.
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COMPANY PROFILE
DLF have established a partnership to enter the Indian construction market delivering both DLF developments and all other construction related projects.
DLF has a 60-year history of service excellence. Since it was founded in 1946, it has been responsible for the development of 21 urban colonies aggregating 5,816 acres, as well as an entire integrated 3,000-acre township - DLF City.
The group is capitalizing on emerging market opportunities to deliver high-end facilities and projects to its wide base of customers by constantly upgrading its internal skills and resource capabilities. In line with its current expansion plans, the DLF Group has over 130 million sq. ft. of development across its businesses, including developed and on-going projects. This comprises over 28 million sq. ft. of projects that the group has executed under its home, offices and shopping mall segments.
Laing O'Rourke plc is the largest privately owned construction firm in the UK having offices in the UK, Germany, India, Australia and United Arab Emirates, with over 23,000 employees worldwide.
Laing O'Rourke specializes in delivering ambitious yet achievable construction projects that delight both clients and the communities who use them every day, and the company is responsible for some of the most innovative construction solutions anywhere in the world.
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COMPANY VISION
Vision as a global business gives everyone within the organization a clear direction and goals to aim for. It underpins everything we do, and the principles are clear for us all:
To be the company of first choice for all stakeholders - customers, employees, suppliers, trade contractors and the society in which we live
To challenge and change the poor image of construction in India With leanness and agility adopt processes to compete with world-
leading businesses
COMPANY VALUES
Customer Centric Social Responsibility Learning and Innovation Performance Excellence
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Collective Ownership
COMPANY CULTURE
At DLF work in a culture based on openness, trust and joint responsibility. They encourage their people to question, to contribute because they believe that responsibilities are to be shared and the best outcomes are arrived at through an open and questioning attitude.
They believe that success can only be attained if they manage to lead a team of committed people as people are the most important asset of their company and every effort is put in to develop professional, technical and management skills and motivate and involve each and every employee.
They respect the diversity of individuals working in their organization and recognize that diverse culture and background makes DLF great place to work.
COMPANY POLICIES
DLF holds customer satisfied, security & The Environment as core business values and is committed to create a future free of incidents and injuries, where :
All stakeholders activity create safe environments; Leadership, passion and commitment are present at all level;
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Working Safely enhances Quality, improves Productivity and generates value;
Attitude and behaviour replaces statistics as a measure of success; People are enabled to make safe choices about their own and their
neighbor’s safety and to challenge the environment in which they work;
Our business only welcomes those who support our vision and are willing to change - no compromise on safety.
'We take pride in everyone returning home safely everyday'
The company recognizes the importance of discharging all its statutory obligations and duties. The minimum health and safety obligations are those required by relevant legislation and authoritative guidance. DLF will take appropriate steps to meet, and in many cases enhance these requirements. To make DLF the company of first choice for all stakeholders, to challenge and change the image of construction in India.
. The Board will ensure that the SMS is periodically reviewed to ensure its remains legally complaint, achievable, relevant and credible.
Continual improvement will be achieved by effective implementation of the above. Everyone working for DLF is required to support and promote this Policy
:
Presence
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DLF since its inception has been spreading its presence across the country at a rapid pace.
Within just few months of inception, we are already executing six projects spread across the National Capital Region (NCR), Mumbai and Bangalore and have also commenced preliminaries for projects in the eastern parts of the country.
ABOUT DLF
The DLF Group has charted it next growth steps to retain its leadership position in India. Already a major player in locations across the country, including key metro cities and urban centers, DLF, with over Six decades of experience, is focusing on strengthening its lateral and vertical business drivers. These include development of innovative business strategies,
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strengthening its professional resources and driving market penetration with an ear-to-the-ground approach that is adaptive to local market needs.
The group is capitalizing on emerging market opportunities to deliver high-end facilities and projects to its wide base of customers by constantly upgrading its internal skills and resource capabilities. In line with its current expansion plans, the DLF Group has over 260 million sq. ft. of development across its businesses, including developed and on-going projects. Under its home, offices and shopping mall segments, DLF is credited with over 25 million sq. ft. of completed developments, while projects under construction represent over 45 million sq. ft across the three verticals.
The DLF Group has made significant progress in pursuing new business opportunities in hotel, infrastructure and SEZs (Special Economic Zones). DLF , UK are strategic partner in several infrastructure projects. Laing O’Rourke are global leaders in construction credited with landmark projects such as the Dubai International Airport, Millennium Tower and the T-5 Airport Terminal in UK. Through this joint venture (JV) the Group plans construction of projects in the sectors of expressways and airports.
DLF is the only company in India in the Consumer validated category from the real estate sector to have been awarded this distinction.
The Homes business line involves a wide range of products including condominiums, duplexes, row houses and apartments of varying sizes, with a focus on the higher end of the market. To the 17 million sq. ft of developed area under homes with195 million sq. ft of plotted development, DLF intends to augment its oldest business area by developing another 375 million sq. ft of projects across the country in the long term.
DLF’s office segment is one of the group’s most admired vertical. Nearly 32 million sq. ft. of developed as well as on-going projects are a significant contributor to the growth of office spaces of the most contemporary architecture. Plans to develop another 62 million sq. ft. across the country, is aimed to give DLF 15-20% of market share in the business & commercial sector.
