A REPORT ON

(SALES AND MARKETING STRATEGIES OF UNICON IN REAL ESTATE SECTOR)

BY (AMIT GUPTA) 11BSP2157

(UNICON REAL ESTATE PRIVATE LIMITED) A REPORT ON (SALES AND MARKETING STRATEGIES OF UNICON IN REAL ESTATE SECTOR)

BY

(AMIT GUPTA; 11BSP2157 )

(UNICON REAL ESTATE PRIVATE LIMITED)

A report submitted in partial fulfillment of the requirements of PGPM Program of IBS Gurgaon

Distribution list: Date of Submission

AUTHORISATION

ACKNOWLEDGMENTS
Any project cant be completed in isolation. It is always the outcome of co-ordination and support of the people of corresponding field

I would like to express my special thanks of gratitude to Unicon Real Estate PVT. LTD. as well as our Centre Head Mr. Vishal Rai (Karrox, Aundh, Pune) who gave me the golden opportunity to do this wonderful project and Mr. Hanuman Raskar (Sr. Accountant Kubix Realities Pvt. Ltd), Mr. Nilesh Gada (Managing Director Kubix Realities Pvt. Ltd), Mr. Mukesh Gada (Managing Director Kubix Realities Pvt. Ltd), who has helped to me complete this project and provided me all the informatiom to complete this project, which also helped me in doing a lot of Research and I came to know about so many new things.

I would also say thanks to all those customers who give me their precious time for questionnaire in sharing their experience for my study.

EXECUTIVE SUMMARY
The project contents mainly the Sales & Marketing activities in Real Estate Company (Unicon Real Estate Pvt. Ltd), and how the Real Estate Company works. In my project I have defined the Activities and Job Profiles of a Managers and Executives in Sales and Marketing Department.

My Summer Internship was divided into two halves: In the first half, I was engaged in introducing Standard Chartered IDR to retail investors, brokers and keep telling them to invest in IDR. In the second half, I had to analyze consumer behaviour towards Standard Chartered -STCI Capital Market products. This comparison is followed by the questionnaire and its analysis and at the end the recommendations that could make Standard Chartered- STCI Capital Market moreeffective in the banking and broking sector. This had been followed by comparison of ST - CAP withother broking companies

Project Objective: To draw a comparison between Standard Chartered -Capital Market and other brokingcompanies on the basis of products and services.To find out the awareness level about additional services provided by Standard Chartered STCI Capital Market.To analyze the various factors influencing investors preference.To identify the future scenario on the basis of collected facts and services.To study the behaviour of different investors towards different investment options.

Reporting: I reported to Sr.Sales Manager- Mr. Mukesh Thakur who kept guiding me during my SIP when required.

CONTENTS
1.Cover page 2. Title page 3. Authorisation 4. Acknowledgement 5.Executive Summary 6. Abstract

7. Table of contents 8. List of Tables 9. List of Figures 10. List of Symbols, Abbreviations and Nomenclature 11. Main Text 12. References/Bibliography 13. Glossary

Table of Contents Authorisation Acknowledgements. Executive Summary. 1.Introduction 1.1 Purpose,Scope and Limitations 1.2 Sources and Methods 1.3 Report Organization

2.Industrial Analysis

PURPOSE OF REAL ESTATE INDUSTRY

A real estate appraisal is needed to determine the estimated market value of a house, condominium, commercial property, vacant land, etc. It is used to assist someone in making a decision. They may be considering purchasing, selling, insuring, or lending money on a house, condo, commercial property, or vacant lot. Appraisals are also used for tax purposes to estimate how much money a property owner has to pay in taxes. Here's a summary of some of the services a professional a real estate appraiser can provide depending upon their qualifications:

Residential and Commercial valuation estimates Estate planning and estate settlements Tax assessment review and advice Advice in eminent domain and condemnation property transactions Dispute resolution - including divorce, estate settlements, property partition suits, foreclosures, and zoning issues Feasibility studies Expert witness testimony Market rent and trend studies Cost/benefit or investment analysis, for example, what will be the financial return of remodeling a house, condo, or commercial property Land utilization studies Supply and demand studies

Banks and mortgage lenders need appraisals to assist them in figuring out how much money to lend someone for a mortgage loan application. There are many different aspects of a loan application that the banker has to consider, but mortgage lenders always require an appraisal since the real estate will be the collateral for the mortgage loan. People get very emotional and excited about purchasing a house. When they're in this highly emotional and excited state, they tend to just look at the cosmetic appeal of a house instead of the important factors. They forget that they're not buying a CAR, they're buying a HOUSE!! There's a big difference between the two. One is a normal expense everyone has to incur occasionally. The other is the biggest financial decision most people will ever make. By becoming too emotionally attached to a deal, people often pay above market value for a home. This can cost them tens of thousands of dollars in an overpriced purchase. Since a house is such a major financial decision, it's prudent

for them not to take any chances. People should try to eliminate as much risk as possible. A pre-purchase appraisal will inform people of the true market value of a house. This will enable them to make an educated and intelligent decision on whether or not to purchase the home. They will also know the approximate amount to pay for it. Pre-sale appraisals are recommended. Before someone puts their house up for sale they should have it appraised to estimate the true market value. This will prevent any last minute holdups because of problems found during the buyers' bank appraisal. Any last minute problems will delay the sale or kill the deal altogether.

Appraisers are needed during property condemnation proceedings, also known as, Eminent Domain. Appraisers often are asked to estimate "just compensation" in situations where the Federal, State or Local governments take ownership of private property for public use. This happens in situations such as, to build a road, public park, expand an airport, etc. The law requires that owners of the condemned property, (property taken by the government in this manner), must be paid a fair price.

SCOPE OF REAL ESTATE INDUSTRY

The Real Estate Boom: A genuine Euphoria
Indian real sector has seen an unprecedented boom in the last few years. This was ignited and fueled by two main forces. First, the expanding industrial sector has created a surge in demand for officebuildings and dwellings. The industrial sector grew at the rate of 10.8 percent in 2006-07 out of which a growth of 11.8 percent was seen by

the manufacturing sector. Second, the liberalisation policies of government has decreased the need for permissions and licenses before taking up mega construction projects. Opening the doors to foreign investments is a further step in this direction. The government has allowed FDI in the real estate sector since 2002. FDI was deemed necessary in the view of making the sector more organised and increasing professionalism. farmers. The villages adjacent to the metro cities have experienced sky-rocketing land prices. This has induced farmers to sell their land for good money.

Future Prospects on Real Estate Industry

The real estate market in India is yet in a nascent stage and the scope is simply unlimited. It does not resemble a bubble that will burst. An unhindered growth for the next twenty years is almost sure. This is because the outsourcing business in India is going in great guns and this entails a huge demand for commercial buildings and urban housing besides improvement in infrastructure. The organised retail market in India is also accelerating with players like WalMart, Bharti, Reliance etc. looking forward to make a foray thus stepping up the demand for real estate According to former Planing Commission Advisor Tarun Das, a price index for the housing market to track price movement must be incorporated. The government must ensure that there is no shortage of funds. Sebi's(Securities Exchange Board of India) recent harbinger of permitting real estate mutual funds in both private and public sector will go a long way in attracting funds from small investors who emphasize on certain return. Another impediment that can be eased on the discretion of government is the existing tax laws and other complex

regulations relating to multidimensional real estates such as industrial parks and SEZs(Special Economic Zone). RITES(Real Estate Investment Trusts) of the type introduced in U.S.,U.K. and Germany should be imitated and explored.

LIMITATIONS OF REAL ESTATE INDUSTRY

A real estate agent can help you sell or buy a real estate in various ways. But there are certain things that a real estate agent can and cannot do for you. There are limitations to the things that a real estate agent can do and one of the restrictions on them is the Federal Fair Housing Act. On sale or rental of housing, no real estate agent is allowed to do any of the following acts that might discriminate according to sex, race, religion, color or nationality: Decline to negotiate, rent or sell housing Make housing unavailable Deny lodging Set unusual conditions, terms and privileges on selling or renting a house Offer unusual services or amenities for housing Convince the owners to rent or sell their properties for their own profit Restrict someone from achieving amenities or services that is connected to the rental or selling of the house For mortgage lending, these are the actions that a real estate agent is now allowed to do:

Decline to bring information on loans Decline to make a mortgage loan Single out on assessing a property. Make use of unusual terms or conditions for getting a loan

Enforce unusual conditions or terms such as unusual fees, rates or points A real estate agent under any real estate transaction is forbidden to:

Make use of advertisements that implies on restrictions on real estate that is based on the discrimination of religion, sex, race, color or nationality. This law also applies to single-family and owneroccupied housing that are originally exempted from the Federal Fair Housing Act. Intimidating, interfering, coercing or threatening a person who exercises their Fair Housing rights There are also other limitations to how much a real estate agent can help. Some expectations of the client according to a neighborhood may not be accepted by a real estate agent. For example, if a client wishes a real estate agent to get them a house that is close to a protected class area, an agent must not comply with the request. The agent should not even dare to advertise the type of neighborhood where he is selling a real estate. If a client demands to get a house to a neighborhood of, lets say African-Americans, a real estate agent must refuse.

