India is currently under a strong grip of the real estate market as the realty sector

is continually growing in leaps and bounds. With the overseas clients making
hefty investments in Indian real estate, the prices have become sky-high. There
are several reasons responsible for the flourishing real estate trends in the Indian
market:
The so called boom can be attributed to the enormous industrial growth,
which has resulted in a huge demand for commercial space. India is doing
exceptionally well being the most sought after destination for outsourced
business activities.
lso, the liberal !"I policies adopted by the Indian government inviting
foreign investments in the real estate market has added an extra spark to
the real estate business, which is already on fire.
The living standards have witnessed a drastic change from the past
centuries and also the evolving mindset of eyeing a property for an
#investment$ purpose rather than a #lifetime shelter$. Thus, a property is no
longer a property only% now the newly coined term for it is #investment
property$.
The &eal 'state industry in India witnessed unprecedented growth in a relatively
short span of time. With most companies having seen only the upward swing, the
economic downturn proved to be a litmus test. The realty industry today has
changed so much that each sector needs special skills to make it work efficiently.
ll over the world, prices are fluctuating. (lobal agencies monitor trends in the
top influential cities. With many foreign investments in India and )&Is returning,
the Indian property market watch is on the top most of every big agency.
*ompanies with stronger fundamentals and ability to make +uick strategic
decisions continued to operate, though with reduced visibility and si,e of
operations, the weaker ones found it challenging to retain their position and
image as a &eal 'state developer. The purchasing power of the new generation
of Indians has increased. They are investing in real estate in a big way- in terms
of investment and assets. -eople have ac+uired refined tastes in housing needs
and become professional in dealing with builders. !inancial companies and
banks have given a boost to real estate marketing as well. To add to this the
government has allowed foreign investors also to test the market conditions here
have helped. 'very area of real estate be it industrial, retail space, malls, office
complexes, residential colonies, hospitals, clinics and other healthcare units have
a vast potential for growth.
&esidential pro.ects across segments have witnessed strong volumes. !or
instance:
/i0 -hase-III of "1!2s residential pro.ect in "elhi, *apital (reens, received
encouraging response, and
/ii0 (odre. -roperties sold3booked 455 units at its mid-income housing
pro.ect in hmedabad, (odre. (arden *ity, within one week of launch.
6acked by strong sales volumes, developers in 7umbai and the )ational *apital
&egion /)*&0 have undertaken multiple price increases across pro.ects over the
last 8-9 months. :n an average, prices have increased by approximately 85 per
cent across pro.ects in these regions. These are times when investors have been
worried about the sector.
s more opportunities grow for people to work they also wish to invest in places
close by to live in. 6uilders or developers in various regions are now separately
marketing each space. 'ven home loan companies and banks are independently
marketing the properties they are giving loans. This helps them to guide their
dedicated clientele and ensure the marketing trends remain closely monitored for
future development.
They generally have customer relationship executives who are assigned /usually
area wise0 to assist customers in making decisions. They do have good
knowledge, are professionals on the .ob and customers do benefit if they are not
very familiar with various technicalities. 'ach company has its own marketing
device and portfolio to attract customers.
;arious tie ups with groups in India and overseas have taken place this year with
increase in !"I. 7(! "evelopments based in )ew "elhi and 'maar -roperties
based in "ubai have .oined hands in the first +uarter of <559 for investments
within the country. )owadays most of real estate focus is on shopping malls and
residential complexes. In some areas down south, the thrust is on IT parks, and
corporate offices and resorts.
=owever, on the other side everyone or every other executive does not feel the
real estate sector in India is being well marketed or managed. >es, there are
some gray areas, which need to be covered up. !or instance, foreigners who
wish to invest or firms who are looking at Indian partners are feeling the crunch of
bureaucracy and familial ways of working. This obviously makes it difficult for
them to do business. The potential is there but it needs to be tapped wisely.
proper way is to have real estate marketing with the right professionals.
'veryone wants to cash on the business.
6uying a dream house or flat to reside is basically not a real estate investment.
6uying real estate with a view to generate income and capital appreciation is
considered as real estate investments.
&eal estate investments can be further classified into residential, farmhouse,
commercial, retail, leisure. 1eisure is a relaxation place where you can spend
free time or vacation.
"epending upon your risk tolerance and time hori,on you can invest in real
estate at different risk levels.
