Industrial Analysis

PGDM 2019-2021

Division: C

GROUP – C4

INDUSTRY: REAL ESTATE

Submitted By:

Name Company SAP ID Roll No.

Aishwarya M. Prestige Group 802031920189 C001
Ashish Yadav DLF 802031920189 C009
Ankita Sadani Omaxe 80203190143 C006
Nikhil Mehta Sobha Developers 80203190104 C028
Simran Sha Godrej Properties 80203190155 C045
Tamal Mandal Oberoi Realty 80203190103 C050
 EXECUTIVE SUMMARY
Introduction
The real estate sector is one of the most globally recognized sectors. 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.

Market Size
By 2040, real estate market to grow to Rs 65,000 crore (US$ 9.30 billion) from Rs 12,000 crore (US$
1.72 billion) in 2019. Real estate sector in India is expected to reach a market size of US$ 1 trillion by
2030 from US$ 120 billion in 2017 and contribute 13 per cent of the country’s GDP by 2025. Retail,
hospitality and commercial real estate are also growing significantly, providing the much-needed
infrastructure for India's growing needs. Indian real estate increased by 19.5 per cent CAGR from
2017 to 2028.
Sectors such as IT and ITeS, retail, consulting and e-commerce have registered high demand for
office space in recent times. Commercial office stock in India is expected to cross 600 million square
feet by 2018 end while office space leasing in the top eight cities is expected to cross 100 million
square feet during 2018-20. Gross office absorption in top Indian cities has increased 26 per cent year-
on-year to 36.4 million square feet between Jan-Sep 2018. Co-working space across top seven cities
has increased sharply in 2018 (up to September), reaching 3.44 million square feet, compared to 1.11
million square feet for the same period in 2017. New completion of office space is expected to
increase 15 per cent to cross 43.6 million square feet in 2019.
 SEGMENTATION, TARGETING & POSITIONING
Segmentation
The main segments of the real estate sector are residential real estate, commercial real estate
and industrial real estate. The residential sector focuses on the buying and selling of
properties used as homes or for non-professional purposes. The commercial sector consists of
real estate used for business purposes; common types include retail and office space.
Industrial real estate is comprised of properties used for manufacturing and production:
factories, plants, etc.

Metropolitan residential segment

The relative lack of sophistication of purchasers is less acute for leasing and managing
property, where landlords generally have a level of expertise, an ability to assess risk and
reward, and to assess the relative merits of different investment strategies.

Metropolitan commercial segment

Purchasers of commercial estate agency services are viewed as being more sophisticated and
experienced than residential purchasers, and as ‘very demanding and footloose.’

Target Market – First Home Buyers

The Stats:
 Age 25-34 (Millennials). Average Age is 32
 86% have a Mortgage.

General Traits:

 Spend a lot of time on phone/laptop/devices

 Tech Savvy – they like the newest tech
 Seek advice on purchases from family & friends

How to Market to First Home Buyers

 Use more than 1 type of media – Video, Images, gif, 360 photos, Virtual Reality etc.
 Focus on word of mouth – they seek advice from family and friends & online reviews.
 Fast response times – they expect it.
 Try and Go Viral – make your material so interesting/valuable that people want to
share it

What First Home Buyers are Looking for in a Home:

 Space to grow family

 Affordable location

 Latest Technology

 Close to family & friends

Target Market – Young Professionals

The Stats:

 Age 25-45
 58% are single. 42% are couples
 64% move homes every 5 years

General Traits:

 Spend a lot of time on phone/laptop/devices

 Tech Savvy – they like the newest tech
 Spend long hours at work
 Environmentally and Health Conscious
 Gravitate to designer brands
 Expensive tastes
 Eat out or get home delivery food regularly
 Look for low maintenance homes
 Security is important for single females

How to Market to Young Professionals

 Be Exclusive. Young professionals like to show off to friends and family. They want
things that other people don’t have.
 Be Sophisticated. They are typically well educated and enjoy the finer things in life.
 Be Authentic. They are keenly aware of what is marketing speak vs real talk.
 Convenience. They are willing to pay for it.
 Fast response times – they expect it.

