project report grp(a08) (1)

8/7/2019 project report grp(a08) (1)

http://slidepdf.com/reader/full/project-report-grpa08-1 1/16

ASIA PACIFIC INSTITUTE OF

MANAGEMENT STUDIES

NEW DELHI

BUSINESS IN REAL

ESTATE

SUBMITTED TO: Dr. ARUN DRAVIUM

SUBMITTED BY: GROUP (A08)

RAHUL KUMAR (A25)

VARUN TYAGI (A43)

VISHAL SHARMA (A53)



CERTIFICATE

This is to certify that the projectBUSINESS IN REAL ESTATE is

submitted by group A08 is partialfulfillment by the 2nd trimestercourse from “ASIA PACIFIC

INSTITUTE OF MANAGEMENT

STUDIES” an original mark has

done under the guidance of Dr.ARUN DRAVIUM. This project hasnot been submitted anywhere inany form.



Real Estate in India

With property boom spreading in all directions, real estate in India is touchingnew heights. However, the growth also depends on the policies adopted by thegovernment to facilitate investments mainly in the economic and industrial sector.The new stand adopted by Indian government regarding foreign direct investment(FDI) policies has encouraged an increasing number of countries to invest in

Indian Properties.

India has displaced US as the second-most favored destination for FDI in theworld. As the investment scenario in India changes, India which has attractedmore than three times foreign investment at US$ 7.96 billion during the first half of 2005-06 fiscal, as against US$ 2.38 billion during the corresponding period of 2004-05, making India amongst the "dominant host countries" for FDI in Asia andthe Pacific (APAC).

The positive outlook of Indian government is the key factor behind the suddenrise of the Indian Real Estate sector - the second largest employer after

agriculture in India. This budding sector is today witnessing development in allarea such as - residential, retail and commercial in metros of India such asMumbai, Delhi & NCR, Kolkata and Chennai. Easier access to bank loans andhigher earnings are some of the pivotal reasons behind the sudden jump inIndian real estate.

Why Invest In Indian Real Estate?Flying high on the wings of booming real estate, property in India has become adream for every potential investor looking forward to dig profits. All are eyeing

Indian property market for a wide variety of reasons:

• It’s ever growing economy which is on a continuous rise with 8.1 percentincrease witnessed in the last financial year. The boom in economyincreases purchasing power of its people and creates demand for realestate sector.

http://www.indianground.com/india_properties.aspx

http://www.indianground.com/kolkata.aspx

http://www.indianground.com/chennai.aspx

http://www.indianground.com/

http://www.indianground.com/kolkata.aspx

http://www.indianground.com/chennai.aspx

http://www.indianground.com/

http://www.indianground.com/india_properties.aspx



• India is going to produce an estimated 2 million new graduates fromvarious Indian universities during this year, creating demand for 100million square feet of office and industrial space.

• Presence of a large number of Fortune 500 and other reputed companies

will attract more companies to initiate their operational bases in India thuscreating more demand for corporate space.

• Real estate investments in India yield huge dividends. 70 percent of foreign investors in India are making profits and another 12 percent arebreaking even.

• Apart from IT, ITES and Business Process Outsourcing (BPO) India hasshown its expertise in sectors like auto-components, chemicals, apparels,pharmaceuticals and jewellery where it can match the best in the world.These positive attributes of India is definitely going to attract more foreign

investors in the near future.

The relaxed FDI rules implemented by India last year has invited more foreigninvestors and real estate in India is seemingly the most lucrative ground atpresent. The revised investor friendly policies allowed foreigners to own property,and dropped the minimum size for housing estates built with foreign capital to 25acres (10 hectares) from 100 acres (40 hectares). With this sudden change ininvestment policies, the overseas firms can now put up commercial buildings aslong as the projects surpass 50,000 square meters (538,200 square feet) of floor space.

Indian real estate sector is on boom and this is the right time to invest in propertyin India to reap the highest rewards.

Indian economy

India is the fourth largest country in terms of purchasing power parity.GDP growth accelerated by 8-9%.