Another limitation of a real estate agent is the use of specific words in advertising. An agent must not use words that would reckon to signify a type of protected class. Words such as handicapped, married, singles only, couples, sports-minded and other similar words or phrases should not be used by an agent on his advertisements. Clients might also request for a house near a school district. The problem is, the children of the client might not be accepted to a school for certain reasons. So a real estate agent must ask for the limits of the clients search and explain that their children might not get into the school they like. To guarantee a certain school district for a client is not the agents job.

AN OVERVIEW OF REAL ESTATE INDUSTRY

The term real estate is defined as land,including the air above it and the ground below it,and any buildings or structures on it. It is also referred to as realty. It covers residential housing,commercial offices, trading spaces such as theatres, hotels and restaurants, retail outlets,industrial buildings such as factories and government buildings. Real estate involves the purchase, sale, and development of land, residential land non-residential buildings. The main players in the real estate market are the landlords, developers,builders, real estate agents, tenants, buyers etc. The activities of the real estate sector encompass the housing and construction sectors .The real estate sector in India has assumed growing importance with the liberalization of the economy. The consequent increase in business opportunities and migration of the labour force has, in turn, increased the demand for

commercial and housing space, especially rental housing. Developments in the real estate sector are being influenced by the developments in the retail, hospitality and entertainment (e.g., hotels,resorts, cinema theatres) industries, economic services (e.g., hospitals, schools) and information technology (IT)-enabled services (like call centers)etc. and vice versa. The real estate sector is a major employment driver, being the second largest employer next only to agriculture. This is because of the chain of backward and forward linkages that the sector has with the other sectors of the economy, especially with the housing and construction sector. About 250 ancillary industries such as cement, steel, brick,timber, building materials etc. are dependent on the real estate industry.

CURRENT SCENARIO It is difficult to estimate the exact contribution of the real estate sector to gross domestic product (GDP) as it appears in a disaggregated and dispersed form in the National Accounts Statistics.Residential housing and real estate services(activities of all types of dealers such as operators,developers and agents connected with real estate)is covered under the category real estate, ownership of dwellings, business and legal services. The gross value added in the ownership of dwellings is equivalent to gross rental of the residential dwellings less cost of repairs and maintenance. Gross rental is estimated as a product of average gross rental per dwelling and the number of census dwellings and includes imputed rent of owner-occupied houses.The rentals of the industrial/trading establishments are deductible expenses from the profits of these establishments but appear as profits of the business or company renting out the premises. Similarly, implicit rents on selfowned real estate is accrued as profits from business and is difficult to

separate from non-real estate profits. The addition to the stock of real assets with these businesses appears in the business accounts as capital addition. In the national accounts it would appear under the head gross fixed capital formation construction. Value of construction output is the additions made to the stock of real estate assets in the public, private and household sectors. The contribution ofconstruction to GDP is the estimate of value added derived from the corresponding estimates of this value of construction output. Further, current data on the sectors such as ownership of dwellings, real estate servicesconstruction are mostly not available and estimates for the benchmark year is prepared on the basis of base year data and projected for other years with the help of relevant indicators.To get an idea of the contribution of the real estate sector to GDP, an attempt is made to factor in the value added to ownership of dwellings,which constitute housing, real estate services and construction. During the period 1994-95 to 1999-2000 the real estate services, housing and construction sector grew by 4.6 per cent. The housing sector grew by 2.8 per cent only while the construction sector grew by 6.4 per cent. Table indicates that the share of real estate services, housing and construction in GDP declined steadily from 2006-07 to 2012-13. TABLE Gross Domestic Product: Housing, Real Estate Services and Construction (at 2006-07 prices)

FiguresInRs Crore YEAR 2006-07 HOUSING REAL ESTATE SERVICES 43507 317

2007-08 44,706 333

2008-09 45,958 351

2009-10 47,252 370

2010-11 48,585 390

2011-12 49,968 413

2012-13 51,391 437

CONSTRUCTION 40,593 TOTAL 84,417

42,830 87,869

45,496 91,805

46,452 94,074

51,195 1,00,170

54,342 1,04,723

58,728 1,10,556

TABLE Gross Domestic Product : Housing, Real Estate Services and Construction (at 2006-07 prices)
(Share in Per Cent) YEAR 2006-07 HOUSING 5.6 2007-08 5.3 0.04 5.1 10.5 2008-09 5.1 0.04 5.1 10.2 2009-10 4.9 0.04 4.8 9.7 2010-11 4.8 0.04 5.0 9.9 2011-12 4.6 0.04 5.0 9.7 2012-13 4.5 0.04 5.1 9.6

REAL ESTATE 0.04 SERVICES CONSTRUCTION 5.2 TOTAL 10.8

Source : National Accounts Statistics 2012

REFORM ISSUES The Indian real estate market is still in its infancy, largely unorganised and dominated by a large number of small players, with very few corporate or large players having national presence. The Indian real estate market, as compared to the other more developed Asian and Western markets is characterised by smaller size, lower availability of good quality space and higher prices. Supply of urban land is largely controlled by state-owned development bodies like the Delhi Development Authority (DDA) and Housing Boards leaving very limited developed space free, which is controlled by a few major players in each city. Restrictive legislations and lack of transparency in transactions are other main impediments to the growth of this sector. Limited investment from organised sector has also hindered the growth of this sector. There is a thriving parallel economy in real estate,

involving large amounts of undeclared transactions, mainly due to high stamp duty rates.The current legislative framework also leads to substantial losses to the Government. Some of these issues are: LEGISLATIVE ISSUES Much of the over 100 laws governing various aspects of real estate dates back to the 19th century. Despite the plethora of laws, the situation appears to be far from satisfactory and major amendments to existing laws are required to make them relevant to modern day requirements. The Central laws governing real estate include: Indian Contract Act, 1872 This legislation specifies when a party can be said to have the capacity to contract. A contract pertaining to realty can be entered into, among others, by an individual (who is not a minor or of unsound mind), partners of a firm, a corporate body,a trust, a sole corporation, the manager of an undivided family, and a foreigner. All the requirements of a valid contract, i.e. consideration, intention to contract and validity under the law of the land must be satisfied. Transfer of Property Act, 1882 This lays down the general principles of realty, like part-performance and has provisions for dealing with property through sale, exchange, mortgage, lease, lien and gift. A person acquiring immovable property or any share/interest in it is presumed to have notice of the title of any other person who was in actual possession of such property. Registration Act, 1908 The purpose of this Act is the conservation of evidence, assurances, title, publication of documents and prevention of fraud. It details the formalities for registering an instrument. Instruments which it is mandatory to register include: (a) Instruments of gift of immovable

property; (b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property;(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of instruments in (2) above. (d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent Sales, mortgages (other than by way of deposit of title deeds) and exchanges of immovable property are required to be registered by virtue of the Transfer of Property Act. Evidently, therefore, all the above documents have to be in writing. Section 17 of the Act provides for optional registration.An unregistered document will not affect the property comprised in it, nor be received as evidence of any transaction affecting such property (except as evidence of a contract in a suit for specific performance or as evidence of part-performance under the Transfer of Property Act or as collateral), unless it has been registered. Thus the doctrine of part performance dealt with under Section 53 A of the Transfer of Property Act and the provision of Section 49 of the Registration Act (which provide that an unregistered document cannot be admissible as evidence in a court of law except as secondary evidence under the Indian Evidence Act) together protect the buyer in possession of an unregistered sale deed and cannot be dispossessed. The net effect has been that a large number of property transactions have been accomplished without proper registration. Further other instruments such as Agreement to Sell, General Power of Attorney and Will have been indiscriminately used to effect change of ownership. Special Relief Act, 1963 This Act is only to enforce individual civil rights. A person dispossessed of immovable property without his consent (other than in due course of law) can recover possession by a suit filed within six months from the date of dispossession.Unless the contrary is proved, in a suit for specific

