“INVESTORS PERCEPTION ABOUT REAL ESTATE

INVESTMENTS IN NORTHERN INDIA.”

[Submitted by: Mohd. Amer M.B.A. A7002212002 MARKETING & SALES

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH LUCKNOW

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EXECUTIVE SUMMARY

There has been a rapid growth in the real estate industry in the past few years. In the

residential sector, a growing middle class is enjoying rising income levels. Combined

with smaller household sizes, this demographic change has boosted demand for more

modern housing and home loans. Meanwhile, increasing consumer spending power has

encouraged growth in organized retailing – both feeding off and contributing to the spear

of ‘mall culture’ and the popularity of other large-scale retail property developments.

In the commercial property segment, strong growth in the services sector – particularly in

the IT and ITES sectors – and corporate growing scale of operations have led to greater

demand for commercial space, including modern offices, warehouses and lodging space.

Many Developers have substantial plans to increase both their size and geographical

spread. They are also expanding into different kinds of properties, which can boost the

firms’ franchise values and reduce concentration risks. However, managing and financing

such activities can be a challenge, and puts a premium on financial flexibility, capital

access and operational infrastructure.

The project assigned to me has an objective to find and analyze the current scenario of

Real Estate, covering the preferences of current as well as prospective customers. The

major part of the project also analyses the size of investment in various states and mind

set of the customers regarding this as well as the perceptions of customers towards major

leading Real Estate players.

The study was carried out with a methodology, in order to collect as much primary data

as possible. Data was collected by meeting clients and getting their views on real estate

investment in U.P. Lucknow region.

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Areas covered in NCR: Gurgaon, Noida, Greater Noida.

Once the data was collected, this data was analyzed and various conclusions were drawn.

Agents’ viewpoints on various issues were also taken in order to get a more insight into

the Real Estate.

Following is the analyses done and conclusions drawn:

Plots, Apartments and Rented Offices are the most preferred investment options

in Real Estate people prefer for investment.

The cities that people prefer for investment and anticipate a good return in those

states are:

NCR

DELHI

NOIDA

LUCKNOW

Delhi is seen as a market of End-Users, rather than investors.

People from all over are interested in investing in NCR, including a good amount

of population of NRIs.

In other states, a declining trend is seen; NCR is into a stagnant state, where there

are least chances of the market going worse in the near future.

Real Estate Scenario In Various States:

RAJASTHAN:

General size of investment in Rajasthan

92% of the people responded that the current size of investment in Rajasthan is

below Rs.25 lac.

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Most Preferred Developer

Omaxe, Ansal API

Preferred Cities

Jaipur, Bhiwadi

PUNJAB:

General size of investment in Punjab

95% of the people responded that the current size of investment in Punjab is below Rs.50

lac.

Most Preferred Developer

Ansal API, Emaar MGF

Preferred Cities

Mohali, Amritsar

U.P.

General size of investment in U.P.

92% of the people responded that the current size of investment in U.P. is below Rs.25

lac.

Most Preferred Developer

Parsvnath, Omaxe

Preferred Cities

Lucknow, Agra

HARYANA:

General size of investment in Haryana

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94% of the people responded that the current size of investment in Haryana is below

Rs.50 lac.

Most Preferred Developer

Ansal API, Omaxe

Preferred Cities

Sonepat, Panipat

DELHI:

General size of investment in Delhi

85% of the people responded that the current size of investment in Delhi is above Rs.50

lac.

Most Preferred Developer

DLF, Unitech

NCR:

General size of investment in NCR

98% of the people responded that the current size of investment in NCR is above Rs. 25

lac.

Most Preferred Developer

Emaar MGF, DLF

Preferred Cities.Gurgaon, Noida

DLF, most preferred developer in NCR, fact remains, DLF, a company for High-

End investors, rather than small investors.

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Emaar MGF, one of the biggest developer with huge amount of capital in its

hands, since none of its projects are complete as of now, real estate agents are still

not clear with its position amongst the investors.

Emaar MGF is likely to come big in the near future.

Parsvnath in Delhi has created a place for itself by setting a trend of Metro Malls.

BRAND NAME and PREVIOUS TRACK RECORD of the company that counts

most for the prospective clients to invest into a particular project. This is for a

reason that projects in Real Estate cannot be accurately forecasted for success or

failure. So, counting on the Brand name and previous track record is the only

option prospects are left with.

People nowadays go for Short-Term investment plans. This is mainly because,

Real Estate is not at a boom, so people, who are interested in investing want to

invest and realize as soon as possible.

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TABLE OF CONTENTS

CHAPTER 1:

Introduction to Report and Real Estate

CHAPTER 2:

Company Profile and Product Portfolio

CHAPTER 3:

Real Estate as an Investment Option

CHAPTER 4:

Study of Competitors

CHAPTER 5:

Literature Review

CHAPTER 6:

Research Methodology

CHAPTER 7:

Data Observation, Presentation and Findings

CHAPTER 8:

Conclusion and Suggestions

BIBLIOGRAPHY

PAGE NO.

