[1]

INTRODUCTION
ABOUT REAL ESTATE INDUSTRY IN INDIA
The Indian real estate sector is one of the fastest growing and globally recognized sectors. It comprises
four sub sectors-housing, retail, hospitality, and commercial. The real estate industry's growth is linked to
developments in the retail, hospitality and entertainment (hotels, resorts, cinema theatres) industries,
economic services (hospitals, schools) and information technology (IT)-enabled services (like call
centres) etc and vice versa. The total realty market in the country is expected to touch US$ 180 billion by
2020.
India ranks third for the most LEED (Leadership in Energy and Environmental Design)-certified space
globally, with nearly 12 million sq m. The LEED system is the most widely used rating system guiding
the design, construction, operations and maintenance of green buildings.
Private equity (PE) funding has picked up in the last one year due to attractive valuations and low level of
bank funding to the sector. Delhi NCR alone has already attracted PE investments of Rs 80 crore (US$
13.22 million) in first quarter of 2014.Moreover, with the government trying to introduce developer and
buyer friendly policies, the outlook for the real estate sector in 2014 looks promising.

Market size
Recent years have seen the Indian real estate sector grow, especially the commercial real estate segment.
According to a study by Knight Frank, Mumbai is the best city in India for commercial real estate
investment, with returns of 12-19 per cent likely in the next five years. Bangalore and Delhi-National
Capital Region (NCR) come second and third on the list, with returns of 12 per cent and 8-11 per cent
respectively. Delhi-NCR was the biggest office market in India with 110 million sq ft, out of which 88
million sq ft were occupied.
The residential segment of real estate has also seen tremendous growth in recent years owing to the
continuous growth in population, migration towards urban areas, ample job opportunities in service
sectors, growing income levels, rise in nuclear families and easy availability of finance.
In the residential segment, the number of new launches in the first quarter of 2014 has increased by 43 per
cent at 55,000 units across eight major cities. Bengaluru recorded the largest number of units launched, an
increase of 22 per cent at 16,838 units, followed by Mumbai and Chennai with new launches at 10,698
units and 7,436 units with a growth rate of 93 per cent and 191 per cent respectively, during the first
quarter.
With the government allowing 100 percent foreign direct investment (FDI) in this sector, the number of
foreign firms owning real estate projects in India has also increased. The construction development sector,
including townships, housing, built-up infrastructure and construction-development projects garnered
total FDI worth US$ 23,587.25 million in the period April 2000-June 2014.



Investments
With the rise in demand for office as well as residential space, the Indian real estate sector has witnessed
high growth in recent times. Some of the major investments in the real estate sector in the recent past are
as follows:
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Piramal Fund Management has launched the Indiareit Apartment Fund which seeks to buy residential
apartments in the Tier I market, and has kept aside a corpus of Rs 350 crore (US$ 57.86 million) for the same.
US-based PE company Blackstone plans to step up its presence in the residential segment and has lined up
about Rs 1,000 crore (US$ 165.32 million) to invest in residential projects across Indian metros. Its first
investment in the residential sector was in the Chennai project of Bengaluru-based Ozone Group.
Panchshil Realty and Blackstone have bought a majority stake in Express Towers, for around Rs 870 crore (US$
143.83 million).
Mr Donald Trump plans to extend his company, Trump Organisation's global footprint into India and invest in
two realty deals. Both the deals involve ultra-premium luxury projects, which will be owned, developed and
promoted by local developers.
Mahindra Group has entered affordable housing through its property development arm Mahindra Lifespaces
(MLDL). MLDL plans to launch two housing projects in Boisar near Mumbai and Avadi in Chennai with the newly
created business vertical Happinest.
Canada-based Brookfield Property has entered into an agreement to acquire Candor Investments, a subsidiary
of Unitech Corporate Park (UCP), for about Rs 2,000 crore (US$ 330.66 million).

Government Initiatives
The Government of India has announced a host of measures to spur the real estate sector, which include
an allocation of Rs 7,060 crore (US$ 1.16 billion) for the development of 100 smart cities, a reduction in
the size of projects eligible for FDI from 50,000 sq m to 20,000 sq m, and having the minimum
investment limit for FDI to US$ 5 million.
A committee on Streamlining Approval Procedure for Real Estate Projects (SAPREP) was constituted by
the Ministry of Housing & Urban Poverty Alleviation (MHUPA) to streamline the process of seeking
clearances for real estate projects.
The governments of different states have also taken various measures to facilitate the growth of this
sector. For instance, the Punjab government has proposed to exempt residents having houses with an area
of up to 125 square yards from paying the levy and delink tax payment from collector rates. It has also
proposed to keep vacant plots out of the ambit of property tax which will be implemented during 2014-
15.
The Indian Green Building Council (IGBC) has joined hands with the US Green Building Council
(USGBC) to strengthen their association for the next 10 years to focus on areas of knowledge exchange
and work on the green building movement in India. The USGBC also plans to expand its support for
LEED in India.
Road Ahead
The Indian real estate sector continues to be a favoured sector for investments from international as well
as private investors. In the upcoming years, the residential as well as commercial segments of the real
estate industry is set for major growth, aided in no small part by the government's plans and initiatives to
boost this sector.