What Young Professionals are Looking for in a Home:

 Location – inner city, close to work and entertainment precincts

 Low Maintenance – apartments and townhouses with little maintenance required
 Luxury – they want a nice space to relax and unwind
 Security – large proportion of young single people who need to feel safe/secure
 Latest technology

Target Market – Upgraders

The Stats:

 Age 40-59 (Generation X)

 The largest property buyer demographic

General Traits:

 Typically families with 2 or more school aged kids

 2 cars, multiple bikes, sports equipment etc – need for storage space
 Health Conscious. Parents want a healthy lifestyle for their kids
 Safety/Security is important
 How to Market to Upgraders

 Its all about the kids. The happiness of their children is paramount to most parents.
Focus in on this emotion.
 Mixed Media. They consume media in various forms so in order to be seen you will
need to be present on multiple platforms.
 Efficiency. Upgraders are busy people. They don’t have a lot of time so make sure
you’re using their time efficiently.
 Honesty/Transparency. Upgraders are protective of their families. They want to
know exactly what the deal is. They appreciate honesty and transparency.

What Upgraders are Looking for in a Home:

 Space – families need space to grow into and for all the family members to have their
own space to live in.
 Backyard/Outdoor space for kids to play
 Proximity to good schools , shops, parks
 Security

Target Market – High End Buyers

The Stats:

 Age 40-60.
 High proportion of business owners & entrepreneurs

General Traits:

 They want the best of the best

 Well connected to other high end buyers
 Often own multiple properties.
 They know what they want and go after it


How to Market to High End Buyers

 High end buyers want the best of the best, you must position your brand as a Luxury
Brand.
 Mixed Media. They consume media in various forms so in order to be seen you will
need to be present on multiple platforms.
 High End Buyers are savvy to what is On Trend and what is not. They expect the
latest of everything. Make sure you have well designed points of contact.
 Form relationships. They like to feel special/important. Always prioritise the client.

What High End Buyers are Looking for in a Home:

 Location – Spectacular views and exclusive location

 Luxury Design and Finishes
 Leading High-End technology

 Space/Size. The bigger the better.

Target Market – Downsizers/Empty Nesters/Retirees

The Stats:

 Age 50-75.
 92% have no children living at home

General Traits:

 Approaching or already into retirement

 Have adult children not living at home
 They are self-assured and independent
 They are motivated by positions of prestige
 Safety/Security is important

What Downsizers are Looking for in a Home:

 Low Maintenance (not necessarily smaller)

 Single Storey/Elevators
 Quiet Location/Privacy
 Convenience to shops, cafes, public transport
 High End Finishes and Fittings
 Safety/Security
 Close to medical facilities
 CONSUMER BEHAVIOR
Consumer behaviour is the study of individuals, groups, or organizations and all the activities
associated with the purchase, use and disposal of goods and services, including the
consumer's emotional, mental and behavioural responses that precede or follow these
activities. 
RESEARCH METHODOLOGY-
Location Visited: Prestige Group, Sparkle Reality, Jain Housing, Brigade Group, Shriram
properties
Learnings:

Residential Projects:
There has been a lifestyle shift in terms of consumer preference when it comes to space more
people prefer compact homes as opposed to large spaces .1500-1800 sq ft for a 3 BHK and
1100 – 1000 sq ft for a 2 BHK. As more women have entered into the workforce and have
less time to spend with the kids more amenities for kids are considered a must at most
residential complexes. The amenities may include but not be limited to a pool, park, tennis /
basketball court, play area etc. Also, as this is a fixed / large investment people tend to carry
out proper research which goes on for about a month. Just like in any other product brand
plays an important role in this purchase as well. Locational advantages hold maximum value
the level of commercialization in the locality the proximity of necessities etc is a key factor.
Depending on size of the project channel partners are identified. Large projects JLL, ICS,
KNIGHT etc take over exclusive marketing. Individual brokers, smaller brokerage firms
engage in project of similar size. Some also go for in house minimum marketing and direct
sales. Most developers have a pre-launch party or a channel partner meet before the official
launch of the project and pick their correspondents accordingly. The builders expect 20% of
sales to be done at time of launch period.
Commercial Projects:
Consumers for commercial real estate look for many factors before finalizing a commercial
property. The property must be connected perfectly with transport facilities like road, airport,
railways, etc., footfall of customers and easy availability of raw materials for the company
buying the property. Consumers also like it if the real estate company provides a free hand in
deciding the interiors for the property. Before the construction of the property the real estate
company sells twenty percent of the property. So, the subsequent companies look at which
company which has already booked the property. Consumers look at the surrounding like
what kind of businesses are there in the nearby areas and if the facilities like water, electricity
etc., are easily available. If the commercial property is built in an area which has never seen a
commercial property, then the consumers also look if the surrounding has a scope for the
development of residential properties. Most of the plots for the commercial projects are
owned by government which are leased to private agencies which develop commercial
projects and pay rent. Commercial plots like food courts generally follow this model. There is
always a small office of the private agency in these food court where any vendor who wants
to open a food stall in the food court must list themselves before they get a slot. The
marketing of commercial plot is generally a tough job. Hoardings and online portals are
generally the way of marketing. Hoardings are generally put up in areas which are already a
tech-park or are full of commercial developments. Online platforms like Magic-Bricks,
99Acres etc., serve the purpose of online marketing.
Important traits observed during a purchase-
For B2C: Each Customer is different from one another and hold vivid opinions, one has to
mold themselves accordingly, for which profiling comes to play. Profiling of the customer is
done either on spot by way of means of a general enquiry form or beforehand through profile
scanning. This decides the flow and approach of the sale pitch which is unique to customers’
needs and wants, catering to just that and more.
For B2B: This process is a one-person profiling, wherein a company’s requirements and
current roles are analysed. Depending upon the study- Area, structure, amenities are
developed for the specific project. In case of common office spaces the basic structure is
developed without identifying the exact end users (eg in a mall) once that is done intrested
parties approach the developers and rent / lease out specific sq ft on required floor and further
furnishings etc is done by them and not the developer.
Value Chain participants:
it is easy to see why a single real estate transaction can distribute revenue to so many services
providers that are so different in what they do. The main players who add value and makes a
living off property transactions taking place are:

1) Builder or developer
In order to buy a house, the house has to either already completed being built, or in the
process of being built. Developers are known to bid for valuable land in order to build
houses, especially condominiums on them. They can afford to pay millions of dollars for a
piece of land in a great location because they know that the costs will eventually be passed on
to home buyers and investors at a premium.

2) Real estate agent

When a property buyer or a home seller makes the decision to get on the market, a real estate
agent or a broker is usually the first professional they contact. They get paid as much as 5%
on the sale price.

3) Online search portal

Search portals are the first or second player that a client gets exposed to before or after the
real estate agent/ broker. These portals have thousands of agents putting up listings for any
visitor to search. The portals make money from charging for premium listings or from ad
sales which will eventually be borne by consumers. Some of the most common sites include
magic bricks,

4) Lender
A mortgage lender (banks- home loan) is the single player that makes the most money out of
property transactions. This is because the total amount of money a borrower repays over the
life of a loan can easily be double of what the original sale price of the house is.

5) Lawyer
As a mortgage is a legal contract, attorneys will inevitably be involved as well. The law firm
or individual lawyer engaged to document the transaction will be decided by the buyer or
seller. Usually the buyer.

6) Insurers

Insurance has become an essential item in the process of real estate transactions.

This helps protect buyers from buying into serious ownership problems that might arise in
future. Other than title insurance, there are also fire insurance, homeowner’s insurance,
liability insurance, etc,

7) Interior designer
One of the popular reasons why homeowners buy a new home is so that they can design their
dream homes to fulfil a lifelong goal. Interior designs feed off the dream of home buyers by
helping them realize the same. When the price of a house is put into perspective, a home
buyer would usually be willing to spend a lot of money on renovations and remodelling.

8) Property management companies

Properties can either be manged by the developers themselves or can be outsourced to other
companies. They charge a sum for the same and is incurred or a regular basis by the final
consumer.

