AA RK DEV IR

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SUMMER INTERNSHIP PROJECT REPORT ON

REAL ESTATE BUSINESS AT

R.K. DEVELOPERS

TOPIC: GROWTH OPPORTUNITIES AND PROBLEMS OF REAL ESTATE

BUSINESS

SUBMITTED BY FACULTY GUIDE

ASHWAJIT AGARWAL MRS. MADHU KHURANA

A1823211003

(BBA+MBA-IB DUAL)

AMITY INTERNATIONAL BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

SEC-125 NOIDA (201301)


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CONTENTS

1. Acknowledgement 3

2. Objective of study 5

3. Introduction 6

4. Literature review 8

5. Industry Profile 10

6. Company Profile 12

7. Issues and challenges faced 15

8. Company Projects 22

9. Recommendations 28

10.Conclusion 29

11.Reference 30

12.Case studies 31


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ACKNOWLEDGEMENT

I would like to express my sincere gratitude to ArunSacher (Addt. Director) who gave me

this opportunity to work and gave all the support that I needed while completing my project.

I extend my sincere gratitude to my guide, Mrs. Madhu Khurana for her constant support and

valuable guidance through the duration of My Summer Internship On Growth Opportunities

And Problems In Real Estate Business. Project

Sincerely

Ashwajit Agarwal


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DECLARATION

I, Ashwajit Agarwal student of Amity University, hereby declare that all the information

furnished in this project is my original work containing authentic facts. This piece of work is

only being submitted to Amity University in the partial fulfillment for the degree of Post

graduation in Business management.

ASHWAJIT AGARWAL


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OBJECTIVE OF STUDY

1. To focus the reasons of price hike of raw materials of REB

2.

To find the reasons of energy crisis3. To study the financial Policies of the company

4. To gain experience in corporate world and know the working style of the professionals

5. To increase self confidence in the work place while developing an expanded network of

associates and professionals.

6. To have personal growth experience and exposure to different job opportunities.


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Introduction

Now a days, flat means own home, as well as safe shelter. Because the residential facilities of

our country is not increasing as per the growth of population. For this reason, the scarcity ofplace becomes acute day by day. It has become, especially in Delhi and NCR almost impossible

to get abode. On the other hand, the person who has place is not willing to deal himself with the

hazard of building house. Thus housing has spread to a great extends at almost every locality

in NCR. Therefore, flat is now popular not only with the upper class but also with the middle

class. Housing fair keeps on taking place and. Many companies offered there different tempting

offers for selling their flats at this fair. And the selling was up the expected level. Emigrants also

have been invested to buy in their native country.

According to the report of World Bank total population of India was 98.20 cores in 1996. 49.40

cores of above mentioned people live in urban area .

Real Estate business was one of the key drivers of growth before we witnessed the present

economic slowdown. Now with companies trying to consolidate their positions and finding

effective means of sustaining growth, the management of real estate has emerged as one of the

key challenges for the corporate sector. The economic slowdown in these markets have resulted

in increasing pressures.

Basically the term real estate as commonly used has two meanings

1. It is a name given to the commodity, reality which includes not only land but also all human

improvement placed on the land

2. It is the name given to the business engaged in by those who conduct commercial transaction

in real estate.

The basic component of reality as a commodity is land. It means not only the surface of earth

but also the property rights and interest that attach to ownership of reality, including sub surface

minerals. Now, the build able land is becoming scarce due to high cost and it is increasing at an

unprecedented rate.


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While India continues to be fastest growing economies , this pace of growth is unlikely to sustain

unless it is supported by an equally robust development of its infrastructure . Key requirements

in order to achieve a GDP growth rate exceeding 8-9% include roads , power , ports as well as

urban infrastructure.

The number of companies increasing gradually and various problems concerning the housing

sector having cropped up requiring early solution, necessity was strongly felt for the formation of

a trade association of real estate developers to project the overall interest of the sector.


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LITERATURE REVIEW

The real estate has become a major contributor of an economys growth . To understand the

significance of the sector and its implications there have been various research on real estateindustry in India . The research are being conducted to gain more knowledge about the various

factors contributing to the growth of the industry and also to analyze the factors which effect the

decision of investment in the sector . I have tried to study the following research paper to get a

better idea about the current scenario of the real estate sector.

GRAEME NEWELL AND RAJEEV KAMINENI in their research paper assessed the risk

adjusted performance and portfolio diversification benefits for the real estate markets (office ,

retail and residential ) of New Delhi and Mumbai . The real estate markets were found to under

perform the stock market in India over 19982005 , with most markets improving their

performance in more recent years , although there was some loss of portfolio diversification

benefits for office and residential real estate with stocks . Deregulation of the capital markets and

international investment in India is also likely to have a significant impact on future FDI levels

and the growth of real estate funds for real estate investment in India. They also studied that off

shoring in the cities like Delhi and Mumbai has created huge demand for better infrastructure

This area of off shoring has significant real estate investment issues , particularly concerning

technology parks , access to Grade A office space .

They have also concluded that deregulation of the Indian capital markets since 2004, and less

restrictive guidelines for foreign direct investment in real estate in India since February 2005

have seen significant improvements in the real estate investment environment in India for both

local and international players.