performance of a contract, the Court shall presume that a contract to transfer immovable property is one in which monetary compensation for its non-performance would not afford adequate relief. The Court could also grant a permanent/ mandatory injunction preventing the breach of such contract and award damages. Urban Land (Ceiling And Regulation) Act (ULCRA), 1976 This legislation fixed a ceiling on the vacant urban land that a person in urban agglomerations can acquire and hold. A person is defined to include an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not. This ceiling limit ranges from 500-2,000 square metres (sq. m). Excess vacant land is either to be surrendered to the Competent Authority appointed under the Act for a small compensation, or to be developed by its holder only for specified purposes. The Act provides for appropriate documents to show that the provisions of this Act are not attracted or should be produced to the Registering officer before registering instruments compulsorily registrable under the Registration Act. The objective of acquiring the excess vacant land could not be achieved because of intrinsic deficiencies in the legislation itself. The provisions under Sections 19, 20 and 21 of the Act have together proved counterproductive to the objectives of the legislation. So far, only 19,020 hectares could be taken possession of by State Governments and Union Territories and the remaining land was locked up in various litigations2 . This has only helped push up land prices to unconscionable levels and practically brought the housing industry to a stop. This legislation was repealed by the Centre in 1999. The Repeal Act, however, shall not affect the vesting of the vacant land, which has already been taken possession by the State Government or any person duly authorised by the State Government in this regard under the provisions of ULCRA. The repeal of the Act, it is believed, has eliminated the large amount of

litigation and released huge chunks of land into the market. However the repeal of the Act has not been carried out in all states. Initially the repeal Act was applicable in Haryana, Punjab and all the Union Territories. Subsequently, it has been adopted by the State Governments of Uttar Pradesh, Gujarat,Karnataka, Madhya Pradesh and Rajasthan.Andhra Pradesh, Assam, Bihar, Maharashtra,Orissa and West Bengal have not adopted the Repeal Act so far. Land Acquisition Act, 1894 This Act authorises governments to acquire land for public purposes such as planned development, provisions for town or rural planning, provision for residential purpose to the poor or landless and for carrying out any education, housing or health scheme of the Government. In its present form, the Act hinders speedy acquisition of land at reasonable prices, resulting in cost overruns. The Indian Evidence Act, 1872 Under the Act, whenever the status of any person as the owner of a piece of immovable property of which he is shown to be in possession is questioned, the burden of proving that he is not the owner lies on the person who asserts that he is not the owner. State laws governing real estate While each state has its own set of laws,which govern planned development, rules for construction and floor-area-ratio (FAR) or floor space-index (FSI) and formation of societies and condominiums, two laws that exist in every state,are the stamp duty and rent laws. Stamp Duty is being covered in a later section. Rent Control Act Rent legislation in India has been in existence for a very long time. Rent control by the government initially came as a temporary measure to protect the exploitation of tenants by landlords after the Second World

War. However these rent control acts became almost a permanent feature. Rent legislation provides payment of fair rent to landlords and protection of tenants against eviction. Besides, it effectively allows the tenant to alienate rented property. Tenants occupying properties since 1947 continue to pay rents fixed then, regardless of inflation and the realty boom. Some of the adverse impacts of the Rent Control Act are: Negative effect on investment in housing for rental purposes. Withdrawal of existing housing stock from the rental market. Accelerated deterioration of the physical condition of the housing stock. Stagnation of municipal property tax revenue, as it is based on the rent. Resultant deterioration in the provision of civic services. Increase in litigation between landlords and tenants. The Rent Control Act, in fact, is the single most important reason for the proliferation of slums in India by creating a serious shortage of affordable housing for the low income families. Low and middle-income families typically live in rented accommodation all over the world and the need for such accommodation in our cities will only increase as the economy modernises, labour mobility increases and urbanisation takes place. It is, therefore, necessary to increase the stock of rental housing. Promotion of rental housing can have a significant impact on the economy in many ways: It reduces shortage of housing for a large section of the population who cannot afford ownership. Housing construction being a labourintensive activity, investment in housing generates employment for both skilled and unskilled labour. Housing has backward and forward linkages with many other industries. Rental housing helps in stabilising real estate prices and checking speculation and, thus, makes housing affordable for the weaker sections.

 It helps check proliferation of slums. In the absence of rent control, dilapidated urban housing would be periodically pulled down and replaced by modern apartment buildings and other complexes leading to more rational use of prime locations and also creating a continuous process of urban renewal. This has not happened in India because rent control combined with security of tenure provides no incentive for house owners to undertake renovation work. This explains the run down appearance of many of our buildings in prime locations, which gives Indian cities a much more shabby appearance than their counterparts in other developing countries. Repeal of the Rent Control Act could unleash a construction boom as has happened in many major cities all over the world.This is not only necessary to meet the growing unmet demand for housing but it would also have a highly favourable effect on employment generation. In 1992, the Central Government proposed a model rent control legislation, which was circulated to all states. The model Act proposed modification of some of the existing provisions regarding inheritance of tenancy and also defined a rent level beyond which rent control could not apply. A new Delhi Rent Control Act based on this model law was passed in 1997 but it has not been notified to date because of resistance from traders who are sitting tenants. Only a few states have introduced the model Act. TAXES AND STAMP DUTY RATES Stamp Duty There is a direct link between Registration Act and Stamp Act. Stamp duty needs to be paid on all documents which are registered and the rate varies from state to state. With stamp duty rates of 13 per cent in Delhi, 14.5 per cent in Uttar Pradesh and 12.5 per cent in Haryana, India has perhaps one of the highest levels of stamp duty. Some states even have double stamp incidence,first on land and then on its development. In contrast the maximum rate levied in most developed markets

whether in Singapore or Europe is in the range of 1-2 percent. Even the National Housing and Habitat Policy,1998, recommended a stamp duty rate of 2-3 percent. Most of the methods to avoid registration are basically to avoid payment of high stamp duty. Another fallout of high stamp duty rates is the understatement of the proceeds of a sale. This is also linked to payment of income tax and capital gains tax. When registration has not been effected,a transfer is not deemed to have taken place and hence capital gains tax can be totally avoided. Thus,the present provisions in various laws and their poor implementation have led to a situation where there is considerable financial loss to the exchequer on account of understatement of sale proceeds, nonregistration and consequent nonpayment of stamp duty and avoidance of capital gains tax. Property Tax Property tax is a levy charged by the municipal authorities for the upkeep of basic civic services in the city. In India it is the owners of property who are liable for the payment of municipal taxes whereas in countries like the United Kingdom,the occupier is liable. Generally, the property tax is levied on the basis of reasonable rent at which the property might be let from year to year. The reasonable rent can be actual rent if it is found to be fair and reasonable. In the case of un-let proper-ties,the rental value is to be estimated on the basis of letting rates in the locality. In the case of special class of properties like cinema theatres, it is estimated by adopting the accountancy method under which the rent is a certain percentage of the total average turnover during the year, i.e. actual receipts of the sale of tickets (excluding entertainment duty). However, some cities follow a different system for the levy of property tax. In Patna , local properties have been categorised into three groups,

(i) reinforced cement concrete (RCC) buildings;(ii) pucca building; and (iii) pucca buildings with A.C or C.I. sheet roof. The rental value per sqr.m. for every building has been fixed according to their status, location, type of construction and user etc.This system has been upheld by the Supreme Court and has been appreciated by international bodies.In Delhi, property tax of un-let properties is basedon rental value, which is arrived at on the basis of capital investment in land and buildings. In the case of rented properties, the rent recovered is taken as the base. The rental value system has its own disadvantages.There is lot of discretion with the assessing officer. There is no buoyancy of revenues because of the restrictions imposed by the Rent Control Act. As a result, the rateable value of the properties increases only on account of alterations to or extension of the existing properties or on account of construction of new properties. As a result of the Rent Control Act, the income of the municipal corporations has become static. The municipal corporations are, therefore, in favour of an alternative method of levying of property tax which will de-link it from rent. The Municipal Corporation of GreaterMumbai commissioned the Tata Institute of Social Sciences to undertake a study to recommend an alternate system for levy of property tax. The study has recommended a capital value based system of taxation. The advantages of this system are:(i) It results in revenue buoyancy, i.e. tax revenue can keep pace with inflation and cost of living since capital value can be revised after five years based on the market value of the residential properties given in the Government ready reckoner for stamp duty. (ii) The system is transparent and simple. (iii) It is objective and eliminates/reduces the element of discretion. (iv) It provides equitable assessment among different property owners.

The study has also developed a formula to work out the capital value and amount of tax:Capital Value= Market value (MV) * Carpet area of the property * Weight for type of construction *Weight for age.Tax= Capital Value * tax rate * weight for user category. While assigning weights, concessions have been given to buildings like chawls, semipermanent structures, those constructed prior to 1985 and those falling in the category of tenements having less than 225 square feet carpet area and belonging to the economically weaker sections. Similarly, weights have also been assigned to the user category in a progressive manner.

