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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 crisis
3. 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 of
place 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 estate
industry 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 1998 2005 , 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 upcoming
opportunities 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 office space.
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 factors
taken into account make India a young nation with a lot of challenges which makes it a piece of
cake in the list of developing nations. However, before one starts doing business in India, they
have 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 Focus

Innovation

Quality

Agility

Integrity

Leadership


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 Office targeted 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 the
above 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 funds is 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 cost has 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 cost is 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 homes across 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 sign
of 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 prices have 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 transparency also 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 is
already 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. The
rods 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 bale
cement 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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FINANCING STRATEGIES
Real Estate Developers adopted various strategies to finance this extremely high growth phase..
In fact not only the projects under execution, at the time of going to IPO, were many times larger
than what they had historically completed; the number and size of the projects which they had
planned, was exponentially larger still, and the land banks which they proposed to acquire for
their future projects could probably out last an entire generation. In this process all these
companies leveraged to the maximum extent possible and their balance sheets were almost
entirely funded by debt.
Additionally, they entered into a number of structured deals with foreign investors to finance
projects. Return expectations were extremely high due to galloping property prices. Large capital
gains on land holdings made the transactions look very simple and extremely lucrative at that
time. Banks unwittingly supported large scale speculation in land banking by providing liberal
finance to developers for construction of projects and easy home loans at zero margins to home
buyers.
Another strategy adopted by developers and supported by banks was to disburse upfront to
homebuyer, by making payment directly to the developer, 100% of home loan sanctioned to
purchase a property. In such a case the EMIs would start only from the date possession and the
home buyer would not have to pay any interest during construction period, interest being paid
out by the Developer to the lender by way of subvention payments. The entire revenue was thus
received upfront by the developer who could then utilize this cash to acquire more land and
announce more projects. The flip side of this was huge interest cost being loaded on to the
development process and balance sheets of companies. The liability of the developer, to pay
interest on such loans, was unlimited in case of construction delays. Another cause of concern
was very low stake of buyer in this whole process. An investor could practically speculate by
paying small margin money (0% to 15%) of the cost of house property to 18








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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 permission
4. 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 as
site selection, sourcing of property, sourcing of tenants, property marketing, structuring of
transactions, negotiations and documentation Operational in: Lease and outright for commercial
across 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 nuclear
families, low interest rates, modern attitudes to home ownership (the average age of a new
homeowner in 2006 was 32 years compared with 45 years a decade ago) and a change of attitude
amongst the young working population from that of 'save and buy' to 'buy and repay', have all
combined to boost the demand for housing and at the same point creating a niche demand for
luxury housing too.
Simultaneously, the rapid growth of the Indian economy has also increased the living standard
and needs of urban India. As per a study by Merrill Lynch in 2005, India is the second fastest
country to produce millionaires in the world. This gives the real estate sector a greater push in
the encroachment of the new luxury market as well as in developing a new market segment in
India (Swiss Business Hub Russia, 2007).
Another major reason behind the increasing prices of real estate in India is the increased
government spending over infrastructure development. The government set in its priorities to
provide for better infrastructure for example, building better roads for transportation, setting
nuclear power plants to generate electricity for meeting the increasing demand of industries and
households etc. All this spending on infrastructure directly affects the prices of real estate and
gives them a push. India has kept aside $517 billion to spend on infrastructure for its five year
plan, 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 the
government is expecting a combined investment of $1.5 trillion by various foreign and domestic
groups 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 of
these expectations are on the grounds of the booming I.T. and Outsourcing industries, which has
raised 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 vocation
outside India or for any other purpose in circumstances indicating an indefinite
period of stay abroad.



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



Government servants deputed abroad on assignments with foreign Governments or
regional/international agencies like the World Bank, International Monetary Fund
(IMF), World Health Organisation (WHO), Economic and Social Commission for
Asia and the Pacific (ESCAP).


Officials of the State Government and Public Sector Undertakings deputed abroad
on 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 the
charges are to be remitted from abroad only through normal banking channels, your
Non-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 an
Non-Resident (External)/ Non-Resident (Ordinary)/ Non-Resident Special Rupee
account

DOCUMENTS SUBMITTED WITH APPLICATION

1. Photocopy of the labour contract and English translation duly countersigned by your
employer
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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Recommendations

1. Government should properly control the market of raw materials of REB. Because the price of
construction materials has been increased by creating fake scarcity in the country.
2. Government should give subsidy to the concern field to control the market and to save
construction industry.
3. Scarcity of land is reality. To solve this problem real estate companies should builds
multistoried apartment. But there should be various types of facilities for the welfare of the
people.
4. Electricity problem is a National problem. To solve electricity problem government should
proper attention. As government can not expand this service, government should encourage
private sector.
5. Gas users should be conscious about the wastage of gas and this sector should be properly
maintained. It is need to use meter for billing of gas.
6. Public motivation and awareness program about protection of environment pollution should be
promoted. Our electronic media should come with attractive environmental programs.
Environmental education in formal education system must be introduced.
7. New technology should be taken to produce bricks that can reduce air pollution.
8. Government should introduce act to prevent Natural environmental problem and government
should implement this act properly.
9. Authorities should take initiative to prevent misinterpretation of various acts. That will be
helpful to implement acts properly.










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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 over
50,000 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.






32

AVERAGE CHANGES IN HOUSING UNITS LAUNCHED (2013 TO 1Q
2014)
City
Avg Unit Size
(SF)
Avg Unit Price
(INR/SF)
Ticket Price
(INR LAKH)
Ahmedabad -8% 7% -3%
Bengaluru 1% 5% 7%
Chennai -3% -7% -10%
Gurgaon -3% -30% -32%
Hyderabad -9% -7% -15%
Kolkata 3% 14% 18%
Mumbai -12% 3% -9%
Noida -16% 17% -2%
Pune -6% 4% -2%
Sanjay Dutt, Executive Managing Director, South Asia, Cushman &
Wakefield says, Residential sector is banking on end-user driven demand and hence developers
are tweaking products to make them more affordable. It also signals a degree of stress among
developers, which is forcing them to launch products to inject doses of robust sales numbers into
their balance sheets. Affordability holds the key right now; end-user buyers have been shying
away from making purchases for a long time owing to lackluster economic conditions and
resultant low confidence.
However, markets of Kolkata and Bengaluru were exceptions to this trend. In these markets,
both unit sizes of apartments as well as the per square foot rate have increased. Correspondingly
the cost of apartments have also increased by 18% in Kolkata and 7% in Bengaluru. This is
indicative of a strong end-user driven market that is catering to the large middle class population
within these cities.

OBSERVATION
THIS CASE SHOWS ALTHOUGH WITH THE DECREASE IN SIZE OF FLAT THERE IS
ALSO APPROX DECREASE IN THE RATES UPTO MORE OR LESS THE SAME
PERCENTAGE MAKING THEM AFFORDABLE EVEN WITH INFLATION AND RISE IN
PRICE OVER TIME




33



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 significant
growth 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, The business 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
34

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, Office market 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 of
Grade 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 available
spaces 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









35

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. Indias new
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.
36

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 Indias market places.
Anshuman Magazine adds, Fashion accessories, 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

37

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 since
H2FY12.
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 to
be 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
38

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















39


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 focus of 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.




40

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 PROFITABLE
FOR BOTH COMMERCIAL AND RESEDENTIAL PURPOSE OVER TIME