Deepak Project

5/20/2018 Deepak Project

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INTRODUCTION

ABOUT REAL ESTATE INDUSTRY IN INDIA

The Indian real estate sector is one of the fastest growing and globally recognized sectors. It comprises

four sub sectors-housing, retail, hospitality, and commercial. The real estate industry's growth is linked to

developments in the retail, hospitality and entertainment (hotels, resorts, cinema theatres) industries,economic services (hospitals, schools) and information technology (IT)-enabled services (like call

centres) etc and vice versa. The total realty market in the country is expected to touch US$ 180 billion by

2020.

India ranks third for the most LEED (Leadership in Energy and Environmental Design)-certified space

globally, with nearly 12 million sq m. The LEED system is the most widely used rating system guiding

the design, construction, operations and maintenance of green buildings.

Private equity (PE) funding has picked up in the last one year due to attractive valuations and low level of

bank funding to the sector. Delhi NCR alone has already attracted PE investments of Rs 80 crore (US$

13.22 million) in first quarter of 2014.Moreover, with the government trying to introduce developer and

buyer friendly policies, the outlook for the real estate sector in 2014 looks promising.

Market size

Recent years have seen the Indian real estate sector grow, especially the commercial real estate segment.

According to a study by Knight Frank, Mumbai is the best city in India for commercial real estate

investment, with returns of 12-19 per cent likely in the next five years. Bangalore and Delhi-National

Capital Region (NCR) come second and third on the list, with returns of 12 per cent and 8-11 per cent

respectively. Delhi-NCR was the biggest office market in India with 110 million sq ft, out of which 88

million sq ft were occupied.

The residential segment of real estate has also seen tremendous growth in recent years owing to the

continuous growth in population, migration towards urban areas, ample job opportunities in service

sectors, growing income levels, rise in nuclear families and easy availability of finance.In the residential segment, the number of new launches in the first quarter of 2014 has increased by 43 per

cent at 55,000 units across eight major cities. Bengaluru recorded the largest number of units launched, an

increase of 22 per cent at 16,838 units, followed by Mumbai and Chennai with new launches at 10,698

units and 7,436 units with a growth rate of 93 per cent and 191 per cent respectively, during the first

quarter.

With the government allowing 100 percent foreign direct investment (FDI) in this sector, the number of

foreign firms owning real estate projects in India has also increased. The construction development sector,

including townships, housing, built-up infrastructure and construction-development projects garnered

total FDI worth US$ 23,587.25 million in the period April 2000-June 2014.

Investments

With the rise in demand for office as well as residential space, the Indian real estate sector has witnessed

high growth in recent times. Some of the major investments in the real estate sector in the recent past are

as follows:


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Piramal Fund Management has launched the Indiareit Apartment Fund which seeks to buy residential

apartments in the Tier I market, and has kept aside a corpus of Rs 350 crore (US$ 57.86 million) for the same.

US-based PE company Blackstone plans to step up its presence in the residential segment and has lined up

about Rs 1,000 crore (US$ 165.32 million) to invest in residential projects across Indian metros. Its first

investment in the residential sector was in the Chennai project of Bengaluru-based Ozone Group.

Panchshil Realty and Blackstone have bought a majority stake in Express Towers, for around Rs 870 crore (US$143.83 million).

Mr Donald Trump plans to extend his company, Trump Organisation's global footprint into India and invest in

two realty deals. Both the deals involve ultra-premium luxury projects, which will be owned, developed and

promoted by local developers.

Mahindra Group has entered affordable housing through its property development arm Mahindra L ifespaces

(MLDL). MLDL plans to launch two housing projects in Boisar near Mumbai and Avadi in Chennai with the newly

created business vertical Happinest.

Canada-based Brookfield Property has entered into an agreement to acquire Candor Investments, a subsidiary

of Unitech Corporate Park (UCP), for about Rs 2,000 crore (US$ 330.66 million).

Government InitiativesThe Government of India has announced a host of measures to spur the real estate sector, which include

an allocation of Rs 7,060 crore (US$ 1.16 billion) for the development of 100 smart cities, a reduction in

the size of projects eligible for FDI from 50,000 sq m to 20,000 sq m, and having the minimum

investment limit for FDI to US$ 5 million.

A committee on Streamlining Approval Procedure for Real Estate Projects (SAPREP) was constituted by

the Ministry of Housing & Urban Poverty Alleviation (MHUPA) to streamline the process of seeking

clearances for real estate projects.

The governments of different states have also taken various measures to facilitate the growth of this

sector. For instance, the Punjab government has proposed to exempt residents having houses with an area

of up to 125 square yards from paying the levy and delink tax payment from collector rates. It has also

proposed to keep vacant plots out of the ambit of property tax which will be implemented during 2014-

15.

The Indian Green Building Council (IGBC) has joined hands with the US Green Building Council

(USGBC) to strengthen their association for the next 10 years to focus on areas of knowledge exchange

and work on the green building movement in India. The USGBC also plans to expand its support for

LEED in India.

Road Ahead

The Indian real estate sector continues to be a favoured sector for investments from international as well

as private investors. In the upcoming years, the residential as well as commercial segments of the real

estate industry is set for major growth, aided in no small part by the government's plans and initiatives to

boost this sector.


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Recent industry trends

Despite strong fundamentals backing the residential real estate, the segment is highly influenced

by economic cycles.

Owing to global meltdown, the residential real estate market in India too witnessed an

astounding fall in demand and capital values, between first half of 2008 and first half of 2009.

However, the sector experienced a pickup in demand during the second half of 2009 across

major cities mainly attributed to improvement in economy. Residential projects across cities saw

several new mid-income housing projects being launched by developers to attract potential

buyers.

Demand for houses mounted as the global economy improved bringing back financial

confidence to the home buyers along with low interest rates. End-users, who had put their

purchasing plans on hold due to the fall in affordability levels and job-related uncertainties,

started booking houses.

