Sonar Bangla The Real Estate Industry Reaping

Gold

A presentation by kolkataproperties.in

May 2008

India – Real Estate Scenario

Introduction

• The Indian economy and the real estate sector in particular are high on its ride to prosperity

• Maximum growth is attributed to its growth from the booming IT sector, since an estimated 70 per cent of the new construction is for the IT sector

• Selling and buying Indian property is now considered as the most profitable and attractive business opportunity in the present real estate scenario in India.

Real Estates - The Most Popular Investment in India

• Key Facts:

– Data showcased by property surveys show that returns from rental incomes on investment in commercial property in Indian metros, is around 10.5%, the highest in the world.

– Capital values in the residential sector have risen by about 25-40% p.a in the last 2 years.

– The retail market in India has been growing due to increasing demand from retailers, higher disposable incomes and opening up of FDI in Retail. The capital appreciation in this sector is close to 20-35% p.a. Changing consumer behavior combined with increasing disposable incomes will ensure further growth of the retail sector in India impacting the real estate industry.

Real Estates - The Most Popular Investment in India

• Key Facts:

– An upward swing on the real estate price values has resulted in investment and speculative interest

– Excess money supply, stock market gains and policy changes are adding to the trend in favor of the real estate sector

– In the last one year, the capital values of the commercial office spaces has increased by up to 40% - the increase in the demand from IT / ITES and BPO sector across major metros in India

– India has a distinct regulatory and financing management in place

– Real estate boom in India is supported by its own flourishing economy on a sustainable basis

Why India? - Factors Favoring Investments

• Phenomenal price escalation (more than 100% in several places) in last couple of years - – Tremendous growth has been taking place in both residential

as well as commercial segments that is attracting huge investments

• Lower interest rates

• Easy availability of housing finance

• New demands have added to strength of real estate markets across the commercial, residential and retail sectors in India

– Increase of nuclear families have given a boost to the demand for residential properties

– Burgeoning income and better job prospects

Kolkata – Real Estate Scenario

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2000

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10000

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North Central North Central East North East South Central South North West West

2004

2005

2006

2007

2008

The Escalation Scenario in Kolkata for last 3 Years.

Year 2005 2006 2007 2008

KOLKATA Real Estate Escalation in Percentage from the previous years

Location

North 33 38 41 45

Central North 80 11 17 43

Central 20 67 40 71

East 31 47 20 33

North East 30 54 50 60

South 22 25 27 57

Central South 20 67 40 71

North West 25 33 35 48

West 25 33 28 4

Key Facts

• Kolkata property market has been growing by leaps and bounds and is today one of the most lucrative investment destinations in the state

• The city has attracted around 25,000 crore in real estate over the past two years

• Gujarat real estate wins the second position whereas Maharashtra comes third after West Bengal

• As compared to other Indian metros, Kolkata offers cheap cost of living which serves as its biggest attraction. Despite such a high growth, the prices of essentials in the city are much lower

Key Facts

• Improvements in the city will pave way for more investments and make the investors feel confident about selling their real estate projects

• Kolkata in any case will add up to 250 million sq ft of built up space, for which an investment of more than Rs 37,500 has been earmarked.

• The demand for properties are shooting up in areas such as Greater Kolkata comprising Garia-Narendrapur, Behala-Joka, Rajarhat, and Howrah

• No slump has yet been identified in the growth as there is a huge housing shortage in the country. Kolkata possesses an untouched potential and is likely to see an astronomical growth of 25-30 per cent in very near future

Key Facts

• The real estate sector in West Bengal never had it so good, and things are getting better by the day. This is primarily due to the unique and innovative public-private partnership model that has been put in place by the West Bengal Government

– The model, whereby joint sector companies have been formed with organised real estate developers in the private sector and the West Bengal Housing Board (WBHB) as partners, has helped unlock vast tracts of urban land, the development of which would otherwise not have been possible on account of urban land ceiling laws

– The cross-subsidy model provides for creation of housing stock

for those belonging to higher, middle and even low-income groups. For housing stock for higher income groups, developers are permitted free pricing while for the middle-income groups, they have to be sold at no-profit-no-loss basis. For lower income groups, the housing stock has to be sold at lower-than-cost.

