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SWOT ANALYSIS OF REAL- ESTATE INDUSTRY IN INDIA

PRESENTED TO-Prof. Vinita Srivastava

PRESENTED BY-Vicky NishadSec-B,PGDM(2013-15)

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SHORT INTRODUCTION TO INDIAN REAL ESTATE INDUSTRY

•The Indian real estate sector has come a long way and is today one of the fastest growing markets in the world. It comprises four sub-sectors – housing, retail, hospitality, and commercial. While housing contributes to five–six percent of India’s gross domestic product (GDP), the remaining three sub-sectors are also increasing at a fast pace. The total realty market in the country is expected to touch US$ 180 billion by 202O.•. It is currently the fourth largest sector in the country in terms of FDI inflows.

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•Total investment by private equity (PE) funds in the real estate sector from January–March 2014 was approximately Rs 28 billion (US$ 465.19 million).

•This is a substantial increase of 28 per cent compared to the previous quarter and close to 2.5 times the investments during January–March 2013.

•contributes about 5 per cent to India’s GDP.

CONT.

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OBJECTIVES OF THE STUDY •To study the internal strengths and weaknesses of Indian Real estate industry

•To Find the opportunities and threats of the industry.

• To Explore the current status.

•To determine the future expectations from the industry.

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MARKET SIZE AND FUTURE EXPECTATIONS

•The market size of the Indian real estate sector stood at US$ 55.6 billion in 2010–11 and is expected to touch US$ 180 billion by 2020

•The market size of real estate in India is expected to increase at a CAGR of 11.2 per cent during FY2008 – 2020.

•New launches in the residential segment during the first quarter of 2014 has increased by 43 per cent at 55,000 units across seven major cities.

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Demand analysis of top 7 cities (‘000 units) 2010-14

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The housing and real estate sector is the biggest beneficiary of thebudget.

• The budget announced multiple measures like development of 100smart cities, foreign direct investment in realty – especially inlow-cost housing, tax concessions for Real Estate InvestmentTrusts (REITs), increase in allocation for the National HousingBank, and allowing slum development as one of the activities underCorporate Social Responsibility.

• These will directly affect the real estate and construction sectorpositively.

RESULTSIn addition, higher tax-exemption onhome loan interest could also helpincrease demand for houses.• These are much-required measures tothe sector, which has been affected bypoor demand and high costs

www.kotaksecurities.com

BUDGET 2014-15 IMPACT

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TOP PLAYERS IN THE INDUSTRY

•1987 by Mr Rohtas Goel. In 1989•Net sales at Rs 342 crore (US$ 56.90 million) for third quarter of FY14

•1958 by Shri Jaiprakash Gaur•constructed the 165-km-long, 6-lane Yamuna Expressway project from Noida to Agra. •Third largest cement producer.

•1988 in the (NCR) by Mr RK Arora.• 75 million square feet under construction

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•1972 by a group of technocratsProfit after tax of Rs 2,095.68 million (US$ 34.46 million) in FY 13•Area delivered – over 3 million square feet in FY 13•1st real estate to be part of the National Stock Exchange's NIFTY 50 Index

•1946 by Chaudhary Raghvendra Singh•revenues of US$ 1.4 billion (FY13)• Market capitalisation of US$ 7.2 billion•Developed 3,000 acre DLF City in Gurgaon

Web- http://www.ibef.org

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SWOT ANALYSISSTRENGTHS

• domestic demand and the huge housing shortage.•Private sector housing boom and commercial building demands.•Low cost well- educated and skilled labour force is now widely available across the country.•Sufficient availability of raw material and natural resources in the country is supportive for the industry

http://www.indianrealtynews.com

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WEAKNESSES

•LACK OF REGULATIONS

•HIGH AMOUNT OF MONEY NEED TO BE INVESTED WHICH LEAD TO HIGH LEVEL RISK.

•PURCHASE AND MAINTENANCE EXPENSES OF CONSTRUCTION EQUIPMENT ARE HIGH.

•ABSENCE OF SALES/MARKETING EXPERTISE.

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OPPORTUNITIES

•EXPANSION IN TIER II CITIES

Along with metros smaller towns and cities are also expandingwould mean more development and more construction

•OFFICE SPACE GROWTH

office space will continue to grow companies and firms in various sectors will need quality work space this gives us immense growth potential.

•LACK OF DOMINANT COMPETITION

•TAX INCENTIVES FOR HOUSING INVESTMENTS

•SHORTAGE OF HOUSE IN URBAN AREAS.

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THREATS

•SKILLS SHORTAGE

The biggest challenge that the industry faces today is the fact that it faces an acute shortage of skilled professionals. As per RICS’ recent report Real Estate and Construction Professionals in India by 2020, India has nearly 50 million people working in built environment, of which only 2 million are professionally qualified, while the remaining are primarily construction workers.

•DELAYED APPROVAL OF PROJECTS

All the real estate projects have to pass through the government for approval regarding FSI,Land clearances and various other clearances from different government institution and in INDIA this process is very slow.

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