With a booming retail environment on the horizon, this is a major thrust area for the Group and DLF is actively creating new shopping and entertainment spaces all over the country. There are over 42 million sq. ft. of quality retail space developed and under development in metros and other urban
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destinations across the country. These include categories of prime downtown shopping districts, shopping centers and super luxury malls.
With the growth of the Indian economy and the resulting increase in corporate and consumer incomes, as well as foreign investment, DLF sees significant opportunities for growth in its three primary businesses. DLF’s mission is to build a world-class real estate development company with the highest standards of professionalism, ethics and customer service and to thereby contribute to and benefit from the growth of the Indian economy.
The key elements of its business strategy are as follows:
Increase land reserves in strategic locations Expand core business verticals nationally
Diversify into SEZ development
Undertake infrastructure development with Laing O’Rourke plc
Diversify into hotel development
Enhance execution capabilities
Locations of its developments, projects and lands across India span over 30 cities – Gurgaon, Ambala, Shimla, Amritsar, Jallandhar, Ludhiana, Sonepat, Panipat, Chandigarh, Panchkula, Noida, New Delhi, Jaipur, Indore, Ahemdabad, Baroda, Lucknow, Faridabad, Mumbai, Pune, Nagpur, Goa, Kochi, Kokkanad, Chennai, Bangalore, Vytilla, Coimbatore, Hyderabad, Bhubhaneshwar and Kolkata.
They specialize in delivering ambitious yet achievable construction projects that delight both clients and the
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communities who use them every day, and the company is responsible for some of the most innovative construction solutions anywhere in the world.
LIST OF PROJECTS
DLF is committed to providing innovative, well engineered and high quality projects taking into consideration the design, construction and low maintenance balance. They have a reputation for the positive "will do" customer orientated approach to deliver within time and budget constraints.
OFFICES:
DLF Towers Jasola - Twin towers at Jasola, at a strategic location of having Commercial & Retail activity catering to the entire population of Jasola and the vicinity of Noida, Delhi, Mathura road commercial development and Okhla.
Built Up Area: 10,36,188 Sqft Status: In progress
IT PARKS / SEZS:
IT Park Gachi Bowli Hyderabad - The total project has a total built up area of 1.9 million square feet.
Built Up Area: 1.9 million square feet Status: In progress
7B, Gurgaon - Tapering structure of eight floors strategically located in Cyber City, Gurgaon to cater to Royal Bank of Scotland .
Built Up Area: 1, 81,844 Sqft Status: In progress
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3C Galaxy, Noida - Designed & developed as state-of-art IT space, four towers at Noida will provide solution to the growing requirement of the IT sector.
Built Up Area: 17, 48,114 Sqft Status: In progress
DLF Techno polis, Bangalore - Spread over an area of 15 acres, the office blocks are designed to provide hi-end workspace, taking into consideration the need for open space.
Built Up Area: 5,25,518 Sqft Status: In progress
Info City Chennai - The total project consists of four buildings with a total built up area of 4.5 million square feet.
Built Up Area: 4.5 million square feet Status: In progress
IT Park Kolkata - This project comprises total area of 25 acres industrial park with a built up area of 3.2 million sq feet.
Built Up Area: 3.2 million square feet Status: In progress
IT Park Bhubaneshwar - The total project has a total built up area of 4.5 million square feet.
Built Up Area: 4.5 million square feet Status: In progress
IT Park Rai - This project comprises total area of 25 acres industrial park with a built up area of 2.5 million sq feet.
Built Up Area: 2.5 million square feet Status: In progress
IT Park Silokhera - The total project has a total built up area of 6.2 million square feet.
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Built Up Area: 6.2 million square feet Status: In progress
RESIDENTIAL:
Magnolias, Gurgaon - Premium Residential apartments overlooking its own golf course.
Built Up Area: 52,06,441 Sqft Status: In progress
Park Place Gurgaon - The Park Place complex comprises a number of multi storey towers with a total built area of apprx 4.25 million sq feet.
Built Up Area: 4.25 million square feet Status: In progress
RETAIL:
Mall Of India, Gurgaon - The total project has a total built up area of 6.0 million square feet.
Built Up Area: 6.0 million square feet Status: --
DLF Times Square, Noida - Positioned to be amongst the largest retail outlets-will offer a unique architecture and enthralling ambience and grand entertainment outlets
Built Up Area: 21, 52,000 Sqft Status: In progress
NTC Mall, Mumbai - Will be the premier shopping mall in Mumbai which will set new standards for the city.
Built Up Area: 26, 90,000 Sqft Status: In progress
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INDUSTRY PROFILE
DEFINITION OF REAL ESTATE
Land and anything fixed, immovable, or permanently attached to it such as
appurtenances, buildings, fences, fixtures, improvements, roads, shrubs and trees (but not
growing crops), sewers, structures, utility systems, and walls. Title to real estate normally
includes title to air rights, mineral rights, and surface rights which can be bought, leased,
sold, or transferred together or separately. Also called real property or realty
FOR BUSINESS SECTOR
With the development of private property ownership, real estate has become a major area
of business. Purchasing real estate requires a significant investment, and each parcel of
land has unique characteristics, so the real estate industry has evolved into several distinct
fields. Specialists are often called on to valuate real estate and facilitate transactions.