8-12

13-18

19-29

30-33

34-35

36-37

38-40

41-45

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CHAPTER 1INTRODUCTION TO REPORT & REAL ESTATE

The purpose of this study is to examine the factors that positively influence the

propensity of Indian investors to invest in the real estate market. India is second

largest country in the world after China in terms of population. By 2030, the

population of India is expected to be largest in the world, estimated to be around

1.53 billion. Because of the large size of population and economic growth, the

Indian real estate sector is booming and the annual demand for residential

buildings in the country is anticipated to grow at a compound annual growth rate of

52.5 percent .

Sanford indicates that the Indian real estate market is one of the emerging

markets in the less developed economics of countries. India recorded an economic

growth rate of 8.50 percent in year 2010-11 .One of the contributing factors of high

GDP growth rate in India during 2010-11 was the real estate market .Thus, the

real estate market and real estate investors play important roles in the economic

growth of India.

Since the Indian real estate market is one of the emerging markets in the less

developed economics of countries and real estate investors play an important role

in the development of the Indian economy, it is important to understand the factors that

have positive influence on the propensity of Indian investors to invest in the real

estate market. Therefore, the resultant thesis is that the propensity to invest in the real

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estate market depends on investment expertise of investors, investors’ knowledge

of neutral information, investors’ motivation from an advisor, and family; the

purpose of this study is to explore these relationships among the above variables.

Commercial and office complexes mushrooming in major Indian metros present a

minefield of opportunities. Over 20 million new housing units required in the next 5

years. The real estate market is projected to grow to $50 billion by 2010 CAGR of over

30% p.a. is expected over the next five years. Increasing demand for commercial and

office space especially from the rapidly growing Retail, IT and Hospitality sectors and

the Urban Infrastructure Renewal mission is expected to give a boost to the sector.

Other factors include:

$11.5 billion earmarked over the next five years for 60 cities.

Investment opportunities exist in almost every segment business ; About 20

million new units expected to be built in five years in office space for IT and five-

fold increase in office space requirement over the next 3 years.

Commercial space for organized retailing: 200 million sq. ft. by 2010.

Hotels and hospitality: Over 50,000 new rooms in the next 5 years; Investment

opportunity of over $50 billion in the next five years.

Various Real Estate Investment Options are:

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AGRICULTURE LAND:

Agriculture Land in India is the most protected area by the State and Central Govt.

Identification of Agricultural Land requires a bit of analysis about the rate and

assessment of future development in the nearby area. Due to fast growing urbanization

and development of infrastructure the price of agriculture land zooms quickly.

Agricultural land can be given on contract to cultivators with sharing of crop model, to

make small but regular tax-free earnings. Rural agriculture land is completely free from

capital gains tax and income from lease out or sale of crop is also exempt as per the

provision of IT Act, 1961.

RESIDENTIAL PLOTTED DEVELOPMENT:

Most state governments have loosened their fists and have implemented land reforms that

make the conversion of agricultural land into residential land much easier. The process of

township development takes a period of about 5 to 10 years. Initially, the prices of plotted

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Real Estate Investment Options

Agriculture Land

Residential/Plotted development

Apartments/Villas

Commercial Spaces

Farm Houses

Real Estate Mutual Funds

development are quite low which rapidly increases with the pace of development and

with the rise in inflation factor.

APARTMENTS/VILLAS:

As per the assessment made in the Indian Habitat Policy 1998, the demand for houses in

urban area is to the tune of 22 million houses. The gap in demand and supply in housing

stock has thrown big investment opportunities. Booking at the launching stage and

getting the exit at the completion stage ca offer shining returns on investments. In this

process the stamp duty and other taxes can be legally avoided.

COMMERCIAL/RETAIL SPACES:

The retail boom in India has fueled huge demand for commercial/shopping spaces. Many

MNC’s and big corporate retailers prefer to take prime commercial properties on long-

term lease basis. The option offers regular returns besides appreciation in capital value,

taking both the returns together gives handsome return and a wonderful combination of

regular and a wonderful combination of regular and long-term returns.

FARM HOUSES/SECOND HOMES:

Many developers are offering lifestyle with smart returns through farm houses/second

homes. The offer comprises of sale of farm houses at affordable rates with professional

property management giving lifestyle and capital appreciation together.

REAL ESTATE MUTUAL FUNDS:

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Securities Exchange Board of India (SEBI) has recently allowed the launch of mutual

funds which can invest in physical property. Many corporates such as HDFC and IDBI

are in the process of launching real estate mutual funds.

FACTS AND FIGURES:

In India Construction is the second largest economic activity after Agriculture.

Investment in construction accounts for 11 percent of India’s Gross Domestic Product

(GDP) and nearly 50 percent of Gross Fixed Capital Formation (GFCF). Construction

accounts for nearly 65 percent of total investment in infrastructure and is expected to be

the biggest beneficiary of the surge in Infrastructure Investment over the next five years.

According to the Economic Survey, India has the potential to absorb US$ 150 Billion of

Foreign Direct Investment in the next five years in the Infrastructure sector.

The sustained growth and positive outlook for the future has increased focus on

Infrastructure development. Opening of the Infrastructure development to private players,

FDI and increased investment commitments from the govt. has thrown a host of

opportunities for companies in the infrastructure development sector, innovative projects

like the metro Rail and along with the proposed SEZ projects have provided additional

opportunities for the SME’s in the sector.