1.2.1 Delhi

An approximate 75% end-user presence makes this a largely end-user driven market. However,

there is a heavy financier presence in this micro market. Across Delhi it has been observed that

the transactions are at rates much higher than the designated circle rates. Circle rates are the

minimum rates for the valuation of land and immovable properties in Delhi.

These rates are taken into consideration for registration of instruments related to land and

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immovable properties in Delhi by all the registering authorities. Land transactions are estimated

at rates over 10 times of the circle rates in most parts of the capital city.

According to the Delhi Master Plan 2021, 'greater efficiency and benefits through a unified

metro transport authority' are being targeted. Acknowledging the increased vehicle density,

the government is trying to rope in the private sector to develop parking facilities through multi-

level and underground parking spaces. It is also planning an integrated multi-modal public

transport system to reduce the pressure of private transport on the road. Cycle tracks, pedestrian-

and disabled-friendly features in the arterial and subarterial roads are also being planned.


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1.2.2: Gurgaon

Gurgaon markets have reached a high level of appreciation. This year launches have been

slow and the transaction volumes have been low. However, over a 4-5 year period the Gurgaon

market will see good appreciation. This will be because of employment opportunities, heavy

investor appetite and a strong broker community presence in this micro market. While Golf

Course Road (GCR) and Golf Course Road Extension areas are seeing the launch of a few high

end properties and builders are looking at higher margins, areas like Dwarka Expressway are

seeing interest on account of affordability and the bet on the future infrastructure in that area.

Price Trends in Gurgaon

1.2.3 Noida, Infrastructure issues

The market has ample supply and the demand has moderated. While the fall of Greater Noida

and Noida Extension markets has benefited Noida (rates have moved up marginally in certain

projects), the situation is one of wait and watch. Over a long term horizon, the Noida markets

will see a 10-15% YoY appreciation on the basis of the healthy infrastructure story in Noida and

its heavy end-user base.

Farmer protests over land acquisition in Greater Noida and Noida Extension have slowed down

the market. We see a downside risk in capital value over the one-year horizon due to land issues

and an oversupply situation. However, over the long term this sector will recover on account of

good infrastructure and continued demand from the sub INR 3,000/sq.ft. category home buyer.


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The Gurgaon real estate market falls under the jurisdiction of the Haryana government whereas

the Noida market comes under the purview of Uttar Pradesh. Buyers tend to invest their money

based on the comfort level with the respective governments.

Greater Noida and Noida Extension:


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The real estate markets in Gurgaon and Noida are driven by very different dynamics;

they are in fact at contrasting ends of the real estate spectrum in certain aspects.

The Haryana government in Gurgaon allows developers to directly acquire land from

farmers. Later, the builder applies to the government for infrastructure support for his project. So

here, acquisition is followed by the completion of the project and subsequently, infrastructure

support from the government.

However, the Uttar Pradesh government in Noida follows a different model. Here, the

government directly acquires land from the farmers, after which it draws a plan in terms ofinfrastructure support for the area, and earmarks plots. The last stage involves auctioning the

plots to builders. So, infrastructure support comes before the residential project.

Gurgaon's infrastructure issues in terms of water, power and roads are a cause of concern.

The city lacks proper amenities to support the rising new supply. In comparison to Noida, the

degree of planning and road connectivity in Gurgaon appears to be flat. As discussed earlier, this

comes from the model of land acquisition followed by the government. In Noida many of the

erstwhile infrastructure issues have been resolved with better road connectivity, better water

supply in most pockets, well laid out drainage systems, and reduction of load shedding from 8-

10 hours to just 1-2 hours. The Metro has penetrated till sector 50, with the end station

being 'Noida City Centre'.

COMPANY PROFILE


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Raas Capitalis a Boutique Investment Advisory Firmfounded by senior private

banker and real estate wealth management professionals to provide a integrated platform

of investment advisory solutions to Private Clients.

Its core team and domain partners includes CA, Architect, Urban Planner and MBAs

from premium institutes who have spent credible years in the areas of Private Banking,

Wealth Management, Corporate Finance, Investment Advisory and Management

consultancy before converging at Raas Capital.

Management team has profound knowledge and cumulative experience of 100 man years

in the field of banking, finance and real estate.

We offer integrated investment services in alternative investments to HNIs, NRIs,

Corporate. We are committed to provide transparent, honest and best in the class

investment advisory to our patrons.

Values

Integrity & respect

Collaboration & trust

Confidence & passion

Mentorship/Leadership/Ownership

Vision And Mission

Vision:


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To be the most respected company in the field of customised investment & funding

solutions.

Mission:

To live our vision, we have established three pillars of values.

Customer focus

Process Excellence

Passion to perform

Advisory Board

Our advisory board comprises leading experts from the world of finance and investment. The

members of our advisory board leverage their deep understanding of business issues related to

loans, finance, sales, marketing, and investment, and their proven experience to provide Raas

capital insights that enable us to make business decisions that are highly profitable for all our

stakeholders.

Mr. Siddharth Chaturvedi

Mr. Ashish Gupta

Mr. Rajesh Sukhwani

Mr. Kawal Jain

Management

At Raas Capital, we attribute our continuous success to the contributions, diligence,

and hard work of each and every single employee in the company. Nevertheless, we

believe, it is our leaders who managed to elevate employee engagement, build our skills

into strengths, and enabled us to deliver exemplary performance that enhanced

organizational effectiveness. We wouldntbe nearly as successful without the guidance,

inspiration and example set by our corporate leadership.


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What is Investment...

In simple, Investment is putting money into something with expectation of

profit. More specifically, investment is the commitment of money or capital to

the purchasing of financial instruments or other physical assets so as to gain

profitable returns in the form of interest, dividend or appreciation of the value

of the instrument. It is related to saving or deferring consumption.