Entertainment Tax The tax rates in the entertainment industry are among the highest in the world. Though some State Governments are waiving entertainment tax on multiplex theatres for periods ranging from three to ten years, on the whole tax on film theatres continues to be high. Lowering of these rates will not only benefit the entertainment industry, which has an annual turnover of Rs. 400 crore, but will also promote real estate development in the form of theatres in cities, towns and even villages. LAND MARKET ISSUES It is estimated that removing land market barriers can contribute an additional 1 per cent to Indias GDP growth rate.3 Titles and Records Another important issue in real estate development is that of title to property. In India, the State does not certify a title to housing or land

property. The revenue records are not documents of title, and ownership is established only by the sequence of earlier transfers. Thus, the fundamental question of title has often led to enormous litigation. At present there are three legislations which have a bearing on property transactions involving transfer of ownership of proprietary interest.These are the Transfer of Property Act, the Indian Registration Act and the Indian Evidence Act. An examination of the provisions of these Acts reveals a number of inadequacies. Most of the sale transactions are done through the power of attorney route to evade transaction costs like registration, stamp duties, property tax etc. The system, as it exists, imposes a responsibility on the part of the purchaser with regard to the inspection of the title. The result is tenuous titles to land and non-transparency in property transactions, thereby hampering large-scale real estate development. Titles to land have become necessary for more efficient handling of land title documents, to provide greater security of tenure for those in occupation of land, to keep pace with the greater demand for reconveyancing, for better support for mortgaging and investment, to face the steady increase in the number of private and public users who make routine enquiries about land ownership. There is an urgent need to ensure compulsory registration of land deeds and also to computerize such records so as to create a database. The Andhra Pradesh experience is a good example to begin with where registration of sale of land/property is achieved within a month. The Tenth Plan Working Group on Information Technology for Masses has recommended computerisation of land records all over the country with computerised land/property documents being available to the public at all levels,including in villages, by 2005. Through online

documentation of land records, hyper links with court registries of the district or the State can be developed, so that the unwary buyer can get immediate information of any pending litigations. In this context, the Registration and Other Related Laws (Amendment) Act, 2001 has proposed the compulsory registration of documents relating to part performance of contracts concerning immovable property (covered by Section 53A of the Transfer of Property Act), in order to prevent loss of revenue to the states. The Act also s eeks to curb the practice of avoiding registration of deeds by transferring property through power of attorney and agreements of sale. Though this Act has received the assent of the President and has been notified in the official gazette, it will come into force only from a date to be notified by the Government.

Urban Land Monopoly Many cities have created development agencies (like the DDA in Delhi) and handed over control of all urban land within the municipal jurisdiction to them in the belief that they would act in the interests of the public. However, such agencies tend to behave like the monopolies that they are. It is in the interests of the monopolist to restrict the development and sale of new land and keep prices high, so as to maximise its own returns. Introduction of a competitive construction boom requires abolishing the monopoly of such agencies over urban land by completely separating control of land from its development. There is a huge opportunity for leveraging the large portfolios of unutilised and underutilized real estate assets of various government agencies.A conscious effort on the part of these agencies,coupled with policy initiatives, can unlock the value of these non-performing assets. Revenues generated from such initiatives can be utilised for the

development of infrastructure. Government staff housing : During British rule, official bungalows were built in exclusive civil lines for government officials. This practice was perpetuated after Independence and a large volume of government housing for functionaries ranging from ministers and legislators to Class III and Class IV employees, involving huge public expenditure was developed during the past 50 years. In other democracies such as the United States and United Kingdom, there is usually an official residence for the elected chief executive and all other officials live in owned or rented houses. Many economists have proposed that all government housing including those in the Lutyens bungalows zone in Delhi should be handed over to the private sector and the resources generated be invested for productive purposes. Public-Private Partnerships : Private participation in housing is giving way to the new mantra of public-private partnerships. Under this, the government acquires the land which is then developed for residential/commercial use by the private developer. One example is the Bengal Ambuja project in Kolkata, which is a joint venture between the West Bengal Housing Board and the Gujarat Ambuja Cement Group. The housing project caters to the housing needs of various income groups by building low density high rise buildings. Another example worth emulating is the HUDA model of the Haryana Urban Development Authority (HUDA) under which a number of integrated cities have been developed through public-private partnership (Annexure-7.6.2).Gurgaon has emerged as the most successful of these, with the countrys largest private sector integrated township DLF City being established there. Development of integrated townships would mean development of residential, commercial, corporate and institutional complexes, besides provision of roads, power, water supply, waste management, storm water drainage as also

social infrastructure medical, community and education facilities. A certain percentage of houses around 10 per cent in these townships can be reserved for the economically weaker sections (EWS) and low-income groups (LIG) at affordable rates. Land Reforms The present ceiling of 15 - 25 acres per person on agricultural holdings comes in the way of large-scale real estate development, especially with the recent foreign direct investment (FDI) norms making it mandatory for having at least 100 acres of land for investment in integrated townships.Therefore one has to under the existing law find methods of circumventing this by first converting agricultural land within the limit into urban land and then again purchasing more land in order to meet the 100-acre limit for FDI. This would only lead to delays in projects. With the urban land ceiling removed in most parts of the country, the agricultural land holding ceiling with respect to land in the periphery of towns needs to be looked into.

Conversion of Rural Land to Urban Use Conversion of rural land at market prices should be completely decontrolled and left to the market. At present, in Delhi, historical village land situated within the city limits cannot be converted to develop urban colonies. The presence of urbanised villages in the middle of the capital city is an anachronism and a testament to bad policy.The curbs on the expansion of urban limits into surrounding village areas should be removed.

FINANCIAL REVIEW OF REAL ESTATE INDUSTRY

Credit Restrictions

Financing options are presently skewed in favour of personal loans vis-vis developer financing. Most housing finance companies cater mainly to individuals in the higher income group, who have a reasonably assured credit worthiness.Only 5-7 per cent of the loans disbursed by these housing finance companies go to builders and institutional developers. The high default rates among the developers is one of the factors dissuading housing finance companies from investing in this sector. The legal recovery mechanism is time consuming. Lack of a code of conduct for the industry is the other factor that keeps investors away. Even now, developers need to become corporatised to avail funding from financial institutions. All this leads to builders and developers approaching private sources of finance at high interest rates, which ultimately leads to higher real estate prices. To attract investment into this sector, it is imperative that the government increases the comfort level of the existing fund providers through appropriate legal measures and corporatisation of real estate, besides maintaining industry discipline.Developing a grading system among the developers will make investors aware of the risks associated with the projects of each developer. Grading would facilitate the overall growth of the real estate sector by providing the developers with incentives to conform to fair trade practices and legal requirements. A scientifically graded project would lend itself to a more accurate and reliable estimation of the risks associated with the real estate project/ project promoter. This is expected to enhance the confidence of the end users and augment the interest of the lenders in these projects, thereby facilitating the flow of institutional funds to the project/project owner. With the construction sector receiving industry status, it is expected that developers and companies will be able to borrow from financial institutions on priority basis.

Sources of Funds Real estate mutual funds, pension funds and insurance companies are the major investors in the housing sector in developed countries. In the United States, pension funds invest 5 per cent of their reserves in real estate equity and mortgages,whereas in India developers ability to get financial help from these sources is limited. Housing finance companies in India also need to be given access to pension, provident and insurance funds. As the gestation period of real estate projects is more than five years, on an average, it is necessary that developers have access to such long term funding sources. Real estate investment trusts In India real estate assets are kept outside the financial market and not leveraged for investment purposes. India must try to make real estate a full-fledged investment option. Real estate as an asset class is vastly different from capital market assets. It is a natural hedge against inflation, experiences low volatility and hence generates positive long-term returns. To begin, with an exclusive stock exchange could be set up under Securities and Exchange Board of India (SEBI) guidelines for trading real estate stocks. The Government should permit the setting up of a Real Estate Investment Trust (REIT) which should be regulated by SEBI in order to open the investment floodgate for the real estate sector. The REIT would operate like a mutual fund, where investments of individual investors are consolidated to invest in real estate, rather than stocks of companies. It would provide a higher level of liquidity as well as professional advice for price discovery,as the investor would be investing through an asset management company. It also provides assured returns in the form of dividends to its investors from rental income earned on real estate assets. The essential difference between a REIT and a mutual fund is that investments made in REIT are traded in real estate stocks and not invested in stock of companies.