The expected development in India in the next few years will also expand the real estate

investment opportunities available in India.

Not only this various other surveys and researches like report by United Nations Conference on

Trade and Development (UNCTAD), India has become the third most popular FDI destination in

world with staggering figures of US$ 1.74 billion in the month of November 2009.

Also study carried out by Makaan.com, property prices in India have increased by an

astonishing 18.6% in June10 when compared to last years prices (Property Intelligence by

Makaan.com, 2010).


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According to (www.indianrealtynews.com, 2010) In the scenario of the global melt down, it was

the Indian real estate market which was affected least in the Asia Pacific region and turned out to

be the fastest recovering market out of all.

According to the United Nations World Urbanization Prospects report, 914 million Indians will

live in cities by 2050, compared to 300 million now. This clearly shows the upcomingopportunities and demands for the real estate market in coming years.

So I went through these various articles researches and surveys before beginning of my own

report which helped me presenting and carrying out my researches in easy way.


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INDUSTRY PROFILE

INDIAN REAL ESTATE SECTOR

In the last two decades India has outperformed and shown a healthy rate of GDP growth rate of

more than 7% annually. The major contributors of this healthy growth rate are industries like the

I.T., BPO and client servicing industries. This has also made India one of the favourite

destinations for Foreign Direct Investors (FDI).

The calculated Real Estate demand for the IT sector in 2010 was projected at 150million sq.ft.

within the metropolitan cities of India. As per the growing business needs and requirements,

most of the fortune 500 companies are looking to open their Head offices in India which has

scaled the demand of premium and luxurious officespace.

India Real Estate is also attracting a lot of domestic and international investors because of the

high YOY (year over year) returns on investments. The high growth of Indian real estate

compared to western markets, has attracted a lot of attention of investors from all around the

world.

Due to the recession, the luxury market took the major hit but it had again started picking up. As

per the latest reports, Singaporean luxury resorts chain Banyan Tree is very much interested in

investing in India and is already in talks with a few resort owners in India (Financial Express,2010). According to the United Nations World Urbanization Prospects report, 914 million

Indians will live in cities by 2050, compared to 300 million now. This clearly shows the

upcoming opportunities and demands for the real estate market in coming years.


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INDIAN REAL ESTATE VS WESTERN REAL ESTATE MARKETS

Understanding the position of India in contrast to various other courtiers in the west like US,Western Europe, as well as Australia is very essential. India is a young country with just 64 years

since Independence and more than 40% of its total population in the youth. All these factorstaken into account make India a young nation with a lot of challenges which makes it a piece ofcake in the list of developing nations. However, before one starts doing business in India, theyhave to consider the positive and negative points attached to the real estate market in India.


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COMPANY PROFILE

Roots of R.K Developers lies in the trust and reputation build over the years by its founder Mr.

Dharmendra Agarwal. His Vision to for making Real Estate sector more approachable for strong

and powerful middle class population of India has turned his small ventures in real estate to a big

revolution in search of a optimum solution for majority of real consumer in Indian market.R.K Developer is presenting its first mega project of township in Alwar (NCR) where the

founders of R.K Developers are comitted to return their favour to their home soil which has over

the years given them vision backed by ability to fulfill their dreams. Team of many efficient and

committed employees under the direct command of Mr. Dharmendra Agarwal & Mr. Ravindra

Agarwal are ready to present 100% govt. approved township R.K Puram in Alwar.

R.K Developers aims to take its business into Real Estate on step forward by not just indulging

in buying, selling and renting part of this business. But one of the core values of our business

model is to provide full assistance to our customer and keep the process of buying & selling a

property hassle free and simple.

COMPANY VALUES

Customer FocusInnovationQualityAgilityIntegrityLeadership

COMPANY MISSION AND VISION

Our mission is to design, build and market residential and commercial complexes at affordable

prices, without compromising on quality standards.

To provide residential and commercial spaces at most attractive and affordable prices, so as to be

a part of every common mans dream and make every possible effort to bridge the gap between

reality and dream by providing optimum solution to it.


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BUSINESS PORTFOLIO

They have a diversified portfolio which includes developing spaces dedicated to single uses

such as Residential Properties, Commercial Properties and Retail alone. Our main

products and services are as follows:

1. In the Residential Property Business, we are committed on Developing, Selling and

Managing a diversified portfolio of residential properties which include Apartments,

Villas and Penthouses across formats such as Value Housing, Affordable/ Aspirational

Housing, Premium Housing, Luxury Housing.

2. In the Commercial Property Business, we are focused on Developing, Selling and

Leasing Officetargeted towards a wide range of customers from Individual Users and

Small Companies to Large Corporate Houses in various Sectors including IT and ITES.

3. Sustainable and affordable Townships, which offers a ranges of residences with facilities

of a Township.


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STATEMENT OF PROBLEM

Residential facilities are one of the important basic needs. The demand of housing facilities in

our country is increasing.23.39% of total population of our country live in towns, 52% of theabove mentioned population live in the five metropolitan cities.

REB is very prospective business in our country. Real Estate companies are constructing not

only apartment but also commercial space for the upper class people. It also facilitates apartment

for middle class people.