An investment involves choice by an individual or an organization to invest

its money or capital in following instrument,

Assets like vehicles, machinery, appliances

Property such as home, building, lands

Commodity

Stock marketBond

Financial Derivatives like future & option

Foreign assets denominated in foreign currency

Investment comes with the risk of loss of the invested sum of money. The

investment that has not been thoroughly analyzed can be highly risky with

respect to the investment owner because the possibility of losing money is not

within the owners control. The above listed all the investment instruments

possesses less or more chances of risk.


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5.1 Classification of Properties:

Real estate has been broadly categories into 3 classes as follow

Types of

Property

(A). ResidentialProperty

(B). Commercialproperty

(C). Vacant land


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(A). Residential Property:

The residential type of property is by far the most popular with both new andexperienced agents. Residential property offers a good investment avenue.

People buy residential property for two important reasons:

For staying


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As an investment

Advantages of Investing in Residential Property

Expenses, including depreciation on the property and interest on your

borrowings, are tax deductible.

You make money as the value of the property increases.

You can leverage your investment.

You get rental income.

Risks of Investing in Residential Property

Interest rates could rise.

The property could be untenanted for a period of time.

You could get "bad" tenants.

It could take up a lot of your personal time.

House prices could remain static, or even fall.

The following are the type of Residential Property:

Single Family Residence

Row Houses/ Townships

Flats

Bungalows

(B). Commercial Property:


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1.Multi-Family Commercial Real Estate:

Commercial real estate property types include duplex homes, and other

construction for habitation by multiple family groups. Condominiums are

frequently called multi-family because of their construction as a group, but are

normally listed and sold as single family residential units. Duplex homes are also

frequently listed and sold as residential units to a buyer that lives in one side andrents out the other.

2. Retail Space Real Estate Properties:


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This category would include single buildings used as stores for clothing,

electronics and other consumer products, as well as malls, strip centers and the

like. Restaurant spaces are a specialty subset of the retail category, with some

listings shown as restaurant/retail. Valuations can be based on size and land

value, retail sales per square foot or other investment return calculations.

3. Office Buildings and Office Complexes

A single building designed for office use, or a group of offices in a single building

or cluster of buildings would fall into this category. When offices are grouped in

structures with single ownership, they are listed as commercial office rental

property. The owner derives income from the rental payments of the office

tenants. These can be valued based on the rental income return on investment,

rather than methods using square footage and land value. Medical & Dental

offices are a subset.

(C). Vacant Land


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Land Investment has historically been the forte of large development

companies, rich farmers or wealthy individuals. It can be a profitable business if

proper development of land is undertaken. Land Investment is referred to as a

long term investment and with land prices on the rise in many parts of the world,

it is said to be the safest and smartest way of investing ones money.

Capital gains can easily be realized from land when land price increases.

The most striking feature of land investment is that investment takes place in a

tangible asset which the investors can readily put into use. It is a branch of real

estate investment which is gaining ground as major part of capital budgeting

analysis. Real estate is basically defined as immovable property such as land and

everything permanently attached to it like buildings. It is essentially at this

juncture that land as an asset differs from real estate as it does not necessarily

includes buildings and the attachments to the land.

Land is perhaps the most basic asset that we want to invest in and may include

vast open tracts with no significant estate on it. The job of developing the land lies

with the developer, and with proper care to include modern houses and the

associated amenities, it will significantly appreciate its value. Land situated close

to developed areas will cost more as opposed to those in less developed areas.

Land developed for commercial purposes and those developed for building

residential complexes will have different prices and tax implications, if any.

Investing in land can be profitable as there is limited supply of land and the

purchaser can really sell dear if he wants to.


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5.2 CHARACTERISTICS OF REAL ESTATE INVESTMENT:

Real estate properties have its own some important features. Some of thecharacteristics that make real estate unique as compared to other investment

alternatives are as follows:

(1). Tangible:

Real estate is, well, real! You can visit your investment, speak with your tenants,and show it off to your family and friends. You can see it and touch it. A result of

this attribute is that you have a certain degree of physical control over the

investment - if something is wrong with it, you can try fixing it. You can't do that

with a stock or bond.

(2). Requires Management:

Because real estate is tangible, it needs to be managed in a hands-on manner.

Tenant complaints must be addressed. Landscaping must be handled. And, when

the building starts to age, it needs to be renovated.

(3). Inefficient Markets:

An inefficient market is not necessarily a bad thing. It just means that information

irregularity exists among participants in the market, allowing greater profits to be

made by those with special information, expertise or resources. In contrast, public

stock markets are much more efficient - information is efficiently dispersed

among market participants, and those with material non-public information are


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not permitted to trade upon the information. In the real estate markets,

information is king, and can allow an investor to see profit opportunities that

might otherwise not have presented themselves.

(4). High Transaction costs:

Private market real estate has high purchase costs and sale costs. On purchases,

there are real-estate-agent related commissions, lawyers' fees, engineers' fees

and many other costs that can raise the effective purchase price well beyond the

price the seller will actually receive. On sales, a substantial brokerage fee is

usually required for the property to be properly exposed to the market. Because

of the high costs of trading real estate, longer holding periods are common and

speculative trading is rarer than for stocks.

(5). Lower Liquidity:

With the exception of real estate securities, no public exchange exists for the

trading of real estate. This makes real estate more difficult to sell because deals

must be privately brokered. There can be a substantial lag between the time you

decide to sell a property and when it actually is sold - usually a couple months at

least.

(6). Underlying resident Quality:

When assessing an income-producing property, an important consideration is the

quality of the underlying residence. This is important because when you purchase

the property, you're buying two things: the physical real estate, and the income


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stream from the tenants. If the tenants are likely to default on their monthly

obligation, the risk of the investment is greater.

(7). Variability among Regions:

While it sounds clich, location is one of the important aspects of real estate

investments; a piece of real estate can perform very differently among countries,

regions, cities and even within the same city. These regional differences need to

be considered when making an investment, because your selection of which

market to invest in has as large an impact on your eventual returns as your choice

of property within the market.