Reasons for Growth in Kolkata – Real Estate

• INVESTORS – While the evolution of the real estate industry has been

gradual, it has lately attracted large foreign and domestic players and venture capitalists. It's growth has been propelled by the burgeoning IT sector in the State

– Contrary to earlier notions, with the organized and professional players joining hands with WBHB, the industry now is transparent and accountable

– The cross-subsidy model has been very successful. Importantly, it has found acceptance across the political spectrum

Reasons for Growth in Kolkata – Real Estate

• BOOM SPREADING OUT – Interestingly, the real estate boom is not confined to Kolkata

and its periphery, where the burgeoning IT sector is seen as the main propeller of demand for commercial space and housing stock

– In tier II cities such as Durgapur, Siliguri and Bardhaman, too, there is a growing demand for housing stock, commercial space and space for niche requirements of sectors such as retail, education, hospitality, medical, etc

– Bengal Shrachi is developing a 10 million sq.ft township in Bardhaman while Bengal Ambuja Housing Development Ltd is developing housing stock and retail space in Siliguri, Haldia and Shantiniketan. Bengal Shristi had joined hands with Asansol Durgapur Development Authority for Asansol and Durgapur

Reasons for Growth in Kolkata – Real Estate

• Besides the boom in the IT sector, several other factors are cited for the growth of the West Bengal's real estate scenario– They include access to quality housing - with amenities such as

lounges, clubs, gyms, swimming pools, spas, etc

– A growing middle class, double-income and nuclear families – High disposable incomes, access to easy home finance and

upwardly-mobile lifestyles and growing aspirations

"Seven years ago, the first-time home buyer was in the 35-40 age group. Today, he is barely 27-28," says a renowned builder, adding that "earlier the norm was one car park for every two flats. Today, it is the other way round"

– In the commercial space, the accent is on large-format offices.

Reasons for Growth in Kolkata – Real Estate

• Also other factors being

– Lower land acquisition cost

– Attractive government initiatives

– Lower asset prices

– Availability of scalable infrastructure

Price Escalation - Kolkata

• Prices of Kolkata real estate have shown a steep upward graph especially in South and South central Kolkata where the price per square feet has risen a mind blowing Rs 800 in just six months

– For example real estate prices in Bhawanipore has risen to Rs.3000 from Rs.2,200 in only six months

– The unprecedented price rise in Kolkata Real Estate is seen in south Kolkata localities like Ballygunge, Prince Anwar Shah Road and Elgin road

• The other boom areas are the Eastern Metropolitan Bypass area and the new Rajarhat township

• The factors behind such a steep rise in select localities are the limited availability of real estate options, successful retail and commercial projects and improved connectivity with improved urban road build quality. There is also an abstract reason- aspirational quotient of the consumer

Summing Up

• All these factors make Kolkata Real Estate a magnet of premium developers from all over India and abroad

• Foreign real estate investors makes Kolkata Real Estate as their first port of call

• Kolkata real estate has huge potential demand in almost every sector, but especially in commercial, residential and retail

Prominent Names

• DLF– The Indian real estate giant, is planning to invest Rs 100,000 crore in

Kolkata and Dankuni real estate projects over next few years; Tower-I of DLF’s first IT Park in Rajarhat has already been bought by IBM.  It is a Rs 350 crore project to include two more towers, thereby adding up to 1.3 million sq ft

• Ascendas– Singapore-based Ascendas is planning to invest Rs 400 crore for a 2

million sq ft IT park in the city

• Unitech– Coming up with Uniworld City in Rajarhat – a 100 acre project and

Unitech Gateway in Kona Expressway – 36 acres

• Keppel Land, Shrachi and Mani Group are also playing a key role of real estate development in the city along with several other promoters

Snapshots of Kolkata – Today and Tomorrow

Bel Air, New Alipore

DLF, New Town

Technopolis,Sector V

Tomorrow Today

Snapshots of Kolkata – Today and Tomorrow

Unitech Gateway, Kona Expressway

Kolkata West International City

Tomorrow

Tomorrow

Snapshots of Kolkata – Today and Tomorrow

Uniworld City, Rajarhat South City, Prince Anwar Shah Rd

Tomorrow Today

Snapshots of Kolkata – Today and Tomorrow

DLF IT Park, Action Area IRosedale Gardens, Rajarhat

Tomorrow Today

XANADU

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THE AIR

AND MANY MORE SIMILAR PROJECTS IN THE PIPELINE

• Let your investment destination be now for Kolkata , India - where the growth is steady and money is safe.