Some kinds of real estate businesses include:
Appraisal: Professional valuation services
Brokerages: A fee charged by the mediator who facilitates a real estate
transaction between the two parties.
Development: Improving land for use by adding or replacing buildings
Property management: Managing a property for its owner(s)
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Real estate marketing: Managing the sales side of the property business
Real estate investing: Managing the investment of real estate
Relocation services: Relocating people or business to a different country
Corporate Real Estate: Managing the real estate held by a corporation to support
its core business—unlike managing the real estate held by an investor to generate
income
Within each field, a business may specialize in a particular type of real estate, such as
residential, commercial, or industrial property. In addition, almost all construction
business effectively has a connection to real estate.
"Internet Real Estate" is a term coined by the internet investment community relating
to ownership of domain names and the similarities between high quality internet domain
names and real-world, prime real estate.
RESIDENTIAL
The legal arrangement for the right to occupy a dwelling is known as the housing tenure.
Types of housing tenure include owner occupancy, Tenancy, housing cooperative,
condominiums (individually parceled properties in a single building), public housing,
squatting, and cohousing.
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Residences can be classified by if and how they are connected to neighboring residences
and land. Different types of housing tenure can be used for the same physical type. For
example, connected residents might be owned by a single entity and leased out, or owned
separately with an agreement covering the relationship between units and common areas
and concerns.
Attached / multi-unit dwellings
Apartment - An individual unit in a multi-unit building. The boundaries of the
apartment are generally defined by a perimeter of locked or lockable doors. Often
seen in multi-story apartment buildings.
Multi-family house - Often seen in multi-story detached buildings, where each
floor is a separate apartment or unit.
Terraced house (a.k.a. townhouse or rowhouse) - A number of single or multi-
unit buildings in a continuous row with shared walls and no intervening space.
Semi-detached dwellings
Duplex - Two units with one shared wall.
Single-family detached home
Portable dwellings
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Mobile homes - Potentially a full-time residence which can be (might not in
practice be) movable on wheels.
Houseboats - A floating home
The size of an apartment or house can be described in square feet or meters. In the United
States this includes the area of "living space", excluding the garage and other non-living
spaces. The "square meters" figure of a house in Europe reports the area of the walls
enclosing the home, and thus includes any attached garage and non-living spaces.
It can also be described more roughly by the number of rooms. A studio apartment has a
single bedroom with no living room (possibly a separate kitchen). A one-bedroom
apartment has a living or dining room, separate from the bedroom. Two bedroom, three
bedroom, and larger units are also common. (A bedroom is defined as a room with a
closet for clothes storage.)
MORTGAGES IN REAL ESTATE
In recent years, many economists have recognized that the lack of effective real estate
laws can be a significant barrier to investment in many developing countries. In most
societies, rich or poor, a significant fraction of the total wealth is in the form of land and
buildings.
In most advanced economies, the main source of capital used by individuals and small
companies to purchase and improve land and buildings is mortgage loans (or other
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instruments). These are loans for which the real property itself constitutes collateral.
Banks are willing to make such loans at favorable rates in large part because, if the
borrower does not make payments, the lender can foreclose by filing a court action which
allows them take back the property and sell it to get their money back. For investors,
profitability can be enhanced by using an off plan or pre-construction strategy to
purchase at a lower price which is often the case in the pre-construction phase of
development.
But in many developing countries there is no effective means by which a lender could
foreclose, so the mortgage loan industry, as such, either does not exist at all or is only
available to members of privileged social classes.
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REAL ESTATE IN INDIA
INTRODUCTION
Coupled with the increase in population the economic growth in the past few years have
turned Real Estate India as a booming industry. The Indian economy is growing rapidly;
the GDP is expected to grow from 6 percent to 11 percent by 2025. Market oriented
policies are boosting economic activities .India emerging as a major outsourcing
destination has created millions of fresh jobs, with an increase in the earning the demand
for quality housing and commercial structure has increased rapidly. Indian Real Estate
Industry estimated to experience a demand supply gap of 17.9 million residential
properties by 2010 and commercial property demand is expected to be around 350
million sq. feet. Looking at the demand supply ratio, India will remain a promising
investment destination for times to come.
Despite being of this size Indian Real Estate Industry still remains unorganized. In an
effort to make this Industry more regularized and streamlined a number of property portal
are being launched. But, Property SENSEX has recently come down with the slow down
in the economy.
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KEY DEMAND DRIVERS
The following factors are driving the demand for real estate in India:
Demographics : India’s rapidly growing population is a key factor behind the rising
demand. Growing urbanization, a burgeoning middle-class with higher discretionary
income and a gradual shift away from the joint-family system has resulted in
increased demand for residential property.
Growth in IT & ITES sector : Continuing strong trends in the global outsourcing
boom have resulted in a greater demand for commercial property for IT and ITES
operations. The sector now accounts for around 80% of the total commercial space
occupied in the country. The Indian IT sector is the country’s fastest growing sector
and Indian IT and ITES industry is expected to continue to grow at more than 30%
for at least the next ten years. The sector is likely to be the key demand driver for
commercial real estate in the country.