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CHAPTER 2

COMPANY PROFILEVardhman is one of the fastest growing professional company with Diverse Business

Portfolio in the Real Estate Industry. We have earned the reputation for creating the

Highest Quality, Architecturally Significant Urban Environments with an unmatched

attention to detail.

Vardhman is undertaking some neo-age projects that creates a successful duo in the

emerging Indian Real Estate Industry. Vardhman has 30 years of experience in

developing Landmark buildings and undertaking World class commercial projects.

Inspired from the glorious past and the upcoming IT Parks, we have planned several

Projects for emerging Corporate as well.

If you're looking for prime locations, quality construction and a long list of standard

amenities, look no further but Vardhman. 

Vardhman, one of the fastest growing professional company with Diverse Business

Portfolio in the Real Estate Industry has assigned outdoor promotion duty of their

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upcoming projects to Mannat innovative media solutions (MIMS). Vardhman is

undertaking some neo-age projects that creates a successful duo in the emerging Indian

Real Estate Industry. 

Vardhman has a vast 30 years of experience in developing Landmark buildings and

undertaking World class commercial projects. Inspired from the glorious past and the

upcoming IT Parks, they have planned several Projects for emerging Corporate as well. 

Mannat (MIMS )laid down prominent areas, media tools and innovative ideas to execute

the campaign at a larger scale in Delhi NCR, Ludhiana, Kanpur & Guwahati. MIMS

delivered the best and the beautiful outdoor coverage for Vardhman by providing highly

visible hoardings at major traffic junctions, flyovers and markets.  

CUSTOMER CENTRIC ATTITUDE:

To ensure complaint free operations with total customer satisfaction by resolving

customer’s issues with utmost attention and speedy services round the clock

 

BRAND VALUE:

To deliver the projects ‘differently’ and make the customer to feel at ease and comfort and create the ‘Vardhman Brand’ a most trusted brand.

In-Flight Branding with Jet Airways

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INNOVATION THROUGH TECHNOLOGY:

Vardhman would be effortful and creative to identify and deliver something new, matching the technological up gradation in the Realty sector, all around the globe. CORPORATE SOCIAL RESPONSIBILITY:

Vardhman would concentrate towards development of affordable houses for the masses, to reach to the heart of all. EMPLOYEE CULTURE:

To keep on constantly searching for the talented employees, developing employee retention policies, providing continuous training and development to facilitate them to contribute completely in the growth of the organization 

CHARACTER, ETHICS AND VALUES:

Vardhman would be governed by its professional policies and procedures to ultimately benefit its values customers. The transparency of the policies would be maintained through the company’s operational manual. Adhering to the manual would be mandatory for all, with tan ultimatum objective to make the Vardhman “Favourite of all’ and to create “Ethical Brand Value” within a short span. CORPORATE OFFICE : New-Delhi, Noida

Organizational Structure:

Vardhman’s TeamThe group's strength lies in its panel of dynamic, young, qualified and highly experienced management.The structured & unified marketing model followed in Vardhman has helped in building a strong network of Channel partners. Vardhman also has a dedicated customer care centre that comprises of experienced executives.

PRODUCT PORTFOLIO -:

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VARDHMAN ALFASQUAREExplore A Whole New Meaning Of Entertainment 

Switch from your office desk to a comfortable plush multiplex seat within minutes. That's the freedom to be. That's the new face of your lifestyle. The multiplex facilities at Alfa Square will make life happier not only for the residents of Greater Noida, but also infuse a happy convenience for the office goers in and around Alfa Square. And in all this arrangement, why leave the kids alone? Bring them to the Kids Zone, let them explore their world in their own way.Specialized Entertainment zone | Dolby digital cinematic experience | Comfortable seats with ample leg space | Kids zone

VARDHMAN’S GALLERIA COMMERCIAL SPACE BEST SUITED FOR

Retail Mart, Consumer Goods, Department Stores, Airline Companies, Showrooms, Fast - food joints, Restaurants, Health / SPA, Fashion Apparel & Accessories, Home & Lifestyle Products, Gift Shop, Jewellery Showrooms, Art & Craft, ATMs, Exporters / Importers, Travel Agents & Many others.

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I-VALLEY, AN ULTIMATE IT DESTINATION

i-valley, Greater Noida, is all set to emerge as an epitome of India 's dream run in the field of IT and ITES . i-valley is expected to be one of the IT parks of its own kind. Located at the heart of Greater Noida, i-valley will catalyze the growth of a burgeoning suburban city. I-valley illustrates the finest of the Advantage that include- Quality Business Space, Reliable Solutions and an International Business Lifestyle second to none. Its world-class business infrastructure amidst wide green spaces provides an excellent environment for Fortune 500 corporations, MNCs and leading local corporations.Experience a hassle-free set-up at i-valley. Here at i-valley, all your business and employee needs are taken care of that include comprehensive lifestyle amenities, regular

shuttle bus services, ample parking and all the conveniences needed in India's most comprehensive work-live-play business space.

VARDHMAN SPRINGDALE

Spring. The season of blossoms. Budding of trees, the green baby leaves, the fresh turned soil with new flowers, and the arrival of the green grass. It's the time of rebirth. Beginning of a whole new life. The beauty in the world around rejuvenates spirits and heals the past. It's the time when you attain a new life.