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Recent industry trends

Despite strong fundamentals backing the residential real estate, the segment is highly influenced
by economic cycles.

Owing to global meltdown, the residential real estate market in India too witnessed an
astounding fall in demand and capital values, between first half of 2008 and first half of 2009.
However, the sector experienced a pickup in demand during the second half of 2009 across
major cities mainly attributed to improvement in economy. Residential projects across cities saw
several new mid-income housing projects being launched by developers to attract potential
buyers.

Demand for houses mounted as the global economy improved bringing back financial
confidence to the home buyers along with low interest rates. End-users, who had put their
purchasing plans on hold due to the fall in affordability levels and job-related uncertainties,
started booking houses.

1.2.1 Delhi


An approximate 75% end-user presence makes this a largely end-user driven market. However,
there is a heavy financier presence in this micro market. Across Delhi it has been observed that
the transactions are at rates much higher than the designated circle rates. Circle rates are the
minimum rates for the valuation of land and immovable properties in Delhi.
These rates are taken into consideration for registration of instruments related to land and
3


immovable properties in Delhi by all the registering authorities. Land transactions are estimated
at rates over 10 times of the circle rates in most parts of the capital city.
According to the Delhi Master Plan 2021, 'greater efficiency and benefits through a unified
metro transport authority' are being targeted. Acknowledging the increased vehicle density,
the government is trying to rope in the private sector to develop parking facilities through multi-
level and underground parking spaces. It is also planning an integrated multi-modal public
transport system to reduce the pressure of private transport on the road. Cycle tracks, pedestrian-
and disabled-friendly features in the arterial and subarterial roads are also being planned.

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1.2.2: Gurgaon



Gurgaon markets have reached a high level of appreciation. This year launches have been
slow and the transaction volumes have been low. However, over a 4-5 year period the Gurgaon
market will see good appreciation. This will be because of employment opportunities, heavy
investor appetite and a strong broker community presence in this micro market. While Golf
Course Road (GCR) and Golf Course Road Extension areas are seeing the launch of a few high
end properties and builders are looking at higher margins, areas like Dwarka Expressway are
seeing interest on account of affordability and the bet on the future infrastructure in that area.
Price Trends in Gurgaon


1.2.3 Noida, Infrastructure issues

The market has ample supply and the demand has moderated. While the fall of Greater Noida
and Noida Extension markets has benefited Noida (rates have moved up marginally in certain
projects), the situation is one of wait and watch. Over a long term horizon, the Noida markets
will see a 10-15% YoY appreciation on the basis of the healthy infrastructure story in Noida and
its heavy end-user base.
Farmer protests over land acquisition in Greater Noida and Noida Extension have slowed down
the market. We see a downside risk in capital value over the one-year horizon due to land issues
and an oversupply situation. However, over the long term this sector will recover on account of
good infrastructure and continued demand from the sub INR 3,000/sq.ft. category home buyer.

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The Gurgaon real estate market falls under the jurisdiction of the Haryana government whereas
the Noida market comes under the purview of Uttar Pradesh. Buyers tend to invest their money
based on the comfort level with the respective governments.












Greater Noida and Noida Extension:
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The real estate markets in Gurgaon and Noida are driven by very different dynamics;

they are in fact at contrasting ends of the real estate spectrum in certain aspects.

The Haryana government in Gurgaon allows developers to directly acquire land from
farmers. Later, the builder applies to the government for infrastructure support for his project. So
here, acquisition is followed by the completion of the project and subsequently, infrastructure
support from the government.
However, the Uttar Pradesh government in Noida follows a different model. Here, the
government directly acquires land from the farmers, after which it draws a plan in terms of
infrastructure support for the area, and earmarks plots. The last stage involves auctioning the
plots to builders. So, infrastructure support comes before the residential project.
Gurgaon's infrastructure issues in terms of water, power and roads are a cause of concern.
The city lacks proper amenities to support the rising new supply. In comparison to Noida, the
degree of planning and road connectivity in Gurgaon appears to be flat. As discussed earlier, this
comes from the model of land acquisition followed by the government. In Noida many of the
erstwhile infrastructure issues have been resolved with better road connectivity, better water
supply in most pockets, well laid out drainage systems, and reduction of load shedding from 8-
10 hours to just 1-2 hours. The Metro has penetrated till sector 50, with the end station
being 'Noida City Centre'.
COMPANY PROFILE

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Raas Capital is a Boutique Investment Advisory Firm founded by senior private
banker and real estate wealth management professionals to provide a integrated platform
of investment advisory solutions to Private Clients.