Easier financing options : Due to structural changes in interest rates, rates on housing
finance have halved, from as high as 15% in FY99 to 7.75% in FY04, significantly
increasing affordability. With the increase in the number of players in the housing
finance market, there has been a greater focus on customer service — all of which
have made financing easier.
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Improved corporate governance : Developers are becoming more professional and
transparent in their approach enabling them to have greater access to bank funding.
As a result, developers are now able to execute larger and greater number of projects.
Government policies : The following recent regulatory changes have proved to be
conducive to the growth of real estate industry in India:
Proposed rationalization of stamp duties : At present, stamp duties vary across
states from 14.5% (Orissa) to 5% (Andhra Pradesh). The government has
proposed rationalizing rates to 4% across all states
Fiscal incentives : Interest payments up to Rs150,000 on housing loans are tax-
exempt, while annual principal repayments are also eligible for a tax rebate.
The Urban Land Ceiling Act (1976) , a key deterrent in government regulation,
has been repealed in nine states, which is encouraging. The move towards
computerization of land records is also positive.
Easier FDI norms in real estate : Although 100% FDI has been permitted since
2001, the flow of investments had been curbed by a criterion that required the
minimum land area for projects to be 100 acres. Under the new regulations
announced earlier this year, this has been reduced to 25 acres, thus allowing
foreign investors to capitalize on smaller projects. Moreover, a committee set up
by the government has recommended that Real Estate Investment Trusts (REITs)
should be implemented in India through the mutual fund schemes. Allowing FDI
in real estate along with creation of real estate funds is likely to create the
platform for garnering fresh investments into the sector.
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Infrastructure Development : Initiatives like National Urban Renewal Mission
(NURM) have given a boost to infrastructure development in the country. NURM
involves the re-development of 60 major cities — which includes the 7 mega-
cities (Delhi, Mumbai, Bangalore, Chennai, Kolkatta, Hyderabad and
Ahmedabad), 29 cities with populations of over 1m and 24 cities with populations
of less than 1m. The FY06 Budget allocation for NURM is Rs55bn (US$1.25bn)
which indicates the seriousness of this initiative. Moreover, infrastructure
overhaul for the Commonwealth Games in 2010 will have a positive impact on
the real estate market.
Retail Boom : The global real-estate consulting group Knight Frank has ranked
India 5th in the list of 30 emerging retail markets and predicted an impressive 20
per cent growth rate for the organized retail segment by 2010. Over 200 malls
with a combined retail space of 2.5 crore square feet are coming up across the
country at an investment of Rs 12,500 crore. Recent government approval for
51% Foreign Direct Investment in the retail of single brand products is also likely
to fuel the demand for large commercial spaces. Retail segment will continue to
drive demand for real estate in the country significantly.
DEMAND-SUPPLY SCENARIO
The last few years have witnessed a strong growth in residential demand supported by
rising disposable incomes, low interest rates, fiscal incentives on both interest and
principal payments and increasing urbanization. Ten years ago, the average house loan in
India was 15 times the annual salary. Today it is just 4.5 times the average salary. Also,
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as per industry estimates, the average age of a house buyer has fallen from 42 to 31yrs.
However, inspite of the recent growth in the residential demand, the demand supply gap
is still widening. According to National Housing Bank (NHB), there was a housing
shortage of 19.4mn units (12.7mn units in rural areas; 6.7mn units in urban areas) in 2001
which is estimated at 19.8 million in 2005.Further, penetration levels are still very low
across India, despite the recent growth seen across housing. The mortgage to GDP ratio is
only about 3% compared to over 50% in the US and between 15-20% for most South
East Asian countries.
Demand for new office space has grown from an estimated 3.5 million sq.ft in 1998 to 16
million sq.ft in 2004. The IT & ITeS industry has emerged as the main driving force
behind this. IT & ITeS companies are now the predominant occupiers of office space in
India, accounting for about 80% of office space absorption. The IT & ITES sector is
creating over 200,000 jobs per annum which itself is expected to create a demand for
commercial space of >15mn square feet per annum. It has been estimated that there will
be a demand for around 100mn square feet of commercial space from the IT & ITES
sector over the next five years.
OUTLOOK
The real estate industry is expected to grow at an estimated 25-30% per annum. Inspite of
the rapid growth in residential demand in the last few years, the demand supply gap has
only widened. The huge shortage in housing units fuelled by rising disposable incomes,
low interest rates, fiscal incentives, urbanization and growth in the BPO sector coupled
29
with low penetration levels of mortgages indicates significant potential for growth in
housing demand in future. According to industry reports, over the next 10-15 years, 80-
90 million housing units will have to be constructed with a majority catering to the low-
income group. According to a study done by Cushman & Wakefield, just the top 50 to 60
cities in India would be able to absorb over 350 to 400 townships, each of over 2,000
dwelling units involving a conservative capital outlay of over $ 40 billion over the next 5-
7 years .As far as commercial demand is concerned, continued growth in the IT & ITES
sector will continue to be the main driver. This sector is expected to grow at 30% per
annum which even after adjusting for increasing revenue per individual is expected to
increase commercial property demand by over 20% per annum. Demand for commercial
space by the sector is estimated at 100 million sq ft @ 20 million sq ft per year.
