EXECUTIVE SUMMARY

The market size of real estate in India is projected to reach US$ 180 billion by 2020. The
expected growth rate of the industry is at a compound annual growth rate (CAGR) of
19% for the period 2010-2014, with Tier 1 metropolitan cities contributing to almost 40%
of this growth.

Today this sector is one of the fastest growing markets in the world. The four components
of this sector are housing, retail, hospitality, and commercial, with housing being the key
one, which comprises 5-6% of India’s gross domestic product (GDP), at present.
However the remaining three sub-sector are also showing an increased pace of growth
over the last few years.
The demand for office space for example in the top 8 metros -Delhi-NCR, Mumbai,
Bangalore, Chennai, Hyderabad, Pune, Kolkata and Ahmadabad – was up 58% for the
period January – march 2014 as compared to the same period the previous years, as per
report of consultants Cushman & Wakefield. Of these, Ahmadabad and Delhi-NCR
recorded the maximum demand.
Meanwhile, the residential segment saw an increase of 43% during the first quarter of
2014 has across the eight major cities, with Bangalore recording the largest number of
units, followed by Mumbai and Chennai.

Investment Opportunities
With increasing corporate expanding their business demand for office space would
continue to be high in the key 8 metros. Retail space in shopping malls cross the key cities
is projected to double in this year.
The construction development sector, including townships, housing, built-up
infrastructure and construction-development projects garnered total foreign direct
investment (FDI) worth US $23,131.64 million in the period April 2000 - February 2014.
This sector continues to be a favoured destination for global investors.
 OBJECTIVE OF THE STUDY

The primary objective

 The project is to understand the basic concept of real estate market sector.

The secondary objectives are as follows

 To evaluate the usefulness of Real Estate market.

 To study how the agency work in Real Estate.
 To know how best we can utilise these analyses to meet the financial goals.
 DATA COLLECTION METHOD

The main sources of data are collected through:

 Website
 Various publications
 Textbook

The study is purely based on secondary data.

The secondary data are those which have already been collected by someone else and
which have already been passed through the statistical process. The methods of
collecting secondary data are published data or unpublished data. It takes short time
and relatively low cost

The secondary data and the articles collected are from the most visited site and mainly
for the Google website.
 LIMITATION OF THE STUDY

 The limitations of the study are as follows.

 Only some basic topics of Real Estate market are taken into consideration as it is
a vast topic.

 The analysis is to focused on the Real Estate Sector.

 The study is only for academic purpose.

 The recommendation made may not be a perfect prediction of the Real Estate
Sector is not an absolutely accurate practice.

 The analysis is made to get additional information related to the real estate sector
in India it’s trends, objectives, agencies, etc.
 INTRODUCTION OF “REAL ESTATE”

The real estate sector is one of the most globally recognised sectors. In India,
real estate is the second largest employer after agriculture and is slated to grow
at 30 per cent over the next decade.
The real estate sector comprises four sub sectors - housing, retail, hospitality,
and commercial. The growth of this sector is well complemented by the growth
of the corporate environment and the demand for office space as well as urban
and semi-urban accommodations.
The construction industry ranks third among the 14 major sectors in terms of
direct, indirect and induced effects in all sectors of the economy.
It is also expected that this sector will incur more non-resident Indian (NRI)
investments in both the short term and the long term. Bengaluru is expected to
be the most favoured property investment destination for NRIs, followed by
Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
 HISTORY OF REAL ESTATE SECTOR

Real estate is land, all of the natural parts of land such as trees and water, and
all permanently attached improvements such as fences and buildings. People
use real estate for a wide variety of purposes, including retailing, offices,
manufacturing, housing, ranching, farming, recreation, workshop, and
entertainment. The success or failure of these uses is dependent on many
interrelated factors: economic conditions, demographics, transportation,
management expertise, government regulations and tax policy, climate, and
topography. The objective of those engaged in the real estate industry is to
create value by developing land or land with attached structures to sell or to
lease or by marketing real estate parcels and interest. The real estate industry
employs developers, architects, designers, landscapers, engineers,surveyors,
abstractors, attorneys, appraisers, market researchers, financial analyst,
construction workers, sale and leasing personnel, managers, office support
workers, and buildings and grounds maintenance workers. By the end of 2001,
1,544,000 were employed in the real estate industry.

The development and marketing of real estate, common in Europe since the
middle ages, came with European colonists to the united states. The first hotel
constructed of n the united states, an early example of commercial real estate
development, was the seventy-three-room city hotel at 115 Broadway in New
York city, which opened in 1794. Served as a model for similar hotels in
Boston, Philadelphia, and Baltimore. In the 1830s, William Butler Ogden came
to investigate land his brother-in-law had purchased near Chicago River and
stayed on to become a real estate developers and Chicago’s first mayor. The
rapid growth of cities in the nineteenth century provided many opportunities for
the real estate industry.

Real estate development is sensitive to fluctuations in the economy and in turn

contributes to those cycles. The combination of a capitalist economy and a
growing population makes the expansion of land uses inevitable, but developers
can misjudge the market and produce too many office buildings, hotels, apartment
buildings, or houses in any particular area. As a result rents and sale prices fall.
The economic prosperity of the 1920s brought a huge expansion of real estate,
especially in housing, but by the mid-1930s, 16 million people were unemployed
and the demand for real estate of all types declined precipitously. World War II
brought technological innovation and a backlog of demand for new construction.
As population growth shifted to the west and the south after the war, investment
in the real estate industry moved with it.

The restrictive monetary policies of the latter years of the 1969s, the energy
crises and inflation of the mid 1979s, inflation in the early 1980s, the savings
and loan crisis of the late 1980s, and inflation and overproduction in the early
1990s, all negatively affected the real estate industry. However, a period of
general economic prosperity began in 1992 and real estate industry flourished in
the remainder of the 1990s.
 Current scenario of the Real Estate Market.

Commercial real estate sector is in boom in India. In the last fifteen years, post
liberalisation of the economy, Indian real rat business has taken an upturn and is
expected to grow from the current USD 14 billion to a USD 102 billion in the
next 10 years. This growth can be attributed to favourable demographics,
increasing purchasing power, existence of customer friendly banks & housing
finance companies, professionalism in Real Estate and favourable reforms
initiated by the government to attract global investors.

Market Size

The Indian real estate market is expected to touch US$ 180 billion by 2020. The
housing sector alone contributes 5-6 per cent to the country's Gross Domestic
Product (GDP).

In the period FY2008-2020, the market size of this sector is expected to increase
at a Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail,
hospitality and commercial real estate are also growing significantly, providing
the much-needed infrastructure for India's growing needs.

Private Equity (PE) investments by domestic and international investors in the

Indian realty market declined 30 per cent year-on-year to US$ 2.5 billion across
48 deals during January-September 2016.

Over April-June 2016, India's office space absorption grew 46 per cent year-on-
year to over 10.2 million sqft, primarily led by Delhi National Capital Region
(NCR) and Bangalore, which accounted for almost 50 per cent of the total space
take-up. On the supply front, over 7 million sqft of fresh office space was added
during April-June 2016, led by Hyderabad and Mumbai, accounting for more
than 65 per cent of the total supply of fresh office space across leading cities
during the quarter.