It can be at the time of converting a rural land to urban land, or when a property
is under construction after a property is already developed.
&eal estate as an asset class comes with its own uni+ue characteristics of risk
and return. The return from real estate investing comes from capital appreciation
as well as regular income from rentals.
Its risk profile is +uite different from e+uities and bonds and, therefore, its
performance has little correlation to the performance of e+uities and bonds. This
makes real estate an ideal diversifier to a portfolio of conventional investments.
The inherent risk of e+uities and real estate is termed high but at particular price
level this may be reduced and entries at such points can create long-term alpha
which may be difficult to beat. That wonderful time to invest in property when
prices were distressed is definitely gone. The investments in property now will
not yield super normal return.
=owever, that does not take away the importance of real estate in a portfolio.
&eal estate provides both a regular cash flow of income to the owner in the form
of rent as well as capital appreciation. The compounding effect of the two put
together over the long term adds up to a very decent return. It is also a very
acceptable form of collateral for loans and provides an inflation hedge in a
manner +uite similar to investing in non-perishable commodities such as gold.
&eal estate has taken all the metropolitan cities by storm. "elhi and )*& are
already feeling the heat and the real estate graph will further ascend higher
owing to the forthcoming *ommonwealth games in "elhi. In the wake of the
economic growth "elhi3 )*& are witnessing a burgeoning demand for retail
properties. The growth of retail properties is evident from the numerous shopping
malls standing proudly in almost every corner of "elhi3 )*&.
With retail properties holding the number one slot in the real estate market for
"elhi3 )*&, the demand for residential properties sits competently at the position
of number two. Thousands and thousands of people are thronging the real estate
market to purchase a residential property, more for investment sake rather than
for spending their whole life under its roof. "elhi3 )*& have several upcoming
township pro.ects for residential purpose. The bigger and fatter pay packages
and loan facilities have led to a superior lifestyle, which has firmly set an
apartment culture in the city. Independent homes now seem outdated to many.
The growth of the residential townships relies on two factors: need and
investment.
The demand in commercial and industrial properties has also been soaring high
in the )*& region due to a sharp increase in the industrial growth and the out-of-
reach prices in "elhi. The increase in the number of business travelers3 tourists
will push the real estate sector in "elhi3 )*& to meet the growing demand for
hotel accommodation3 rooms. -otential customers are identified by criteria such
as age, race, religion, gender, income level, family si,e, occupation, education
level and marital status. *hoose those characteristics of your demographic target
market that relates to the interest, need and ability of the customer to purchase
your product or service.
For example, a target market for a real estate developer selling luxury
apartments and flats would include professional married couples approximately
85 to ?@ years old with young children, and with incomes of more than
&s. @5555-A.@ 1acs per month.
ffordability is the altitude of aspirations, need and the budget of an individual
customer. The range may vary from place to place and from individual to
individual. The net value of affordable segment has increased over time with
increase in per-capita income across all the Btates.
The monthly carrying costs of an affordable home should not exceed 85 per cent
of the household gross income. ffordability is for Cam admiD, for whom house
is like a dream. This common man constitutes almost E5 per cent of the total
demand for housing.
:ut of this, ma.ority constitutes for nuclear families that would preferably opt for a
midsi,e apartment of around E55-A555 s+ ft.
The ongoing condition of economic contraction has also resulted in improved
services to the customer. In order to shed off an image of being non-transparent
and unorganised, a number of developers increased their focus on customer
satisfaction.
customer was provided the facility of checking the status of construction of his
property by logging on to a website. 'arlier, this was possible only after visiting
the site and following up with the concerned officials.
With such initiatives, developers are fast changing their image as professionally
managed corporate houses, committed for meeting customer expectations and
empathetic in resolving the concerned issues.
The recent situation, however, has sent the message home. The Indian real
estate companies are urged to focus on customer satisfaction. The industry is no
more dominated by a developer, putting customer expectations at the backstage
and carrying on operations at his own sweet will.
7ore significantly, the ongoing correction in the real estate market has indicated
towards its fundamental strength wherein it tends to correct itself with any
excesses on the front of prices, and other demand relating factors.
)evertheless, real estate companies are fast-learning to lay emphasis on
retention of existing customers and ac+uire new customers. The present times
have been calling for a fair level of flexibility, which even the real estate
companies have been expecting from their suppliers and service providers. t
the same time, many developers have found a viable strategy in forging
collaborations F leading to cost benefits, synergies, and mutual strength. The
potential areas of collaboration include supply chain, procurement, production
and brand promotion.