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HOUSING MARKET SET FOR STRONG GROWTH
20 to 30 million housing units are short at present. The key drivers of housing demand
are disposable incomes, financing terms and population development. The latter,
however, has only an indirect impact, because demand on the housing markets is
generated by households rather than the absolute number of inhabitants. The last census
survey in 2001 reported roughly 192 million households in India, about 40 million more
than ten years earlier. The number of households has thus risen slightly faster than the
number of inhabitants. This means average household sizes are decreasing a little,
although at roughly 5.4 persons per household they are still extremely high (in Eastern
Europe for example there are roughly 3 persons per household, in west European
countries not even 2.4). The 1970 statistic of 5.7 persons per household was only
marginally higher. Interestingly, urban household sizes are scarcely lower than those in
rural areas. In developed countries households in cities are normally considerably smaller
than in rural regions. The similarity in Indian household sizes could suggest that family
structures also play an important part in the cities. What is more, the scarcity of urban
housing presumably makes larger households a necessity.
Between 1991 and 2001 the number of housing units grew by about 54 million.25 At the
same time the quality of the housing stock was improved. The number of households
living in cramped conditions dropped appreciably, and the accommodation was better
equipped.
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In the cities the home ownership rate rose from 63% to 67% and in the country by one
percentage point to 95%. Even so, the situation on the Indian housing markets has not yet
eased sufficiently. In the 2001 census the number of households still outstripped the
number of housing units by almost 5 million, with roughly a third of housing demand in
urban centres.
The overall backlog of demand in the housing market is probably much higher still, given
that more than 5% of households live in derelict accommodation. Only half the housing
stock in 2001 was deemed adequate, a figure that did at least rise to nearly two-thirds in
the cities. Nonetheless, many people still live in very cramped conditions: 70% of
households have no more than two rooms, and over 40% of even very large households
with more than nine members live in two rooms at the most. The National Building
Organization estimates pent-up housing demand at around 20 million units; the Ministry
of Urban Employment and Poverty Alleviation even puts catch-up at a good 31 million
housing units. 24 million of these are needed in rural areas and somewhat more than 7
million in urban centres.
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PRICE TRENDS IN MAJOR CITIES
The housing markets have picked up considerably in recent years. Powerful demand
stimuli have caused shortages in almost all cities, pushing up residential property prices.
On the supply side, too, steep rises in energy prices and, more importantly, accelerating
land prices are fuelling the cost of property. In the ten most important cities, residential
property prices jumped by around 25% in 2005. In popular districts, the growth rate over
the past 24 months has climbed more sharply still. In some parts of Ghaziabad (such as
Indirapuram or Vaishali) in the north-east of Delhi, for example, house prices have
doubled since 2003.
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MARKETING FOR REAL ESTATE
WHAT IS MARKETING RESEARCH ?
Marketing research is the function which likes the consumers, customers & public &
the marketer through information which is used to identify & define marketing
opportunities & problems, generate, refine & evaluate marketing action; monitor
marketing performances & improve understanding of marketing as a process.
TYPES OF MARKETING RESEARCH
On the basis of fundamental objectives of the research, marketing research projects are
classified into two branches:
Exploratory Research
Conclusive Research
EXPLORATORY RESEARCH:
It seeks to discover new relationships. All marketing research projects start with it. This
is a preliminary phase & is absolutely essential in order to obtain a proper definition of
problems at hand. The major emphasis is on the discovery of ideas & insight.
Exploratory research looks for hypothesis in well-established fields of study. Hypothesis
usually comes from ideas developed in previous researches or are delivered from theory.
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Hypothesis is tentative answer to the question that serves as guide for most of the
research projects.
CONCLUSIVE RESEARCH:
Conclusive research provides information that helps the executive so that he can make a
rational decision. This study has done well while attempting to arrive at a more clear
description of an apparent problem.
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ADVERTISING AND PROMOTION
The marketing activities will include the following.
1. Mass Marketing -This will focus on providing the maximum coverage for the
project. The key elements of this will be :
Print advertisements in newspapers
Print advertisements in relevant magazines
Hoardings at strategic locations
2. Direct Marketing :-The key elements of this will be:
Mailing project brochures to select existing and prospective customers
Sending walkthrough CDs to select existing and prospective customers to enable
them to get a feel of the project.
3. Indirect Marketing - The key elements of indirect marketing will be:
Sales through big property consultants specifically international property
consultants
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Sales through local brokers
4. Other complementing Activities- These would include:
Working closely with a selected group of banks/financing agencies who
would be interested in extending financing facilities to individuals planning to
purchase residential units.
Participating in property development exhibitions in India (and abroad if
required) in order to attract target customers.
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REAL ESTATE MARKETING
As an marketing executive, an individual must learn the following six steps that will
assist him to get more clients and get maximum profit in every market situation:
SETTING AN OBJECTIVE
The first step to creating a successful marketing plan is to define your goals. Goals help
you clarify who you are and where you see your business in the future. In Brian Tracy's
book, Goals, he writes "The number one reason for failure is action without planning.
People who say that they are too busy to plan in advance must be prepared for
unnecessary mistakes and great losses of time, money, and energy."
What Types of Goals Should You Set?