5.3 CONSIDERATIONS WHILE MAKING INVESTMENT INREAL ESTATE


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When it comes to making money, Real estate is considered to be one of the surest

investments. Lots of opportunities abound, whether it be in the stock market or in

business. But these areas also offer a significant amount of risk. As a result, most

people do not engage in these speculative activities. But real estate is something

which more people can be involved in, simply because everyone needs a home to

live in. However, no investment is entirely risk free, and so even here a certain

amount of due diligence is required.

Some important point you need to think about:

1. Who is the developer?

2. Is the project a self development / partnership or joint venture?

3. Past business / trading history

4. The location of the proposed project

5. Basic amenities

6. The growth prospects of the neighborhood development

7. Industrial and business development in the locality

8. Price comparison analysis

9. Future property price valuation

10. What are the returns on your investment?

Affordability is a key consideration when making any purchase. One should factor

additional expenses such as electricity and property taxes to get a complete idea

of how much can be afforded.


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An integrated service model offering end-to-end - 360 Realty

Services to cater to the diverse needs of corporate & developers in

project management & execution. Managing realty projects right

from identification to marketing is a lengthy process replete with

many challenges. You may be keen to execute realty projects for

commercial / residential purposes but may not be equipped with

the right skill-sets / know-how for the undertaking.

Build-One offers you with a integrated service model meeting the

entire realty business needs to help you successfully undertake

your realty projects. Build-One offers you with a unified value-chain

of core realty services with critical forward & backward integration

of other value-added services. The services are effectively

streamlined enabling steady progression of the projects, right from

idea conceptualization to profit generation / hand-over,

encompassing all functional & operational tasks.


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1.Market study:

Market study refers to detailed analysis of

market and locations in different regions within the specific area.

One has to look the trend and path of the property market in the

area where he want to set up the project. A marketability study tries to

create a market area demand model based on available demographic information

and the application of common sense to develop a picture of the current and future

market area trends that may effect demand.

2. Feasibility Study:

Market Study Feasibility

Study

Property

Identification

Title

Check/Legal

Property

acquisitionPlanning &

Designing

BudgetingRegulatory

Approvals

Project Mgt. /

Construction

Marketing

Plans

Selling, Leasing

& Hand over

360* DegreeFirms significant Functions pertaining to Construction Project.


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Feasibility Study typically involves testing

geographic locations for a real estate development project, and

usually involves packages of real estate land. Developers often

conduct feasibility studies to determine the best location within a

jurisdiction, and to test alternative land uses for given packages.

Jurisdictions often require developers to complete feasibility

studies before they will approve a permit application for retail,

commercial, industrial, manufacturing, housing, office or mixed-

use project. Market Feasibility takes into account the importance

of the business in the selected area. Could the project be built?, Can the

site support a building structure that is planned?, etc. should be check out.

3.Property Identification:

Property identification refers to the type of project which the builder

has to plan. It mean whether put residential or row house or to put specific

commercial project looking at the locations and demand for the market. Property

identification generally is driven by demand of type of property in the market.

4.Title clear/Legal work:

Title clear is the phrase used to state that the owner of

real property owns it free and clear of encumbrances. In a more

limited sense, it is used to state that, although the owner does


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not own clear title, it is nevertheless within the power of the

owner to convey clear title. For example, a property may be

encumbered by a mortgage. This encumbrance means that no

one has clear title to the property. However, standard terms in a

mortgage require the mortgage holder to release the mortgage if a

certain amount of money is paid. Therefore, a buyer with enough

money to satisfy both the mortgage and the current owner can

get clear title.

5.Property Acquisition:

Generally, property acquisition refers to a person or other entity

acquiring title to real property by a deed. A deed is the legal instrument used

to transfer ownership in real estate. Real property can also be acquired byinheritance and by a court order.

6.Planning & Designing of Project:Planning and designing is carried out only after finishing the above

legal works. It is concerned with the proper plans and the design of the project

that the developer is going to construct. Here, builder can approach architects

to develop plan and design as per the requirements of builder.

7. Budgeting:


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This point is also important to be considered by a builder. The budget

of the real estate project should be optimal as per the plan and designs of the

structure. Budgeting needs to analyze the size of the projects.

8. Regulatory Approval:

After the plans and design of the projects, it needs to be submitted

the same at the concerned govt. authority (Municipal Corp./Municipality) for

further verifications and approval for the project. If authority finds no

objections, then after they can arrive at decision for approval and sanction of

project.

9. Project Mgt./Construction:

If government regulatory approvals and project get sanctioned by

authority, then after builder can take step further to start initial work of

construction. A project management team also has to form for various aspects

of the project of residential or commercial. At regular interval of time, govt.

executives checks the work whether is going as per the criteria.

10.Marketing Plan:

While developer put the marketing plan for the project he has put. On

the bases of demand for the housing and location. As a promotional efforts

and marketing for the project Hoardings, newspaper ads. attractive schemes,

agent/ broker approach has to be followed.

11.Selling, Leasing and Handover:

Builder may sell the entire project to other party, or he may sell the

project on leasing bases. Another option he may adopt is he can hand over to

the party who want to handle this project.


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Below are some of the main points that were made along the way:

Real estate investments fall into one of the four following categories: private

equity, public equity, private debt and public debt. Your choice of which one to

invest in depends on the type of exposure you are seeking for your portfolio.

You can invest in either income-producing properties or non-income-producing

properties. Any leased property is income producing, and vacant properties are

non-income producing. You can still earn a capital return on a non-income

producing property, just as you would on an investment in a home. .

Real estate can produce income (like a bond) and appreciate.


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Real estate is tangible, so it requires ongoing management. On the other hand,

you also have an increased ability to influence the performance of a single

investment as compared to other asset classes.

Some of the benefits of adding real estate to a portfolio include: diversification,

yield enhancement, risk reduction and inflation-hedging capabilities. However,

real estate also has high transaction costs, can be difficult to acquire and it is

challenging to measure its relative performance.