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, followed by Bengaluru
and Delhi-National Capital Region (NCR). Sectors such as IT and ITeS, retail,
consulting and e-commerce have registered high demand for office space in
recent times.

Investments

The Indian real estate sector has witnessed high growth in recent times with the
rise in demand for office as well as residential spaces. According to data
released by Department of Industrial Policy and Promotion (DIPP), the
construction development sector in India has received Foreign Direct
Investment (FDI) equity inflows to the tune of US$ 24.19 billion in the period
April 2000-March 2016.

Government Initiatives

The Government of India along with the governments of the respective states
has taken several initiatives to encourage the development in the sector. The
Smart City Project, where there is a plan to build 100 smart cities, is a prime
opportunity for the real estate companies. Below are some of the other major
Government Initiatives:

The Cabinet Committee on Economic Affairs (CCEA) has approved various

measures to revive the construction sector, putting in place a mechanism to
release funds stuck in arbitration awards to revive stalled projects.
The Make in India initiative has helped to accelerate leasing of commercial
property by the manufacturing sector, which has outpaced the Information
Technology (IT) sector by registering two-fold increase in office transacted
space in the first six months of 2016.%

Brihanmumbai Municipal Corporation (BMC) has introduced a single-window

clearance for construction which will cut the time taken for getting approvals
for a building project and lead to correction in prices of residential property,
thereby giving a fillip to Mumbai realty.

The Securities and Exchange Board of India (Sebi) has proposed easier
regulations for real estate investment trusts (REITs), such as raising the cap of
investment of REITs’ assets in under-construction projects from 10 per cent to
20 per cent, in order to attract the interest of developers, and also plans to relax
the rules for foreign fund managers to relocate to India.

The Government of India has brought into force the Real Estate (Regulation and
Development) Act, 2016 on May 01, 2016, which is aimed at making necessary
operational rules and creating an institutional infrastructure for protecting the
interests of consumers and promoting growth of the real estate sector in India.

The Securities and Exchange Board of India (SEBI) has allowed Foreign
Portfolio Investors (FPI) to invest in units of Real Estate Investment Trusts
(REITs), infrastructure investment trusts (InvITs), category III alternative
investment funds (AIFs), and also permitted them to acquire corporate bonds
under default.

The Rajya Sabha or the upper house of the Parliament has passed the Real
Estate (Regulation and Development) Bill, 2013, which aims to protect
consumer interest, ensure efficiency in all property related transactions, improve
accountability of real estate developers, increase transparency and attract more
investments into the realty sector in India.
The Securities and Exchange Board of India (SEBI) has issued the consultation
paper for public issue of Real Estate Investment Trusts (REITs), which include
provisions such as capping of allocation to qualified institutional buyers (QIBs)
at 75 per cent, among other topics.

India’s Prime Minister Mr Narendra Modi approved the launch of Housing for
All by 2022. Under the Sardar Patel Urban Housing Mission, 30 million houses
will be built in India by 2022, mostly for the economically weaker sections and
low-income groups, through public-private-partnership (PPP) and interest
subsidy.

The Securities and Exchange Board of India (SEBI) has notified final
regulations that will govern real estate investment trusts (REITs) and
infrastructure investment trusts (InvITs). This move will enable easier access to
funds for cash-strapped developers and create a new investment avenue for
institutions and high net worth individuals, and eventually ordinary investors.

The State Government of Kerala has decided to make the process of securing
permits from local bodies for construction of houses smoother, as it plans to
make the process online with the launch of software called 'Sanketham'. This
will ensure a more standardised procedure, more transparency, and less
corruption and bribery.
 Characteristics of the Real Estate Market

What characterizes a real estate investment? What are some of the determining
features, both common and unique of real estate as an investment?

 Real Property.

Real estate is a physical asset. It’s something you can feel and see. It’s an
investment that you can literally drive by and look at. It’s unlike an investment
in stock or a mutual fund, where the investment is based upon the performance
of the corporation and represented as share of stock.

 Asset Appreciation.

Real property can come in a variety of forms such as commodities, precious

metals or even an automobile. Yet real estate investments can provide not just
a monthly income but appreciates in value over time.

 Steady Income.

Real estate investments provide steady income over time until the asset is sold.
Other investments can provide a fixed or variable return but typically ends at
a predetermined date such as a bond or certificate of deposit.

 Leveraged.

The acquisition of real estate can be, and usually is, leveraged. Instead of
paying cash for the asset, real estate investors place a down payments as initial
 equity and finance the rest. Fixed rate financing helps projects rental income
well into the future.

 Illiquid.

Real estate cannot be bought and sold as easily as other investments. A stock,
mutual fund, bond or gold coins can be readily sold in the open market. Real
estate involves multiple service providers and is privately brokered from the
seller to the buyer.

 Transaction costs.

Buying and selling costs are high for real estate compared to other investment
types. Real estate commissions, title insurance, closing and attorney fees are
required in addition to multiple third party fees.

 Management.

Income producing properties must be managed. Finding and screening

tenants, collecting rent, maintaining the property and answering service calls
are all part of a real estate investor's duty.
 Characteristics of the Real Estate Market in India

Greater availability of information

• Emergence of transparency and

liquidity

• Entry of international real estate

consultancies

• Governing legal framework relaxed

• Competitive pricing

Growing Market Demand

 Realization of large commercial

projects

• IPOs by developers

• Gradual organization of the markets in

the Tier I cities.

The property market in India has traditionally been unorganized and

fragmented.

However, the recent past has seen a consolidation of positions in the market as

developers are stretching their capacities to the maximum in order to meet the
growing
market demand, which in turn has encouraged large projects with sourced
financing. The

IPOs by large real estate developers like Sobha, Raheja and DLF have led to
organization

of the market in the Tier I cities, but the Tier II and Tier III cities still
demonstrate the

traits of an unorganized market. Whilst the Indian real estate market still lacks

transparency and liquidity compared to more mature real estate markets, the
increasing

requirements of multi national occupiers, as well as the influx of international

property

consultancies has led to the introduction of greater availability of market

information,

both in published and private form pushing the sector to an organized market
form.

Driving Forces

Stated below are the reasons that have led to the real estate boom in the country

• Booming economy; accelerated GDP to 8% p.a.

• India’s emergence as an attractive offshoring destination and availability

of pool of highly skilled technicians and engineers ; Development of

largecaptive units of major players include GE, Prudential, HSBC, Bank of

America, Standard Chartered and American Express

• Rise in disposable income and growing middle class, increasing the

demand for quality residential real estate and real estate as an investment
option.

• Entry of professional players equipped with expertise in real estate

development;

• Relaxation of legal rulings and processes by the governing bodies

encouraging investments in real estate

• Improvement in infrastructure facilities

Categorization

The demand for new office space in India has grown from an estimated 3.9
million sq. ft

in 1998 to over 16 million sq. ft in 2004-05. 70% of the demand for office space
in India

is driven by over 7,000 Indian IT and ITES firms and 15% by financial service
providers

and the pharmaceutical sector. In 2005 alone, IT/ITES sector absorbed a total of
approx

30 million sq. ft and is estimated to generate a demand of 150 million sq. ft. of
space

across major cities by 2010. This data clearly demonstrates the growth of the
real estate

sector in the country.