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It contains 555 units.

Having 1BHK to 3BHK apartments

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VARDHMAN VEDIC SUITES

1 BHK STUDIO APARTMENTS IN SOFT LAUNCH

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CHAPTER 3REAL ESTATE AS AN INVESTMENT OPTION

Real Estate, A Good Investment Option:

Are you fatigued by the diminishing income and risk-factors associated with main-stream

investment avenues – fixed deposits, stocks, mutual funds, etc.? Think `real estate': a

lesser explored investment option.

Real Estate Investment stands out:

• Quantum of investment required is high

• Investment horizon is long

• Dual returns are available in form of rental income and capital

Appreciation

The Promising Avenues of Real Estate Investment:

• Offices

• Shopping malls

• Retail outlets

• Industrial warehouses

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CURRENT INDIAN REAL ESTATE SCENARIO:

• Periodic returns on commercial property ranges from 10 to 13 percent

Per year

• The Indian real estate industry has a growth rate of 35 to 40 percent

Annually

• The demand for real estate is picking up as the IT industries set up their

Base in India or look for expansion in these cities.

• Top financial companies have recognized the advantage of India as a

Business process outsourcing destination and had started expanding

their business.

• Companies are increasingly switching over to renting office premises.

This offers flexibility in operations and avoids locking capital.

• Companies operating in automobile design, auto components

Manufacturing, computer aided design and drawing are also entering

India in search of acquisition of space preferably as ready-to-occupy

premises.

• Real estate developers are offering premises on long lease to the

companies.

• Individual investors are benefiting from the developing commercial real

estate market in India by investing in pre-leased properties.

• Norris / Pies are investing in real estate as the rental income and capital

used to purchase the property is easily reparable.

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FUNDING SOURCES SUPPORTING INVESTMENT IN REAL

ESTATE:

• Banks

• Financial institutions

• High net worth individuals

• Real Estate Mutual Funds

Procedures to be followed before Investing in Real Estate:

• Find out credibility of the developer.

• Check out the attractiveness of property to tenants/ buyers

• Weigh future value potential

• Get to know the chances of project completion (in case it’s under

Construction)

• Investigate the quality of project

• Explore the availability of financing option

• Take advice from a reputed and a credible real estate consultant.

• Consult a reputed financial institution

Selecting a right option to invest hard earned-money is always a matter of big confusion.

The decision making process requires in depth analysis of available options which suits

the needs of a particular person or organization. A complete analysis and overview of

investment decision making with innovative solutions are given hereafter.

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INVESTMENT NEEDS:

The investment needs depend on the requirements of a particular person about the

liquidity of funds and his capacity and temperament bear risk. The tax implication on

return of investment to the investor is always a crucial matter for choosing the right

option.

Features→

↓Options

Liquidity

Options

Safety Convenience Tax

Benefits

Approx.

ROI

P.O/Bank/Got.

Securities

Reasonable Good Good Good 6-8%*

Bonds/Debentures Reasonable Reasonable Reasonable NIL 8-10%*

Shares/Mutual

Funds

Good High Risk Reasonable Reasonable 12-15*

{With high

level of

uncertainty}

Bullion[Gold and

Silver]

Good Good Good Reasonable 5-7%**

Real Estate Reasonable Reasonable Not so

Convenient

Good 14-24%

{High

Returns}

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Comparative Features of Investment Options

GRAPH ON RETURN ON DIFFERENT INVESTMENT OPTIONS

Real Estate in GREATER NOIDA & NOIDA:

GREATER NOIDA: Paving way for major urban development work in the region around the Yamuna Expressway, which connects Greater Noida with Agra, the NCR Planning Board has approved the first phase of the Master Plan 2031 of the Yamuna Expressway Industrial Development Authority (YEIDA). According to the master plan, the Authority will develop the area up to Jewar, which will include 584 sq km of Gautam Budh Nagar and Bulandshahr districts. The plan has now been forwarded to the Uttar Pradesh state government for final approval.

As per the Master Plan 2031, the population in the Yamuna Expressway area will be around 35 lakh in the next two decades. The Authority, therefore, has proposed residential development in a total area of 25,000 hectares. The plan includes 18 group housing units, whereby plots between 100 and 200 acres have been allotted by the Authority to private developers along with another 21,000 individual plots. The plan for phase-I also plans to connect the region with others through expressways like the Eastern Peripheral Expressway and the Ganga Expressway. A 130m-wide railroad corridor connecting it with Khurja in Bulandshahr and Palwal in Haryana has been planned. 

To connect the sectors with adjoining regions such as Khurja, Bulandshahr and Palwal, the Authority has proposed to construct a 120m-wide road. The roads connecting YEIDA sectors with Greater Noida and Noida will be 130 metres wide.

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The Authority has also allocated more than 20 sectors for commercial development. Other salient features of phase-I of the plan include a "world class" Sports City, an inter-state bus terminus, a transport nagar, two power generation plants, each having a capacity of 2,000 megawatts and procurement of Ganga water for residents. 