Investment of US$ 16 billion required in the next five year in infrastructure.Real estate sector is registering an annual growth rate of 30%. Investment of US $16 billion is expected in real estate sector for the next five to six year.Credit to the housing sector has continued to be strong and benefited to below interest rate and incentive.1.1% of GDP constitute FDI in real estate sector.

http://www.indianground.com/investments.aspx

http://www.indianground.com/investments.aspx



Returns in India range between 12-16% compare to 3-5% in advance foreigncountries.It has forecast that Indian real estate sector will grow to US $90 by 2015.

India’s Growth Story-Strong FundamentalsMacro - Economic Indicators• Avg. GDP growth of 6% in last decade; Currently 8%• Domestic savings – 24% of GDP• Foreign Exchange Reserves – US $ 140 bn

• Inflation around 4.1% in FY2006• Population growth rate – down to 1.6%• Literacy – 65% (Census 2001)Foreign Investments_ FDI inflows $ 7.5bn in FY 2006 (40% y-o-y growth)_ FII inflow $30 billion in last 3 years (2004 to 2006)Foreign trade• Exports - $ 101 bn in FY2006 (25% y-o-y growth)• Imports - $ 140 bn in FY2006 (32% y-o-y growth)

Growth driver in real estate sectorThe robust growth in IT sector has pumped growth in real estate sector. Anestimate of the 70% new construction is for the IT sector.Retail sector has grown at very fast pace. India has been ranked as 5th in thelist of 30 fast emerging country in retail market and 20% growth is predictedfor organized retail segmented by 2010.

Spiraling demand of hotel room has brought boom in hotel industry. Thedemand supply mismatch will remain over 50% beyond 2009, generatingsubstantial business for real estate.



(1). Housing shortage in India

(2). Reducing family size



(3). Rising middle class income

(4).Improve affordability



Noida Real EstateGreater Noida is a known planned township situated in proximity to the India'sCapital city, Delhi. As such, the area falls within the NCR region and is adjacentto Noida, the first industrial township in Asia. It is a township developed on theoutskirts of NOIDA, is mainly to cater to the phenomenal influx of population intothis region in the last few years.

If Noida boasts of a vigorous growth as far as real estate is concerned, Greater Noida indeed tops the chart in real estate development. Much development hastaken place here during past years, making Greater Noida an attractivedestination for prospective investors. Greater Noida has shed its old area tag andis on the verge of emerging as a fast developing infrastructure support system.

Property market in Greater Noida is flourishing at a tremendous pace. Whether talk about residential property or commercial, both are raising sky high and thattoo with rocket speed. The demand for property is outstripping supply therebyresulting in an increase in rental and property prices.

What adds on to real estate value of Greater Noida is its proximity to Noida andalso its pollution-free environment. Indeed, the authorities do not permit pollutingindustries to set their establishments here. There are laboratories for measuringambient air quality. With a multitude of construction projects budding in this twincity of Noida, its infrastructure is metamorphosing from better to excellent.

A lot of quality constructions are expected to be coming up in the residentialmarket of Greater Noida. Adding to the living standard are improvedinfrastructural facilities like wide roads, proper underground cabling and excellentdrainage system. A number of shopping avenues featuring world class brandsand outstanding services also make Greater Noida an attractive destination for investors.

One of the major reasons why people are mulling over investing their money inGreater Noida is the escalating prices in Noida. The rate of property in Greater Noida range between Rs 2,400-2,800 per sq ft m as compared to Noida whereasthe rate of built up property is no less than Rs. 3.500 per sq ft. Likewise, land

http://www.indianground.com/noida/about-noida.aspx


http://www.indianground.com/residential-properties.aspx


http://www.indianground.com/residential-properties.aspx



rates in Greater Noida hang between Rs 16,000 - 22,000 per sq m whereas it isbetween Rs 35,000 - 65,000 per sq m in Noida.

Noida is also establishing itself as an attractive value proposition for commercialproperties. One of the most significant sector gaining high market value in the

commercial phase of into view, is the IT and ITES sector. It is believed to be thekey driver for the office market which accounted for a major portion of the over alloffice absorption.

Alpha, Beta, Gamma, and Delta enjoy reputation of being well-settled sectors inNoida. Here the going rates for land range between Rs 16,000 - Rs 18,000.Following in ranking are P3 and Swarna Nagri, where the property prices areslightly high. Top real estate developers like Unitech, Eldeco, Ansals, Omaxe,Parsavnath, Assotech have established their presence in Greater Noida.