The goals you set for yourself will be highly personal, based on what you want to do,
have, and be. There isn't any right or wrong answer - after all, one reason you probably
went into business for yourself was for the freedom. Now it's up to you to mold your
future the way you want. Here are some questions to get you started.
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Personal Business Goals
What are your strengths?
What do you love most about real estate?
Which areas of real estate do you enjoy the most? Why?
Which areas of real estate do you prefer not to do? Why?
Which areas of real estate do you have the most experience in?
What types of people would you like to work with?
Describe your perfect work life five years from now. Where do you see yourself? What
are you doing? Who are you working with? How much are you making?
Firm Goals
What is the mission of your firm? The vision?
What are your short- and long-term goals?
Are you looking to grow and expand the firm, or do you prefer to work alone?
Describe where you'd like your business to be five years from now. How many clients
does it have? How many employees? What kinds of work does it do? How much revenue
does it bring in? What kinds of people work there? What's a typical day like?
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IDENTIFY YOUR TARGET AUDIENCE
Before you can start marketing to prospects, you have to know who you're marketing to.
That means uncovering the types of people who are inclined to buy your service, what
their motivations are for buying, and why they might buy from you or your competitors.
At any given point, only a small percentage of the population will have a need for your
services. As a licensed real estate agent, you'll have to narrow that down further to doing
business in the states you are licensed. But simply picking a geographic area isn't specific
enough in most cases.
Identify Your Ideal Clients
The final step in choosing a target market is to narrow your target audience even further.
Not everyone in your target market will be a friendly, considerate client. In this step, you
should identify characteristics of the types of people you enjoy working with. This will
be your niche.
Not everyone in your target audience will be the kind of person you want to work with.
By identifying and clarifying the characteristics of your ideal clients, you will define the
types of people that make your work purposeful and a pleasure to serve. Why would you
want to do business with people who clash with your personality, always complain about
something, or suck the energy out of you?
If you won the lottery next week, what would you do now that money is no object?
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How can you identify your ideal clients?
1. Start with those people you are currently working with or have worked with
in the past.
What did you enjoy most about working with them? What qualities and
personality traits do you value most? For example here are some characteristics
you might consider:
Action Oriented - They are constantly looking for ideas to implement
now. Once they make a decision, they follow through, look at the results
and learn from the experience.
Collaborative - They like focusing on and collaborating with others to
find a solution. They don't want to be cut out of the process, but genuinely
want to hear suggestions their agent offers to make their home-buying or -
selling process faster and more efficient.
Focused - They have some idea of the homes they'd like. They've made a
list of characteristics that are "musts" and others that are "deal breakers."
They know what their goals are.
2. Next, look at your strengths and passions.
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Look through the subgroups you've identified as potential target markets. Which
fit the best with your mission and purpose in life?
For instance, if you're technologically savvy and keep up with the latest trends,
you might like working with 20-something first-time buyers. If you're of a
particular ethnicity and are passionate about that culture and lifestyle, you might
choose to work with others of that ethnicity. If you have a strong financial
background, perhaps you might target investors. If you're a single woman,
perhaps you might help single women buy homes.
It's your business. You can choose whether you want to work for people you
dislike and providing services you find dull and boring. Or you can choose to
partner with clients who are a pleasure to serve and make life interesting every
day. Which will you choose?
CREATE A MARKET MESSAGE
If you really want to set yourself apart from other agents, you need something that will
make your prospects sit up and take notice - and that will influence and motivate them to
hire you. A red hat may get you noticed, but what in the world does that have to do with
selling real estate? It doesn't tell your target audience that you have the skills, knowledge,
and expertise to get the job done. In other words, it doesn't in still confidence that you
know real estate inside and out.
To be meaningful, your differentiating factor must be:
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Specific to a target audience - You have to pick a target audience and craft
your message based on their preferences. If you have multiple target
audiences, you'll have to craft a different marketing message for each.
In line with your strengths - You have to be better than most - preferably
all – other agents in something that is meaningful to your target audience.
Creating Your Unique Selling Proposition (USP)
"Why should I choose you?" It's the question in the minds of each prospect who talks
with you. How do you differ from other real estate agents, and why will that difference
help your prospect buy or sell a home? This is what marketers call a Unique Selling
Proposition (USP).
Your USP should include:
Who your target audience is
What you'll do for them
Why that's different from what others are offering
Why that solution matters to your target audience
Your USP should be based on your strengths, passions, talents and skills. How does what
you bring to the interaction help your target audience? If you decide to target investors
and you have a 10-year background in financial services, mention that. If you're a single
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mom and have been helping single moms buy homes, mention that. If you offer a solid
guarantee - such as if the home doesn't sell in 90 days, you'll buy it - mention that.
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The Client Buying Process
There are very few people who decide on the spur of the moment that today is the perfect
time to buy a home. How many people have you worked with who have been able to
decide to buy a home, choose a real estate agent, find the perfect home, and pay for the
home in cash on any particular day?
It rarely happens that way, right? That is because buying a home is one of the most
complex and stressful decisions a person will make. Virtually no one has the cash on
hand to pay for the home, so they must explore financing options. For many people, that
means they will go six figures in debt as soon as they sign on the dotted line, and they
will spend many years of their life paying it back. They often have other life events
occurring at the same time - like relocating for a job or a life transition such as getting
married, divorced, or retired.