JUSTIFICATION OF STUDY

The housing sector in the last decades in the urban areas has developed significantly because the

residential scarcity is very much acute . More over the contribution of housing sector to the

national economy is great. Contribution of housing sector is given below:

1. The investment of worth tk. 30 thousand cores on this sector.

2. More than 20 lakhs people including many planners, architects, graduate engineers,

diploma engineers, professionals, skilled unskilled laborers are directly concern with the housing

sector in India. On the other hand approximately 50 lakhs people get benefit from this sector.

3. The contribution of this sector to GDP is 15%.

4. The annual turnovers of this sector is more than 7500 cores.(approx.)

5. Government earns almost 7 hundred cores per year.

6. This sector helps to spread cement industry, re rolling, steel mills, aluminum, color, brick

field, ceramic, building construction materials and furniture making concern as its backward

linkage.

7. By the help of housing sector our country earns a lot of foreign currency.

Natural environmental problems impact on Volume of capital investment, Volume of profit

earning, Return on investment, Employment opportunity, Employees productivity, Sales

revenue and Number of unit production is great. Not only people live our country but also

emigrants have been interested to buy flats in their native country.


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ISSUES AND CHALLENGES FACED

Real estate in India has been going though a dimly lit corridor during the past one year. Dip in

demand for housing sector and a weak economy has resulted in sluggish sales across the country

in 2012.

The absorption rates in realty hubs like Delhi NCR and Mumbai have come down by about

30% and Mumbai alone has to bear the burden of around 80,000 unsold units. Launches have

plummeted by 50% in most of the cities in 2012 as well. Let us take a look at the major

challenges that the real estate industry has to face today.

1. Raising fundsis the most difficult challenge for the real estate projects. Indian real estate

have suffered from plummeting inflow of funds in the past year. The inflow has been hurt

by Eurozone crisis and low performing global economy. While foreign direct investment (FDI)

in real estate was about Rs 1,58,490 million in present value in 2009-10, it has come down to Rs

39,474 million in 2011-12.

2. Input costhas been rising steeply due to inflation. Real estate is a capital and labour intensive

industry and rise in cost of construction materials as well as in labour makes it harder for realty

developers to reduce prices of the unsold units. Cost of cement has gone up by as high as 50% in

few states and cost of steel per tonne has gone up to Rs 52,000 from Rs 40,000 per tonne till the

first quarter of 2012-13 year. Labour prices have risen by 40%-50% during the same period.

3. Financing costis also on the rise for developers. As the number of defaulters increases,

commercial banks have become more restrictive in lending money to the developers. Developers

have to rely on lending from alternate sources at high rate of interests which again pushes up

property prices. As a result, prices go above the buyers range, making it difficult for the units to

get sold.

4. There is a huge gap between the demand and supply of affordable homesacross the

country. Ministry of Housing and Urban Poverty Alleviation (MHUPA) estimates the urban

housing shortage in the country to be 24.71 million at the end of the 10th Five-Year Plan.

Although the demand is highest for the range of Rs 10-20 lakh, there is a dearth of affordable

homes in the country. Of the total shortage of homes, 88% account for the economically weaker

section (EWS).

Recent allowance of external commercial borrowing in to the affordable housing brings in a signof relief to the developers. It opens up avenue to the developers who are constructing affordable

homes to avail loans at lower interest rate.

5. However, there is a downside to emphasis on affordable housing in India. The government has

urged the developers to reserve 20% of a developed project for affordable housing, which would


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mean that the increased burden on the developer could very well be passed on to the rest of the

80%.

6. There is a need to look beyond the IT/ITeS industry when it comes to

commercial office space. Any upset in the IT sector would inevitably have a huge impact on

absorption of office spaces in cities like Bangalore, Noida and Gurgaon.

7. Speculation in property and land priceshave led to the unreal price appreciation in Indian

real estate market. Overpricing has been deterring customers from buying homes and as result

there exists a huge number of unsold units. Foreign Private Equity funds have been blamed for

this to a certain extent as they look for a high return in a short period of time.

8.Lack of transparencyalso hampers the Indian real estate. Land encroachment, lack of

regulation act as a deterrent to foreign investors looking to invest in Indian realty.

An independent body appraising prices of lands as per international standard is needed in India

to bring in the much needed transparency


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SHORTAGE OF RAW MATERIALS

The earths raw materials consist of the infinite, the finite renewable, and the finite non

renewable. In finite resources, such as air, water, are becoming a problem. Water shortage isalready a political issue, and the danger is no longer long term. Environmental group have

lobbied for a India on certain propellants used in aerosol cans, because of the potential damage

they can cause to the ozone layer.

Finite renewable resources, such as forests and foods, must be used wisely. Forestry companies

are required to forest timberlands in order to protect the soil and to ensure sufficient wood to

meet future demand. Because the amount of arable land is fixed and urban areas are constantly

encroaching on farm land, food supply can also be a major problem. Finite nonrenewable

resources- oil, coal, platinum, zinc, and silver- will pose a serious problem, as the point of

depletion approaches. Firms making products that require these increasingly scarce minerals face

substantial cost increased. They may not find it easy to pass these cost increases on to customers.

