INDIAN REAL ESTATE MARKET

Done by:SaurabhSanthanamDiptiBasheerAsha

AGENDA Overview Noida Real Estate Market Locational Analysis Sectors( 74-79) Trends Growth Drivers Conclusion

INDIAN REAL ESTATE MARKET Real estate is the second largest employer after agriculture and is slated to grow at 30 per

cent over the next decade. The Indian real estate market has become one of the most preferred destinations in the

Asia Pacific1 as overseas funds accounted for more than 50 per cent of all investment activity in India in 2014, compared with just 26 per cent in 2013.

Real estate market is expected to touch US$ 180 billion by 2020. The housing sector alone contributes 5-6 per cent to the country's Gross Domestic Product (GDP).

In the period FY08-20, the market size of the sector is expected to increase at a Compound Annual Growth Rate (CAGR) of 11.2 per cent.

The Government of India along with the state governments has taken some initiatives like the Smart City Project, where there is a plan to build 100 smart cities.

NOIDA REAL ESTATE MARKET(1/2) NOIDA (New Okhla Industrial Development Area), spread over an area of 20,316 hectares, is

under the management of the New Okhla Industrial Development Authority having a balanced combination of industries and habitation with good infrastructural facilities..

It is located in the state of UP which is about 15km’s from the heart of Delhi. NOIDA earmarked roughly 710,000 sq. m. land for different industries. There are 6,014

manufacturing units operating out of this area. With an investment of INR 127.1 billion, these industries provide employment to about 95,000 people.

About 35.66% of Noida’s area is being earmarked for residential development. In the decade ahead, Noida plans to acquire and develop 3,400 hectares of land, out of

which 430 acres for residential, 620 hectares for commercial, 650 hectares for industrial and 200 hectares for institutional purposes.

Another 300 hectares of land has been assigned for development of recreational purposes, which would include entertainment parks and cultural activities. 125 hectares of land would be utilized for road transport facilities.

NOIDA REAL ESTATE MARKET(2/2) As an industrial hub, Noida experienced residential and retail developments as a part of its

planning. However, the surge of IT industry in this market changed the prospects of Noida as it experienced large scale infrastructure developments along with overall real estate developments.

Though the sentiment in the Noida market has been subdued because of the deliveries not happening as per schedule. In the recent times the occupancy rates starting to rise in this area.

Noida Authority has also started working on the last mile infrastructure developments such as electrification, water supply, roads etc.

The major malls operational in Noida are Unitech's Great India Place, Centre Stage, Supertech Shopprix, Sab mall and Spice World Mall. Unitech and DLF are coming up with new high-end malls in Noida.

Developers like Prateek Group, Wave Infratech, 3C Company, Supertech and Lotus Greens have launched super-luxury projects with 3 - 5 BHK apartments of 2,000 - 4,000 sq. ft. priced in the range of INR 1 crore to INR 3 crore in this market.

The point of investment in this area is the fact that compared to other NCR region’s NOIDA is well placed in terms of price which is expected to get good appreciations and better ROI.

LOCATION ATTRACTIVENESS INDEX

SECTOR-74Segment

Residential Commercial

Budget FriendlySemi-Luxury

Luxury&Ultra luxury

Group Housing.35 acres ranging from 47L to 1.4Cr.95% Occupancy.

ORB Homes5 acres ranging from 1.5 to 3Cr.

North Eye6 acres 1.6Cr-3.8Cr70% Occupancy

RITZ Villas4 acres of 12 to 18Cr.50% occupancy

NO POSSESSION YET

Dominated by single player. Supertech group.

Out of 4800 flats only 60-75 are not sold. Which makes vacancy only 1.5%(approx.)

SECTOR-75 Segment: Both residential and commercial. It is an economical area which is budget friendly. Prominent Developers Includes

Gardania GatewayGolf City

The sector constitutes of 152 acres. Flats start with a min of 2BHK where the average sq ft is 1045. All the properties are valued based on super built model. The average cost per Sq Ft is 4400. Vacancy loss is about 20% of the total constructed area. Usually the construction period takes about 3-4 years and there are no new projects in the

foreseeable future. This is the only sector of our confined area, which offers properties for rent. The rental cost of 2BHK is 12000 and 3BHK is around 15000 wherein the average area is about 1265

and 1700 Sq Ft. Payment Slab: 10(B)-60(B+50)-30(Possession).

SECTOR-76 Segment: Only residential. Budget segment where the cost is 5000 per Sq Ft.(approx.) Highly competitive area which makes it advantageous to the consumers as some developers

offer 100-200Rs discount per Sq Ft to cope up with the market. Prominent Developers Includes

PrateekSupertekAjanara

The sector constitutes of 152 acres. Flats which are of 2BHK ranges from 1015 to 2340 Sq Ft. All the properties are valued based on super built model. Vacancy loss is roughly about 10% and it varies from developers to developers. The average time for construction is about 2.5 to 3 years with +/- 6 months. No leasing or renting is being done. Payement slab- 10(B)-85(B+45)-5(Possession).

SECTOR-78 Segment: Residential and commercial. Caters to all categories such as luxury, budget class and ultra luxury buyers. The cost structure ranges from 5300-7000 per Sq Ft. The amenities are based on the class of property. Prominent Developers Includes

MahagunAdityaAmrapaliPrateekNimbusAsotek Etc

Area of a single flat ranges from 1150-6000 Sq Ft. All the properties are valued based on super built model. Vacancy loss is about 30%. Few of the category is still under construction. No leasing or renting is being done. Even the commercial properties are being sold. Payement slab- 50(B)-25(B+45)-25(Possession).

TRENDS OBSERVED In almost all the sectors, the amount of developers were very limited and are closely related

to each other. Since Government norms are stringent almost all facilities seems like properly maintained

( like water, drainage, security system, electricity etc) Though the developers suggested that almost all the flats are occupied there is a too much

deviation from the secondary vacancy data. And we also felt that it is a bogus figure. Many flats are still under construction . Though some of the developers deliver the possession on a timely basis many aren’t doing

so which makes this a challenge for the Noida Real Estate Market. No developer offers flexibility to the consumers in terms of deciding the structure of his flat. Every developer feels the heat of the Real Estate Regulatory Bill. Though some didn’t

accept it explicitly few did so. Few developers felt that the bill would in fact benefit them in many aspects such as

ascertaining the actual value, gaining credibility and adhering to the principles.

GROWTH DRIVERSThe proposed agreement between DMRC and Noida Authority for construction of metro link in Noida would allow the commuters to reach wherever they want without any difficulty.METRO CONNECTIVITY

Upcoming projects such as Taj Economic Zone and Export Promotion zones would enhance the economic development of this region.

Presence of Software Technology parks

Well developed social infrastructure where DND Flyovers, 8 Lane express way and Yamuna Expressway would ease the traffic flow and helps in better connectivity.

Improvements in Road Networks

Economic Stability India is expected to grow at a very good rate which would lead to increase in the personal income levels.

CONCLUSION The inventory built up can also be attributed to the slowing down of the economy over the

years. With the recent turnaround and an expected economical stability and growth real estate

can be of good opportunity for an investor to get a decent ROI. NOIDA is at a competitive advantage over other NCR regions since the valuations at other

places are sky-rocketing and the level of pollution, congestion is also less in NOIDA comparatively.

Anyone having a long term horizon can enter this market.