With reference to the availability of infrastructure facilities, following cities are

currently

attracting MNCs/corporate/real estate developers:

Tier I cities, Mumbai (Commercial hub), Delhi (Political hub) and Bangalore

(Technological hub):

• Preferred option for many new market entrants

• Command the highest international profiles and significant proportion of

FDI

• Offer qualified labor pool and the best infrastructure facilities

• Exhibit development of sub-urban commercial real estate

• Yield of 9.5 – 10%

Tier II cities, notably Hyderabad, Chennai, Chandigarh, Kochi, Mangalore,

Mysore,

Thiruvananthapuram, Goa, Bhubaneshwar, Ahmedabad and Pune

• Yield of 10.5-11.5%

• Offer competitive business environments, human resources availability,

telecommunications connectivity, quality of urban infrastructure,

• Attract high value IT, ITES and biotech corporate houses

Tier III cities, like Cuttack and Jaipur

• Low liquidity and still highly unorganized.

Special Economic Zones:

• 28 operational SEZs in the country, including those converted from Export

processing zones (EPZ) to SEZ

• Development of SEZs in various segments such as multi-product, Information

Technology Bio-technology, Gems and Jewellery, Textiles
and technology intensive industries

• Attract both developers and corporate houses (refer table for a list of

corporate that have shown interest in development of SEZs)

Corporate Location

Reliance Industries Gurgaon, Mumbai/Navi Mumbai

Adani Group Mundari

TCG Refineries Haldia

Suzlon Coimbatore, Udipi, Vadodara

Hindalco Sambalpur

Genpact Bhubaneshwar, Jaipur, Bhopal

Vedanta Orissa

Corporate interested in development of SEZs in India and the location of

interest

Apart for the corporate clientele, the SEZs also attract a number of real estate
developers,

including DLF, Ansals, Omaxe, Parsvnath, Shipra Estate to name a few.

As per utilization, the real estate space can be classified as follows:

Real Estate Utilization

Commercial

Office

Hospitality

Retail
Malls Multiplexes

Residential

Real estate utilization

Listed below are the salient features of each category:

Commercial Real Estate

Office Space

• Backed by strong infrastructure

• Promoted by increasing demand from IT industry

• Shift of focus from the traditional CBDs towards secondary centers owing

sharply higher land prices in the city centers.

Retail Space

• Growth of 25- 30% expected in the organized retail sector (malls and

multiplexes) leading to an increased demand in real estate

• Affected by government policies for foreign retailers

• Pronounced in the Tier I, Tier II and Tier III cities.

Hospitality space

• Increasing demand of lodging in commercial cities such as Bangalore,

Mumbai, Delhi etc. from business travelers.

• Established brands in this sector include Asian Hotels, Indian Hotels, ITC,
Le Meridien etc are in expansion mode with many new players such as

Accor Group, Marriot, Choice, IHG Group.

Residential Real Estate

• Development triggered by:

o Low per capita housing stock

o Rising disposable income

o Easy availability of finance

• Currently growing at 30-35% per annum

• Driven by retail investors who view real estate as an attractive investment

option as compared to mutual funds and stocks

• Geographically widespread with townships being built in both the metros

and the tier II and III cities.

Real Estate Investment Banking

Real Estate Investment Banking is an approach to real estate financing –

providing the

client a host of services including the structuring of real estate projects, legal
advice,

operative management of real estate projects and support in marketing

properties. The
banking focus in Real Estate Investment Banking is on structured financing
products andstructuring of entire portfolios. Extending on similar lines is the
importance of

syndication that forms the base line of larger-sized transactions.

Real estate investment banking focuses on the following target market as

prospective

client base:

Real Estate Consultants

The increase in transparency and liquidity in the real estate market in India is
attracting

international real estate consultants to India. These consultants offer end to end
solutions

for their clients’ real estate needs. These services include strategic consulting to

developers, investors, advisors and lenders seeking assistance with existing

assets,

potential acquisitions, new development projects and properties slated for

disposition,

feasibility studies, concept testing, business planning exercises, investment

advice,

market research and analysis, demand forecasting, financial modeling and

project

structuring exercises, portfolio optimization and re-engineering strategies,

expansion and

occupancy, location and entry, brokerage services, legal documentation review,

valuations etc.

Real estate consultants also ensure that the financing needs of the client are well
taken

care of by liaising with banking/non banking institutions and providing them

with

investment and structured finance solutions including securitization and sale &

leasebacks, structured finance facilitating equity/debt into development projects

on behalf

of private and government sector clients, structuring development financing,

public -

private - partnerships, joint ventures, portfolio transactions and privatization

exercises.

The recent players in the Indian market are Jones Lang Lasalle, Colliers,
CBRichard

Ellis, Frank Knight and Trammell Crow Meghraj.

Developers and Construction Companies

With the opening up of the real estate sector in the country, the construction
houses are

scaling up the commercial and residential constructions. An increasing number

of

developers are offering IPOs for fund raising. AIM too is a sought after solution
to meet

the fund requirements for these developers.

Domestic Corporate Houses

 As the land prices in the Tier I cities have always moved upward, land
was regarded as a
 safe investment which, regardless of how it was used, would produce
capital gains far
 above the inflation rate. It was thus common for companies in the
manufacturing and
 service industries to acquire real estate even though they themselves were
completely
 unrelated to property rental or real estate investment, seeking collateral
value and tax
 benefits from depreciated assets, and expecting unrealized gains to absorb
business risk.
 Acquisition of real estate as an asset was further encouraged as part of a
diversification
 strategy in the investment portfolio of these corporate houses..
 As these real estate possessions are classified as fixed assets held for the
company’s own
 business purposes, it becomes feasible recent moves to increase real
estate liquidity often
 involve the conversion of corporate real estate into commercial use. The
corporate houses
 in India are also demonstrating a shift from ownership to leasing. With
the advent of
 MNCs into the country, a growing number of companies no longer see
real estate
 ownership as an absolute necessity.
 From the perspective of companies who want to sell off assets,
securitization schemes
 provide a greater diversity of alternatives to liquidate real estate. This has
been greatly
 encouraged by corporate restructuring and a return to focusing on core
competencies.
 Thus, there seems an opportunity to tap the corporate houses who have a
large corpus of
 real estate and are willing to trade this asset for want liquidity.

FDIs/FIIs
 Post liberalization, the investment opportunities in real estate for the FDIs
and FIIs have
 greatly opened up. Foreign investors can now purchase commercial
development projects
 (under construction) over 50,000 sq m (540,000 sq ft), or plotted
residential
 developments with a minimum size of 10 hectares. Foreign investors may
purchase an
 equity stake in an unlisted real estate company and thereby partner in its
growth plans
 across asset classes and cities. Listed real estate companies also offer
good liquid
 investment opportunities routed into designated special purpose vehicles
that hold the
 asset(s) being developed, thereby reducing risk. These investors look for
innovative
 financial products to suit their investing needs.