Firms engaged in research and developments have an excellent opportunity to develop substitute

materials.

Disaster has come to the field of construction business for the unusual price hike of MS rods,

rods made products, cement, bricks, aluminums, and electronic wire. Construction worth tk. 20

thousand cores all over the country has been closed due to the price increasing of only rods. Therods dependent public construction work is on the verge of undeclared close. The 60% of

construction work of the country has already been closed as a result 40 lakhs construction

laborers have been unemployed. The acute scarcity of MS rods and rod made product continues.

The price is increasing day by day. The selling price of 60 grade rod was tk.23-25 thousand last

year. Now we need tk. 40-47 thousand to by the same amount of materials.

The price of rods in the international market has increased by 100 dollars per ton which costs

more than tk. 6 thousand. But in the country that price has increased by almost tk. 25 thousand.

Cement of different brands costs tk.340 per bale.

The price of construction materials has been increased by creating fake scarcity in the country.

But the government needs to give subsidy to the concern field in order to control the market as

well as save the construction industry.


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The demand of cement is 90 lakhs tons in the country. The total amount of production of the

local industries is one core and 30 lakhs tons per year. Though the production is more than the

demand, the price is not up to reasonable level. In comparison with the price of cement of last

year the price is increased by tk.40- 50 per bale according to the variation of quality and per balecement cost tk. 300-340.

The price hike of bricks has also increased with the price of rods, cement. Few day back one

truck bricks of high quality cost tk. 6 thousands. Now it cost tk. 7 thousands. A manager of

concern brick fields says that the price of bricks increased because al other necessary products

has increased and this creates a negative impact on production of bricks. Besides this due to

increased fuel cost, the carrying cost of clay has increased.

Private real estate companies are wanted to expand their activities with taking realistic and

pragmatic steps by capitalizing of demand of housing. But their activities are halted due to scarce

of build able land and its cost. 100% real estate companies informed that the build able land in

appropriate area is not available. The topography of land is a significant problem in expanding

city area which makes the land for constructing houses scarce and costly. More over 100%

builders mentioned that they faced big troubles in purchasing land and construction materials.

Initial land for starting business.

Land in Square feet Number of the company Percentage

720-7200 18 60

7200-144000 8 26.7

144000-above 4 13.3

Total 30 100%

Above table we see that 60% of the companys started business by taking 720 square feet to

7200 square feet. 26.7% of the company started with 7200 square feet to 144000 square feet of


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land initially, and only 13.3% of the companies started their business with above 144,000 sft. of

land initially.

Increased energy cost:

One finite non renewable resource, oil, has increased serious problem for the world economy. In

October 2000 oil prices shot up to 34 dollar a barrel, creating a renewed search for alternative

energy forms. Companies are searching for practical means to harness solar, nuclear, wind, other

forms of energy.

Energy:

Two types of energy used in real estate business.

Gas:

Natural gas is our valuable resources which can change the fate of whole nation if right decision

is taken in right time. Many countries of the worlds possess valuable minerals hydrocarbon like

Natural gas. But a few of those countries only could achieve optimum benefit out of such

existing gas resources.

Gas reserves in India

A joint study conducted by the hydrocarbon unit of energy ministry and Norwegian directorate

indicate that India is potentials gas reserve could amount 41.6 trillion cubic feet (tcf).

The study observes that out of such resources potentials the proven reserve could be 20.4 TCF.

Earlier the official estimate of proven reserve was amount 11 TCF. This latest study also

indicates that the recovery rate in some major gas field could now be higher up to 75% in some

cases. But earlier the recovery rate usually ranged between 51% and 69%.

Thus the new study conduced in collaboration with the Norwegian gas and oil agency projected a

potential of larger than expected reserve of national Natural gas in the country. Another previous

study jointly conducted by the United States Geological survey and Petrobangla the state oil and

gas agency earlier last year had indicated mean possibility of striking 32.1 TCF Natural gas

in India.


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Uses of Natural gas in India:

At present the Natural gas in India is being used normally for power generation, fertilizer,

manufacturing domestic uses as fuel and in industrial plants. About two- third of our annual gas

production is being used for power generation and fertilizer manufacturing.

Sectorial demand of Natural gas (2004-2010).

Year sector 2004-

2005

2005-

2006

2006-

2007

2007-

2008

2008-

2009

2009-

2010

Electricity 141 151 163 178 192 208

fertilizer 83 89 98 15 114 120

Domestic use 27 30 31 34 37 40

commercial

use

5 7 9 11 13 15

Industry 36 45 24 60 69 80

Total 291 322 355 388 423 436

Source: India economic survey

A very few number of our people use Natural gas as fuel


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Electricity

Electricity is vitally important for India both as a means to relief poverty and as means to

accelerate economic growth. Electricity service is subject to voltage variation and is interrupted

by load shedding.

Load shedding and voltage variation:

Like many other developing countries, the generation and transmission capacity in India is

inadequate to meet the pick demand among those connections. Power authorities manage by load

shedding eliminating power to regions of country or neighborhoods within cities, on rotating

basis, load shedding worsened over much of the last decade

Operating inefficiency

The India power sector does not fare well in terms of operating efficiency. For

example, India requires considerably more employees per customers served than in the case of

most countries.