:wing to increased competition in metropolitan cities, developers opted to
diversify geographically as well. Tier II and Tier III cities thus came under their
radar. Interestingly, one can easily find developers cheering their strategy of
foraying in smaller cities, which are relatively less-affected of the ongoing
economic turbulence.
!lip through any newspaper that gets printed from 6angalore, and it is not
uncommon to find real estate companies putting out full page advertisements of
their pro.ects.
Bimilarly, hoardings are back in action in the city showcasing real-estate
developments, and radio ads are also being resorted to. *ompanies are now
thinking out of the box and, in fact, <55G witnessed a few prominent players
showcase their ongoing pro.ects in a bid to find buyers for their unsold stock.
Today, most real estate developers have adopted marketing techni+ues that
seemed to hitherto be the CprerogativeD of consumer and lifestyle product
companies. The term CmarketingD no longer denotes the mere sale and purchase
of property, but also encompasses creating customer awareness. nd this has
enabled the realty segment to graduate to more professional heights.
The result: they have their own advertising agencies% most of them have roped in
-& companies to manage their media relations% many have revised their
marketing and advertising budgets% and now do not even hesitate to participate in
various in-vogue, brand building activities.
In order to cut the clutter, one needs to think ahead of oneDs time. -eople have
also become hugely +uality and brand conscious. They are looking for an
CaddressD, a lifestyle rather than .ust a home. Thus, in order to fuel this perception
in the minds of prospective customers, it has become absolutely necessary to
create a differentiatorHwhich in turn leads to the creation of a brand, a premium
brand.
6rand establishment means rising above the ordinary. :nce established, it
garners better trust, results in the easier marketability of pro.ects and commands
a better price.
Bome innovative, customer-friendly schemes include sale by invitation, a ready
sample house, the inclusion of a penalty clause in the agreement and optional
payment plans. 1aunch discounts, introducing pro.ects to clients first before
opening them to the public and adopting a customised approach are some of our
other schemes.
Bome builders even help the customer to choose the interior design of his house
before he moves in. In keeping with our brand value, they offer free interior
design inputs to their customers whereby they can sit with a designer who helps
them create a customised home layout solution fitted around their needs.
The real estate sector has become more brand conscious, corporatised,
customer friendly and has grown immensely in si,e. It has also become
competitive in terms of product innovation, pricing, +uality and marketing
strategies.
With aggressive promotional campaigns on the one side, and favourable home
loan rates and a big push from banks and the government on the other,
developers were successful in stimulating buyer-interest during the second half
of <55G.
Well-designed advertisements are the ones which will stand out and assist
developers in generating product-level. Though developers are not willing to
come out with actual ad-spends, it is believed that ad-spends in the re.uvenated
market conditions could be significant.
&eal estate developers are now banking on the star power of the likes of Bhah
&ukh Ihan, mitabh 6achchan and ishwarya &ai to endorse their pro.ects.
"eepika -adukone is the latest to .oin these mar+uee names. spire &eal
'state, a "ubai-based developer, has signed up the actress as its brand
ambassador.
The trend of celebrities - from tinsel town and outside - endorsing real estate
pro.ects started around two years ago. Bo while big banner draws such as Bhah
&ukh, ishwarya, 6achchan or even sarod maestro m.ad li Ihan and his sons
represent the likes of "1!, Bahara and :maxe, a host of smaller developers too
have started signing up celebrities to cut across the clutter. There are many who
aver that stars are being signed up more in an attempt to build brands than to
propel sales. pro.ect sells on its own strength, so basically celebrities are
adding to the developer2s brand e+uity.
The "elhi )*& region has witnessed a great number of residential pro.ects in the
last A< months and still the pace is picking up with many upcoming pro.ects in the
next <?-85 months. This has resulted into the over supply leading to a slump in
the residential market in certain areas. The residential property rates and the
demand depend on the infrastructure of the area. (ood infrastructure certainly
leads to higher rates. !or instance the flat rates in Indirapuram range between
&s. <,@55-<,455 per s+. ft. whereas in )oida it is about &s. 8,@55 per s+. ft.