Its core team and domain partners includes CA, Architect, Urban Planner and MBAs
from premium institutes who have spent credible years in the areas of Private Banking,
Wealth Management, Corporate Finance, Investment Advisory and Management
consultancy before converging at Raas Capital.

Management team has profound knowledge and cumulative experience of 100 man years
in the field of banking, finance and real estate.

We offer integrated investment services in alternative investments to HNIs, NRIs,
Corporate. We are committed to provide transparent, honest and best in the class
investment advisory to our patrons.

Values

Integrity & respect
Collaboration & trust
Confidence & passion
Mentorship/Leadership/Ownership

Vision And Mission

Vision:
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To be the most respected company in the field of customised investment & funding
solutions.

Mission:
To live our vision, we have established three pillars of values.
Customer focus
Process Excellence
Passion to perform

Advisory Board
Our advisory board comprises leading experts from the world of finance and investment. The
members of our advisory board leverage their deep understanding of business issues related to
loans, finance, sales, marketing, and investment, and their proven experience to provide Raas
capital insights that enable us to make business decisions that are highly profitable for all our
stakeholders.
Mr. Siddharth Chaturvedi
Mr. Ashish Gupta
Mr. Rajesh Sukhwani
Mr. Kawal Jain

Management

At Raas Capital, we attribute our continuous success to the contributions, diligence,
and hard work of each and every single employee in the company. Nevertheless, we
believe, it is our leaders who managed to elevate employee engagement, build our skills
into strengths, and enabled us to deliver exemplary performance that enhanced
organizational effectiveness. We wouldnt be nearly as successful without the guidance,
inspiration and example set by our corporate leadership.

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What is Investment...


In simple, Investment is putting money into something with expectation of
profit. More specifically, investment is the commitment of money or capital to
the purchasing of financial instruments or other physical assets so as to gain
profitable returns in the form of interest, dividend or appreciation of the value
of the instrument. It is related to saving or deferring consumption.
An investment involves choice by an individual or an organization to invest
its money or capital in following instrument,
Assets like vehicles, machinery, appliances
Property such as home, building, lands
Commodity
Stock market
Bond
Financial Derivatives like future & option
Foreign assets denominated in foreign currency

Investment comes with the risk of loss of the invested sum of money. The
investment that has not been thoroughly analyzed can be highly risky with
respect to the investment owner because the possibility of losing money is not
within the owners control. The above listed all the investment instruments
possesses less or more chances of risk.
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5.1 Classification of Properties:

Real estate has been broadly categories into 3 classes as follow



Types of
Property
(A). Residential
Property
(B). Commercial
property
(C). Vacant land
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(A). Residential Property:



The residential type of property is by far the most popular with both new and
experienced agents. Residential property offers a good investment avenue.
People buy residential property for two important reasons:
For staying
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As an investment
Advantages of Investing in Residential Property
Expenses, including depreciation on the property and interest on your
borrowings, are tax deductible.
You make money as the value of the property increases.
You can leverage your investment.
You get rental income.
Risks of Investing in Residential Property
Interest rates could rise.
The property could be untenanted for a period of time.
You could get "bad" tenants.
It could take up a lot of your personal time.
House prices could remain static, or even fall.
The following are the type of Residential Property:
Single Family Residence
Row Houses/ Townships
Flats
Bungalows
(B). Commercial Property:
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1. Multi-Family Commercial Real Estate:

Commercial real estate property types include duplex homes, and other
construction for habitation by multiple family groups. Condominiums are
frequently called multi-family because of their construction as a group, but are
normally listed and sold as single family residential units. Duplex homes are also
frequently listed and sold as residential units to a buyer that lives in one side and
rents out the other.

2. Retail Space Real Estate Properties:
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This category would include single buildings used as stores for clothing,
electronics and other consumer products, as well as malls, strip centers and the
like. Restaurant spaces are a specialty subset of the retail category, with some
listings shown as restaurant/retail. Valuations can be based on size and land
value, retail sales per square foot or other investment return calculations.