Every home buyer follows a process, during which they:
Become aware that buying a home is a real possibility for them.
Gather information about how they might make that happen, including visiting
websites, looking at home listings, reading books, talking to friends and family
members who have recently purchased a home, etc.
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Evaluate the different options they have for buying a home, such as talking with a
real estate agent, looking into the cost of movers, applying for a mortgage, and the
like.
Take the action they've been thinking about, which includes hiring an agent,
getting their financials together, doing what it takes to move the transaction along,
and buying the home.
Re-evaluate their purchasing decision such as whether they've made the right
decision to move, how helpful the professionals they hired were, and how the
home lives up to their expectations
Developing Education-Based Marketing
At the "information gathering" stage, prospects start considering whether to buy or sell
their home. Something has happened that has made them aware that buying or selling
their home is worth investigating.
Now, prospects are looking for any and all advice they can get from trusted sources. They
pick up books at their local bookstore. They search internet sites for information on the
steps of the home-buying process, which agencies they need to contact, how to calculate
what they can afford, and so on. They ask friends and coworkers how they bought or sold
their home.
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Prospecting : Ask For the Next Step - But Don't Make It Too Big
During the buying process (awareness and information gathering)
your prospects are slowly becoming aware that they may want to buy or sell a home and
start the information gathering process. During this time, you should be actively
prospecting to them.
What is prospecting? It's everything you do search for potential clients and get them to
take notice. That means sending mail, cold calling, door knocking, email, offering free
guides, holding seminars, distributing fliers and so on.
During the prospecting process, you should focus on marketing to your ideal clients by
educating them about your services so they think of you first when they're ready to
choose a real estate agent.
Don't Give Up - Follow Up
It never ceases to amaze me how many people would rather give up on these prospects-
who are close to buying - in favour of mass marketing because they think someone out
there somewhere might be looking for a real estate agent.
Prospects who have given you permission to market to them are a much more targeted
group of candidates for your services. These people have already raised their hand to let
you know they were interested. They've already told you they'd like more information.
Why would you quit now?
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Yet so many agents do because they don't get that instant gratification of an immediate
client. The failure to follow up with leads is costing you big bucks! Sales studies show
that 70 percent of leads aren't followed up with regularly. In order to reach these
prospects consistently, you must have a follow-up system in place.
Put yourself in your prospect's mind. Making a real estate purchase is a big decision for
most people, so not only must your prospect understand the real estate laws and jargon,
he/she will also want to know:
Is this real estate agent credible?
Can he/she do what he/she says?
Can I afford his/her fees and still get the price I’m asking for my home?
Is there another agent who can do the job better?
Can I trust this real estate agent?
It's your job to convince your prospects that you can do what you say you can - and that's
what you need to prove in this stage.
Sales
When a prospect contacts you, how do you determine whether this person is ready to do
business with you - or is just looking for information? Not all people who contact you are
ready to buy. You need a system in place to help you decide whether your prospect is
ready to buy or sell, if they're still in the information-gathering stage, or if they're just a
bad fit for you.
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Not all people who contact you are ready to buy. For each phone call or email you
receive, you must determine:
Who is contacting you?
How did they find you (so you can keep track of your marketing ROI)?
What stage of the decision-making process are they in?
Are they qualified to do business with you?
The next step is to classify each contact based on how good of a prospect he/she is at this
time. Generally, most people who contact you will fall into one of the following
categories:
Inquiry: When people contact you in any way - via phone, email, website, etc -
they are making an inquiry. They want to know more about you and whether you
can help them. Here, you know nothing about them, while they know at least
enough information to contact you. At this stage, you have no idea if they have a
problem you can solve and can/will pay your fees to hire you.
Lead: Inquiries become leads when you pre-qualify them. This is the basic
information you need to know to determine whether this prospect is worth setting
up a phone or face-to-face consultation. If they are still in the information
gathering process, you should get permission to add them to your mailing list
and/or offer to send them free information - thus adding them to your follow-up
system.
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Qualified Lead: Leads become "qualified" if they meet your criteria for your
ideal prospect. Are they ready and motivated to buy? Are they the sole decision
maker(s)? (If not, who is?) Are they pre-qualified for financing? Do they have a
set move date? Some questions you might ask:
How long have you been looking for a home?
Where do you live, and how long have you lived there?
Do you want any security near your home.
Do you want any loan facility.
Have you seen any homes that you really liked?
How soon are you thinking of moving?
What price range are you considering?
Could you describe your present home, location
Do you have any special requirements for your new home i.e fully Ac,
100% Power back
Keep in mind - just because someone isn't yet a qualified lead doesn't mean you
should discard their information. Rather, you should put them back into your
follow up system so that when the time comes and they do become a qualified
lead, they think of contacting you first. Once a lead has been qualified, the "sales"
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stage begins - meaning that it's now time to meet your prospect to evaluate
whether you and he/she are.
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DEVELOP A REFERRAL SYSTEM
Every business owner wants more referrals. Referrals are more-reliable prospects and
clients. They are the cheapest to acquire and, generally, make the best clients because
they are more loyal and tend not to second-guess you.
Most real estate agents say they get most of their business through referrals, yet the vast
majority of them don’t have a formal system in place for asking current and past clients
for referrals.