Buying real estate requires substantial due diligence to ensure that you're

getting what you expect after you close.

The way to determine the value of your property (other than actually selling it) is

to have it appraised by an accredited appraiser.

5.4 ADVANTAGES AND DISADVANTAGES OF REAL ESTATE

INVESTMENTS:

ADVANTAGES:


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Investing in real estate is as advantageous and as attractive as investing in stock

market. Here are the main benefits of investing in property market.

Real Estate Investments are Less Risky:

As compared to other investments, less of misadventure is involved in a real

estate property.. Real estate investments are traditionally considered a stable and

rich gainer, provided if one takes it seriously and with full sagacity. The reasons

for the real estate investments becoming less risky adventure primarily relate to

various socio-economic factors, location, market behavior, the population density

of an area; mortgage interest rates stability; good history of land appreciation,

less of inflation and many more.

No Need for Huge Starting Capital.

A real estate property can be procured for an initial amount as low as $8,000 to $

15,000, and the remaining amount can be taken on holding the property as

security. This is what you call High Ratio Financing. If you don't have the idea as

to how it works, then let explain with the help of an example.

Honing Investment Skills


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A real estate investment, especially when you buy a condo for yourself, will be a

pleasurable learning experience. It gives you the opportunity to learn and when

you went ahead with your first real estate property.

Not a time taking Adventure

Real estate investment will not take out all your energies, until you are prepared

and foresighted to take the adventure in full swing. You can save hell lot of time,

if you are vigilant enough to know the techniques of making a judicious

investment in the right time and when there are good market conditions

prevailing at that point of time.

Leverage is the Right Way

The concept of leverage in real estate is not a new one. It implies investing a part

of your money and borrowing the rest from other sources, like banks, investment

companies, finance companies, or other people's money (OPM). There have been

many instances where people have become rich by practically applying OPM

Leverage Principal. Moreover, in case the lender is interested in selling the

property, the net proceeds resulting from the sale of the property should

comfortably cover the mortgage amount.

Real Estate Appreciation

An appreciation is an average increase in the property value over original capital

investment, taking place over a period. There are some neglected real estate


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properties that have an appreciation below the average mark, whereas, some of

the properties located in maintained geographical areas, showing high demand,

have an above average appreciation. In such centrally located and high demand

areas, the average appreciation can reach up to 25% in a year.

Low Inflation

Inflation is the rise in the prices of the products, commodities and services, or

putting it another way, it is the decrease in your capacity to buy or hire the

services. Supposing, a commodity was worth $10 a decade back, will now cost $100 as the result of inflation. Comparatively, real estate sector has minimum rate

of inflation.

Tax Exemptions

You get various tax exemptions on your principal and investment income

property. The tax exemptions available in real estate property investment are

more than available in any other investment. In other investments, you lose

terribly on the investments in your bank in the form of inflation and high taxes

therein, but in real estate; you don't actually have such hindrances.

There are several beneficial provisions in the Income-tax Act, 1961 which

promote investment in residential properties, having regard to the need for


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housing millions of citizens. Of course, only those who pay taxes can take

advantage of the appropriate incentives given under the law.

Interest payable on loans taken for purchase or construction of house is

deductible to the extent of Rs 1.5 lakh every year, though the annual value of one

self-occupied residential property is exempt from income-tax. In addition,

repayment of the installment of housing loan is deductible to the extent of Rs 1

lakh per annum under section 18-C.

High Return on Investments

Real estate investment gives you potentially high Rate of investment before and

after the taxes levied on your income. In fact, investing in real estate gives you

high ROIs after the taxes

Net Positive and High Income is Generated.

Increased demand for properties.

DISADVANTAGES


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Beside the large potential of return on Investments, there are certain levels of

Disadvantages. These disadvantages can be easily taken off, if you have an insight

about the limitations of real estate investment and what can be its short term as

well as long-term repercussions.

Taking Wrong Decisions

People going for the real estate investment property take decisions in haste.

Make a firm decision when you go for purchasing your first real estate property, is

just not easy man. If you are swayed by emotions, you will be ruined.

No readily available Liquidity:

With your real estate investment, you need to know one thing

straight, and that is you simply cannot aspire hard cash immediately. You have to

wait and watch the market movements and other socio-economic and politico

economic factors before selling your real estate property, like a mall or your

home.

Eats away your time and energy:


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Real estate investment can get you real fatigue. It is a lethargic time consuming

process that makes you feel almost laid back. You need to plan and have those

instincts to get going with your property. You will learn more on about making

you real estate investments more time efficient in later part of the chapters.

A Risk full decision can harm:

Investing in a real estate property can be a risky and costly even, if you

are not prepared before, you will make losses. Not just losses but, but you will

become a pauper. Remember, as I said in my earlier statements, Real estate

market is speculative.

No Stringent Comparison Methodologies

Real estate market is variable. The price of two real estate properties can

vary a great deal, provided you keep other factors such as time and location,

constant. No two real estate properties can have exact. There always exists kind

of variation and this need to be taken into account. Though, you do have the

existing rule of thumbs and set strategies, but all these are workable, if tried in

combination.

Guided and Drawn on Government Policies:


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Government policies and regulations play an indispensable role in

deciding on the real estate investment. These policies and regulations include

control the zone based bylaws, construction activities; property prices; rent

control procedures; license dispensations and property transfers; taxes etc.


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5.5 The Factors that affects the Real Estate market:

Micro factors;

There are certain Micro factor that influences the property

market and its aspects. Suppliers, Cost of materials, firms competitors and also

marketing intermediary are the major elements that have effect on property

business.

Macro Factors:

Factors like political, legal, social, global and demographic are the

Macro environment with generally influences reeal estate industry in large scale.

