GROWTH DRIVERS OF INDIAN REAL

ESTATE
Rapid urbanization

Significant rise in consumerism

Policy and Regulatory reforms (100% FDI relaxation)

Surge in Industrial and Business Activities

Increasing demand for newer avenues for
entertainment, leisure and shopping
MARKET SIZE OF INDIAN REAL ESTATE
0
10
20
30
40
50
60
70
2008 2009 2010 2011
US $ Billion
US $ Billion
Source: CCI Report on Real Estate in India Aug 2012
GOVERNMENT INITIATIVES
Development of smart cities.
Project eligible for FDI reduced in size from
50,000 to 20,000 sq m.
Minimum investment limit for FDI to US$ 5
million.
SEGMENTS OF REAL ESTATE SECTOR
IN INDIA
Residential


Commercial


Retail


Hospitality
PEST ANALYSIS
POLITICAL ASPECTS
Governments regulations & policies in favor
of Real Estate Sector
Heaviest tax imposed on the construction
industry
FDI experience in Indian Real Estate Market
ECONOMIC ASPECTS
Controlled Inflation levels
Low interest rates
Provides Liquidity
SOCIAL ASPECTS
The saying, its not what you know, its who you
know holds true in real estate, especially for
private investors who dont have the social network
to get a foot in the real estate market.

Investors can now browse hundreds of deals online
from their couch.
Investors have access to real estate deals that
previously seemed off-limits
Developers have access to a wealth of investors
that they never would have been able to connect
with before.

TECHNOLOGICAL ASPECTS
Social Media
Mobile Devices and Apps
Cloud Services
Omnichannel Retailing
Site Selection
KEY SUCCESS FACTORS
Key success factors (KSFs) are those limited
number of areas in which if results are
satisfactory, it will ensure successful
competitive performance for the firm. These
are the areas that a firm must get right if it is to
succeed.

SUCCESS FACTORS
Understanding the economy
Market Research
Networking
Forbearance
Logical Thinking
Proper Entity Selection
Understand the Risks of Leverage

Issues & Challenges
Raising Funds is the most difficult challenge for the real
estate projects. 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.

Input costs has been rising steeply due to inflation. 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.

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.

Declining absorption Rate There is a need to look beyond the
IT/ITeS industry when it comes to commercial office space.

Speculation in Property and land prices have led to the
unreal price appreciation in Indian real estate market.

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

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.