Further the swings in this market are in the range of 5-10 per cent, which an average investor is in a better position to absorb than the 6090 per cent swings on the stock market. Mortgage market and securitisation Another source of finance for housing companies is development of the secondary mortgage market which involves conversion of mortgages into tradable financial or debt instruments.Securitisation is a process popular among housing finance companies in the West by which the home loan assets are bundled into securities and sold to the investors. Such securities are called mortgage-backed securities and they help the finance companies convert their loan assets into cash for further loan disbursals, thus maintaining a flow of funds from the lenders. It also helps finance companies reduce their investment risk; the risk of earning a lower rate of return on cash flows for prepayments of home loans. There are two pre-requisites for secondary mortgage market: (i) Mortgage loan insurance: The risk of default under mortgage loan is covered under an insurance policy for a nominal premium.,which protects the risk of non-payment to the lender. As a result, the mortgage loans are risk-free and it is this reason that only 50 per cent risk weight is assigned to housing loans under capital adequacy norms. In India, however, such risk weight is 100 per cent given the absence of such insurance cover which increases the risk of non-payment/failure. The Reserve Bank of India (RBI) has recently reduced the risk weight for housing loans to 75 per cent,taking into account the good recovery in this sector. (ii) Foreclosure: Housing loans are long-termloans, repayable over a period of 15 to 20 years. Any default will be restricted to the period of actual default. Under prudential norms, the account will become a nonperforming asset after default of six monthly instalments. Foreclosure

laws will enable the lender to call back the entire dues when default of six monthly instalments takes place, irrespective of the fact that the full amount is not due. The various agreements obtained by the lender will have such clauses to recall the entire balance due in case of default. At present, banks and housing finance companies find it difficult to sell their housing loan portfolio to institutions if it does not have the remedy of foreclosing an account. The normal procedure for recovery of bad debts under the civil code takes more than 10 years. Parliament passed the National Housing Bank (Amendment) Act 2000 adding a new chapter, V-A, to the National Housing Bank Act, 1987.This simplifies the foreclosure norms for housing loans and permits summary proceedings for dues by appointing a Recovery Officer and setting up Appellate Tribunals on the lines of the Debt Recovery Tribunals in the case of banks. Further, the Government has also included scheduled banks in the definition of approved institutions, besides housing finance companies. Under these provisions, officers of approved institutions with a legal background shall be appointed as recovery officers of the Tribunal. If a borrower defaults in repayment, the lending institution may resort to foreclosure of the account and apply to the recovery officers for sale of the property pledged, mortgaged or assigned to it as security.The foreclosure law can speed up the recovery process considerably. However, the government has to notify the rules and appoint recovery officers before the foreclosure norms can take effect. ROAD NETWORKS According to a study conducted by the real estate management company, C.B. Richard Ellis,the returns on commercial property in India are among the highest in the world. Mumbai prime property fetches returns of 13 per cent, New Delhi 12 per cent and Bangalore 11 per cent. In contrast,returns in London are 5.3 per cent and in Singapore

4.8 per cent. Lack of space is not the reason for these high returns because India is a huge country while Singapore is just a tiny city. Various reasons have been put forward to explain the curious phenomenon of astronomical real estate values in a poor country. The real reason, however,is the distorted market for real estate combined with the under-supply of roads. Absurd land ceiling and rental laws combined with high stamp duties have skewed the real estate market towards a situation of perennial shortage. Roads add to the supply of land by connecting villages to towns and this makes land available to the urban economy. This keeps land prices down. It also reduces the rural-urban migration, easing the pressure on cities. Unfortunately, roads have long been neglected by our policy makers. Roads are a public good and, therefore, an area where State investment is required. However, the planned economy has failed to invest sufficiently in roads even as it has been investing in cars and running hotels. This has put pressure on land in cities, causing urban land prices to soar. It is now time to usher in a free market in real estate development. With roads, tramways and rail connections to the surrounding areas, a lot of rural land will be developed. All these parcels of land will add to the total supply of real estate and this will work to keep prices down.

FOREIGN DIRECT INVESTMENT(FDI)

The real estate market is currently characterized by small players. None of the local developers have a truly national presence and large companies are still not fully involved in real estate development. None of the current players have the financial strength to invest in large-scale development projects. The development of new towns and cities would require huge massive investment and technical expertise that domestic players alone cannot provide. One way to overcome this hurdle is to

raise funds through the FDI route. However,right now, FDI in the real estate sector is allowed only for the development of integrated townships. Allowing FDI in the real estate sector will result in the following advantages: (i) It will provide the much-needed investment for the funds-starved sector; (ii) it will bring in professional players equipped with expertise in real estate development; (iii) the introduction of new technology and quality real estate assets will have a demonstration effect on the local developers; (iv) it will lower real estate costs in the long run; (v) it will generate employment and revenue; and (vi) it will improve the quality of related infrastructure. The real estate sector needs to be opened up to FDI as returns in the form of rentals (annual investment yield) and capital appreciation are assured. Rentals in Indian cities are amongst the highest across the world. The average yield from investments in commercial property has ranged between 11-13 per cent per annum in India over the last few years. Across the world, real estate is a preferred option for foreign investors. It is estimated that roughly, half the FDI flow into China is for the housing sector only. But the stumbling block is the fear that foreign investors may repatriate all the profits.These apprehensions are fuelled by the fact that the

Southeast Asian financial crisis was partly the result of short-term investments in the real estate sector in these countries leading to flight of capital.To guard against this, a minimum lock-in period of three years must be fixed on investments and care should be taken to ensure that no long-term investment is funded by short-term capital. Opening up the real estate sector will bring in substantial foreign investments into India which would result in developing the real estate market and making it more efficient. This is also likely to give a big fillip to the construction industry, which has tremendous spin-offs, especially in terms of employment generation.These issues are discussed more fully in Legal problems, small individual land holdings, untraceable records and unavailability of organised finance are major entry barriers to FDI in real estate. These need to be tackled before the sector is opened up.

MUNICIPAL LAWS, RULES & PROCEDURES

Municipal Laws Most urban and municipal laws and regulations in India date back to half a century if not more. There is a need to thoroughly review and modernise them in the light of the latest developments in urban infrastructure, transport, pollution control etc. A committee of eminent persons from the concerned fields should be set up to draw up a model municipal law. Such a law must make provision for private investment in and supply of all public utilities and services. It must ensure that the municipal authority focuses its attention on data gathering, analysis, planning, organisation and monitoring. In other words, the government should play the role of the facilitator more than that of the provider. Zoning Rules

In an ever-changing urban scene, the zoning regulations are in a constant state of flux with no systemic reviews or updation taking place.There is need to establish a regulatory commission to continuously review the zone shifts and activity shifts as demographic patterns change in urban areas. The failure of the Master Plan for Delhi is a case in point. The most important cause of this is the poor and inadequate implementation of the Plan during the first 20 years of its existence from 1961 to 1981. Most of the provisions made for various facilities in the Plan were not realised on the ground.Space made available for housing, retail, commercial offices, service industry, small-scale industry, as well as for educational, social and cultural institutions was far below the provisions made in the Master Plan. The implementating agency, the DDA, notified and acquired all the land required for the future growth of the city, but failed to develop it on a scale and at a speed sufficient to meet actual need. In such circumstances, restrictions on change of use of land and premium charged by authorities like DDA/Directorate of Industries are matters to be investigated. Approval Procedures Another serious malaise affecting investment in the real estate sector and housing development is the tardy process of planning approvals. A system of deemed approvals for all planning permissions by registered architects operating on the basis of self-regulation much like chartered accountants do, would enormously speed up the entire plan approval process. This will ensure that far larger quantum of housing stock is supplied every year, at more reasonable prices than is the case presently. CONSUMER PROTECTION Real estate came under the purview of the Consumer Protection Act (1986) in 1993 after an amendment to the definition of service in

Section 2(1) 0 of the Act to include the term housing construction. However, there are still several lacunae relating to consumer protection. Under the provisions of this Act, housing is considered a service not goods. If housing is treated as goods then replacement or liquidated damages can be claimed if it is defective, unlike in the case of breach of service provision, which requires only payment of a penalty. Further, pricing is covered under the Act under the unfair trade practice as applicable to goods. By defining housing as a `service, unfair practices related to pricing of housing are not covered. However, merely defining housing as goods will not solve all problems. The responsibility of making the right choice under the Act rests with the consumer and the seller is protected from giving a warranty of the goods. Thus,even if housing were to be included as a good, the very definition of good adopted in the Act may need to be reviewed to give adequate protection to a purchaser of housing. PATH AHEAD There are three critical issues in real estate development - archaic rules and regulations, lack of affordable finance on a mass scale and inadequate land availability. Legislative Reforms a. Revise the number of legislations governing property transactions and merge them into one comprehensive law. b. The repeal of the Urban Land (Ceiling & Regulation) Act by various states which have not done so is necessary. This is expected to facilitate the release of 2.2 lakh hectares of urban land, which remains frozen.