Financial Institutions – Real Estate Mutual Funds

 Major financial institutions such as ICICI, HDFC, IL&FS and Kotak
Mahindra have all
 launched real estate funds, either as joint ventures or sole investors. Most
institutional
 funds operate on a pan-Indian basis, and are increasingly looking at
opportunities in Tier
 III cities, in order to gain "first mover advantage".

Private Equity/Venture Capital Funds

 As per the Securities and Exchange Board of India (SEBI), Foreign
Venture Capital
 Investors (FVCIs) may invest in real estate assets, within the framework
of SEBI. This
 has paved the way for capital infusion into the market and a significant
weight of foreign
 capital is now chasing Indian real estate. Indirect real estate investments
are made into a
 pooled investment fund; such funds are usually created in partnership
with domestic
 developers or financial institutions. Such VC firms, partnered with
developers form.
 Advantages and Disadvantages of Real Estate

Real estate investing is an investment strategy where an investor

purchases property in order to earn a profit. In most cases, the
investor will either rent out the property, or improve on it in order to
resell it at a higher cost than it was purchase for. Real estate investing
can be riskier than other investments since property cannot usually be
sold quickly.

Advantages

 Income Stream

If the property is easily convertible to rental units, the owner of the

property can earn a steady income stream in the form of rent.
Depending on the geographical location the property is located in, the
earnings can be quite significant. For example, urban city centers or
towns with colleges and universities tend to offer the highest income
streams because the demand for rental units is always high.

 Security

Owning property can offer the investor a sense of security because the
value does not tend to fluctuate as much as other assets such as stocks
and bonds. However, this does not mean that the investor will always
break even or earn a profit on their investment. Although housing
prices do not tend to fluctuate in the short term, they may increase or
decrease in value in the longer term. Therefore, it is important for the
investor to thoroughly research the area before making a purchase.

 Self Occupation

Another reason why many investors are attracted to investing in real

estate is because the property can be utilized by the investor. They can
either live on the property while they fix it up, or they can be a live-in
landlord and earn an income stream at the same time by renting out
the other rooms.

 Tax Shelter

Since tax laws on income properties vary depending on your

jurisdiction, you should always be sure to thoroughly research it
beforehand. However, it is very common for taxes on any gains to be
deferred until you sell the property. For example, if a house
appreciates in value from $250,000 to $300,000, the investor will not
be required to pay the taxes on the extra $50,000 until the property is
sold.

 Hedge Against Inflation

Real estate is one of the few assets that reacts proportionately to

inflation. As inflation goes up, housing values and rents go up.
Though real estate in general is a good hedge against inflation, rental
properties that are re-leased every year are especially effective, since
monthly rents can be adjusted upward in inflationary periods.

For this reason alone, therefore, real estate is one of the best ways to
hedge an investment portfolio against inflation.

 Real Estate Properties Exist in an Inefficient Market

Unlike the stock market, the real estate market is full of inefficiencies.
There is a lack of transparency relating to individual property values
and also the strength of different markets, which means that real
estate investments have the potential for very high profits.

Real estate investors who do their research, especially with help from
industry experts, can find great real estate bargains.

 Financed and Leveraged

Of course, you can technically purchase stocks and other assets using
debt, but this can be very risky because the financing is not

purchase a hard asset. Real estate, on the other hand, is a market

where products are usually bought with debt.
Disadvantages

 Legal Difficulties

Investing in real estate has the potential of being very confusing

because it requires that you are fully aware of the laws in each
jurisdiction that you own property. Some jurisdictions may even
enforce land ceilings which can make the investment risky. The legal
difficulties can become much more complex if the investor is
investing in commercial real estate.

 Maintenance Cost

The cost of maintaining the property can cause the investor to lose
money on the investment. In larger cities, property taxes can be so
high that it will be very difficult to resell the house at a higher value.

If the owner of the property is renting out the units, maintenance costs
can take large chunks out of the income stream. If the owner does not
personally know the tenants before renting out the units, they run into
the risk of renting the space out to someone who will not take care of
the unit, causing the owner to put large sums of money into repairs.
Furthermore, other costs such as electricity and heating will also add
up.

 Property Taxes
Before investing in real estate, the investor should always factor
property taxes into their valuation of the property. In larger urban
cities, property taxes can be significant and may cause the investor to
lose a big chunk of their profit. Property taxes will vary depending on
which city or state the property is purchased in. Therefore, the
investor should always consult with city officials before investing in
property.

 Higher Transaction Costs

When purchasing shares of a stock, the transaction cost for the trade is
very low, often just a few dollars. But when purchasing real estate, the
transaction costs are considerably higher.

Unlike other types of investments, real estate transaction costs can

significantly affect the value of the investment and make it more
difficult to turn a profit.

 Low Liquidity

Many investments are highly liquid, and can be bought and sold for a
profit in a fraction of a second, as with high-frequency stock trading.
But real estate investments are comparably illiquid, because
properties can’t be quickly and easily sold without a substantial loss
in value.
Real estate investors must be prepared to own a property for months
and years, especially if it will be leased out.

 Creates Liabilities

Real estate investing involves taking on a great deal of financial and

legal liability.

All the disadvantages mentioned above add to the liability a real

estate investor takes on when purchasing, financing, rehabbing,
leasing, managing, and maintaining a property. Even though
investment properties may be in a corporation, there are often
personal guarantees associated with the business, and the risk of
losing the income and profits generated by the company.
 Concept of Real Estate Market in India

Indian real estate has seen an unprecedented boom in the last few years. This
was ignited and fuelled by two main forces. First, the expending industrial
sector and created a surge in demand for office building and dwellings. The
industrial sector grew at the rate of 10.8 percent in 2006-07 out for which a
growth of 11.8 percent was seen in this sector. Second, the liberalisation
policies of government have decreased the need for permission and licences
before taking up mega construction projects. Opening the doors to foreign
investment is a further steps in these directions. The government has allowed
FDI in the real estate sector since 2002. With increasing sophistication of the
real estate market in India, the need for valuation systems and practice becomes
extremely acute, particularly in this large country of sub continental proportion.
This need becomes even more important in the evolving economy of India
which has embarked on the overall policy of liberalisation with foreign direct
investment and entry of several players in the market. Concomitantly, the
mortgage housing finance market for home ownership has also been maturing in
India and this present it’s own issues for a standardised system of valuation
practice. All these developments over the last 10 years have fuelled a lot of
churn in the real estate industry. Purchasing real estate requires a significant
investment and each parcel of land has unique characteristics, so real estate
industry has evolved into several distinct fields.

Real estate can be divided into three categories these are:

Commercial,

Residential,

Agricultural.
 The following factors influence the price and cost of the Real Estate:
1. The physical characteristics of the property
2. The property rights holding the property
3. Geographical area
4. The development rate

 Some kind of Real Estate Businesses Include:

Appraisal –Professional valuation services

Brokerage – Assisting buyers and sellers in transactions

Development – Improving land for use by adding or replacing buildings

property

Management – Managing a property for its owner

Real Estate Marketing –Managing the sale side of the property business
relocation

Services – Relocating people or business to difficult country

 Real Estate Marketing in India

Real estate agents use signage to market home for sale.

