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• What relevance does Real Estate And construction hold in our economy?• Why has infrastructure getting the prime focus in the recent budget?• What has actually changed the face of Realty and Real Estate?• Who are the names behind this change?
• The strong fundamentals of the Indian economy are having a favorable impact on all asset classes of Indian real estate viz. housing, commercial – office space and retail and hospitality.• In recent years, the growth has spread out to tier-II and III cities as well.• High growth in services as well as manufacturing sector has resulted in high demand for commercial and industrial real estate.• Further the economic growth has trickled down to the large Indian middle class increasing affordability and affluence. Improving living standards are driving the demand for better quality housing and urban infrastructure.
Drivers for Growth of Real Estate & Construction
Rising TourismRise Of Real Decline ofMiddle Estate Joint Families Class Easy Availability of Finance
Fiscal Policy Real StrongRising FDI Estate Demographics Rise of Middle Class
First Time BuyersMedical Real InternationalTourism Estate Tourism Developme nt of new Stream of Business
OBJECTIVES Generation of Promotion of exports additional economic of goods and services. activities. Promotion of Creation of Development of investments from employment infrastructure facilitiesdomestic and foreign opportunities. in the country. sources.
Range ofThere has been a Government drastic benefits & curtailment in Liberalization of Reforms in the incentives restrictive FDI rules and the Integrated includingpolicies such as emergence of Township Policy. residential taxthe Urban Land real estate funds. breaks and the Ceiling and SpecialRegulation Act. Economic Zones.
DLF Group AnsalsParsavnath Developers Unitech Group K. Raheja
Founded in 1946 DLF Group is one of the biggest real estate giants Built many high-quality buildings across the country, specifically in Gurgaon Tied up with Hilton Group to build whopping 100 hotels in India over the next few years. In current expansion plans, DLF has over 425 million sq. ft. of development across its businesses, including developed, on- going and planned projects. Spread over 32 cities, mostly in metros and key urban areas across India
Founded by Lala Chiranji Lal Ansal By far most dominant activity of Ansals has been Real Estate Promotion & Development company has several landmark high-rise commercial building like Statesman House, Ambadeep, Antriksh Bhawan, Tolstoy House, Indra Prakash, Navrang House and Ansal Bhawan Ansals have also completed several residential buildings like Gauri Sadan, Upasana at Hailey Road & Dhawan Deep at Jantar Mantar road, all in the heart of New Delhi at Connaught Place.
There is the most prestigious “Ansal Plaza” Shopping Mall associated with its work Also it has made elite townships, Sushant Lok and Palam Vihar in Gurgaon and several other places all over the country.
It was incorporated on July 24, 1990 under the Companies Act, 1956 as Parsvnath Developers Limited. With more than two decades of experience in its repertoire, the group has already stamped its presence already in seventeen states and going Pan – India. It has made various developments in areas like GURGAON, Noida, South Delhi.
Plans to invest US$ 720 million in building hotels in the country Its partner for this venture is Marriott International. Carved a niche for itself in India with its sprawling properties and projects in Bangalore, Gurgaon, Noida, Greater Noida and Kolkata Unitech Group took over projects in International areas as well. Actively involved in construction projects of power plants, expressways, highways, transmission lines, classrooms, amusement parks.
Radisson Hotel, New Delhi has won accolades for its wonderful infrastructure, astounding interiors, ideal location and extra ordinary facilities for the distinguished customers. Rohini Amusement Park is also a creation of Unitech Group. The commercial complexes like Global Business Park, Signature Towers, Unitech Business Park and Unitech Trade Center and the launch of Millennium Plaza & Infocenter in Gurgaon have made Unitech Builder earn a good reputation in the industry.
DLF is the market leader in this sector with net profit of 1547 cr. It was way lower than its last year profit by more than 1000 cr. It was well supported by the timely launch of IPL. The share of this co. touched the all time high of 1227 in dec. 2007 which was just 6 months after its issue and now trading at 337.
Their profit declined by 81.24% in the last financial year over the last year. This is one of the badly hit company by the economic slowdown. 569 is the all time high of this company in 2006 and now trading at just 10% of its all time high.
Bankruptcy Of Investment Banks and Crash of US Economy The Housing Bubble BurstInvestment inReal Estate byPE Firms
•IT Infrastructure – Temples of Modern India•Townships•Programming Houses•Green Buildings
Skill Shortage.Non Availability of Statistics. Overvaluation of Property. Highly Fragmented. Lack of Transparency.
Bricks Prices Increase by 30-35 %Labour Rates High InterestEscalated to Rates 5-10 % CONSTRUCTION COST
Incompletion Less demand Cash of previous Bad Debts. in all starvation. projects. segments.
Launched Payment of Terminatedaffordable Sale of Cost short term projects with housing properties reduction debt by long project. for liquidity through tight raising long gestation preservation. cash flow. term debt. period.
QIP issuance to reduce debt. Reduced promoter’s stake from 64% to 51%.Increased confidence with customers on project delivery. Major Strategic restructuring.
Key Focus Areas Before Now1. Residential Segment Primarily target More focus on mid and luxury/upper middle affordable housing income housing segment segment.2. Assets and Land bank Buy predominantly Sell assets selectively and agricultural land and build acquire land only for land bank for projects mid/low income housing across all segments. projects.3. Debt Short Term maturities. Restructured to longer maturities. Higher proportion of Cheaper Collateralized expensive unsecured loans. loans. Increasing debt with more Reduced leverage. projects.
Overall Impact considered to be marginally positive. Infrastructure investment to be raised over 9% of GDP. Funding pressure on construction companies to be eased by PPP. PPP infrastructure projects to be refinanced upto 60% through IIFCL. Rs 39.7 billion allocated for rural housing schemes. Focus on providing housing to people of economic weaker section & lower income group.
Close to $7 billion to $8 billion of venture capital expected to flow into Indian real estate market. A significant increase in project execution through Public- Private-Partnerships. More demand for office and industrial space. Current levels of investments in infrastructure are not sufficient to bridge the gap between demand and supply.