Presented By: Gunjan Masand Ritul Jain Saurab Vats Shanky Singhal Shubhomita Sengupta Shweta Datta

What relevance does Real Estate And construction hold in our economy? Why has infrastructure getting the prime focus in the recent budget? What has actually changed the face of Realty and Real Estate? Who are the names behind this change?

The strong fundamentals of the Indian economy are having a favorable impact on all asset classes of Indian real estate viz. housing, commercial – office space and retail and hospitality. In recent years, the growth has spread out to tier-II and III cities as well. High growth in services as well as manufacturing sector has resulted in high demand for commercial and industrial real estate. Further the economic growth has trickled down to the large Indian middle class increasing affordability and affluence. Improving living standards are driving the demand for better quality housing and urban infrastructure.

Drivers for Growth of Real Estate & Construction

Real Estate Rising Tourism Decline of Joint Families Easy Availability of Finance Rise Of Middle Class

Real Estate Fiscal Policy Strong Demographics Rise of Middle Class Rising FDI

Real Estate First Time Buyers International Tourism Developme nt of new Stream of Business Medical Tourism

OBJECTIVES Promotion of investments from domestic and foreign sources. Creation of employment opportunities. Development of infrastructure facilities in the country. Generation of additional economic activities. Promotion of exports of goods and services.

There has been a drastic curtailment in restrictive policies such as the Urban Land Ceiling and Regulation Act. Reforms in the Integrated Township Policy. Liberalization of FDI rules and the emergence of real estate funds. Range of Government benefits & incentives including residential tax breaks and the Special Economic Zones.

DLF GroupAnsalsParsavnath DevelopersUnitech GroupK. Raheja

Founded in 1946 DLF Group is one of the biggest real estate giants Built many high-quality buildings across the country, specifically in Gurgaon Tied up with Hilton Group to build whopping 100 hotels in India over the next few years. In current expansion plans, DLF has over 425 million sq. ft. of development across its businesses, including developed, on- going and planned projects. Spread over 32 cities, mostly in metros and key urban areas across India

 Founded by Lala Chiranji Lal Ansal  By far most dominant activity of Ansals has been Real Estate Promotion & Development  company has several landmark high-rise commercial building like Statesman House, Ambadeep, Antriksh Bhawan, Tolstoy House, Indra Prakash, Navrang House and Ansal Bhawan  Ansals have also completed several residential buildings like Gauri Sadan, Upasana at Hailey Road & Dhawan Deep at Jantar Mantar road, all in the heart of New Delhi at Connaught Place.

 There is the most prestigious “Ansal Plaza” Shopping Mall associated with its work  Also it has made elite townships, Sushant Lok and Palam Vihar in Gurgaon and several other places all over the country.

 It was incorporated on July 24, 1990 under the Companies Act, 1956 as Parsvnath Developers Limited.  With more than two decades of experience in its repertoire, the group has already stamped its presence already in seventeen states and going Pan – India.  It has made various developments in areas like GURGAON, Noida, South Delhi.

Plans to invest US$ 720 million in building hotels in the country Its partner for this venture is Marriott International. Carved a niche for itself in India with its sprawling properties and projects in Bangalore, Gurgaon, Noida, Greater Noida and Kolkata Unitech Group took over projects in International areas as well. Actively involved in construction projects of power plants, expressways, highways, transmission lines, classrooms, amusement parks.

 Radisson Hotel, New Delhi has won accolades for its wonderful infrastructure, astounding interiors, ideal location and extra ordinary facilities for the distinguished customers.  Rohini Amusement Park is also a creation of Unitech Group.  The commercial complexes like Global Business Park, Signature Towers, Unitech Business Park and Unitech Trade Center and the launch of Millennium Plaza & Infocenter in Gurgaon have made Unitech Builder earn a good reputation in the industry.

 DLF is the market leader in this sector with net profit of 1547 cr.  It was way lower than its last year profit by more than 1000 cr.  It was well supported by the timely launch of IPL.  The share of this co. touched the all time high of 1227 in dec which was just 6 months after its issue and now trading at 337.

 Their profit declined by 81.24% in the last financial year over the last year.  This is one of the badly hit company by the economic slowdown.  569 is the all time high of this company in 2006 and now trading at just 10% of its all time high.

Investment in Real Estate by PE Firms The Housing Bubble Burst Bankruptcy Of Investment Banks and Crash of US Economy

IT Infrastructure – Temples of Modern India Townships Programming Houses Green Buildings

Skill Shortage. Non Availability of Statistics. Overvaluation of Property. Highly Fragmented. Lack of Transparency.

CONSTRUCTION COST Labour Rates Escalated to 5-10 % Bricks Prices Increase by % High Interest Rates

Rising Prices Decreasing Demand DLF UNITECH PARSAVNATH

IMPACT OF RECESSION ON REAL ESTATE

Incompletion of previous projects. Bad Debts. Less demand in all segments. Cash starvation.

Launched affordable housing project. Payment of short term debt by raising long term debt. Terminated projects with long gestation period. Sale of properties for liquidity preservation. Cost reduction through tight cash flow.

QIP issuance to reduce debt. Reduced promoter’s stake from 64% to 51%. Increased confidence with customers on project delivery. Major Strategic restructuring.

Key Focus AreasBeforeNow 1. Residential SegmentPrimarily target luxury/upper middle income housing segment More focus on mid and affordable housing segment. 2. Assets and Land bankBuy predominantly agricultural land and build land bank for projects across all segments. Sell assets selectively and acquire land only for mid/low income housing projects. 3. DebtShort Term maturities.Restructured to longer maturities. Higher proportion of expensive unsecured loans. Cheaper Collateralized loans. Increasing debt with more projects. Reduced leverage.

 Overall Impact considered to be marginally positive.  Infrastructure investment to be raised over 9% of GDP.  Funding pressure on construction companies to be eased by PPP.  PPP infrastructure projects to be refinanced upto 60% through IIFCL.  Rs 39.7 billion allocated for rural housing schemes.  Focus on providing housing to people of economic weaker section & lower income group.

 Close to $7 billion to $8 billion of venture capital expected to flow into Indian real estate market.  A significant increase in project execution through Public- Private-Partnerships.  More demand for office and industrial space.  Current levels of investments in infrastructure are not sufficient to bridge the gap between demand and supply.

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