Each real estate agent’s goal is to sell or rent the properties they represent.
Successful real estate agents recognize that is to order to get clients to looks at a
property, they must market it effectively and accurately. By developing strategic
sake plans, agents are able to place their properties in front of potential clients
and real the rewards of generating interest and sales.

 Ways to market Real Estate

Real estate agents advertise the properties they have for sale a variety of ways
including online classified advertisement, websites and blogs, local print
publication, newsletter, email marketing campaigns and through open houses.
Agents and brokers often use a combination of these methods to maximise the
number of prospects they reach.

 Marketing helps make the sale

Marketing gives real estate agents and brokers an opportunity to reach a wide
audience with the properties they're trying to buy or sell. Through marketing
they are able to promote the features and benefits of the homes they're selling by
presenting potential buyers with written descriptions about the homes, as well as
pictures and sometimes video tours. Whether it’s an open house, which allows
agents to give tours and answer questions immediately, or an online
advertisement that reaches potential buyers who are out-of-sale residents
looking to relocate, effective team estate marketing generates qualified leads.

 Advertisement Requirements
Real estate advertisement that advertise the sake or lease of a property must
include the name of the broker the property is listed with and must indicate that
he is licensed as a real estate broker by the state of California. The California
department of real estate cities that material such as business cards, stationery,
broker or agent owned websites, fliers, brochures, electronic and postal mailing
and any other marketing materials used to state a relationship with a potential
buyers or renter, must include the broker's agent’s licence identification number.
However, advertisement in electronics media, print advertisement and for sale
signs used on a property do not need to Include the licensed number.

 Avoid thesepractices

When marketing real estate, it’s important for agent and brokers to keep the fair
housing act in mind. Advertising cannot suggest that it limits who can buy or
rent a hoe based on their race, color, national origin, religion, sex, family status
or handicap. Agents and brokers should also take care in ensuring that the
advertisements they place are accurate and don't misrepresent the facts about a
property. If your advertising violates any of these rules, individual may file
complaints with U.S department of housing and urban development. Agents and
brokers participating in discriminatory advertising may risk losing their licences
to practice real estate, jail time and fines.
Real Estate and Financing Trends in India

Securitization and CMBS

From the perspective of companies who want to sell off assets, securitization
schemes provide a greater diversity of alternatives to liquidate real estate.
Securitization is primarily used by the corporate houses to convert the corporate
real estate to commercial real estate.

Realty Funds/ Realty Mutual Funds in India

Initiated by SEBI, the REMFs true potential would be tapped only after the
setting up of REITs, as they infuse confidence among investors by serving as
custodians of title deeds. (REITs pool various real estate assets, including
warehouses, buildings, industrial estates and parks, malls, commercial and
residential premises and get listed on the stock exchange to enable investors to
buy and sell. They afford an opportunity to diversify the portfolio within that
limited sense as well. However, SEBI has not allowed the creation of REITs in
India as yet, though REITs are well established in the more mature real estate
markets. ) Currently the REMFs in the Indian market are targeted at the HNIS
and corporate investors.
Risks involved in the Real Estate Investment Market

 Liquidity risk

The real estate investment market is still in its infant stage. The time
required for liquidity of real estate property can vary depending on the
quality and location of the property.

 Regulatory risks

In terms of property ownership, permission from the Reserve Bank of

India is required for foreign investors. For capital repatriation,
investors need to apply for approval from the RBI, and foreign direct
investment is limited to a limited set of opportunities (e.g. townships).
The REMFs work within the SEBI framework. Being a developing
and growing sector, the rules, regulations and legalities demonstrate
frequent changes, making it seem as a cumbersome investment option
to the investors.

 Property market transparency risk

The Indian property market has low transparency when compared to

the more mature and developed real estate markets. Although market
transparency has improved, reliable and consistent information on the
Indian property market is still not easily available. There are also
more professional due diligence and valuation institutions needed.
This holds true even for the Tier I cities.

 Macroeconomic risks
Interest rates, inflation and exchange rate risks are amongst the
important macroeconomic indicators and have shown decreased
volatility. The provision of facilities, is in many regions, still
inadequate (education, transport infrastructure). These risk factors are
not likely to disappear in the near future, impeding the development
of the real estate sector.

 Ownership and Land Title Issues

Lack of information and low transparency in the real estate segment

in India, coupled with the age old property related issues discourages
the investment of the large players in the semi urban and rural areas
thus slacking an overall growth of the real estate sector.
 Demonetisation: Dissecting the impact on real estate sector
While the demonetisation initiative by the Central government means further
delays in ongoing real estate projects due to the massive cash crunch, it also
paves the way for a cleaner and more transparent real estate industry in the
times to come. Developers will now look for alternative funding arrangements
while end-users or investors will wait for more certainty before making any
move. Let’s delve deeper into the impact of this change on real estate sector in
short to long term.

Short-term: Market to undergo a slowdown

The sudden ban on Rs 500 and Rs 1000 currency notes has resulted in a
situation of limited or no cash in the market to be parked in real estate assets.
This has subsequently translated into an abrupt fall in housing demand across all
budget categories in the short term. While a share of this dwindled demand
could be attributed to distractions caused by the move, many industry experts
opine that this is a result of a trust deficit in the market. Money has become
dearer, leading to cautious spending and minimal transactions.

The slowdown owing to this announcement has been more severe in NCR
particularly Gurgaon, Mumbai Metropolitan Region (MMR) and certain Tier II
markets such as Surat and Vadodara. Minimal impact of demonetisation has
been felt in markets such as Bangalore, Pune and Chennai, which are primarily
end-user driven and rely on bank funding.

Liquidity has been severely impacted and this would result in a deflation with
limited sales over the next three months. In short, the move has taken the real
estate sector by a storm, and it would take time for all stakeholders in the sector
– brokers, buyers, owners and developers - to assess its repercussions on their
businesses and decisions.

In particular, transactions in the premium housing sector and the residential land
category – overtly dependent on the cashcomponent - would come to a standstill
in the short term.
Mid-term Impact: Reduced inflation, better home ownership appetite,
improved rental landscape

With limited money floating in the economy, the inflation rates are expected to
fall in the next 2-3 quarters. This, coupled with key policy developments such
as speculative repo rate cuts by the Reserve Bank of India (RBI), could mean a
better home ownership appetite. However, this could be restricted to the
affordable housing category.

The heavily cash-dependent secondary market could bear a colossal brunt of the
demonetisation move. With the gap between circle rates and market rates
bridging, owners would reduce ‘ask’ prices, impacting the average housing
prices across cities. Resale properties would, thus, become cheaper and this
could pressurise the primary market, as well. Developers might offer new
projects at discounted rates or propose incentives to magnetise buyers.

The dwindling demand for housing could benefit the rental market across
metros but the change might take a year or so to manifest its impact on the
rental price points. Both commercial and residential markets could see rentals
going north by 10-20 percent.

In the midst of all these developments, affordable housing will remain largely
unaffected due to their non-dependence on the cash component. In fact, the
demand for this category might witness an uptrend due to improved purchasing
power.