Adding more to its investment features are better connectivity like plans to build

an international airport and connecting by Metro Railway. Undoubtedly, Greater Noida is riding on growth wave and promises to set new benchmarks.

Real Estate Greater Noida - Buy, Sell, Rent Properties, Commercial, ResidentialLand, Plots, Apartments, Flats, Office and Retail space from reputedbuilders/developers by our qualified real estate agents with extensive experiencein Greater Noida properties.

FDI in Real Estate

Till recently, FDI in real estate was restricted to development of industrial parks,hotels, integrated townships and SEZ’s.

On March 3, 2005, Government of India replaced the integrated township policyto permit FDI up to 100% in townships, housing, built-up infrastructure &construction - development projects, under automatic route (Press Note 2 (2005series))

FDI is now permitted in:

townships housing

commercial premises

hotels

resorts

hospitals

industrial park

http://www.indianground.com/builders/

http://www.indianground.com/builders/ansals/new-developments.aspx

http://www.indianground.com/builders/omaxe/omaxe.aspx

http://www.indianground.com/noida/noida-future.aspx

http://www.indianground.com/noida/residential.aspx

http://www.indianground.com/builders/

http://www.indianground.com/builders/ansals/new-developments.aspx

http://www.indianground.com/builders/omaxe/omaxe.aspx

http://www.indianground.com/noida/noida-future.aspx

http://www.indianground.com/noida/residential.aspx



resorts

hospitals

educational institute

SEZ’s etc.

FDI in Real Estate – Aspects to be considered

Q. Minimum built up area in case of construction-development projectssuper built up area or covered (carpet) area?

A. May be governed by local regulations which is typically based by Floor Space Index (FSI)/ Floor Area Ratio (FAR)

Q. Requirement of minimum land area of 25 acres for serviced housing plots.Whether applicable to ‘constructed housing’?

A. Requirement of minimum land area of 25 acres is only for projects whereland developed with provision of common facilities & infrastructure for subsequent sale as plots for independent housing ie serviced housing plots. Byimplication, for ‘constructed housing’, criteria of minimum built up area of 50,000sq meters should apply

Q. Minimum capitalization requirement of US$ 5 million - Capitalizationrequirement for JV company or minimum capital contribution by foreign investor?

A. Refers to capital to be brought in by the foreign investor in the JVCompany



Tax environment – Developers

Industrial parks

10 year tax holiday (in a block of 15 years) on profits derivedfrom developing, developing & operating, maintaining &operating industrial parks in India, developed before March 31,2006

Tax holiday available subject to obtaining Government approvalunder Industrial Park Scheme, 2002 & subsequent notificationby Central Board of Direct Taxes

Special Economic Zones

10 year tax holiday (in a block of 15 years) on profits derivedfrom developing SEZ’s in India, notified on or after April 1, 2005(as per SEZ Bill 2005)

Tax holiday available subject to obtaining Letter of Permissionfrom Board of Approvals in the Ministry of Commerce andnotification by Central Government

Housing projects

Income tax holiday available to housing projects approved bylocal authority before March 31, 2007



Construction of project to be completed within 4 years from endof financial year in which approval is obtained

Residential unit should have maximum built up area of 1,000/1,500 sq ft (based on city of location)

Project should be on a plot of land which has minimum area of 1 acre Built up area of shops & other commercial establishments

included in housing project not to exceed 5% of aggregate builtup area of housing project or 2,000 sq ft, whichever is less

Section 10(23G)

Income from dividends, interest and long term capital gains bycompanies/ trusts from investments in shares/ long term finance(more than 5 years), of specified infrastructure developmentcompanies (eg engaged in industrial parks, hotels, housingprojects, etc) is tax exempt

However, MAT may apply on such income of investorscomputed @ 8.42% of book profits

In order to claim above exemption, the project company shouldbe notified by CBDT

Section 115O

Domestic companies declaring dividend liable to pay dividenddistribution tax (‘DDT’) @ 14.025%

DDT is in addition to regular corporate tax payable bycompanies @ 33.66%

How to get a House/Plot?



a. Eligibility for applying in U.P Housing &Development Board.b. Procedure for applying in U.P Housing &Development Board.

c. Rules for registration in U.P Housing &Development Board.d. Allotment in U.P Housing &Development Board.