"The area between Greater Noida and Jewar covered in the first phase of the master plan includes 133 villages spread across an area of 58,000 hectares. Twenty-five percent of this area has been earmarked as dedicated green area, 20% has been earmarked for industrial development and 9% for institutional development. The master plan proposes a holistic development plan for the entire area with an emphasis on setting up industrial hubs," a senior Authority official said. According to officials, the second phase of the master plan will cover the area between Jewar and Agra.  NOIDA: In order to decongest the city and bring respite to commuters, the Noida Authority has approved the Detailed Project Reports (DPR) for six underpasses on strategic routes along Master Plan-II and III roads. In a meeting on Tuesday, Noida CEO Sanjeev Saran also directed that DPRs be prepared for three new underpasses. 

The Authority has drawn up a blueprint to steer its residents clear of chaos on roads. During the weekly meeting, Saran instructed officials to start the process for construction of the six approved underpasses with immediate effect. "The underpasses will ensure signal-free access at nine busy stretches on these two arterial and important routes," said Saran. 

"The focus is on decongesting the most clogged-up roads of the city. As suggested by our consultants RITES, construction of underpasses including flyovers and elevated roads will take place in a phased manner," said AK Goel, chief maintenance engineer (civil), Noida. Traffic surveys have revealed that these roads see heavy traffic during all times of the day. Moreover, due to lack of space on either side of these roads they cannot be widened, hence there is a need for underpasses and elevated corridors. 

As per plan, the Master Plan-III road from Kalindi Kunj to Sector 71 will have three underpasses, while another three will be built on Master Plan-II road from Uflex crossing to Sector 16A. Underpasses are also planned on the route from Atta underpass towards Sector 60 crossing. Earlier, there were two elevated roads planned along Master Plan Road-II from Vishwa Bharti Public School to Shopprix Mall in Sector 61 and on Master Plan Road-III from Sectors 60, 61 & 71 crossing to NH-24, but the plan was shelved due to it not being feasible. 

TRAFFIC MASTER PLAN 2031:

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INDIA: REAL ESTATE SCENARIO

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GROWTH ACROSS GEOGRAPHIES

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INDIA’S PROPERTY SECTOR: CREDIT STRENGTHS

In the residential sector, a growing middle class is enjoying rising income levels.

Combined with smaller household sizes, this demographic change has boosted demand

for more modern housing and home loans. Meanwhile, increasing consumer spending

power has encouraged growth in organized in organized retailing – both feeding off and

contributing to the spear of ‘mall culture’ and the popularity of other large-scale retail

property developments.

In the commercial property segment, strong growth in the services sector – particularly in

the IT and ITES sectors – and corporate growing scale of operations have led to greater

demand for commercial space, including modern offices, warehouses and lodging space.

Many Developers have substantial plans to increase both their size and geographical

spread. They are also expanding into different kinds of properties, which can boost the

firms’ franchise values and reduce concentration risks.

However, managing and financing such activities can be a challenge, and puts a premium

on financial flexibility, capital access and operational infrastructure.

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The property industry is also wrestling with oversupply in certain areas, such as in India’s

commercial property sector, which may lead to rent reductions and value drops.

Meanwhile, property firms must also cope with a reduction in customer advances on new

construction, increasing land values (making acquisition and development deals tougher),

rising interest rates since 2005, and increased difficulty in arranging capital. The latter is

exacerbated by rising interest rates and property prices, which have encouraged banks to

become more selective in granting loans as they try to preserve asset quality.

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CHAPTER 4

STUDY OF COMPETITORS

Competitors:

DLF

JAYPEE

SUPERTECH

AMARPALI

UNITECH

OMAXE

ELDECO

ANSALS

PARSVNATH DEVELOPERS

DLF:

DLF presently has its land bank in 31 different cities, through with a small presence (less than 100 acres) in 20 of these. In addition to 574 mn Sq. ft. land bank, DLF has 23 super luxury hotel sites, a golf course and clubs.Too large dependence on Gurgaon:The total land bank of 10,225 acres is highly skewed in favors of Gurgaon. DLF has approximately 72 percent of its total land bank in Gurgaon (46 percent) and in Kolkata (23 percent) together.DLF has a total debt of Rs. 94.5bn and an outstanding amount of Rs. 55.4bn towards land Rs. 94.5bn and cost. Of the total debt of Rs. 94.5bn, 75 percent is on a floating rate basis which is a risk in a rising outstanding land interest rate environment. DLF had capitalized Rs. 1.1bn out of the total interest charge of cost is Rs. 2.8bn for FY06 and estimated the interest charge for FY10 would be Rs. 5.4bn, on a conservative basis, as interest rates have gone up by roughly 150 percent in the last nine months.A total of 10,255 acres translates into 574mn. Sq. ft. of saleable area, the total 574mn sq. ft. involves the development of plots of 46mn sq. ft., residential apartments of 377mn sq. ft. DLF is of the opinion that its present land bank is sufficient for the next 10-11 years. Out of 574mn sq. ft., DLF has a total of 46mn sq. ft. under development as of 30

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November 2006, between FY07-09 with 9m sq ft under residential; 26m sq ft under commercial and 11m sq ft under retail development.