Long-term impact: Transparency, revived trust and capital inflows in the

realty sector

The real estate sector is expected to get cleansedof its ailments in the due course
of time owing to the elimination of black money clubbed with multiple
regulatory changes such as the Goods and Services Tax Act, Real Estate
(Regulation and Development) Act and amendment of the Benami Transactions
(Prohibition) Act. Subsequently, project approvals will be quicker, resulting in a
substantial reduction in the total cost of construction, thereby, the ‘per unit’
.cost. Fair pricing would mean a revived demand for new projects in the
market.

Demonetisation could also mean fresh sources of funding for developers to

complete their projects. Some of the alternate sources may include the
following:

• Developers will be forced to clean up their balance sheets so that they can
avail funding from legitimate sources, however, this may come at extremely
high costs from the Non-banking financial companies (NBFC) segment.
• Developers can avail short-term loans from their existing buyers at market
price with a promise to deliver the project on time and at an interest rate as per
the agreement in the sales deed.
• Investments from private equity firms would usher positive sentiment across
the market, helping developers to source funding and strengthen end-user
demand.

The real estate sector could witness a major revolution with cash transactions
getting eliminated and a major share of trades going online with the penetration
of alternative forms of payment such as E-wallets, apps and plastic money. To
sum it up, the demonization of old currency has ushered a new era for the real
estate industry in India that would be transparent, corruption-free, organised and
veracious.

Real Estate demonetisation: Measuring the impact.

After note ban, a large number of buyers went off the market due to scarcity of
cash and sellers can do little but wait. This will also result in the reduction of
prices, thereby benefitting buyers
Demonetisation — the most-repeated word used by the nation in the current
times. Since November 8, 2016, the day Prime Minister Narendra
Modiannounced this revolutionary step affecting India’s economy,
demonetisation has dominated every conversation. The purpose of the entire
exercise was to clean up the system, and that is how it invariably got connected
with real estate.
It is high time to tame the wild rumours and uniformed angst about the impact
of demonetisation — and other macroeconomic and policy changes in 2016 —
on the Indian real estate sector.

Let’s have a bird’s eye view of the entire market:

Pre-demonetisation-The Indian real estate sector has been facing significant
challenges in the past few years in terms of sales and overall growth. With a lot
of measures, the sector was clearly pointing towards a slow and gradual, but
sure recovery.
Sales & prices: After stagnating or even declining sales for past couple of
years, the first half of the year saw some upward movement on the back of
many positive factors. These include growth in the economy, attractive deals &
discounts by developers, and schemes such as Smart Cities, AMRUT and
‘Housing for All by 2020’. The positivity these factors induced, coupled with
increasing incomes and lowering of prices, encouraged buyers to begin
finalising deals that were previously put on hold. Importantly, it was not only
investors but also end-users who started coming back in the market.
Unsold inventory: Except for a few pockets in Delhi-NCR, most of the
prominent real estate markets, saw a gradual decline in the unsold inventories
that had been choking up liquidity for builders. One of the reasons was the
residential market being flooded with expensive projects, against the demand
for more affordable ones — in simple terms, a classic supply-demand
mismatch. To liquidate their holdings and ensure financial stability, developers
became amenable to negotiating more and offering attractive deals. They also
tied up with financial institutions to offer affordable loans, and announced other
schemes to help buyers take decisions.
New launches: New launches reduced markedly in the current fiscal, owing to
higher unsold inventory. Also, catering to the demand of affordable housing,
new launches started focusing on that segment instead of catering to the high-
end residential sector.
Post-demonetisation-Demonetisation brought a lot of confusion,
uncertainty and, most of all, rumour-mongering — especially when it came to
the realty sector. No doubt, everyone was affected by this radical measure, and
initially, all possible economic activities slowed down to a large extent.
This is not to say that the real estate sector has not been affected by
the demonetisation move; however, it is important to understand where the
pinch really lies, and where the silver lining is. The sector contributes 5-6 per
cent of the country’s GDP, and any misinformation in a sector that is largely
sentiment-driven can lead to chaos.
 What's new in Budget 2017 for real estate sector?
Finance Minister ArunJaitley in his Budget 2017-18 speech has given one of the
much needed thrust to the Indian real estate sector. The minister announced that
the ‘Affordable Housing’ will be given ‘Infrastructure’ status, which is likely to
result in increased participation from private players.

“The announcement of affordable housing being given Infrastructure status is a

welcome move and will act as a catalyst to meet the objectives of Housing to all
by 2022. Credit off-take towards affordable segment of housing will lead to
creation of supply especially for both stake holders the first home buyer and
developer who will now have access to cheaper funding,” said Ravi Ahuja,
Executive Director, Office Services & Investment Sales at Colliers International
India.

Jaitley also announced that National Housing Bank will refinance indiviual
loans worth Rs 20,000 crore in 2017-18. “NHB allocation will give a big push
to affordable Housing Finance Ccompanies namely AU housing, Gruh Finance,
Repco,” said India Ratings.

On the all-important front of personal income tax, the existing tax rate for
incomes between Rs. 2.5 lakh to 5 lakh has been reduced to 5%, and taxpayers
in other categories will also save Rs. 12,500.

Key highlights for real estate sector in Union Budget 2016-17:

* Affordable Housing has been given the Infrastructure status

* 1 crore rural houses will be created by 2019

* National Housing Bank to refinance Rs 20,000 crore loans

* Pradhan MantriAwasYojana to get Rs 23,000 crore

* Real estate developers to get tax relief on unsold stock as liability to pay
capital gains will arise only in the year a project is completed

* Instead of Built up area of 30 and 60 sq meters, the carpet area of 30 and 60 sq

meters will be applicable for affordable housing

* Holding period for capital gains tax for immovable property reduced from 3
years to 2 years
* Window for availing 3 year profit-linked incentives for start ups increased to
7 years against 5 years earlier

* Tax break of 1 year post receipt of the completion certificate, for the unsold
stock

* New FDI policy under consideration

* No cash transaction above Rs 3 lakh will be allowed

* Rs 2.41 lakh crore has been allocated to boosting infrastructure for

transportation

* IndraAwasYojana will be extended to 600 districts

* Total allocation for the infrastructure sector is Rs 3,96,135 crore

* Allocation for National Highways to be at Rs 64,000 crore

* No cash transactons above 3 lakh

* Indexation for capital gains shifted from 01-04-81 to 01-04-2001

 TOP REAL ESTATE COMPANIES LISTED ON STOCK
EXCHANGE

DLF
 Consolidated

MARKET CAP (RS CR)-25,957.11

P/E-37.21
BOOK VALUE (RS)-153.36
DIV (%)-100.00%
MARKET LOT-1
INDUSTRY P/E-25.87
EPS (TTM)-3.91
P/C-17.59
PRICE/BOOK-0.95
DIV YIELD.(%)-1.37%
FACE VALUE (RS)-2.00
DELIVERABLES (%)- 24.09

 F & O QUOTE

OPEN PRICE-147.10
HIGH PRICE-147.25
LOW PRICE-144.50
PREV. CLOSE-146.25
AVERAGE PRICE-145.78
NO. OF CONTRACTS TRADED-5,017
TURNOVER (RS. IN LAKHS)-36,568.91
MARKET LOT-5000
OPEN INTEREST-28,275,000
OPEN INTEREST CHANGE-(-290,000)
OPEN INTEREST CHANGE %--1.02
FINANCIALSStandalone
Income Statement
STANDALONE Dec'16 Sep'16 Jun'16 Mar'16