-roperty rates in Iundli, 7anesar and Bonepat region have appreciated due to
developing infrastructure and industries and the momentum is expected to pick
up. The land rates in Iundli belt started from &s. 8955 per s+. y. which today is
&s. 4,555-A<,555 per s+. y. (overnment policies like home loan rates,
investment on infrastructure, B'J status, etc will determine the pace of the
residential market in the )*& region. two-kilometer flyover is under
construction which will take care of the 6adarpur traffic bottleneck. nother
highway is being constructed which will begin from Ialindi Iun., go around the
newly demarcated sectors of !aridabad, and end at -alwal. =ence, traffic that
does not have to go into !aridabad will bypass the city altogether, thereby
decongesting 7athura &oad. lso, the government initiatives such as proposed
international airport, infrastructure development and other schemes in (reater
)oida are likely to provide impetus to property prices in future.
=ealth care is also one of the deciding factors in the real estate market scenario.
=uge upcoming pro.ects like 'scorts 7edicity, rtemis =ospital /pollo Tyres
(roup0, -aras =ealthcare and a health care pro.ect by !ortis might change
(urgaon2s health map.
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The rates for the residential upcoming pro.ects in "elhi )*& clearly depict the
following facts:
i0 There area many established national builders like T"I, :maxe, "1!, nsals,
-arasvanath, Knitech as well as some of the new entrants like "ynamic in the
real estate industry foraying into the suburbs like (reater )oida, Iundli and
&udrapur.
ii0 Bame as the commercial pro.ects, the rates of the residential pro.ects also
depend on the factors like the location of the pro.ect, commercial viability i.e.
existence of any mall or multiplex in the vicinity of the residential pro.ect will
certainly lead to increased demand of that place thus resulting in higher rates.
!or instance residential property rates in Bouth "elhi are higher as comparison to
other places due to the development in this area and close proximity to place like
(urgaon.
iii0 The accessibility and the approach of a place is one of the ma.or factors.
Introduction and expansion of 7etro routes has certainly played a vital role in the
appreciation of property rates.
iv0 There is a wide variety in residential upcoming pro.ects ranging from the
investment, total built-up area, facilities provided by the builders like attached
servant +uarter, furnished or fully furnished flats, penthouses etc to name a few,
number of towers in the pro.ect and number of floors in one tower, the payment
plan, etc.
1:*TI:) 6 *
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(=JI6" - - 9555 G@55 9G55 GG55
!&I"6" <<555 85555 4555 A5555 9@55 4@55
7)'B& 9555 A@555 - - - -
Number of Projects as per the location
7aximum number of commercial pro.ect are coming up in "elhi whereas
(a,iabad is attracting the residential developers. Tier II and tier III cities /non-
metros, towns, semi-urban areas0 are witnessing a preference over tier I cities by
real estate investors. This may lead to the inventory pile-up in these cities in
future as leading real estate category developers like "1!, nsal, :maxe
(roup, Knitech (roup, T"I (roup and others are now foraying into tier II and III
towns like 7anesar, Iundli and &udrapur and the suburb areas of (a,iabad,
(reater )oida, !aridabad, etc.
Apartments and Flats in Noida:
The enormous industrial growth in )oida has led to a huge demand for
residential properties. 'ven though )oida offers a lot many residential options
like villas, penthouses, bungalows and condominiums it is the apartments and
flats which are basking in the glory. partments and flats have become a hit in
)oida due to the comfort, safety and the affordable price tag for stylish living. The
flats and apartments have been designed keeping in mind the different pocket
si,es. Thus, )oida offers flats or apartments which fit all the budgets ranging
from low, medium to high. This )*& region has all the facilities to be a residential
area. It has shopping malls, eateries, entertainment hubs, educational institutes
and what not. The apartments and flats come in all si,es from a single bedroom
to a five bedroom set. !amous builders are now targeting )oida for their next
pro.ect while some are already accommodating many happy residents.
partments and flats have the provision of a tight security round-the-clock and
making the essential amenities available at all hours for their residents there is
no doubt as to why they are leaving behind the cra,e of living in bungalows or
villas. These well-planned apartments also offer a lot of greenery in and around
the apartments. The government of Kttar -radesh also has role to play in giving
the city a planned structure. partments are also nothing but an evolved form of
planning and comfort. )oida or the )ew :khla Industrial "evelopment uthority
was created in AGE9 to define the commercial, residential and industrial areas
and to provide facilities as well as infrastructure to help these grow. It also
regulated and kept a check on the number of residential buildings being built on a
particular area. -roper drainage as well as garbage disposal facilities were also
provided. )oida authority was also set up to share the load of residential
properties of "elhi and provide cheaper alternatives to the "elhi people. Thus
slowly and gradually planned residential areas along with commercial and
industrial were developed by the )oida authority. 6uying a piece of land and then
building it into your favorite villa, bungalow or independent house is a process
which is very expensive and time consuming. ll these factors make the
apartments and flats score higher in comparison to other available residential
options.