c. Amend the Rent Control Act so as to remove the absolute authority of the rent controller over the disposition of the rented property. This allows the rent controller to virtually divest the owners of the natural right to his property and transfer it to the tenant. The Rent Control Act must limit itself to ensuring a level playing field in terms of rent (adjustment) negotiations and a reasonable period for vacation of property. Market rates must be allowed to prevail in the medium term. Instilling confidence in the owners would lead to release of vacant houses into the market within the levels of affordability of the tenants. d. Amendment of the Indian Stamp Act, 1899 and the Indian Registration Act to delink the process of registration from the payment of stamp duty and also to liberate the registration process from the requirement of various no-objection certificates. e. Rationalise the tax rates and duties pertaining to the real estate sector. States should reduce stamp duties from the present range of 13-26 per cent to the level of 3-5 per cent. Stamp duty rates must also be uniform across States. The perceived loss in stamp duty revenues will be more than compensated through increased disclosure of property sales and the correct value of the property transacted. Property tax must be linked to the capital value of the property than on the rental value of the property. Entertainment tax rates must be reduced. f. The principles of law applicable to statements made in a prospectus should also apply to the sale of property. This will also facilitate the institutionalisation of conveyances and conveyancers can investigate titles and cross-linkages between municipal authorities, electricity boards, taxation departments, land registries and collectorates can be easily facilitated through hyperlinks.g. A formal system for enabling private participation in the provision of municipal services will provide

access to the skills required for improving the efficiency of urban services and make them selfsustaining in the long run. Pricing municipal services rationally will ensure enough funds for the maintenance and expansion of municipal services. Municipal authorities maybe allowed to raise funds by issuing municipal bonds. Financial Reforms a. Allow the pension funds, provident fund and insurance sector to invest in real estate. Provident and pension funds must be allowed to invest in deposits/bonds of housing finance companies. b. Encourage creation of real estate mutual funds/real estate investment trusts. c. Promote trading in mortgage-backed securities. The introduction of foreclosure norms and establishment of recovery tribunals is essential. Though securitization of mortgage debt has just started in India it has not succeeded due to the high incidence of stamp duty on documents. d. The present stipulation that FDI will only be allowed for the development of integrated townships of a minimum area of 100 acres needs to be relaxed to 50 acresor less, as such vast expanse of land may not be available in urban areas. FDI in the rest of the real estate sector may be permitted up to 74 per cent with a lock-in period of three years and there should be no repatriation of dividend during the construction period. Repatriation thereafter may be allowed. e. Develop a grading system among real estate developers to keep flyby-night operators out and control default rates among developers.This will help investors (end user/buyer of property) be aware of the risks regarding the developers ability to deliver as per specified terms and quality parameters and transfer of ownership on time.

Land Related Reforms a. Simplify and modernise the current registration system for land/property titles.The Registration and Other Related Laws (Amendment) Act 2001 must be notified at the earliest. b. A time-bound programme for auctioning of all vacant government land should be drawn up and implemented. State owned development bodies like DDA can bid along with others for the land they want to develop. c. Promote public-private partnerships in housing based on the HUDA model in order to increase the housing stock. d. Freedom to convert rural land for urban use would increase the supply of land and stimulate real estate development. e. Set up a regulatory commission for continuously reviewing zoning regulations. f. A system of deemed approval of plans for development/re development by registered/authorised architects can speed up the process of securing approvals. g. Existing ceiling on agricultural land holding,especially lands on the periphery of towns, needs to be reviewed to allow development of integrated townships. h. Amendment to the Land Acquisition Act to speed up the process of acquisition and to de-link the process of taking over possession of land from the process of determining compensation. The Act should also be modified to focus solely on the acquisition of land for public goods (e.g. roads, defence) and public utilities (power lines, irrigation dams/canals) and exclude commercial purposes such as housing.

The real estate sector can be a leading sector in generating economic growth and employment.employs 30 million people and as many as 250 industries are directly or indirectly dependent on this sector. The policy reforms outlined above, if implemented,can unleash a boom in this sector, the likes of which the country has never seen.

Demand Drives
These trends have benefited from the substantial recent growth in the Indian economy, which has stimulated demand for land and developed real estate across the real estate industry. Demand for residential, commercial and retail real estate in rising throughout India, accompanied by increased demand for hotel accommodation and improved infrastructure. Additionally, the tax and other benefits applicable to Seas are expected to result in a new source of real estate demand. KEY DEMAND DRIVES
Residential
Increase in urbanization & working population High disposable Incomes & aspiration levels Easier access to finance Fiscal Incentives on House loans

Office Spaces
India accepted as most attractive destination for IT and BPO services

Retail

Hotels
Increased business travel both domestic & foreign due to buoyant economic growth & growing FDI 2004 saw record tourist arrivals of 3 mn. By 2020, India is expected to be a leading tourist arrivals

Entry of global brands Organised retailing only 2% of total retail Industry India ranked as second most attractive retail destination by AT Keamey

Residential Real Estate Development The growth in the residential real estate market in India has been largely driven by riseing disposable incomes, rapidly growing middle class, low interest rates, fiscal incentives on both interest and principal payment for housing loans, heightened customer expectations, as well as increased urbanization and growing number of nuclear families. According to National Council of Applied Economic Research (NCAER), income classes with annual incomes between Rs. 2 million and Rs. 5 million per year, Rs. 5 million and Rs. 10, million per year, and in excess of Rs. 10 million per year are expected to increase in size by 23 per cent, 25 per cent and 28 per cent, respectively, from fiscal 2005 to fiscal 2010. These higher income households are expected to be the target customers for the luxury and super luxury residential developments. The residential sector is expected to continue to demonstrate robust growth over the next five years, assisted by the rising penetration of housing finance and favorable tax incentives. Commercial Real Estate Development The recent growth of the commercial real estate sector in India has been fuelled by increase revenues of companies in the services business, particularly in IT and ITES sectors. Industry sources expect the IT and ITES sectors to continue to grow and generate additional employment, which they expect will result in increased demand for commercial space. Within the IT and ITES sectors, the Indian off shoring operations of multinational companies are expected to increase demand for commercial space. The trend for these companies has been to set up world class business centers to house their growing work force. India continues to lead the AT Kearney Offshore Location Attractiveness Index by a significant margin.

Retails Real Estate Development The organized retail segment in India is expected to grow at a rate of 25 per cent to 30 per cent over the next five fiscal years. The growth of organized retail is expected to be driven by demographic factors, increasing disposable incomes, changes in shopping habits, the entry of international retailers into the market and the growing number of retail malls. The major organized retailers in India currently include Tata-Trent, Pantaloons, Shopper's Stop and RPG Group. While organized retail has so far been limited to larger cities in the country, retailers have announced major expansion plans in smaller cities and towns. The growth of organized retails in India will also be affected by the reported entry into the sector of major business groups such as Reliance, Bennett & Coleman, Hindustan Lever, Hero Group and Bharati. International retailers such as Metro, Shoprite, Lifestyle and Dairy Farm International have already commenced operations in the country. Hospitality Industry The hotel industry in India has grown as a result of a growing economy, increased business travel and tourism. Further, Investments in the premium segment of the hotel industry are expected to be between Rs. 20 billion and Rs. 23 billion in the aggregated over the next five years. Special Economic Zones (SEZ) SEZs are specifically delineated duty free enclaves deemed to be foreign territories for purposes of Indian custom controls, duties and tariffs. There are three main types of SEZs: Integrated SEZs, which may consist of a number of industries; services SEZs, which may operate

across as range of defined services; and sector specific SEZs, which focus on one particular industry line. Regulatory approvals have been received for SEZs proposed to be developed by a number of developers. SEZs, by virtue of their size, are expected to be a significant new source of real estate demand.

Weights for Capital Valuation of Realty 1. Construction Category Construction Category C1 C2 C3 C4 Construction Type Weight

Vacant land/land under construction Semi-permanent structures Chawls RCC structures without lift (usually up to four floors) RCC structures with lift (usually more than four floors) and bungalows

0.5 0.6 0.6 1.00

C5

1.10

2.User Category

User Category

Broad User Type

Charitable

Detailed User Description

Weight

U1 U2 U3

Charitable Properties

1.00 1.00 2.00

Residential

Residential Properties

Industries/Factories

Tuition classes and computer classes, nursing homes, 2.00

factories including workshops, laundries, oil installations,

printing press, refineries, private swimming pools, clubs,

gymkhanas, industrial estates, mills (textiles, silk, flour,

oil) godowns and tanks for industrial use, drama theatres,

marriage halls, stadiums, service stations

U4

Shops

Shops, credit societies, co-operative departmental stores 2.50

2.50

(Apna Bazaar, Sahakar Bhandar), petrol pumps, cinema

houses, studios, ordinary lodging-boarding, other nonresidential

property not covered elsewhere.

U5

Offices

Offices in less prominent areas, other hotels excluding ordinary lodging-boarding

3.50

U6

Hotels (4 Star or lower) and Offices

Four star hotels, banks (Co-op scheduled banks excluding credit societies, Air conditioned markets, shopping

4.00

complexes, commercial/administrative office buildings

in commercial locality, departmental stores excluding

Co-op department stores

U7

Hotels (5 star)

Five star hotels, banks (excluding credit societies and Co.op banks)

5.00

3.Age Category
Age Category Year of Construction Weight

A1 A2 A3 A4 A5

Pre-1960 1961-1981 1981-1990 1991-2006 Post-2006

0.80 0.85 0.90 0.95 1.00

Source : Tata Institute of Social Sciences, Mumbai

Haryana - HUDA Model The Haryana Urban Development Authority (HUDA) is a prime agency of the State Government engaged in the planned development of urban areas in the state. It undertakes development of land after the same is acquired by the Government of Haryana through its urban estates department for specific land uses, like residential, commercial and industrial etc. in accordance with the provisions of the development plans of a particular area. The Development Plans are prepared and published by the Director, Town & Country Planning, Haryana,in exercise of the powers conferred by Sub-Section 7 of section 5 of the Punjab Scheduled Roads and Controlled areas (Restriction of Unregulated Development) Act, 1963. After acquisition of land, a layout plan is prepared on the basis of a plane table survey of the acquired land, and in accordance with the norms and standards evolved by HUDA for providing a congenial living environment. For the purpose of ensuring the health and safety of the allottees and for proper aesthetics and a desirable street picture, the Haryana Urban Development Authority (Erection of Buildings) Regulations, 1979 have been framed, which, besides other design/structural requirements, specify the proportion of the site which may be covered with building, F.A.R., Max. height etc. in the case of different types of buildings.