System Lose

The difference between electricity generated and electricity for which customers are billed is

referred to a system lose. System lose occurs both the high voltage transmission stage and the

lower voltage distribution stage. Loses are inevitably uncertain but at approximately 30%.


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COMMERCIAL PROJECTS OF THE COMPANY

Krishna Tower in Alwar (Comercial Complex)

A Multi Story Commercial Building: UPCOMING


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TOWNSHIP PROJECTS

RK Puram, Old Delhi Road, Alwar

SALIENT FEATURES:

1. Government approved

2. All plans and layouts passed

3.

90B permission4.

Featuring residential plots

5. Commercial plots

6. Group housing and community centre


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SERVICES PROVIDED BY THE COMPANY

The operations span various aspects of real estate development, such as land identification and

acquisition, project planning, designing, marketing and execution and property management.

Transaction Services Activities : This includes all types of property related transactions such assite selection, sourcing of property, sourcing of tenants, property marketing, structuring oftransactions, negotiations and documentation Operational in: Lease and outright for commercialacross metros and mini metros; lease and outright for residential.

ALL ROUND DEVELOPMENT

Rising income levels of the growing upper middle class, along with an increase in nuclearfamilies, low interest rates, modern attitudes to home ownership (the average age of a newhomeowner in 2006 was 32 years compared with 45 years a decade ago) and a change of attitudeamongst the young working population from that of 'save and buy' to 'buy and repay', have allcombined to boost the demand for housing and at the same point creating a niche demand forluxury housing too.Simultaneously, the rapid growth of the Indian economy has also increased the living standardand needs of urban India. As per a study by Merrill Lynch in 2005, India is the second fastestcountry to produce millionaires in the world. This gives the real estate sector a greater push inthe encroachment of the new luxury market as well as in developing a new market segment inIndia (Swiss Business Hub Russia, 2007).

Another major reason behind the increasing prices of real estate in India is the increasedgovernment spending over infrastructure development. The government set in its priorities toprovide for better infrastructure for example, building better roads for transportation, settingnuclear power plants to generate electricity for meeting the increasing demand of industries andhouseholds etc. All this spending on infrastructure directly affects the prices of real estate andgives them a push. India has kept aside $517 billion to spend on infrastructure for its five yearplan, as at 2011-12 and is expecting it to double it to $1 trillion for the next budget of 2016-17(HT Media, 2010). All these sentiments are triggering the rise of real estate market and thegovernment is expecting a combined investment of $1.5 trillion by various foreign and domesticgroups in the coming 2-3 years. At the same point, funds which have invested their money in

these groups IPOs (Initial Public Offering) are expecting returns of 16%-20%. The basis ofthese expectations are on the grounds of the booming I.T. and Outsourcing industries, which hasraised the requirements for quality commercial, residential, hospitality and health care facilities(Indian Ground Reality Mantra, 2009).


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In case of an NRI investor

Under the Foreign Exchange Regulation Act of 1973, Non-Resident Indians are:

Indian citizens who stay abroad for employment or carrying on business or vocationoutside India or for any other purpose in circumstances indicating an indefiniteperiod of stay abroad.

Government servants who are posted abroad on duty with the Indian missions andsimilar other agencies set up abroad by the Government of India where the officialsdraw their salaries out of Government resources.

Government servants deputed abroad on assignments with foreign Governments orregional/international agencies like the World Bank, International Monetary Fund(IMF), World Health Organisation (WHO), Economic and Social Commission forAsia and the Pacific (ESCAP).Officials of the State Government and Public Sector Undertakings deputed abroadon temporary assignments or posted to their branches or offices abroad.

The loan amount shall not exceed 85% of the cost of the dwelling unit

The loan amount shall not exceed 85% of the cost of the dwelling unit.Repayment of the loan, comprising of the principal and interest including all thecharges are to be remitted from abroad only through normal banking channels, yourNon-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR(O)] account and /or Non-Resident Special Rupee account [NRSR] in India.


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VARIOUS METHODS OF PAYMENTS TO INSTALLMENTS

Payment of fees, charges, Pre-Emi, additional interest and incidental charges.

1. Cheque drawn on an Non-Resident (Ordinary)/ Non-Resident (External)/Non-Resident

Special Rupee account.

2. Post dated cheques drawn on any of the above accounts.

3. Demand draft/pay order from an Non-Resident (Ordinary)/ Non-Resident Special Rupee

account.

4. FCNR account.

5. Funds transfer from abroad.

6. Cash payments are not to be accepted.

Payments towards EMI:

Payments towards EMI are to be made through post dated cheques drawn on anNon-Resident (External)/ Non-Resident (Ordinary)/ Non-Resident Special Rupeeaccount

DOCUMENTS SUBMITTED WITH APPLICATION

1. Photocopy of the labour contract and English translation duly countersigned by youremployer

2.

Latest salary certificate (in English) specifying the following.