Real EstateMicro Macro

Supplier,

Cost,

MarketingIntermediary

Social,

Legal,

Global and

Demographic


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5.6 Government regulations in Real Estate sector:

Much of the over 100 laws governing various aspects of real estate in India

dates back to the 19th century and major amendments to existing laws are

required to make them relevant to modern day requirements. The Central laws

governing real estate include:

Registration Act, 1908


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The purpose of this Act is the conservation of evidence, assurances, title, and

publication of documents and prevention of fraud. It details the formalities for

registering an instrument. Instruments which it is mandatory to register include:

(a) Instruments of gift of immovable property;

(b) other non-testamentary instruments which purport or operate to create,

declare, assign, limit or extinguish, whether in present or in future, any right, title

or interest, whether vested or contingent, to or in immovable property;

(c) non-testamentary instruments which acknowledge the receipt or payment of

any consideration on account of instruments in (2) above.

(d)Leases of immovable property from year to year, or for any termexceeding one year, or reserving a yearly rent.

Urban Land (Ceiling and Regulation) Act

(ULCRA), 1976

This legislation fixed a ceiling on the vacant urban land that a

'person' in urban agglomerations can acquire and hold. A person is

defined to include an individual, a family, a firm, a company, or an

association or body of individuals, whether incorporated or not.

This ceiling limit ranges from 500-2,000 square meters (sq. m).

Excess vacant land is either to be surrendered to the Competent


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Authority appointed under the Act for a small compensation, or to

be developed by its holder only for specified purposes. The Act

provides for appropriate documents to show that the provisions of

this Act are not attracted or should be produced to the Registering

officer before registering instruments compulsorily registrable under

the Registration Act.

The objective of acquiring the excess vacant land could not

be achieved because of intrinsic deficiencies in the legislation itself.

Stamp Duty:

There is a direct link between Registration Act and Stamp Act.

Stamp duty needs to be paid on all documents which are registered

and the rate varies from state to state.

Rent Control Act:

Rent legislation in India has been in existence for a very

long time. Rent control by the government initially came as a

temporary measure to protect the exploitation of tenants by

landlords after the Second World War. However these rent control


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acts became almost a permanent feature. Rent legislation provides

payment of fair rent to landlords and protection of tenants against

eviction. Besides, it effectively allows the tenant to alienate rented

property.

Property Tax:

Property tax is a levy charged by the municipal authorities

for the upkeep of basic civic services in the city. In India it is the

owners of property who are liable for the payment of municipal

taxes whereas in countries like the United Kingdom, the occupier is

liable. Generally, the property tax is levied on the basis of

reasonable rent at which the property might be let from year to

year. The reasonable rent can be actual rent if it is found to be fair

and reasonable. In the case of un-let proper-ties, the rental value is

to be estimated on the basis of letting rates in the locality.


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RESEARCH OBJECTIVE

Primary objective:

The Report has been prepared with certain goals. The Following are the Main

objective of study of the report.

To analyze the investment in real estate.

Comprehensive study of overview and Trends in Real Estate sector

Investment.

To study the advantages of investment in properties, prospects of

investment.

SCOPE OF THE STUDY:

The operational jurisdiction of the research is limited to Central bank of India. The scope

covers all loan schemes of CBI.

The study is mainly concentrated on the lending practises pattern and influence in the

organisation performance.

This project is mainly concerned with the lending practises in the nationalised bank of

issuing various securities.

The study enables the company to know its current position.

To know and to set its objectives and goals.

The study helps in ascertaining peoples response on bank lending.

RESEARCH METHODOLOGY:

This refers to the method of data description. Descriptive research includes surveys and fact

finding enquire of different kinds. The major purpose of descriptive research is description of

the state of affair as it exists at present. In business research we quite often use the term export

facto research for descriptive research studies.


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The main characteristics of this method is that the researcher has no control over the variable, he

can only report what has happened or what is happening. The method of research utilised in

descriptive research are survey methods of all kinds including comparative and correlation

methods.

DATA COLLECTION TOOLS:

Data mainly collected from both primary and secondary sources.

PRIMARY DATA:Primary data are freshly gathered for a specific purpose or for a specific

research project. Primary data was collected by way of discussion with company officials.

Mainly with bank manager. It has colled through the interim schedule, discussion and by

interacting with the officials of the organization or the respondents.

SECONDARY DATA:Secondary data that were collected through published materials like

pamphlets, company books and from the official website that is www.centralbankofindia.co.in

TOOLS AND TECHNIQUES:

Information has to be collected on the basis of the questionnaire distributed to the borrowers

Internet/ prominent search engines have been used for collecting the Data, market watch is also

used to some extent for interpretation analysis.

All data collected are carefully classified, tabulated for the purpose of research and interpreted

on the basis of charts and tables.

Sampling Design

1. Sampling Area:

For this survey I have covered the credit department of the organizationCentral bank of India

2. Sampling Population:

In order to take a reasonable sample size and not to disturb the functioning of the organization, a

sample size of reasonable strength of the Company has been taken in order to arrive at the

present practices of training in the Company.


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Accordingly, 7 officers and 10 workers have been selected at random from all the departments of

the organization and feedback forms (questionnaire) have been obtained. The data has been

analyzed in order to arrive at present training practices in the organization.

3. Sampling Design

There are four steps involve in the sampling design process. These steps are closely interrelated

and relevant to all aspects of the marketing research project. These steps are as follows:

3.7.1 Define the target population

The target population is the collection of elements or objects that possess the information soughtby the researchers and about which the inferences are to be made. The target population

represents the Delhi/NCR regions. The people were from different professional backgrounds.

3.7.2 Select a sampling technique

The sampling technique used in this project is Convenient Sampling Technique. It is because

equal opportunity should be provided to every kind of people in order to obtain betterresult to understand the consumer perception. The selection of sampling units is left primarily

to the interviewer. Often, respondents are selected because they happen to be on right place at

the right time.