9) Tax
Property tax includes sales tax (stamp duty, registration charges, service tax, vat, TDS, capital
gains tax), stamp duty, registration charges, service tax.
 Social
Residential Commercial Retail Hospitality
Infrastructure
1)Super 1)Co- 1)Shopping __ 1)5-Star
Luxury Working Malls Hotels
DLF
2)Premium Spaces 2)Clubs
2)Tech Parks
1)Group 1)Office 1)Shopping __ 1)Hotels
Housing Spaces Malls & 2) Service
Omaxe 2) Hi Tech 2)SCO’s Shops Apartments
Townships
1)Hostels 1)Corporate 1)Multiplexs 1) Academic 1)Hotels
2)Premium office 2)Food institutions
flats 2) IT Parks Courts 2)Training
Sobha
3) Centres
Convention
Centres
Oberoi Premium Office Space Shopping School 5-Star Hotel
Realty Flats Mall
1)Group 1) Office __ __ __
Housing Spaces
Godrej 2)Luxury 2) IT parks
Properties Villas and
Apartments
1)Premium 1)Tech Parks 1)Shopping __ 1)Hotels
Prestige flats 2)Office Malls 2)Resorts
Group 2)Luxury Spaces 3)Clubs
villas
1)Luxury 1)Office 1) Shopping Schools 1)Clubs
Brigade Apartments Spaces Malls
Group 2)Villas 2)Townships
1)Premium Shopping
Shriram Apartments Malls
Properties 2)Regular
 Flats
3)Smart
Flats
4)Penthouse
1)Regular Tech Park Shopping Schools
Salarpuria Flats Malls
Sattva
1)Regular Office
Flats Spaces
Purvankara
2)Premium
Flats
1)Luxury Infocity
Shapoorji Apartments
Palonji
1)Luxury
Apartments
SNN
2)Regular
Apartments
1)Regular 1)Township
Windsor Apartments
Developers
1)Luxury
Sparkle Flats
Realty

The product portfolio above indicates a significant gap in the area of social infrastructure and
hospitality. Any new player can tap these areas and create a stronghold and emerge as a
strong player in the market.
 PERCEPTUAL MAP

For perceptual map we have taken following dimensions -

● Status (High and Low)
● Segments (More Diversified and Less Diversified)
The status of the real estate companies is based on analysing the reports and research available and
evaluating on the basis of parameters like consumer perception, brand awareness, brand strength and

customer buying behaviour.

The segments are based on the product offering which is categorized into these segments as
Residential, Commercial, Retail, Social Infrastructure, Hospitality. Product Portfolio is taken as the
reference and the real estate companies having the projects spread across all the segments are falling
under the Most Diversified Segment against the ones only catering to few or one of the segments are
falling under the Less Diversified Segment.

PROJECT FLOW
Flow:
1. Contracts
- Supply Lot Sale Agreement
- Supply Construction Agreement
- Supply Contract Site Plan
- Secure Financing
- Construction Loan Settlement
2. Document Review & Revision
- Review & Finalize Plans
- Review & Finalize Site Plan
- Print Construction Drawings
- Approve Revised Site Plan
3. Bids & Contracts
- Make Copies of Plans
- Make Copies of Specifications
- Distribute Plans & Specifications
- Receive Bids
4. Grading & Building Permits
- Stake lot
- File Grading & Building Permit Application
- Grading Permit Issued
- County Permit Process
- Building Permit Approved
- Building Permit Issued
5. Site Work / Construction
- Location Survey
- First Floor & Second Floor Deck
- Concrete Slabs
- Plumbing
- Electricals
- Roof, Windows Doors
- Exterior
- Insulation
- Interior
- Hardware
6. Building Inspection
7. Final Punch-Out
- Punch Out Walk-thru List
- Trim and Adjust Doors
- Paint Touch-up
8. Cleaning
9. Final Walk-Through
10. Move-In

References
https://www.ibef.org/industry/real-estate-india.aspx
https://www.cbre.co.in/en/research-reports/India-Real-Estate-Market-Outlook-2019
https://www.grantthornton.in/globalassets/1.-member-
irms/india/assets/pdfs/realestate_annual_handbook_2018.pdf
http://www.assotech.in/Press/real-estate-sector-india.pdf
http://www.internationalbrandequity.com/indias-best-100-real-estate-brands-list-2019/
https://housing.com/news/sobha-voted-top-brand-fourth-consecutive-year-track2realty-
brandxreport-2017-18/
https://www.business-standard.com/article/pti-stories/dlf-most-reputed-real-estate-brand-in-
india-report-116092700998_1.html
https://www.b4ubuild.com/resources/schedule/6kproj.shtml
Contribution by each group Member

Sl. No. Particulars Student Name

1 Industry Research By everyone
2 STP Ashish and Ankita
3 Portfolio Tamal, Simran, Ashish,
Ankita
4 Consumer buying Behavior Ashish, Simran, Aiswarya
and Tamal
5 Value chain Simran and Aiswarya
6 End to end process Nikhil