Net Sales 960.69 730.56 676.17 1,133.87

Other Income 174.68 214.64 231.59 462.93

PBDIT 420.97 317.60 200.45 533.22

Net Profit 170.90 124.39 67.46 1,088.94

Balance Sheet
Mar'16
(In Rs Cr)

Total Share Capital 356.74

Net Worth 17,850.07

Total Debt 8,419.48

Net Block 3,700.30

Investments 3,618.06

Total Assets 26,269.57

Peer Comparison
Market Cap
52
COMPANY LAST % 52 WK MARKET
WK
NAME PRICE CHANGE LOW CAP
HIGH
DLF 145.70 -0.41 169.20 86.10 25,992.79
Oberoi Realty 333.40 0.60 377.85 224.00 11,316.17
Godrej Prop 356.60 0.62 394.80 275.05 7,715.54
Prestige Estate 174.55 0.78 224.00 129.85 6,545.63
Phoenix Mills 369.90 1.16 445.00 238.30 5,661.94

Share Holding Pattern in (%)

DEC' 16 SEP' 16 JUN' 16 MAR' 16

Promoter 74.95 74.95 74.96 74.95

Public (FII + DII) 25.05 25.05 25.04 25.05
Others 0.00 0.00 0.00 0.00
Total 100.00 100.00 100.00 100.00
HDIL(Housing Development and infrastructure Limited)

 Consolidated

MARKET CAP (RS CR)-2,875.28

P/E-19.15
BOOK VALUE (RS)-257.20
DIV (%)-0.00%
MARKET LOT-1
INDUSTRY P/E-25.87
EPS (TTM)-3.46
P/C-18.40
PRICE/BOOK-0.26
DIV YIELD.(%)-(-%)
FACE VALUE (RS)-10.00
DELIVERABLES (%)- 16.75 new

 F & O QUOTE

OPEN PRICE-66.00
HIGH PRICE-67.00
LOW PRICE-65.40
PREV. CLOSE-65.70
AVERAGE PRICE-66.21
NO. OF CONTRACTS TRADED-841
TURNOVER (RS. IN LAKHS)-4,454.61
MARKET LOT-8000
OPEN INTEREST-23,096,000
OPEN INTEREST CHANGE-(-1,056,000)
OPEN INTEREST CHANGE %-(-4.37)
FINANCIAL
Income Statement

Dec'16 Sep'16 Jun'16 Mar'16

Net Sales 96.57 214.88 256.35 336.40

Other Income 4.25 4.88 4.73 4.75

PBDIT 119.89 110.39 122.57 167.83

Net Profit 13.89 36.79 41.10 55.39

Balance Sheet
Mar'16
(In Rs Cr)
Total Share Capital 419.00

Net Worth 10,997.19

Total Debt 1,950.69

Net Block 136.60

Investments 1,207.68

Total Assets 12,947.89

Peer Comparison
Market Cap
52 52 MARK
COMPANY LAST %
WK WK ET
NAME PRICE CHANGE
HIGH LOW CAP
25,948.
DLF 145.45 -0.58 169.20 86.10
19
Oberoi 11,316.
333.40 0.60 377.85 224.00
Realty 17
7,715.5
Godrej Prop 356.60 0.62 394.80 275.05
4
Prestige 6,545.6
174.55 0.78 224.00 129.85
Estate 3
Phoenix 5,661.9
369.90 1.16 445.00 238.30
Mills 4

Share Holding Pattern in (%)

DEC' 16 SEP' 16 JUN' 16 MAR' 16

Promoter 36.49 34.25 34.25 34.25
Public (FII + DII) 63.51 65.75 65.75 65.75
Others 0.00 0.00 0.00 0.00
Total 100.00 100.00 100.00 100.00
 RESEARCH REPORT ON REAL ESTATE

Shopping Centres
F&B driving demand in Asia During 4Q16, retail rents for the most expensive
locations in shopping centres remained relatively stable. Of the 18 featured
markets, only Auckland and Manila saw a quarterly rental increase of 1% or
more for the most expensive locations, while the remainder mostly recorded flat
rents.the aggregate Asia Pacific Retail Rental Index held relatively
stable.
Greater China
• Inbound tourism and retail sales in Hong Kong showed signs of stabilisation
with total tourist arrivals and retail sales declining at a more moderate pace in
October-November. Mass retailers – in particular cosmetics and active wear
retailers - as well as F&B operators underpinned demand, whilst luxury retailers
continued to downsize.
• Landlords of top malls in Beijing looked to boost their profile and increase
footfall by utilising ‘trendy retailers’. For example, Greybox, a specialty coffee
brand under Roseonly, opened its first store at Kerry Center. Key properties
with a strong reach across the city continued to thrive, while others were
squeezed between these thriving malls and the booming suburban market,
which has come into its own as a mature alternative for most shopping needs.
• Sentiment improved among fashion retailers in Shanghai as several brands
experienced y-o-y sales increases after a weak 1H16. However, this did not
translate into increased leasing activity as brands remained cautious about
overcommitting themselves. Overall leasing patterns remained similar to earlier
in the year with F&B remaining strong, particularly from mid-range restaurants
serving regional Chinese cuisine. Children’s retailers continued to expand, as
did fitness centres, sportswear brands and other tenants specialising in healthy
lifestyle products and services.
• Muted growth in Guangzhou retail sales resulted in subdued leasing demand.
Fashion retailers, particularly in the mid-to-high-end segment, became even
more cautious in expansion plans, and some even closed shops during 4Q16.
F&B remained the key driver of demand, while sportswear retailers were the
exception among fashion retailers and performed relatively well.
Southeast Asia
• The leasing environment in Singapore continued to be confronted by weak
consumer and retailer sentiment. As such, the entrance of new-to-market
international retailers was limited in 4Q16 and mostly related to the F&B trade.
• Bangkok remained a magnet for foreign brands with at least five
internationally recognised retailers opening their first stores in Thailand in the
city in 4Q16, most of which operate in the F&B segment.
• Robust leasing activity remained evident among key retail developments in
Metro Manila. Notable brands to open their first stores in the Philippines
included US clothing brand Vera Wang, US F&B brands Fatburger and Sugar
Factory, as well as Czech footwear brand Bata and Japanese F&B brand Tokyo
Milk Cheese Factory.