NAME,DATE OF JOINING, PASSPORT NUMBER, DESIGNATION,

PERQUISITES AND SALARY

3. Photocopy of labour card/identity card.

4. Photocopy of valid resident visa stamped on the passport.

5. Photocopy of monthly statement of local bank account for the last 6 months.

6. Property related documents.


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CONCLUSION

The demand of housing of urban area in developing countries like India is dramatically

increasing. By born tendency people like to live and lead safe and sound life in a peaceful place.We can enjoy renewal from various places but we can rest and revive our mind at one place that

called home but it will far away dream for people to purchase and build a home in Delhi city. So

the real estate business is an important sector in our country. This study is concerned with

problem of natural environment on real estate business. This report shows various problems of

Natural environmental problem and causes of these problems. For this study data was collected

from real estate companies and customers. In this report there some suggestions to solve these

problems. Marketers who take the help of this report can solve the problem of Natural

environment on REB. Government can also take help of this report to solve the Natural

environment problem. Government role is important in REB. Government should take initiative

to improve this sector.


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REFERENCE

1. Roy Shib Shankar, Article, Real Estate Marketing In India.

2.

Rahman Mizanur, The Real Estate Business In Delhi City, Applied Marketing In India.3. The Daily Amar Desh 28 May, 2007

4. Research Methodology, C.R. Kothari.

5. India Economic Survey 2000.

6. GOOGLE.COM

7. RK developers

8. Wikipedia

TERMINOLOGY USED

REB= Real Estate Business..

REC= Real Estate Company.

REI= Real Estate Industry.

TCF= Trillion Cubic Feet.


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CASE STUDIES

New homes get smaller but affordable: Cushman & Wakefield

Track2Realty: The reduced apartment sizes in

new launches in 2014 have contributed to making prices more affordable. In the over50,000 mid segment units (1 and 2 BHKs) of newly launched houses across top eight cities in

Quarter 1 of 2014, most cities have seen a reduction in sizes of approximately 100 sf. This has

led to an average drop of 6 percent in cost of the apartments within these cities, says a report by

Cushman & Wakefield.

While the average unit sizes of new launches in most cities have dropped, Noida recorded

the sharpest decline of 16% in newly launched home sizes. This has helped control the cost of

the apartments in this micro market despite a 17% increase in per sq.ft rates. Similarly, Mumbai

witnessed a reduction in apartments sizes by 12% contributing to the ease in cost of apartments

by 9% over last year.Other markets that saw unit sizes drop were Ahmedabad (8%); Chennai (3%); Hyderabad (9%);

Pune (6%); and Gurgaon (3%). However in the same period the benchmark pricing of these areas

(price per sf of new launches) is not disturbed as far as possible. The ticket prices of these

locations have seen a decline to infuse more affordability into the system despite some of the

locations witnessing an increase in the average Unit price (INR / sf).

Chennai, Gurgaon and Hyderabad saw an additional push towards creating affordable options as

they also saw a decline in prices of new launches, albeit most of these new launches have been in

the peripheral or futuristic locations with lower benchmark pricing. These locations are generally

price sensitive and driven by end user purchase, making it necessary to meet price expectations.
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Pune 4th among top 10 ranking of Asia Pacific rental growth: Cushman & Wakefield

Track2Realty: The emerging cities continue to dominate the

rental growth in the region with Jakarta (Indonesia) witnessing the highestoffice rental growth

(yoy) among 33 cities in Asia, followed by Manila (Philippines) at 2nd position and Shenzhen

(China) at 3rd Pune (India) at 4th position while NCR (India) ranked at 10, says Asia Office Q1

2014 report of Cushman & Wakefield.

The report recorded a surge of nearly 19% in Pune within a year, primarily due to significantgrowth in the demand of Grade A buildings. Limited supply of stock and sizeable pre-

commitments has resulted in these buildings commanding higher rentals, thereby contributing to

increase in overall Pune rentals.

The demand for office space in NCR increased by nearly 5 times in Q1 2014 compared to Q1

2013 driven primarily by large size transactions of more than 100,000 sf from IT-ITeS and

Consulting sector, leading to a rise in rents.

Sanjay Dutt, Executive Managing Director, South Asia said, Thebusiness sentiment is likely to

strengthen with the new elected Government. We believe the new government would

aggressively pursue much delayed policy reforms that will help to boost investor confidence,both domestically and internationally. Consequently, we expect demand for office spaces to start

improving from the second half of this year and show positive momentum next year. However,

rentals are expected to remain stable with the exceptions of few micro markets such as

Cybercity, Gurgaon, Lower Parel & Goregaon, Mumbai and Outer Ring Road, Bangalore. For

most other micro markets there will be a slightly downward bias due to the double digit vacancy
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levels of 18%. However Grade A office and preferred locations is likely to show upward

movement from the second half of 2015.

Sigrid Zialcita, Managing Director of Research for Asia Pacific said, Officemarket conditions

showed a mixed performance in the region. Rental growth was slightly up across Asia Pacific

over the year, with an overall regional rental rise of just 2.8% in Q1 2014. Limited availability ofGrade A space should enhance landlord leverage and sustain rent increases in some of the core

markets this year; However, mounting supply in the emerging markets of Delhi NCR, Kuala

Lumpur and Ho Chi Minh City means that these cities will continue to remain favourable to

occupiers.