Here are some tips for generating more referrals:
Describe what kind of referrals you want. When you ask for referrals, be sure to
explain what you are looking for to others. Often, people don't refer others
because they don't know what types of people you are looking for.
Be specific. Bring up the value you've provided to them in your conversation,
show them you care about their happiness and wellbeing, and help them think of
possible people to refer to you. Ask them if they know any family, friends,
neighbours, co-workers, vendors, suppliers, or colleagues who are going through
a life transition such as marriage, divorce, retirement, job relocation into the area,
or a new baby on the way.
Set an expectation for referrals. When you start working with clients, explain that
you get the majority of your clients from referrals and that you expect when the
job is completed and they see what a great job you’ve done for them, they’ll refer
others to you.
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Explain that this allows you to spend more time caring for and serving your
clients rather than spending the bulk of your resources prospecting for clients
through advertising and direct mail, as most agents do.
Ask for referrals at celebratory moments. Clients are most appreciative of your
services when things have just gone extremely well for them. Use one of those
opportunistic moments to ask for referrals - and follow up with a letter or email
explaining that you do your business primarily by referrals and would they know
of anyone they could refer.
Ask for referrals just after the transaction completes. Take a gift basket or other
nice gift over to your clients to check up on them after they’ve moved in. Again,
ask them for referrals, while explaining how you will provide the same level of
service they received from you to anyone they refer to you.
Hold contests or give referral bonuses. Give others an incentive to refer business
to you by giving referral bonuses or holding contests. For instance, anyone who
refers business to you will receive an entry in your contest to win an all expenses
paid trip to Hawaii as well as smaller prizes like an iPod or even cash if your
ethics board allows it. Or, you can give referral bonuses by partnering with local
service providers - if someone refers three people who become your clients, you’ll
pay for your personal accountant to do their taxes this year or a six-month gym
membership to your local gym or three months of golf or cooking lessons or
whatever your clients might like.
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Hold client appreciation events. Have an exclusive summer BBQ or a holiday
Christmas party and invite your clients. Then, be the facilitator at your party by
introducing people who might share common business goals or hobbies.
Send articles or "just thinking of you" gifts. If you've worked with your clients for
an extended period of time, you probably know some of their interests and
hobbies. Next time you see an article in a magazine or a small gift they'll love,
send it to them to keep in touch. They'll appreciate that you thought of them.
Partner with other professionals. Create a group of like-minded professionals who
also work with similar types of clients (such as mortgage brokers, movers,
attorneys, home decorators, swimming pool companies, lawn care professionals,
plumbers or staging companies) and create a referral network whereby you each
send one another referrals.
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YOUR MONTHLY MARKETING PLAN
The next two pages contain a worksheet that will help you plan your marketing activities
for the next month. For marketing to work, you must set SMART marketing goals (see
step 1), commit to them and take small steps each day to accomplish those goals. You
don't have to fill out every line, but plan to spend at least 15-20 minutes on your
marketing each day and schedule activities accordingly.
The plan focuses on marketing to your referral partners and past clients because they will
send you the best types of clients. This type of marketing is much more cost-effective
than prospecting for new clients because these people already know and like you. The
worksheet is comprised of the following sections.
Goals: Set goals for the month so you have a target to measure your success. Start
off by describing what you hope to accomplish this month. Then, explain in
specific terms, how you'll measure success (getting X new prospects, adding X
referral partners, making $X by the end of the month).
Referral Partner Marketing: How can you keep in touch with your referral
network so they send you referrals?
Past Client Marketing: How can you keep in touch with past clients so they send
you referrals?
Prospecting: How can you find new clients to serve?
Other Activities: What else can you do to market your services?
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DATA ANALYSIS
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LIMITATIONS OF PROJECT
The major limitation which was faced during the project was shortage of time.
Marketing requires more analysis and less theory.
Everything practical we learn can’t be summarized.
Lack of knowledge about the statistical techniques and methods.
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CONCLUSION AND RECOMMENDATIONS
India has enormous potential in all its property investment categories. Strong population
growth, a large pool of qualified workers, greater integration with the world economy and
increasing domestic and foreign investment are fuelling demand for office, retail and
residential property. Although not discussed in depth in this paper, this demand growth
can also be applied to many special property classes, such as hotels or second homes.
Manily people want good location. Power back is a important task for real estate
company. Going forward, it will be a matter of exploiting this potential. For the real
estate industry, three aspects are most particularly important. First, further opening to
foreign investment is desirable. Not only do international investors have the means to
finance new construction projects, but also possess the expertise in market analysis,
facility management and building construction. In the medium term these will act as
catalysts to bring greater transparency to the market.
SOME RECOMMENDATIONS
The strategies formulated by the marketing department must be after SWOT
analysis.
There is a direct connection of real estate sector with the other forms of industries.
So, accurate information should be considered while using marketing research.
Various counseling programmes should be held in institutions to attract the
students towards this sector.
Real estate sector must be provided with proper government programmes.
The culture of India should also used in promoting these programmes but should
be maintained properly.
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REFERENCES
RELATED WEBSITES
www.dlf.com
bharatbook.com
economictimes.indiatimes.com
RELATED ARTICLES
Housing Development Finance Corporation Ltd.
Times of India New Paper Real estate article.
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