INDUSTRIAL
Maximum permissible coverage on ground 60 percent of area of the site Maximum permissible F.A.R 125 percent Maximum height of the industrial building 21 meters

INSTITUTIONS AND OTHER PUBLIC BUILDINGS

Area of Plot Maximum permissible coverage on ground floor Maximum permissible F.A.R

upto 10,000 sq. M. Above 10,000 sq. M.

33 per cent of the area of 100 % the plot 25 per cent of such additional plot 100 %

Residential
(a) Permissible Maximum Coverage
Area of Site Maximum permissible coverage on ground (including ancillary and residential zone) 60 per cent of the such portion of the site Maximum permissible coverage on the 1st floor 100 % 55 %

1. For the first 225 sq. m of the total area of the site

2. For the next 225 sq. m, 40 per cent of such i.e. portion of the area portion of the site between 225 and 450 sq. m. 3. For the reamaining portion of the site. i.e., for the portion of the area exceeding 450 sq. m. 35 per cent of such portion of the site

35 %

25 %

(b) Permissible FAR and Maximum Height

Area of Site/category of plot 6 Marla 10 Marla 14 Marla 1 Kanal 2 Kanal

Maximum permissible FAR 1.45 1.45 1.30 1.20 1.00

Maximum permissible Height 11 Mtr. 11 Mtr. 11 Mtr. 11 Mtr. 11 Mtr.

NORMS FOR DEVELOPMENT OF COOPERATIVE GROUP HOUSING SCHEME

1 Building Zone 2 Set backs (including inter-se distances) 3 Boundary Wall /Gate 4 Max. permissible coverage on ground as well as subsequent floors 5 Max. F.A.R 6 Density of dwellings 7 Population density 8 Building area of general DUs (Super Area) Building Area of EWS Service Personal DUs (Super Area) 9 Max. height of building As shown on zoning plan of site cooperative society/ organisation As per zoning plan or the B.I.S code as the case may be To standard design as specified in zoning plan 33.33 per cent of the site 150 per cent of the site area 40 to 80 DUs per acre (To be calculated @ 5 persons per dwelling unit.) 200 to 400 persons per acre 50 sq. m to 150 sq.m 20 sq.m to 35 sq. m Upto 30 m or as per local instructions subject further to zonings and provisions of light, vent planes etc. as per B.I.S code. Adequate parking on basis of occupancy shall be provided for cycle, scooters and cars with in residential blocks and in any case the area for such parking shall not be less than 5 per cent of the covered area of each dwelling unit. In case of dwelling units of size 120-150 sq. m space for one car, parking shall be provided for each dwelling unit. However, the total parking space including open parking shall be governed by the following: Sr. Area of flats Car parking Scooter No. (in sq.mts) space parking space 1. Below 80 2 .80-119 3 .Above 120 Nil 50 per cent of number of flats 100 per cent of number of flats 100 percent of number of flats 50 percent of number of flats Nil

10 Covered Parking

11. Open Parking

In addition to the above, open parking space equivalent to 10 per cent of the total covered parking areas shall be provided for visitors etc. Area under stils and basement shall not be counted towards F.A.R if used for covered parking. For building having more than four storeys, provision of adequate number of lifts shall be made as per B.I.S Building code in addition to stairs. For continuous running of lift system, provision of power generation run on diesel/petrol or other such fuel shall be made. Ramp shall be optional in Group Housing Schemes if adequate (as per B.I.S code ) lifts and stairs are provided. Ramp shall be optional. If constructed in addition to the lifts and staircases (as mentioned above) within buildable zone and as per definition of Covered Area in NBC (Definitions) will not be counted towards F.A.R subject to the condition that ground coverage shall not exceed 35 percent of the site. A twin level basement restricted to the actual ground coverage will be permitted for parking and services and detailed out in the zoning plan of the site and the same will not be reckoned in F.A.R. Entry to the basement shall be from inside the building.Basement can also be used for captive generation, water storage, liftwell/room, fire fighting pumps, electric substations etc. Subject to the restrictions, stipulated in the zoning plan. At least equal to 15 per cent of the area of site All buildings shall conform to the provision of part IV of the National Building Code and shall be provided with adequate arrangements to overcome fire hazards to the satisfaction of concerned authorities HUDA (Erection of Buildings) Regulations, 1979 and B.I.S Building Code

12. Parking under stils and basements

13. Lifts and Stairs

14. Ramps

15. Basement

16. Organised Children Park 17. Fire Safety

18. Building Regulations

1. Status on State Income Estimates, CMIE, May 1981. 2 .Ministry of Urban Development & Poverty Alleviation. 3 .Identifying the Barriers to Employment and Output

AN OVERVIEW OF COMPANY PROFILE

Unicon is a financial services company which has emerged as a one-stop investment solutions provider. The company is headquartered in New Delhi, and has its corporate office in Mumbai with regional offices in Kolkata, Chennai, Hyderabad and Noida. The company is supported by more than 4500 Uniconians and has a team of over 900 business offices in 235 cities across India. Uniconproperty.com is the online extension of specialized Real Estate consultant company Unicon Real Estate Pvt. Ltd. Unicon, specialize in services related to the purchase of properties, documentation, renting and leasing, investment advisory services, property valuation and assisting clients with home loans. It expertise and commitment towards complete customer satisfaction are unchallenged.

About Unicon Group: Unicon is a financial services company which has emerged as a onestop investment solutions provider. It was founded in 2004 by two visionary and flamboyant entrepreneurs, Mr. Gajendra Nagpal and Mr. Ram M. Gupta, who possess expertise in the field of Finance. The company is headquartered in New Delhi, and has its corporate office in Mumbai with regional offices in Kolkata, Chennai, Hyderabad and Noida. Unicon is a professionally managed company led by a team with outstanding managerial acumen and cumulative experience of more than 400 man years in the financial markets The company is supported

by more than 4500 Uniconians and has a team of over 900 business offices in 235 cities across India. With a customer base of over 200,000 the Unicon Group has an eye for the intricate financial needs of its clients and caters to both their short term and long term financial needs through a comprehensive bouquet of investment services. It has been founded with the aim of providing world class investing experience to the investing community. These services range from offline & online trading in equity, commodities and currency derivatives to debt markets to corporate finance and portfolio management services. The company has a sizable presence in the distribution of 3rd party financial products like mutual funds, insurance products and property broking. It also provides expert Advisory on Life Insurance, General Insurance, Mutual Funds and IPOs. The distribution network is backed by in-house back office support to provide prompt and efficient customer service The Equity broking arm UNICON Securities Pvt. Ltd offers personalized premium services on the NSE, BSE & Derivatives market. The Commodity broking arm Unicon Commodities Pvt. Ltd offers services in Commodity trading on NCDEX and MCX. The UNICON group also has a PCG division providing investments solutions for High Net Worth Individuals. The Corporate Advisory Services arm Unicon Capital Services (P) Ltd offers entire gamut of Investment Banking services to corporates. Unicon can boast of some of the most respected names in the private equity space like Sequoia Capitals, Nexus India Capital and Subhkam Ventures as its shareholders.

GOALS
OUR GOAL IS TO SERVE YOU AT SATISFACTORY LEVEL........ YOU WILL HAVE THE ...........