The demand for office space increased by nearly five times in Q1 2014 compared to Q1 2013,

driven primarily by large size transactions of more than 100,000 sf from the IT-ITeS and

Consulting sector companies leading to rise in rents.

Since significant demand was noted in Gurgaon(excluding MG Road and Cyber City) which

accounts for nearly 56% of the Grade A availability in Delhi-NCR, rise in rents of availablespaces in the sub-market added to the overall increase.

Furthermore, addition of 0.45 msf of office space in the Delhi International Airport submarket at

significantly higher than the overall city rents added to the increase in weighted average rentals

for the entire NCR.

OBSERVATION

THIS CASE JUST TALKS ABOUT THE RENTAL GROWTH OF TOP ASIAN CITIES IN

WHICH PUNE WAS FOUND TO BE ON NUMBER 4 AND DELHI NCR WAS ON

NUMBER 10 AND JAKARTA HOLDING TOP POSITION OUT OF 33 TOP CITIES


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More than 60% of global retailers present in India; lack of quality space & legislative issues hamper organised

retail: CBRE Report

Track2Realty: Despite more than 60% of global

retailers already having a presence in India, the lack of quality retail space and legislative issues

have been an impediment to the spread of organized retail in the country, according to CBREs

report, Expanding Horizons of Global Retailers in India.

The expanding retail footprint of global brands in India has been a major growth driver of retail

real estate in the country. In an effort to map and analyze the spread of international retailers,

CBRE undertook a research study of more than 300 prominent global retailers to identify

operating trends, expansion strategies, and extent of penetration across leading cities.

Brands across segments were analyzed in the luxury, premium and high-end categories; and their

presence judged on the basis of standalone stores within malls as well as high streets. Since

luxury brands in India have traditionally operated through boutiques in five star hotels, stores in

such locations were also included in the survey.

Commenting on the findings of the report, Anshuman Magazine, Chairman and Managing

Director of CBRE, South Asia, said, India is still a largely untapped and unorganized retail

market as a large number of prominent global retailers are yet to commence operations here. The

country holds a considerable advantage over other emerging retail destinations due to its strong

domestic consumption and low rate of market penetration by international retailers. Indiasnew

middle class is increasingly becoming brand conscious and willing to spend on quality goods, a

trend which is creating numerous business opportunities for mid-range international brands. With

political and economic sentiments already showing signs of improvement, we believe this is the

right time for international retailers to look at India for expansions into the region.

The CBRE survey analysis revealed that while India has emerged as a prominent destination for

retail segments like food and beverage (F&B), fashion apparel and big box/hypermarket chains,

almost 40% of the global retailer base considered for the study was yet to establish a presence in

the country.
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Of the retailer base already present in India, nearly 80% are present in New Delhi, while the

figure stands at about 70% for Mumbai and close to 50% for Bangaloreclearly elucidating the

significance of these metropolitan cities as the preferred entry points for international retail

chains. According to the report, this entry pattern is then typically followed by a spillover into

tier II cities such as Pune, Hyderabad, Kolkata, Ahmedabad, Chandigarh and Jaipur.US brands accounted for the bulk of retailers covered in the CBRE study, comprising 30% of the

total. Most US retailers were present in the mass market F&B category; while retailers from Italy

and the UK accounted for about 19% and 16%, respectively, of the total study, largely

concentrated in the luxury segment.

On the flip side, the report points to the lack of quality retail real estate supply, coupled with

prohibitive legislation, which has acted as an impediment to the spread of organized retail in

India. Compounding the problem of limited investment-grade supply of retail space are high

rentals and lack of professional mall management, all of which make for a challenging operating

environment for global retailers.It is evident, therefore, that efforts from all quarters are needed to provide global retailers with an

environment comparable to that typically offered in developed retail markets. There is a need to

address the concerns posed by this report, and build upon opportunities available to provide for a

robust built environment for retailers venturing into Indiasmarket places.

Anshuman Magazine adds, Fashionaccessories, F&B, and beauty and cosmetics happen to be

the most penetrated retail segments in terms of the presence of global brands in India; while

hypermarkets are the least penetrated, largely due to the legislative barriers imposed on the

category. Most international retailers incorporated in our study have, interestingly, adopted either

of the two entry routesfranchisee or joint venturecreating strong linkages with domestic

operators, utilizing local market expertise to guide their business operations in India.

The report provides a reference point for global retailers planning to enter India by focusing on

the entry strategies of global counterparts, in terms of preferred cities, store formats and sizes. It

could also be utilized by other stakeholders, such as government authorities, to address

legislative barriers responsible for the uneven development of organized retail infrastructure in

most of our urban centers. Real estate developers too can benefit by targeting trends such as

desirable segments of operation, preferred cities, and for planning upcoming retail projects.

OBSERVATION

THIS CASE TALKS ABOUT THE LACK OF QUALITY AND FACILTIES AND

STANDARD WHICH THE RETAIL COMPANIES ARE FAILING TO PROVIDE WHICH

ACCOUNTS TO 60%. AS WITH TIME MIDDLE CLASS PEOPLE ARE GETTING AWARE

AND CONCIOUS AOUT BRANDS


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Signs of improvement visible in real estate: India Ratings

Track2Realty:India Ratings has revised

its outlook for the Indian real estate sector to negative to stable for 2013, from negative in 2012.