3.7.3 Determine of the sample size

Sample size refers to the number of units or respondents to be included in the study. One of the

important considerations in the sample size determination is the sample size used in the similar

studies and the resource constraints. In the study, sample size is influenced by the target

population. So, sample size of 100 customers, to obtain better results for analyzing the

perception of consumers.


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Q1. On which bank you depend for your regular transaction?

( ) No. of People

CENTRAL BANK OF INDIA 50%

ICICI 20%

PUNJAB NATIONAL BANK 20%

OTHER 10%

TOTAL NO. OF PEOPLE 100


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It has been observed that approximately 50% correspondents are using the service of CBI for their

daily transaction, around 20% of people are using ICICI Bank for their transaction, 20% & 10% of

people are using HDFC & other Bank service respectively in New delhi It also shows that CBI have

the highest market position in Delhi as per my sample

Q2. Are you aware of products & services provided by CBI?

YES 85%

NO 15%

Total No. of People 100

50%

20%

25%

5%

SALES

CBI ICICI PUNJAB NATIONAL BANK OTHER


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From the above data it is clear that most of the customers (around 85%) of Delhi have the idea about

the product & services ofCBI, the rest 15% have the idea about the product they are using. In this

15% most of the people are from typical rural area (Farmers).

Q3. If yes are you aware of the advance products (Loan segments) of CBI?

YES 95%

NO 5%


YES

85%

NO

15%


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It is clear that most of the people have the idea about the advance product of CBI. Almost all the 95%

people who have the idea about the advance product are the user of CBI product & service.

Q4. Which bank you prefer for taking loans?

CBI

75%

ICICI 15%

PUNJAB NATIONAL BANK 8%

95%

5%

% OF PEOPLE

YES

NO


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OTHER 2%


According to my sample size 75% of people prefer CBI for loan product, but some people prefer

ICICI, PNB or OTHER Bank for loan because they are working with that bank & it is easier for them

to get loan from their bank & it easier for them to pay the interest because it is less as compare to

other bank because they are the employee of that bank.

Q5. If you prefer CBI for taking loan than what influence you to take Loan from CBI?

Most of the people said that they prefer CBI for taking loan because of the transparency and the

lowest interest rate for any kind of loan product. And it is easy to get loan from CBI as compare to

other bank because less paper work is require and as it is the largest govt. bank in India and having

partnership with RBI (Reserve Bank of India) and other association, it is easier for CBI to give loan

to people with a longer repayment period.

Q.6 Which loan product of CBI you have used?

50%

20%

25%

5%

SALES

CBI ICICI PUNJAB NATIONAL BANK OTHER


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HOME LOAN 40%

EDUCATIONAL LOAN 30%

CAR LOAN 15%

PERSONAL LOAN 10%

OTHER 5%


From the sample size 85% of people are using the CBI loan product. From the 100 people 40% ofpeople took home loan from CBI. 30% of people took education loan for their children, 10% of

people took car loan from CBI. Some of the customer took 2 type of loan from CBI like both car &

educational loan and home & car loan. 5% of people took personal loan.

Q7. What do you feel about the services providing by CBI in advance product?

Bad 0%

Satisfactory 2%

Good 55%

40%

30%

15%

10% 5%

SALESHOME LOAN EDUCATION LOAN CAR LOAN PERSONAL LOAN OTHER


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Excellent 43%


From this it is clear that the service provide by CBI in its advance product is good in between the

customer. All of them satisfy with the product provide by CBI. 55% of people said that the service

provide by CBI is good & 43% said it is excellent & just 2% of people said that it is satisfactory.

Q8. Which features you like most in Loan segments of CBI?

LESS PAPER WORK 3%

ATTRACTIVE INTEREST RATE 35%

0% 2%

55%

43%

CUSTOMER PERCEPTION TOWARDS THE SERVICE

PROVIDE BY SBI IN ADVANCE PRODUCT

BAD

SATISFACTORY

GOOD

EXCELLENT


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TRANSPARENCY 20%

SIMPLE AND FAST PROCESSING 2%

LONGER REPAYMENT PERIOD 40%


Most of the people like the attractive interest rate & longer repayment period. Its easier for people to

repay the whole loan amount with its interest with low interest rate and with longer repayment

period.

PAST YEAR BALANCE SHEET

Mar '14 Mar '13 Mar '1

12 mths 12 mths 12 mt

Capital and Liabilities:

Total Share Capital 2,967.44 2,661.58 2,353.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

LESS PAPER WORK ATTRACTIVE

INTEREST RATE

TRANSPARENCY SIMPLE & FAST

PROCESSING

LONGER

REPAYMENT

PERIOD

FEATURES LIKE BY CUSTOMER


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Equity Share Capital 1,350.44 1,044.58 736.

Share Application Money 0.00 0.00 0.0

Preference Share Capital 1,617.00 1,617.00 1,617.0

Reserves 12,821.12 12,651.27 8,201.4

Revaluation Reserves 0.00 0.00 1,896.9

Net Worth 15,788.56 15,312.85 12,451.5

Deposits 240,068.99 226,038.31 196,173.3

Borrowings 22,079.78 18,305.51 12,919.6

Total Debt 262,148.77 244,343.82 209,092.9

Other Liabilities & Provisions 11,558.90 8,472.87 8,255.2

Total Liabilities 289,496.23 268,129.54 229,799.7

Mar '14 Mar '13 Mar '1

12 mths 12 mths 12 mt

Assets

Cash & Balances with RBI 11,926.63 13,560.17 13,114.1

Balance with Banks, Money at Call 451.40 532.04 1,012.4

Advances 177,315.17 171,935.84 147,512.8

Investments 86,135.14 72,603.79 59,243.2

Gross Block 2,804.39 2,684.75 3,770.8

Accumulated Depreciation 0.00 0.00 1,296.

Net Block 2,804.39 2,684.75 2,473.9

Capital Work In Progress 0.00 0.00 0.0

Other Assets 10,863.49 6,812.95 6,443.

