indian real estate1

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REAL ESTATE SCENARIO IN INDIA

The size of the Indian real estate market is estimated at USD 12billion and it is currently

growing at rate of about 30% annually. Real-estate lending by banks has increased by 3.78

times in the last two years, forming 18% of the total bank credit. Strong and improved economic

growth, proactive policy initiatives like relaxation of FDI in construction and availability of finance

(institutional and retail) has driven the demand for real estate across all sectors - Commercial,

Residential, Retail and Hospitality. Also, there is an increased focus towards development of

INDUSTRY SIZE The real Estate sector is currently worth US$ 12billion, it is growing at the rate of around30%

annually and has a potential to grow to a whopping US$ 45 50billion in the comingfive years.

People all across the Asia Pacific region are viewing the real estate sector in thecountry as the

most lucrative one and thus offering great prospects in the near future inrespect to contributionto the nation s growth. Five per cent of the country s GDP iscontributed by the housing

sector. In the next three or four or five years this contributionto the GDP is expected to rise to6%. According to the report of the Technical Group onEstimation of Housing Shortage, anestimated shortage of 26.53 million houses during theEleventh Five Year Plan (2007-12)has beenidentified

Special Economic Zones (SEZ) in India. The last few years have seen Indian market mature through regulatory reforms (rationalization

of stamp duties, reform of urban land ceilings), improving products in terms of quality andtechnology, changing tenant profile (MNCs, and respect for tenancy laws), and improving

management and maintenance models (enhanced product life-cycles and sustained project /

real estate yields). Although the initial real estate boom was concentrated in places like

Bangalore and the National Capital Region of Delhi (including Gorgon), more recently the

geographical spread has widened. There has been a significant shift in real estate market from

metros to its suburbs and to tier II and tier IIIcities. Lease rentals and occupancies have been

picking up steadily and there is an increasing demand for quality infrastructure across various

segments of the real estate sector.

Commercial Real Estate

The demand for new office space in India has grown from anestimated 3.9 million sq. ft in

1998 to over 16 million sq. ft in 2004-05.70% of the demand for office space in India is driven by

over 7,000Indian IT and ITES firms and 15% by financial service providers and



thepharmaceutical sector. Cumulative demand for office space in India overthe next two years

(2006-08) is estimated to be in excess of 45 millionsq. ft. The Indian IT-ITES Industry, estimated

at USD 36.3 billion in 2006has grown at a CAGR of 36% over the last decade and by 2008,

isexpected to account for over 7% of India¶s GDP and 30% of foreignexchange inflows. In 2005alone, IT/ITES sector absorbed a total ofapprox 30 million sq. ft and is estimated to generate a

demand of 150million sq. ft. of space across major cities by 2010. South Indian citieslike

Bangalore, Chennai and Hyderabad along with NCR (NationalCapital Region) continue to

attract the major share of IT/ITES andbusiness investment. However, secondary cities, like

Pune, Chandigarh,Indore, Kochi and Kolkata are now emerging as the new

preferreddestinations for these companies due to their cost and infrastructureadvantages.

Residential Real Estate

The residential property market in India constitutes almost 75% ofthe real estate market

in terms of value. Low per capita housing stock,rising disposable income coupled with easy

availability of finance fromthe housing finance companies and banks are driving demand in

thissector. Also, Average age of housing loan borrowers have decreased to30- 35 years from

40- 45 years a few years ago, indicating a youngerbuying threshold. The housing sector is

currently growing at 30-35% perannum. A proportion of demand is also being driven from

investors whoview housing as an attractive investment option as compared to mutualfunds and

stocks. The demand for housing is geographically widespreadwith townships being built in both

the metros and the tier II and III cities.In India, there is a housing shortage of 19.4 million units

out of which 6.7million are in urban areas alone. This translates into very highopportunities for

investors in the residential sector.