Snapshot of DLF past and future developments plans

Development Completed In Progress PlannedPlan for year2008-09

Plots 195 - 46 -

Residential 17 9 375 69.8

Commercial 6 26 62 48.2

Retail 2 11 45 31.7

UNITECH:

The Rs. 1600crores Unitech Group is one of the Major Township Planning and real estate development companies in India and has a diverse business portfolio of heavy construction, leisure and entertainment projects, hospitality business and residential property developments.After playing second fiddle to DLF in Gurgaon, the low-profile Unitech Group is gradually asserting itself in the real estate market of the national capital region. In May 2006, in an upset of sorts, Unitech got the better of DLF by grabbing 345 acres of prime land in Noida for whopping Rs. 1582 crores. Unitech has a land bank of 10500 acres whose breakdown is shown below and its future plans are of 500m sq ft for the year 2008-09 for which they need huge amount of funding.Unitech Builder plans to use the Noida land to make 4000 top-of-the-line apartments priced at Rs. 2 crores (Rs. 20 million) each. The investment required to build this dream residential project: Rs. 3000 crores (Rs. 30 billion). Besides inking this mega deal, Unitech has been on a land-buying spread across the country - from Gurgaon to Kolkata, Kochi, Hyderabad and Chennai - to establish a pan-Indian presence. In the last few months, the Group has created a land of over 8,000 acres.

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PARSVNATH DEVELOPERS:

Parsvnath developers announced that they would invest Rs. 1600 crores over the next three years to construct a metro station cum shopping mall near the Commonwealth Games Village in the National Capital. The metro station cum shopping mall is spread over 7.3 acres and about 3.65lakh sq. ft. of retail space would be developed. This will be the 12th mall which the Parsvnath will develop at metro stations, owned by Delhi Metro Railway Station Corporation, a building operator transfer basis.Parsvnath projects cover saleable area of 134 million sq. ft, including owned land development rights; this does not include land owned in SEZ business. Ongoing projects are spread over 17 states and 46 cities.

Upcoming Projects

No. of Projects

Saleable Area

Land Cost

Development & Construction Cost

Total Cost in Rupees

Total Cost in US$

Residential 31 32.88 1344.9 3978.32 5323.3 1183

Commercial 21 4.91 795.68 800.12 1595.8 354.62

Integrated Township 21 86.06 1121.0 7405.8 8526.8 1894.8

IT Park 4 6 4.55 915 919 204

DMCR 6 1.46 276.64 260 536 120

Hotels 17 2.69 247.31 627 875 200

Total 100 134 3790 14000 18000 4000

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OMAXE:

It started in 1987 as a vision, to realize the dreams of millions across the length and breath of our country, is today an ISO 9001:2000, D&B 5A2 rated organization that proudly boasts of over a 100 successfully completed projects under its belt. At OMAXE we believe that our spectacular performance, extra-ordinary growth and spotless track record over the past 19 years are proof of the infinite possibilities that lie within us.

It is the belief that puts OMAXE in the forefront of this multi-billion industry as a pioneer with an unshakeable reputation for delivering what is unconceivable for others. It also beckons us to continue realizing the dreams of million into reality.OMAXE, one of the India's fastest growing Real Estate developers, has registered its presence across the country with a healthy mix of projects that range from well planned office spaces to international standards townships, group housing, state of the art malls, commercial complexes, multiplexes, theme malls, resorts, hotels, service apartments etc. The company has also diversified into IT parks, bio-technology parks, SEZs etc.Today, OMAXE enjoy a reputation of being one of the India's premier Real Estate Developers with an indelible focus on customer satisfaction. This feat has been achieved through the adoption of quality system standards that integrate technological and design innovations with a strong technical base to provide state of the art real estate options.

At OMAXE, the human mind and spirit continue to be our most precious resource and a critical ingredient in the spectacular success of our endeavors. Today OMAXE boasts of over 800 qualified men and women who are successfully turning their dreams, and dreams of million into reality.Having registered phenomenal start based on the successful acquisition and implementation of a large number of highly challenging and hugely varied projects, all in a short span of under two decades, OMAXE today enjoys the reputation of being North India's fastest growing Real Estate Developer.

Thus, the company having to compete with big competitors still stands out unique and different owing to its incredible features, experiences and team work. It always works for the benefits of its customers and to give them quality products at affordable prices.

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CHAPTER 5

LITERATURE REVIEW

There are many factors such as investment expertise of investors, investors’

knowledge of neutral information, investment motivation from an advisor, etc., that

influence the investment propensity of investors. Investment propensity, in the

context of this study, is defined as the extent to which investors are inclined to

invest in the real estate market to: i) get rich quickly, ii) diversify risk and iii) obtain

higher rate of return.

Emerging markets for investment feature slightly higher risk levels than the

developed nations of the world. Investment risk is a multidimensional construct with

four principal attributes: i) the possibility of a very large loss, ii) the possibility of a

below target return, iii) the ability to control loss and iv) the investor’s level of

knowledge. The investor’s level of knowledge is one of the principal risk attributes

that impact on investment propensity. The relative importance of the investor’s level of

knowledge attribute is a function of idiosyncratic investor and asset characteristics.

Improved investment knowledge and experience enable consumers to make better

investment decisions. That is, the more accurately investors perceive risk, the better

they understand the link between risk and return in the Indian real estate market; and

the better the understanding of the link between risk and return in the Indian real

estate market, the higher the investment propensity of investors. Risk-averse investors

continue to be attracted by relative stability of residential properties and buildings.