Apartments and Flats in Gurgaon:
(urgaon is a ma.or revenue churner for =aryana with all the top multinationals
setting up their offices here. The city has undergone an exponential boom in the
real estate market owing to the growing industrial and financial activities. With so
many commercial establishments the demand for residential properties is
naturally bound to increase. (urgaon has responded e+ually well to the
apartment culture and embraced it gracefully as well. World-class apartments
e+uipped with all the modern day comforts of life provide a sophisticated life style
to the top management executives employed in the world-renowned 7)*s and
corporate firms. They come in attractive designs, at an affordable price and offer
all the luxuries. "ifferent categories of flats and apartments make it possible for
all the home seekers having different budgets to own an apartment. Beveral big
players of the real estate market like "1!, Knitech, -arshvanath etc. are busy
constructing classy apartments in (urgaon which have all the possible luxuries.
s the safety and facilities provided in the apartments and flats outnumber the
benefits of living in an independent house or a villa, apartments are flourishing all
over (urgaon. If you dream of spending a lavish life then (urgaon has plenty of
options for you. The spacious @ bedroom flats, attractive gardens, centrali,ed
cooling, spa facilities, escalators, pools, golf course, cameras for security, play
grounds for kids and much more are sure to enhance your stand in the society. If
you buy an apartment in (urgaon be assured of getting a high resale value and
rent for that purpose.
Apartments and Flats in Faridabad:
!aridabad is going to be the next big thing in industrial development and also in
terms of real estate. lready many investors have headed to !aridabad
considering its bright future which lies ahead. The =K" !aridabad authority has
planned to build the next model industrial township in !aridabad. The real estate
market in !aridabad is becoming hot day by day as investors are reali,ing its
worth and also because purchasing a property in "elhi is becoming an almost
impossible dream for people with a low budget. !aridabad is all set on the path of
infrastructural growth. It has a well-connected railway and road network which
makes it accessible. !aridabad will also have the metro running through the
length of the city in the future. The economy is going to witness a rapid boom.
7any residential pro.ects are already complete while some are still in progress.
Though !aridabad is a bit slow in catching up with the apartment culture, things
still look promising. Beveral reputed builders as well as the government has
ongoing residential pro.ects while many pro.ects are in the pipeline to meet the
residential demands of the people. number of people are flocking towards
!aridabad for investment or residential purpose. 'conomical apartments and
flats are ready to lure the prospective buyers and tend to become more popular
in the coming days as they are comparatively low priced and are furnished with
all the comforts and amenities. 6uying individual plots is very expensive and in
todayDs world when time is becoming a rare commodity people prefer apartments
or flats where they can simply get their stuff reloaded. 1iving in apartments or
flats also provides a sense of security with a round-the-clock vigil at the entrance
of the society.
=K" !aridabad has made continuous efforts to build the available plots for
residential, commercial and industrial purpose. The housing pro.ects undertaken
by =K" !aridabad have given a new shape to the city. It is accommodating
many people who aspired to own a house in "elhi but failing to do so have
headed to !aridabad. The economic growth and employment opportunities have
also attracted many to live in !aridabad. !aridabad is surely living up to the
expectations of the master plan to develop an )*& region so as to decrease the
population pressure on "elhi. Today, !aridabad houses thousands and
thousands of people in the comfortable, secure and classy apartments and fulfills
their dream of living under their own roof.
Apartments and Flats in Ghaziabad:
(ha,iabad is in the initial stages of growth and development in real estate
market. -art of "elhi )*& region it has also played an important role in
decreasing the population pressure on "elhi. It has also helped in meeting the
exponential residential demand of "elhi by providing an accommodation the
people thronging "elhi. partments and flats culture though not a cra,e is
gaining ground slowly but steadily. Beveral well-known manufacturing M service
industry giants are setting their offices in (ha,iabad and gearing it up for the
slow but consistent growth. 6eing well-connected to "elhi, (ha,iabad has a lot
to offer in the coming future as it holds an immense potential for development.