Demand remains subdued and EBITDA margins low, leading to weak credit metrics for

companies in the sector. The agency however sees signs of improvement, in terms of stability of

margins and the easing of liquidity pressures, with free cash flows turning positive sinceH2FY12.

Demand for residential real estate stabilised in 2012, with yoy growth in home loans from banks

showing an uptrend from May 2012. However, the sales of large players declined marginally in

2012. Economic weakness continued with the associated apprehension of employee downsizing

and salary freezes, which adversely affected consumer sentiments. Persistence of adverse

sentiments, high inflation and high interest rates which reduce affordability, coupled with high

property prices, continue to hinder improvement in demand. Commercial demand will be hit by

subdued job growth in the IT sector, where average quarterly net headcount addition in 2012 has

been around 28%-32% lower than in the previous two years. Demand for retail space is likely tobe muted in the near term.

EBITDA margins which had been steadily declining from about 55% in FY08 remained at

around 30% during 2012. With subdued sales and the lower level of profitability at which the

industry seems to be stabilising now will keep financial leverage at elevated levels of around

6.5x in the short to medium term. To achieve a significant improvement in leverage, companies

will need to rely less on debt financing and focus on buyer advances and internal accruals, a

strategy which can only be adopted if there is an improvement in demand.

An encouraging trend noted by India Ratings is the easing of liquidity pressures. In FY12,

companies generated positive free cash flows and the trend continued into H1FY13. Apart from

stable demand, other efforts to improve liquidity included strategies like monetisation of land

and non-core assets, exercising prudence in new launces and adopting the JV route to developing

projects.

With funding options limited, the key to sustainability for real estate companies is growth in

sales. During the first 11 months of 2012, banks exposure to the commercial real estate sector

increased by just 1.7%. Private equity inflow into the sector has been moderate. The limited
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funding options imply a continuance of dependence on operational cash flows for funding

growth and debt servicing. Commercial real estate developers, especially those with cash flow

visibility through lease rentals, continue to have better credit profiles.

India Ratings-rated real estate companies include: Adarsh Developers (IND B+/Negative),

Ansal Housing & Construction Limited (IND BB-/Stable), Bhoruka Park Private Limited(IND B/Stable), Indian Express Newspapers (Mumbai) Limited (IND A-/ Stable).

OBSERVATIONS

IN THIS CASE IT IS SAID THAT THERE IS A LOT IMPROVEMENT IN THE REAL

ESTATE BUSINESS OF INDIA ALTHOUGH THE CURRENT GROWTH RATE IS SLOW

BUT QUITE OPTIMISTIC IN THE FUTURE DUE TO THE NEW GOVERNMENT AND ITS

SUPPORTING POLICIES. APART FROM THIS THE EASE IN BANK LOANS AND EASY

CASH FLOW LIQUIDITY ENCOURAGING THE YOUNG POPULATION OF THE

COUNTRY TO INVEST MORE


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Top 25 real estate companies Q2 revenues fall 4% to Rs 67.44 billion: Knight Frank India report

Track2Realty: Indias top 25 real estate

companies have reported 4% year-on-year decline in cumulative revenues of Rs 67.44 billion in

the second quarter ended September 30, another quarter highlighting the slump in the sector, a

Knight Frank India report said.

The analysis of these realty developers quarterly performance indicates an improvement in sale

momentum with focus on the residential sector. While the revenue of top 25 real estate

companies declined by 18% in Q3FY12 and 9% in each of Q4 FY12 and Q1FY13, the margin of

decline in Q2FY13 was lower at 4%

The reason being the change in focusof developers on residential real estate which even in this

tough economic environment fares better in comparison to commercial real estate, the report

said.

To track the growth in the sales volumes, Knight Frank has analyzed data for a set of 14

companies out of the top-25 companies that have consistently disseminated information on a

quarterly basis. On a cumulative basis, this set of 14 companies has made sales of 18 million sq

ft in Q2 FY13, which is a growth of 25.6% over a year ago.

The same period last year (Q2 FY12) witnessed sales decline by 30%. The sales volume data,

indicator for the depth of the market, signals September12 quarter was much better in

comparison to the same period last year.

While the residential demand in major metros was the primary reason behind this uptick,

improvement in state of project approvals in some western markets also helped the cause. On the

backdrop of improved sentiment many developers accelerated residential project launches,

Knight Frank said.
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OBSERVATION

THIS CASE ON THE BASIS OF RESEARCH ON TOP 25 COMPANIES OF REAL ESTATE

IN INDIA THERE IS OVERALL FALL IN REVENUE BY4%. ON;Y IN FEW AREAS LIKE

CYBER CITY AND MG ROAD THERE WAS MORE CUROSITY AMONG PEOPLE TO

INVEST AS IT IS A NEW CONCEPT AND QUITE INNOVATIVE AND PROFITABLEFOR BOTH COMMERCIAL AND RESEDENTIAL PURPOSE OVER TIME

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