Retail Real Estate

The Retail industry in India continues to be dominated by individualsmall format stores

with floor space of less than 500 sq.ft. Total numberof retail outlets is estimated to be around 12

-15 million, indicating aretail density of 12-14 outlets per 1,000 people, which is one of

thehighest in the world. The retail sector in India is currently estimated atUSD 230 billion. The

current size of the organized retail activity is USD 7billion, which is a mere 3% of the total retail

market. The retail sector iswitnessing a growth of 5-7% per annum; however the organized retail



ispoised to grow at a rate of 25% - 30% per annum and is expected to beworth over USD 30

billion by the year 2010, thereby increasing the shareof organized retail activity from the current

level of 3% to 15% in thecoming decade.

Special Economic Zones

The upcoming realty trend in India after multiplexes and megahousing projects are the

Special Economic Zones (SEZ). Currently, 28SEZs are operational in the country, including

those converted fromExport Processing Zones (EPZ) to SEZ. Approx. 189 proposals

havealready been granted approval since the SEZ Act, 2005 came into force.These include

SEZs in various segments such as multi-product,Information Technology, Bio-technology, Gems

and Jewellery, Textilesand technology intensive industries. Both developers and corporatehave

shown tremendous interest in developing SEZs in the country.Reliance Industries, for instance,

is planning a 25,000 acre SEZ inGurgaon and is also the main partner in twin SEZs coming up

at NaviMumbai and Maha Mumbai, with a combined size of 35,000 acres.

The Adani group is also setting up an SEZ at Mundra, covering30,000-35,000 acres, and

it proposes to invest Rs 7,300 crore oninfrastructure. Other corporate who are in process of

setting up SEZsinclude TCG Refineries of the Chatterjee Group (SEZ refinery at Haldiain West

Bengal), Suzlon Infrastructure (hi-tech engineering products andservices near Coimbatore in

Tamil Nadu, Udupi in Karnataka andVadodara in Gujarat), Hindalco (aluminium SEZ at

Sambalpur in Orissa),Genpact (IT SEZ at Bhubaneshwar in Orissa, Jaipur in Rajasthan

andBhopal in Madhya Pradesh), Vedanta Alumina (aluminium SEZ atOrissa). Seeking the

permission for SEZs are also a number of realestate developers, including DLF, Ansals,

Omaxe, Parsvnath, ShipraEstate and Sunny Vista Realtors.

FDI in Real Estate

With the opening of the sector for 100% FDI under automatic route, thereal estate sector is

estimated to capture about 18-20% of the total FDIcoming to India in 2005-06. The FDI in Real

Estate is expected to have a favourable multiplier effect on the economy.As an indicator, for

every rupee spent on construction, an estimated 75-80% gets added to the GDP. The spill-over

effect of



this initiative can also be witnessed in important sectors like the cementand construction

industries, where the key players are expandingcapacity to meet the soaring demand.

With the relaxation of the FDI limit, the country saw an influx of globalreal estate developers

likeDubai-based Emaar Properties (the largestlisted real estate developer in the world) ± whichenetered

India in a joint venture with Delhi based MGF Developments

MARKETING DEPARTMENT

A good Real Estate Marketing Agency always puts specialemphasis on the right kind of

information that one needs before startingReal estate Marketing and for that the agency

normally conducts somekind of survey to gather the right kind of information. Later the

Realestate marketing Agency depending on that report develops their waysof marketing.

In marketing, Promotional strategies were used namely -

News paper advertisements,

Visual media ads in local cable channels

Direct Marketing(door-to-door) in commercial complexes and

Through www.iproperty.com.

Business cards can either by a waste of paper or an effective bridgebetween a

prospect and their potential as a long-term client. So, follow-ups of all the business

cards that were dropped in at the site office weredone on a daily basis.

Brokers & agents were also approached to get their clients for thedeals. Telephone &

Email follow-ups also formed a part of my job. Therewas face-to-face interaction with

the customers for the sale ofshops/offices by convincing them to buy.

Customer Database was also maintained considering various headslike- Date of

purchase, Shop/Office no., Name of the customer, Area ofthe shop/office in sq.ft.,



Total value of Shop/office in Rupees, TotalReceived(cash/cheque) and Balance

amount.

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indian real estate1