Total Assets 289,496.22 268,129.54 229,799.7

Contingent Liabilities 96,224.25 46,881.78 50,885.0

Bills for collection 0.00 18,732.82 14,183.4

Book Value (Rs) 104.94 131.11 121.4

FINDINGS


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From this project it is found that CBI advance product having the 1 stplace in the market at

New delhi, there is a great opportunity to compete with ICICI Bank & to retain its customer

by fulfilling the requirement of customer in CBI advance product.

It has been observed that approximately 85% correspondents are using advance product of

CBI and 15% are not using any type of advance product of CBI in New delhi

All of CBI customers are satisfied with the services provided by the bank.

Many of these customers satisfied with the low interest rate and longer repayment period of

the advance product.

Most of the customers at Bhubaneswar prefer to take loan from CBI.

Approximately 43% of advance product users said that the service of CBI in advance product

is excellent.

A response from customer care is so clear & good.

Many customers have no time to call customer care so that they are not able to know about

the service & features of CBI advance product.

Most customers are shifted from other banks advance product to CBI because of hidden

charges, high interest rate, less repayment period.

Government employees are more concern than private employees for advance product.

REASONS FOR HIGHLY USE OF CBI ADVANCE PRODUCT:

LESS PAPER WORK

ATTRACTIVE INTEREST RATES

TRANSPARENCY

SIMPLE & FAST PROCESSING

LONGER REPAYMENT PERIOD

QUICK PROCESSING

LIMITATIONS OF THE STUDY


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Although the study was carried out with extreme enthusiasm and careful planning there are

several limitations, which handicapped the research viz,

1. Time Constraints:

The time stipulated for the project to be completed is less and thus there are chances that some

information might have been left out, however due care is taken to include all the relevant

information needed.

2. Sample size:

Due to time constraints the sample size was relatively small and would definitely have been more

representative if I had collected information from more respondents.

3. Accuracy:

It is difficult to know if all the respondents gave accurate information; some respondents tend to

give misleading information.

4. It was difficult to find respondents as they were busy in their schedule, and collection of data

was very difficult. Therefore, the study had to be carried out based on the availability of

respondents

Suggestion & Recommendation


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Customer awareness programme is required so that more people should attract towards

advance product.

If there are any kind of hidden charges than that must disclose to customer before giving loan

to them.

CBI must take some steps so that customers can get their loan in time. Like phone

verification by customer care that one customer is got their loan on time or not .It must be

before a certain date so necessary steps can be taken.

CBI should more concern about physical verification rather than phone verification so it will

avoid fraud or cheating.

Advance product selling agents must not give any type of wrong information regarding

advance product.

For the better service new offers would be require.

CBI customer care should more concern about the fastest settlement of customer problems.

Before deducting or charging any monetary charge CBI must consult with customer.

Agents should be trained, well educated & proper trained to convince the people about

different advance product.

It is the duty of the bank to disclose all the material facts regarding advance product, like

interest charged, repayment period, other types of charges, etc.

Special scheme should be implemented to encourage both customer and agents.

The bank should increase the period for repayment of loan.

CBI should more focus on Retaining existing customers.

SBI must focus on Segmentation based on customer knowledge Product offering based on

customer demand.

CBI must take feedbacks of customers regarding features & services.

Conclusion


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From the analysis part it can be conclude that customers have a good respond towards CBI advance

products in NEW DELHI. CBI is in 1stposition having large number of customers & providing good

services to them. The bank has a wide customer base, so the bank should concentrate on this to retain

these customers.

In present scenario CBI is the largest advance product issuer in India. Within a very short period of

time the achievement made by CBI is excellent, what a normal bank cannot expect, but it is being

done by CBI. It happens due to employee dedication towards the organization, fastest growing Indian

economy, & brand image.

To be the largest advance product issuer, CBI should focus on-

Launch Innovative product

Customized advance products

Better customer services

Fastest customers problem solving techniques

Customer retention

Apart from all the above, CBI believe in providing good customer services to their customers which

is a key factor for success in future.

Bibliography


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[56]

Indian financial system Machi Raju

Credit Management Arun Chatterjee

Websites

http://www.rbi.org.in

http://www.google.com

http://www.centralbankofindia.co.in

Questionnaire
http://www.google.com/http://www.google.com/http://www.centralbankofindia.co.in/http://www.centralbankofindia.co.in/http://www.centralbankofindia.co.in/http://www.google.com/


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Name - _____________________________________

Occupation-__________________________________

Contact Detail -_______________________________

Q. On which bank you depend for your regular transaction?

a) CBI

b) ICICI Bank

c) PUNJAB NATIONAL BANK

d) Other Bank, Specify (_____________)

Q. Are you aware of products & services provided by CBI?

a) YES

b) NO

Q. If yes are you aware of the advance products (Loan segments) of CBI?

a) YES

b) NO

Q. Which bank you prefer for taking loans?

a) CBIb) ICICI Bank

c) PUNJAB NATIONAL BANK

d) Other Bank, Specify (_____________)

Q. If you prefer SBI for taking loan than what influence you to take Loan from CBI?


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______________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

Q. Which loan product of CBI you have used?

a) Home Loan

b) Education Loan

c) Car Loan

d) Personal Loan

e) Other Loans, Specify ( ______________ )

Q. What do you feel about the services providing by CBI in advance product?

a) Bad

b) Satisfactory

c) Good

d) Excellent

Q. Which features you like most in Loan segments of CBI?

a) Less paper work

b) Attractive interest rate

c) Transparency

d) Simple & fast processing

e) Flexibility to choose an EMI base loan or an overdraft

f) Longer tenure lone for ease of repayment

g) Specially design product for self employed

h) Any other feature, specify ( _____________ )

Q. Any suggestion you want to give for the betterment of CBI advance product.

_____________________________________________________________________________________

_____________________________________________________________________________________

____________________________________________________________________________________

Documents

Deepak Project