CONVENIENCE ,RESULTS,TIME .......FOR YOU ENJOY TO LIFE WHY UNICON At Unicon Investment Solutions, we assist our prestigious customers in investing in the best properties in India, by offering them the most lucrative real estate deals We exist to serve : service does not stop when sales close-we never break our commitments. Quality of service promise : * To provide excellent sevice to all customers to the best of our ability. * To be the honest in our dealings with the public at large. * To promote the best interest of our cilents

REAL ESTATE
Although real estate investing does not guarantee to be an instant millionaire, it is certainly one of the safest investment vehicles in the country. Uniconproperty.com is the online extension of Real Estate consultant company . Real estate investing is something that can be incredibly beneficial to those who can afford to invest. This benefit is generally unmatched by many other investments; you can make a lot of money by simply investing in a home

 Most important goal of REAL ESTATE are complete customer satisfaction and fullfillment of customer requirements . SERVICES PROVIDED BY UNICON REAL ESTATE ARE Unicon always think about the customer first. Secure & transparent cheque deals. Zero brokerage on purchase of New Projects. Impartial advice to assist your search for the best-fit property. One-stop service location that provides property selection, site visit, booking, documentation & home-loan assistance. UNIQUE SERVICES PROVIDED BY UNICON REAL ESTATE No fixed maturity : Unlike a bond which has a fixed maturity date, an equity real estate investment does not normally mature. Tangible : Real estate is, well, real! You can visit your investment, speak with your tenants, and show it off to your family and friend. You can see it and touch it. BENEFITS AT UNICON REAL ESTATE Cash Flow from Rental Income : The real estate investor has a bit more control over the risks to that cash flow also. Though there are downturns in real estate prices and homes sold in some years and areas, generally those renting property in which to live will continue to rent and without a corresponding decrease in rent amounts. Increases in Value Due to Appreciation : real estate has shown to be an excellent source profit through the increase in investment property value over time.

 Improving Your Investment Property - More Value at Sale : As trends and styles change,your property can also be improved in order to garner a better price and more profit . You Could Just Find that "Steal of a Deal" :This is the last item, though it's one of the first ones many investors think about and this is an immediate way to increase your net worth and the value of your investment portfolio.

REAL ESTATE VERSUS EQUITY

HOW REAL ESTATE IS BETTER THAN EQUITY However, REAL ESTATE investing is steadily becoming one of the most popular investment opportunities in the country today..... Investing in the EQUITY you will be affected, just like everyone who invest their money in the market, a downturn occurs........... ........... On the other hand investing in REAL ESTATE is a much safer option because even if home values drops in one city, it wont affect the property values of other cities. This allows investors to get the protection they need through geographically diversified portfolio, which prevent such things to occur. One of the best things about investing in REAL ESTATE is the tax benefit investors get from depreciation deduction. But in equity we don't get so much tax benfit like real estate.

SERVICES OFFERING AND NRI SERVICES

BUY PROPERTY IN INDIA

Uniconproperty.com provides the best deals in real estate properties in India. Unicon Real Estate offers 0% brokerage on property in Noida, property in Gurgaon, property in Ghaziabad, property in Faridabad, property in Mumbai, and other major cities of India. Buy property in India and build your dream home by viewing many real estate properties in India on one property portal in India.

SELL PROPERTY IN INDIA

If you are looking for a dependable medium to sell your property, we provide efficient property resale services for all types of real estate properties across India. We have a huge database of prospective buyers already interested in buying ready-to-move-in properties all over India, we can help you sell your property by presenting it to individuals who are genuinely interested in purchasing resale property in India.

PROPERTY IN INDIA
Noida | Greater Noida | Delhi | Gurgaon | Faridabad | Ghaziabad | Mumbai | Pune | Ko lkata | Chandigarh | Ludhiana | Lucknow | Sonepat | Dehradun | Mora dabad| Kurukshetra | Bhiwadi | Jaipur | Chennai | Agra | Meerut | Sol an | Hyderabad | Patna | Jalandhar | Haridwar | Vizag | Nainital | Goa

NRI SERVICES
At Unicon, our dedicated NRI services team operates with the philosophy of identifying investment opportunities & maximizing wealth for NRI clients. Our relationship managers are adept with the prevailing laws and have credible experience in consulting NRI customers on property purchase decisions in India. We guarantee our clients with a completely reliable, transparent and flawless experience.

HOME LOAN ASSISTANCE

The decision to buy a home & seek finances for it involves a complex maze of terms and conditions imposed by the housing finance companies. At Unicon, it aim to simplify the process of evaluating various home loan options and choosing the best suited one for the customers. It has relationships with leading banks and housing finance institutions which enable its customers to receive the best quotes.

BRANCH OFFICES
New Delhi Unicon Real Estates Pvt. Ltd. 26, 2nd Floor Block No 34 Pusa Road, Karol Bagh New Delhi-110005 Gurgaon Unicon Real Estates Pvt. Ltd. SCO-382, 2nd Floor, Sector 29 Behind IFFCO metro station Gurgaon 122001 Noida Unicon Real Estates Pvt. Ltd. D-221, Sector 63 Noida 201301 Gurgaon Unicon Real Estates Pvt. Ltd. SCF, P-29 (First Floor), Sector 14 Old Delhi - Gurgaon Road Gurgaon 122001 Pune Unicon Real Estates Pvt. Ltd. Office No. 1A, Behere Arcade Besides Hotel Royality S.No.-114A, Prabhat Road Pune 411004

Mumbai Unicon Real Estates Pvt. Ltd. VILCO Center (Opp Hotel Planet Residency) 8, Subhash Road, Ville Parle (East) Mumbai 400057

E-MAIL:property@unicon.in
PHONE: 09999 56 1111

ALL ABOUT MARKETING OF REAL ESTATE INTRODUCTION

 BEFORE MOVING TO THE MARKETING PART LET US UNDERSTAND THE HIERARCHY LEVEL OF A REAL ESTATE INDUSTRY

NOTE: THE STRAIGHT ARROW SHOWS THE HIERARCHY LEVEL AND THE REVERSE ARROW SHOWS THE REPORTING.

THE MARKETING ACTIVITIES INCLUDE THE FOLLOWING

(In Marketing activities the Vice president, Marketing Manager (projects), and the Sales executive takes part and takes the approval from Managing Director) Designing Broacher for residential/commercial scheme Designing the sales office Selecting the hoardings in particular area for advertising the project Giving the contract for Website Designing Giving all legal papers to major Banks for project finance Sanctioning Planning the budget for News paper Ad Scheming the Sample Flat (In Residential Scheme) Planning for offers and Discounts to customer Designing Broacher for residential/commercial scheme Designing the Broacher is very tough task it attracts the customer so we have to include the following things properly Theme of the project

About the builder/his past project Nearby location details Floor plans/3d view Amenities we are giving the scheme Specification we are giving in flat/shop

Designing the sales office Designing Sales office includes following activities Proper branding (small signage boards ) inside the sales office Proper furniture /computer setups Walkthrough (on LCD) should be on proper place Entirely the sales office should be pleasant Selecting the hoardings in particular area for advertising the project Selecting the hoarding includes the following decisions Size of the Hoarding

Yearly rent for Advertising on Hoarding Location of the Hoarding (Usually it should be near signal or highway crowded areas) Giving the contract for Website Designing Over 80% of customers worldwide sees advertising on internet/website so having a Real Estate Company website is very necessary A Smart Real Estate Marketing Strategy Is a Search Engine Optimization Plan Over 80% of all websites are discovered through search engines. Almost 90% of visitors to a real estate agent website are potential homebuyers usually prepared to purchase a home. And most of those are out-of-state home seekers looking for a local real estate agent. To them, web search is a vitally necessary convenience. Giving all legal papers to major Banks for project finance Sanctioning Giving legal papers to all Major Banks is very necessary because almost customers take loan from these banks The legal papers of a project include the following

Title Report Commencement Certificate Blue prints/Sanction Plan 7/12 Extracts All other legal papers The major Banks Include the following HDFC Bank ICICI Bank IDBI Bank Axis Bank LIC Bank SBI Bank Planning the budget for News paper Ad Spending the too much for news paper Ad is waste of money so proper planning is necessary Usually a good Real Estate company spends 25 Lacs for Every 6 Months Scheming/designing the Sample Flat (In Residential Scheme) In Under construction projects Sample Flat is very necessary because only on floor plan customer does not understand the specification and areas exactly While designing Sample flat the following things should be considered Avoid too much interior/furniture Only include the specification which are mentioned in Broacher

Planning for offers and Discounts to customer Giving too much discounts and offers doubting the customer about the quality of the project so planning of good discount scheme is very tough task JOB PROFILE OF MARKETING/SALES EXECUTIVE Main job is selling Apartments Attend Walk ins Showing them the sample flat and walkthrough Accompany buyers during visits to and inspections of property, advising them on the suitability and value of the homes they are visiting Generate References through old customers Tele calling Attend Exhibitions and Promotions Enquiry Management and Follow-ups Answer clients' questions regarding construction work, financing Advise clients on market conditions, prices, mortgages, legal requirements and related matters

Some time have to Act as an intermediary in negotiations between buyers and sellers, generally representing one or the other.
Building Good Relation and good rapport with customer Usually following information is taken from the customer while he comes for enquiry

Customer Information Form Name:___________________ Contact No:_______________ Address: _______________ Your Occupation: __________ Your Workplace _________ Email: ___________ Are you having your own house/Flat: If Yes Location:_____________ This Flat you are taking as: Your First Home As a Second Home Investment When do you plan to Book the Flat? Within 2 days Within a Week After 15 Days How do you Rate this Project? Good Very Good Best Requirement 1 BHK 2 BHK Yes: No:

Date: _____

3 BHK