Investors’ investment knowledge and experience have positive and negative impacts

on their propensity to invest capital in the real estate market. That is, if Indian

investors perceive higher risk in the Indian real estate market, they are reluctant to

invest capital and vice versa.

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Investor knowledge of ‘neutral information’ plays an important role in

investment decision making process. Investors’ propensity to invest capital is

positively affected by their own perceived knowledge of neutral information. Thus,

investors do not rely on a single integrated approach, but rather on many categories of

factors such as price movement in the real estate market and current economic

indicators (e.g., business cycle, GDP, etc.).

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CHAPTER 6

RESEARCH METHODOLOGY

Objectives of the Study:

1. To identify the scope of investment in various states, especially outside Delhi

NCR AND LUCKNOW

2. To identify the current trend of Real Estate, in areas across Delhi, NCR,

U.P.LUCKNOW, Noida and Greater Noida.

3. To identify the reasons of investment in various states.

4. To identify the reasons of people for not investing in various states.

5. To identify the preferences of customers.

6. To evaluate the effectiveness of major real estate players.

Type of Data:

The data collected is Primary data and Secondary data which is both quantitative and

qualitative data, which was further analyzed in order to draw conclusions and

suggestions.

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DATA COLLECTION AND METHOD:

Data was collected by visiting Real Estate Agents across U.P. LUCKNOW. Descriptive

Research method was used for data collection which proved to be quite beneficial for

carrying out market research.

LIMITATIONS OF STUDY:

1. Biasness of the real estate agents towards a particular company.

2. Lack of knowledge of the agents about areas outside their scope.

3. Agents catering to a specific kind of market, tend to favor those options.

4. Some generalizations by the targeted agents.

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CHAPTER 7

DATA OBSERVATION, PRESENTATION & FINDINGS

OBSERVATION:

Wealthy investors expect to increase their asset allocation to property: Over the next two years, 35 per cent of respondents plan to increase the proportion of property in their portfolios (not including their primary residence), while 48 per cent plan to maintain their current allocations. The main reason that investors give for the increase is that they believe property offers better long-term prospects than other asset classes.  Some investors may already have extremely high exposure to property: Almost six out of ten investors from Noida, and just under 30 per cent of those, say that 50 per cent or more of their portfolios are in property. Allocation also tends to increase with wealth: among those respondents or more in assets, almost 40 per cent say that they have allocated more than half their portfolio to property.

Investors can see opportunities in the property market, but the scarcity of credit is constraining their options: Following a prolonged downturn in property markets around the world, high net worth investors are once again eyeing opportunities in the sector. Three out of four wealthy investors say that residential property is looking attractive, but 60 per cent of them say that tight credit conditions are preventing them from “taking the plunge”. Respondents are slightly less sanguine about opportunities in commercial property, with 68 per cent saying that they are keen to explore opportunities, but 73 per cent of them feel hampered by the high cost of borrowing.

There is growing confidence about the medium-term outlook for property, but prices may have further to fall in the near future: Although they recognize that current market conditions are throwing up significant investment opportunities, high net worth investors give a cautious assessment of the prospects for their own property portfolio. Just under half expect an increase in the overall value of their property investments over the next two years, while 29 per cent expect no change and 23 per cent

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expect a decrease. Across the ten focus countries, fewer than half of respondents believe that prices have reached their lowest point in their own markets.Investors may be less dispassionate in their approach to managing property investments compared with other asset classes: An emotional attachment to bricks and mortar – often stemming from the central role that homes play in people’s lives but also due to factors like prestige and location – can mean that high net worth investors are often unwilling to sell property at short notice and, therefore, they may be less rigorous in measuring its performance as an asset class. Investors also may not be taking advantage of the diversification possibilities within property as an asset class. For example, just 29 per cent hold indirect property investments, such as mutual funds and real estate investment trusts, when these can offer a relatively liquid way to gain exposure to real property across a wide range of sub-sectors and markets.

A significantly greater proportion of women than men are keen on investing in property: When it comes to property, the survey reveals a striking variation in the attitudes of the two sexes. Nearly half the women surveyed say property is a less risky investment than stocks, whereas only 37 per cent of men agree with that view. Similarly, while 44 per cent of women find buying property more enjoyable than investing in other asset classes, just 28 per cent men feel the same way. Women also tend to favor investing directly in bricks and mortar more than men. While 34 per cent of men are likely to invest in property indirectly through a fund, only 14 per cent of women would prefer to go down that route.

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FINDINGS:

1. Customers have a short history of real estate investment but are currently

increasing their allocation to the real estate, more so than equities, debt and

commodities.

2. Legal and regulatory risk, hard to determine the best opportunities and risk of

poor professional advice are given as the main reason for real estate investing.

3. Despite of developers investing their large part of funds on entertainment centers

like shopping malls, multiplexes etc. large part of customers prefer to invest in

residential projects such as plots and group housing.

4. Residential property is gaining as an attractive mode of investment of middle

class people leading to growing demand.

5. The most important factors influencing the real estate asset allocation decision are

statistical estimates of risk and return, advice from external consultants and long

term historical performance.

6. Despite of billion of money spent on brand advertising, customer's rate brand-

strength as a weak influence at best on their purchase decisions.