Australia / New Zealand

• International retailers continue to be attracted to the strong fundamentals of
Melbourne and Sydney retail markets; while local retailers are seeking ways to
differentiate their retail offerings to compete with new entrants and online
retailers. Many shopping centre owners are seeking to upgrade their portfolio
quality by refurbishing assets, and are also looking to grow their portfolios
through shopping centre extensions. India
• A shortage of available space in premium malls continues to impede leasing
volumes in India’s top markets. Nevertheless, the strong long-term outlook has
drawn brands, with the likes of Cath Kidston, Kate Spade and Marvel Comics
opening their first stores; while other notable retailers such as H&M, Steve
Madden, Aeropostale and Decathlon have further expanded. Demand patterns to
be consistent with recent trends
• Landlords in China are likely to look to non-traditional tenants to differentiate
their malls but this trend may be difficult to sustain. Nonetheless, experience-
related retailers, including F&B, are most likely to be the tenants continuing
their expansion, while general retailers exercise caution. In Hong Kong,
weakness in inbound tourism will present challenges in the short term but a
recovery may materialise in the later part of the year.
• Subdued consumer sentiment and spending are likely to see a difficult
operating environment persist in Singapore, while emerging Southeast Asia’s
rising middle class and household incomes to continue to attract international
retailers and F&B operators.
• Above-average population growth and large tourism numbers have bolstered
retail trade and suggest market conditions in Sydney and Melbourne will remain
healthy over the short term.
• Foreign retailers to grow their presence in key markets in India, drawn by the
appealing long-term prospects.

High Streets
Prime space remains in demand
Greater China
• Leasing slowed ahead of the holiday season, with landlords turning more
accommodative towards short-term tenancies to minimise vacant periods. A
notable lease involved Victoria’s Secret committing to a street shop spanning 6
floors (51,188 sq ft) at Capitol Centre in Causeway Bay reportedly for HKD 7
million per month, paying nearly 50% less than the existing tenant Forever 21.
• Shanghai’s once dominant shopping areas such as West Nanjing have faced
increased competitive pressures, pushing many landlords to re-evaluate tenant
profiles to lift footfall and their profile. Despite this situation, brands are still
looking for space in established retail properties.
North Asia
• There were signs of improvement in consumption in Tokyo with some luxury
brands seeing healthy sales underpinned by domestic consumers. Okura House
opened in Ginza Chuo-dori with Cartier as the ground floor tenant and F&B
retailers Kitcho and Bills located on higher level floors.
• Consumer sentiment in Seoul touched a multi-year low in December weighed
down by political turmoil and economic uncertainty. Even so, foreign retailers
continued to open new stores including athletic apparel retailers Lululemon and
Under Armour.
Southeast Asia
• Singapore’s retail market continued to be beset by persistently weak consumer
and retailer sentiment. As such, the entrance of new-to-market international
retailers was limited in the quarter and mostly related to the F&B
trade.
Australia / New Zealand
• International retailers were drawn to Auckland in 2016 with numerous brands
opening their first stores in the country, greatly increasing the range of options
available to local consumers. While international retailers flourished, a number
of New Zealand and Australian operators ceased operations including major
national occupiers Pumpkin Patch and Dick Smith. India
• Key high streets in India were the epicentre of leasing activity amid limited
vacancy in premium malls. In addition, major high streets benefit from easy
accessibility and in a few areas, greater visibility and footfall than malls.
Prominent F&B brands such as Starbucks and Pizza Express continued to open
up outlets on streets in major office districts.
Asia Pacific High Street Rents, 4Q16
Net Face Rents (USD per sqm per annum)
Manila - Bonifacio Global City
Hong Kong - Russell St
2,000 4,000 6,000 8,000 10,000 12,000
Delhi - Connaught Place
Mumbai - Linking Rd
Brisbane - CBD
Melbourne - CBD
Sydney - CBD
Auckland - Queen St
Osaka - Shinsaibashi
Singapore - Orchard Rd
Shanghai - West Nanjing Rd
Seoul - Myeongdong
Tokyo - Ginza
Appendix
Shopping Centres
Rents are average net face rents for prime level locations in the best prime
shopping centres and on a net lettable area basis. Net face rents are calculated
excluding the tenant outgoing costs and landlord incentives are not taken into
account. The most expensive locations in shopping centres can garner rents in
excess of three or four times that of the average mall level. Limited available
space due to strong demand and a lack of new additions in the most expensive
& central locations contribute greatly to the rental gap. A higher level of sales
activity and increased brand exposure are core reasons retailers seek these
locations. Stock weighted average of average net face rental movements for
prime shopping centres across Asia Pacific.
 ARTICLES
Popular Articles about Real Estate
NEWS
Middle path
October 30,2005| Soumyadipta Banerjee, TNN
The real estate market, which has been steadily forward over the past two year
in Kolkata now, stands witness to yet another interesting trend. Builders, bank
and property managers alike are now agreeing to the fact that the number of
customers in the MIG sector has almost doubled over the past one year. More
importantly, it seems that the average age of customers have dropped to around
35 years mark! “ The market for loans in the country continues to grow at the
rate of 30 percent per annum in India.
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NEWS
Union Budget 2015: Analyst see money testable value of REITS at over $96
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March 6, 2015| PTI
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AHMADABAD METRO TO PUSH CITY’S REAL ESATE MARKET
November 11, 2014
By pushpa Rawat, Magicbricks.com Bureau apart from a suitable budget and a
strategic location, physical infrastructure also plays an important roll in the
decision of buying a property. The approval for the Ahmadabad Metro Rail
Project Phase-1 is expected to lift the real estate market of the city. The metro
Phase-1 stretch covers two corridors- the north south corridor starting from
APMC, vasna to Motera stadium followed by the east-west corridor starting
from.....

NEWS
Will Diwali brighten up real estate market?
October 14, 2007| E Jayashree Kurup, TNN
Will Diwali brighten up the real estate market again? Everyone’s watching with
bated breath. While stock markets crossed the 18,000 mark and continued the
bull run, the sentiment among real estate buyers continues to be negative. When
the RBI raised weightage on home loan interest rates, it was to curtail the
growing speculation in the real estate market where investors were underwriting
large numbers of units to book future profit. But while the move has slowed
down the investors, it......

NEWS
Rising US dollar strengthening real estate market in Dubai
February 20, 2015| PTI
DUBAI: Rising US dollar combined with world class infrastructure and high
quality of life are strengthening real estate market in Dubai which is competing
with other global cities such as Paris and London, according to a report real
estate consultancy Knight Frank in the report said that USD 1 billion could buy
146 sq m of prime property in Dubai, whereas the same area would cost USD
3.5 million in Paris and USD 5.8 million in......

NEWS
How to sell property during a slowdown
February 16, 2015 | Sanjay Kumar singh
If you want to sell an apartment, you may find it a challenging task in the
current scenario with real estate market in India is passing through difficult
times. But there are ways you can improve your odds. Advertise locally first
when you are trying to sell an apartment, as a first step, localize your search.
People who have lived on rent in the area and like it, or those who have
relatives living in the neighbourhood, are more amenable to a purchase. If you
live in an apartment.

Top 6 real estate scams and how home buyers can avoid the

“ It is double whammy for gullible real estate invertors because

justice for fraud victims is long drawn and uncertain, due to the
complex nature of disputes in this sector. The absence of an industry
watchdog compounds the matter further, “ informs Bank Bazaar, a
multi brand financial product comparison platform.

Here is a rundown of scams typically plaguing the Indian real estate

market that investors need to keep an eye out for:

 False promises:
With increasing competition in real estate, builders are trying to lure
as many buyers in the initial of a project to meet their funding
Requirements. Advertisement with false promises are part of it. A
Gurgaon based real estate