(" or (ha,iabad "evelopment uthority has played an important role in giving
the city a planned look. It has undertaken several housing pro.ects. (" came
up with a 7aster -lan and took charge of ac+uiring plots and converting them
into housing pro.ects. Beveral apartments and flats in the category of 1I(, 7I(
and =I( were constructed. (" was responsible for the urban development of
(ha,iabad. The ("I now has plans of building around two and a half lakh of
houses along with some private builders. The Indirapuram pro.ect of (" can be
cited as an excellent example of how (" has been making sincere efforts to
provide affordable accommodation in the form of well-planned township and
apartments. The housing schemes of (" inspired many private builders to
construct affordable and stylish apartments. partments are e+uipped with all the
basic amenities and comforts and also have tight security arrangements. The
vast array of facilities provided in the apartments and flats is attracting the buyers
more than the expensive independent houses which are not even considered
that safe.
partments and flats offer a lot many advantages when compared to
independent housing or the expensive villas and bungalows. Bome of the very
basic facilities offered in apartments are <?-hour water and electricity supply,
security, well-designed and stylish interiors, elevators, intercoms etc. (" has
also constructed a number of malls, hospitals, banks and educational institutes to
meet the residential demands.
Other Ke !e"elopments
=ousing and real estate form the backbone of the countryDs infrastructure and are
critical drivers of economic development. With the Indian economy growing at
over E per cent, the construction sector too has witnessed rapid growth. This has
been primarily led by the housing sector, which has got an impetus from
increasing urbani,ation and easy availability of housing finance. With
government policies emphasi,ing faster economic growth, the real estate sector
is pro.ected to attract large investments in the coming decade.
Traditionally, investments in this sector have been constrained by the lack of
information and agreed standards. The resulting uncertainty ensured that
financial institutions were cautious in their exposure to residential and
commercial real estate pro.ects.
In light of this uncertainty and in order to provide third-party opinion to housing
customers and financial institutions, *&IBI1 has developed two speciali,ed
products for the construction industry, namely, "eveloper &atings and -ro.ect
&atings.
!e"eloper #ating
&ating of developersD track record in executing real estate pro.ects as per the
agreed +uality levels and transferring a clear title within the stipulated time
schedule.
Project #ating
&ating of developersD ability to execute the specific pro.ect as per the agreed
+uality levels and transfer a clear title within the stipulated time schedule.
These ratings are opinions based on a developerDs past track record in executing
real estate pro.ects and are indicative of his ability to do so in future. !actors
such as construction as per the schedule and +uality specifications, transfer of
clean title and sales track record are assessed while assigning the rating.
"evelopers with higher ratings will have properties that are legally sound and that
are completed and delivered on schedule.
Need For #ating
The Indian real estate market is highly fragmented and unorganised.
Transactions are based on market perceptions and are generally characteri,ed
by uncertainty. (iven the industryDs dynamics, a rating is needed to highlight the
developersD customer focus, help them build their brand and improve market
perceptions. In addition, a rating also helps a developer to benchmark his
services with the industry. !inally, a rating not only provides comfort to customers
but also to financial institutions besides enabling the developer to access funds.
"eveloper &ating - What it is and what it is not
It is not a credit rating of developers, but a rating of their pro.ect
development track record and ability.
It is not a legal opinion on the pro.ect, but it reflects the variability in legal
risks.
It is not an opinion on architectural design, but comments on the buildingDs
safety, inhabitable +uality and adherence to norms.
It is not an opinion on the adherence to costs, but assesses the impact of
cost overruns on the pro.ect
Affiliation $ith Naredco
*&IBI1 has conceptualised the methodology for the real estate developer rating
in consultation with and after incorporating the relevant suggestions and
recommendations of the )ational &eal 'state "evelopment *ouncil
/)&'"*:0. The rating process has been developed after taking into account
the specialised needs of the sector. *&IBI1Ds association with )&'"*:
enables it to leverage the latterDs expertise and experience.
The )ational &eal 'state "evelopment *ouncil /)&'"*:0 is the apex national
body of real estate developers. It is a self-regulatory body that aims to inculcate
ethics and a code of conduct into the profession. Its members include the
minister of urban development and food and consumer affairs, public sector
organi,ations and practitioners from the real estate sector. )&'"*:Ds mission
is to improve the confidence level of lenders, investors and consumers by
bringing in professional practices through self-regulation and ultimately catalysing
the growth of the sector.