7. With the shifting of more and more companies and offices to the suburbs, growth

in the suburban residential real estate market has been witnessed. Lavish

townships with good quality construction replete with luxurious amenities and

facilities are now coming up.

8. At present, Noida and Greater Noida are places of Huge Investment where

Returns are high as COMPAIRED TO LUCKNOW. It is becoming the hub

mainly for Commercial Investments with good returns especially for IT/ITES

spaces.

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CHAPTER 8

CONCLUSION & SUGGESTIONS

CONCLUSION:

The real estate market in Northern India especially in Delhi NCR region, Lucknow,

Noida & Greater Noida has tremendous potential and a cut throat competition has already

started among the developers to seize this opportunity. The city offers some distinct

advantages which are not present in other cities. The city is one among the greatest real

estate playing cities where huge investments are attracted with larger returns and has high

potential. Besides, improving infrastructure in terms of road networks, good educational

institutions, organized retail, creation of employment opportunities by the public and

private sector companies are additional factors. Also availability of land at affordable

prices and being a metro city, has led private developers to venture into the market. It is

because of these reasons that a study into the perceptions and expectations of the people

of Delhi regarding the present real estate scenario assumes importance.

An effort has been made to provide a clear view about Real Estate and its present state in

DELHI NCR region with special reference to Noida & Greater Noida. The projects of

Vardhman depicts some unique qualities which is quite different from other real estate

players and for this reason, large amount of investors are attracted from all over India .

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SWOT ANALYSIS:

STRENGTHS:

Brand Name- within 30 years, the company has created a brand image of its own

well equipped in the market.

Widely spread Network of Dealers & Suppliers- its contacts and networks are

spread over India.

A loyal customer base- its strong base lies in its customer service where it

provides numerous benefits to customers.

Strong Management- it has a very stable and strong management force which

controls the activities and functions of the organization.

Strong Branding- it’s branding is done largely to create goodwill in the market.

Efficient Channel- the channels of the company are spread over India with big

contacts and associates.

Strong customer base- its important strength is loyal to customers and committing

to what the company promises.

Loyal employees- its employees are loyal in all departments and do not provide

false information to anyone.

WEAKNESSES:

Improvement required on networking for small customers as even they are

important to the company..

Less Brand Value- it still has to create more brand value through Advertising.

Not enough Manpower- the most important drawback of the company is its lesser

manpower and for this reason, most of the official work gets delayed.

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OPPORTUNITIES:

Specialty products are expected to improve to depict it different from its

competitors.

High profit margin is expected as the company has projects which should yield

large amount of returns.

Emerging Markets & Expansion- It should emerge strong in the market and

expand at a faster rate to grow at a larger rate.

THREATS:

Competition in the market- there is immense competition in the market which is a

great threat to the company in the near future.

Macro Economic changes- the economy of real estate changes frequently. As a

result, the company may face problems.

If new capacity additions announced earlier go on stream, there could be an over-supply situation in the market which can put pressure on margins.

Other Competitors- there are many other big and small competitors in the real estate market which could harm the company’s market position.

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SUGGESTIONS:

1. Investors have a great amount of hope from the company. Although, there are

delays in some Projects, even then, investors feel secured in investing in

Vardhman’s projects.

2. Clients often face problems with the company follow-up and allotment.

3. In the view of real estate agents, UNITECH & DLF are the best service

providers.

4. Circle rates of Plots must go up. Government should control the non-

committed trend of upcoming builders. With prices of property, infrastructure

should also grow.

5. Bank Loan Interest rates must go low for the survival of real estate.

6. People are not too keen to invest outside NCR, and block their money for long

term.

7. There should be no hidden costs, and everything should be crystal clear, which

poses a great influence on building brand image.

8. Developers should come up with timely projects. Companies should keep

constant correspondence with its customers. There should be a commitment of

prices by the company.

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9. Pre-Launching is a major problem, thereby customers feel cheated by the

Developers/Agents.

10. In Delhi, in some places like South Delhi, there is a high demand of floors,

than its supply.

11. A significant reason for people to not invest outside NCR, is that there are still

good options left in NCR.

12. It is noted that there is a good amount of scope on Gomti Nagar Extension

Lucknow, as the foresight of the agents see many colonies flourishing on the

highway.

13. It is seen that there is a great demand for 2 & 3 BHK Apartments in Lucknow,

but lack of supply.

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BIBLIOGRAPHY:

BOOKS:

Kothari C.R.- “Research Methodology” New Delhi Tata McGraw Hill In (95-102)

Kotler Phillip –“Marketing Management“- Analysis, Planning Implementation and

Control.

JOURNALS/ MAGAZINES:

Corgel, John B., Halbert C. Smith, & David C. Ling, Real Estate Perspectives, Boston:

Irwin/McGraw-Hill, 3rd ed., 1997.

Howard, John A. and Jagdish N. Sheth, The Theory of Buyer Behavior. Wiley, 1969.

Urbany, Joel E., Peter R. Dickson, and William L. Wilkie, Buyer Uncertainty and

Information Search, Journal of Consumer Research, September 1989, 16, 208-215.

WEBSITES:

www.vardhmans.com

www.RealtyTimes.com

www.realestatesncr.com

www.indiaproperty.com

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www.wikipedia.com

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