Eligibility for applying in U.P Housing & DevelopmentBoard

1. There is no income limit for applying for home in U.P Housing & Development Board.

2. Applicant must be 18 years old at the time of filing an

application.3. Applicant or his/her family must not be owning any other plot or

house in the city where a house is allotted to him/her. Apartfrom this the applicant or his/her family must not own more than

one plot or house in the entire state.

4. At the time of allotment or any time after the allotment, theapplicant or his/her family must not own the property more than

specified under Urban Land Ceiling and Regulation Act-1976including the property allotted by the Housing Board also.

5. If the applicant or anyone in his/her family is registered earlier

as well under different scheme and in the mean time is allottedthe plot/house in that earlier scheme then that allotment or this

new registration will be cancelled.6. Those people registered earlier with the Housing Board under

any category and have not been allotted the plot/house can

register themselves for the new scheme by paying the balanceregistration amount. The interest earned on earlier deposited

registration amount will be settled in the last installment to be

paid.

Procedure for applying in U.P Housing & DevelopmentBoard

1. Application form along with challan (4 copies) attached in the

application booklet should be duly filled. This should be



submitted along with the registration amount in cash or bankdraft payable to U.P Housing & Development Board in the

respective city's approved bank before the last date mentionedin the form. In case of bank draft it should be noted that it

should be encashed in the same city only where the application

form is submitted. The 4th copy of the challan will be returnedback by the bank which should be kept safe.

2. If the application letter is deposited by post then it should benoted that the letter alongwith the bank draft and the challan

duly filled should reach before the last date to Indian Overseas

Bank, 3-Vidhaan Sabha Marg, Lucknow - 226001 by registeredpost only. The bank will send the 4th copy of the challan back to

the applicant by post which should be kept in safety.

3. Registration amount should be deposited either in cash or in

terms of bank draft in the respective bank. Incomplete and late

submitted forms will not be entertained.

Rules for Registration in U.P Housing & DevelopmentBoard

1. Registration cannot be done for more than one or joint names.

Joint registration is valid in the case of husband-wife only. Inspecial cases registration can be transferred in the name of

husband/wife or close blood relations as per the rules of theHousing Board. Application of the person other than the

registered person will not be entertained.

2. Registration is done in the name of applicants personally not inthe name of certain society etc.

3. Board is not bound to allot the houses/plots to every registrationholders. Those who are not allotted the land/house by the Board

are not entitled to claim the dues/amount spent.

4. If no. of registrations are higher than the available plots/landthen old registration holders will be preferred over the new ones.

In general category allotment is done through lottery system.5. No interest will be paid on the amount deposited for registration

with the Board. If any person cancels his/her registration and

wants the amount back then the amount is returned back bydeduction of 20% and that too without any interest. at the time

of cancellation 4th copy of challan received from the bank at thetime of registration has to be deposited.

6. If Board cancels the registration then the registration amount isreturned without deduction of penalty. If the amount is returned

after 1 year then the simple interest at rate of 6% is paid.



Allotment in U.P Housing & Development Board

1. Normally every registration holders will be allotted a plot/house.

2. Allotment of houses/plots will be based on lottery system.Normally the allotted property will not be changed/transferred.

In certain circumstances, the Housing Commissioner can changethe allotment by charging 5% amount of total expenditure.Property is allotted on "As It Is and Where It Is" basis. The

dispute on quality of property will not be entertained after theacquisition of the property. If anybody doesn’t acquire the

property after it is allotted to him due to certain reasons and theHousing Commissioner accepts his/her application then the

deposited registration amount is returned back cutting the

penalty of 20%.3. Under normal circumstances the allotment of the property is

done within 3 years from the date of registration. If due tounavoidable reasons the construction of the houses is delayed

then the Board will not be responsible and no interest will be

given on the amount paid.4. Allot tee cannot sell or transfer the property allotted to him/her

without prior permission from the Housing Board.5. The land of the allotted houses will be on leasehold. The lease

would be of 90 years and will be renewed thereafter every 30

years. The annual rent for lease would be 0.25% of the presentland rate. Housing Board can increase it as well.

6. The decision of the Housing Commissioner in case of any dispute

in registration or allotment will be the last and final. The HousingCommissioner has the right to change the prerequisites

described as per his/her will.

.

project report grp(a08) (1)

Documents