%enefits of real estate de"eloper and project ratings
&eal estate developer ratings will offer a useful comparative tool to the industry.
The specific benefits to each of the constituents is outlined below:
#eal &state !e"elopers
"eveloper &ating gives real estate developers a tool to highlight their strengths
in legal procedures, pro.ect execution and marketing. It can thus be used to
command a better price.
-ro.ect and developer ratings increase visibility and substantiate the informal
word-of-mouth mode of appraising developers. This formali,ed process of
assessing capabilities provides comfort to investors, especially non-resident
Indian /)&I0.
The rating also acts as a benchmark for developers and helps them to identify
their shortfalls vis-N-vis the best practices in the industry. This will lead to
continuous improvements in +uality and services levels.
!urther, a good rating can also help developers to mobili,e institutional funds and
other financial services for their pro.ects and enhance their ability to market the
pro.ect.
'ustomers and (n"estors
good rating provides customers and investors the comfort that the rated
developer has a good demonstrated track record and that the pro.ect will be
completed on time with a clean marketable title transferred to him.
The rating also provides a higher level of security for investments, especially
those that have been made during the construction phase, thereby reducing
post-investment dissonance.
%an)ing, Financial and *ending (nstitutions
=istorically, given the sectorDs risk profile, institutions have been apprehensive
about lending to the housing and construction industry. good rating gives an
independent third-party opinion on the developerDs performance and ability to
mitigate the high construction and market risks inherent in the sector.
Go"ernment and #egulators
The rating service gives an incentive to developers to maintain standards with
respect to legal and construction practices. This is expected to facilitate the
orderly growth of the sector, leading to a self-regulated industry framework.
To sum it up, India is all set to take on the real estate storm in a determined
manner at least for the next twenty years basking in the glory of being the hub for
real estate. &esidential properties seem to rule all the metros as more and more
people agree with the idea of investment property. 7ore than 45 percent of the
development in real estate comprises residential properties while the remaining
<5 percent is held by offices, hotels, shopping malls and hospitals. 'ven though
residential properties hold the ma.or share, there is still a dearth of houses for the
middle and lower classes.
+orld has come to recognize real estate or propert in"estment as the
safest in"estment on the earth, (t has man benefits, People go for real
estate $hen the $ant to in"est their hard earned mone safel,
c+uisition of real estate is an excellent investment strategy regardless of
whether the purchase of your main family home or .ust buy for investment
purposes. 6ut finding and buying the ownership of real estate investment return
or lease is one of the most difficult facing investors. #eal estate mar)et is a
de"eloping countr li)e (ndia has gone up considerabl,
#eal estate in"estment is capital intensi"e in"estment, -ou need mone
upfront to transfer the propert,
ffordable housing is the bu,, word in the real estate industry today. It refers to
housing units offered by developers at prices which are within the budget of low
and middle income groups of a society. With an ever mounting growth in urban
population, the demand for affordable housing is witnessing a constant rise.
There is a gap of <?.E million houses in this segment which needs to be
addressed, keeping in mind the biggest challenge of rapid urbanisation.
There is also a need to develop innovative ways to reduce construction costs
without compromising on the +uality of housing. There is also an urgent need to
look at the use of newer, energy efficient, environment friendly materials and
innovative construction technologies.
n affordable house has all the basic amenities to cater the daily needs of the
household and at the same time it should be cost effective and within the reach
of the maximum number of people. s per the market trend, 'xotica =ousing has
also introduced affordable houses and has tried to make the product cost
effective by in-house planning, introducing cost effective techni+ues and adhering
to the construction schedules which definitely saves the cost.
:n the other end, they have tried to avoid luxury kitchens and other accessories
in the units without disturbing the comfort of the customers. This has not only
helped them in using the +uality product adhering to the time line but at the same
time establishing their brand as a front runner in providing the affordable houses
to the customers.
!or <5A5-AA, 'xotica =ousing would focus on an integrated marketing
communications approach, #to further enhance their brand e+uity, generate leads
and sales en+uiries, and reassure the consumer that they are a high-+uality
player with significant focus on delivery. The planned spend for the next financial
year would be based on #target sales and would be distributed appropriately
across channels to optimise their cost of sale$.