3. Office Buildings and Office Complexes

A single building designed for office use, or a group of offices in a single building
or cluster of buildings would fall into this category. When offices are grouped in
structures with single ownership, they are listed as commercial office rental
property. The owner derives income from the rental payments of the office
tenants. These can be valued based on the rental income return on investment,
rather than methods using square footage and land value. Medical & Dental
offices are a subset.

(C). Vacant Land

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Land Investment has historically been the forte of large development
companies, rich farmers or wealthy individuals. It can be a profitable business if
proper development of land is undertaken. Land Investment is referred to as a
long term investment and with land prices on the rise in many parts of the world,
it is said to be the safest and smartest way of investing ones money.

Capital gains can easily be realized from land when land price increases.
The most striking feature of land investment is that investment takes place in a
tangible asset which the investors can readily put into use. It is a branch of real
estate investment which is gaining ground as major part of capital budgeting
analysis. Real estate is basically defined as immovable property such as land and
everything permanently attached to it like buildings. It is essentially at this
juncture that land as an asset differs from real estate as it does not necessarily
includes buildings and the attachments to the land.
Land is perhaps the most basic asset that we want to invest in and may include
vast open tracts with no significant estate on it. The job of developing the land lies
with the developer, and with proper care to include modern houses and the
associated amenities, it will significantly appreciate its value. Land situated close
to developed areas will cost more as opposed to those in less developed areas.
Land developed for commercial purposes and those developed for building
residential complexes will have different prices and tax implications, if any.
Investing in land can be profitable as there is limited supply of land and the
purchaser can really sell dear if he wants to.
[16]





















[17]

5.2 CHARACTERISTICS OF REAL ESTATE INVESTMENT:

Real estate properties have its own some important features. Some of the
characteristics that make real estate unique as compared to other investment
alternatives are as follows:

(1). Tangible:
Real estate is, well, real! You can visit your investment, speak with your tenants,
and show it off to your family and friends. You can see it and touch it. A result of
this attribute is that you have a certain degree of physical control over the
investment - if something is wrong with it, you can try fixing it. You can't do that
with a stock or bond.
(2). Requires Management:
Because real estate is tangible, it needs to be managed in a hands-on manner.
Tenant complaints must be addressed. Landscaping must be handled. And, when
the building starts to age, it needs to be renovated.
(3). Inefficient Markets:
An inefficient market is not necessarily a bad thing. It just means that information
irregularity exists among participants in the market, allowing greater profits to be
made by those with special information, expertise or resources. In contrast, public
stock markets are much more efficient - information is efficiently dispersed
among market participants, and those with material non-public information are
[18]

not permitted to trade upon the information. In the real estate markets,
information is king, and can allow an investor to see profit opportunities that
might otherwise not have presented themselves.
(4). High Transaction costs:
Private market real estate has high purchase costs and sale costs. On purchases,
there are real-estate-agent related commissions, lawyers' fees, engineers' fees
and many other costs that can raise the effective purchase price well beyond the
price the seller will actually receive. On sales, a substantial brokerage fee is
usually required for the property to be properly exposed to the market. Because
of the high costs of trading real estate, longer holding periods are common and
speculative trading is rarer than for stocks.
(5). Lower Liquidity:
With the exception of real estate securities, no public exchange exists for the
trading of real estate. This makes real estate more difficult to sell because deals
must be privately brokered. There can be a substantial lag between the time you
decide to sell a property and when it actually is sold - usually a couple months at
least.
(6). Underlying resident Quality:
When assessing an income-producing property, an important consideration is the
quality of the underlying residence. This is important because when you purchase
the property, you're buying two things: the physical real estate, and the income
[19]

stream from the tenants. If the tenants are likely to default on their monthly
obligation, the risk of the investment is greater.
(7). Variability among Regions:
While it sounds clich, location is one of the important aspects of real estate
investments; a piece of real estate can perform very differently among countries,
regions, cities and even within the same city. These regional differences need to
be considered when making an investment, because your selection of which
market to invest in has as large an impact on your eventual returns as your choice
of property within the market.








5.3 CONSIDERATIONS WHILE MAKING INVESTMENT IN
REAL ESTATE


[20]

When it comes to making money, Real estate is considered to be one of the surest
investments. Lots of opportunities abound, whether it be in the stock market or in
business. But these areas also offer a significant amount of risk. As a result, most
people do not engage in these speculative activities. But real estate is something
which more people can be involved in, simply because everyone needs a home to
live in. However, no investment is entirely risk free, and so even here a certain
amount of due diligence is required.
Some important point you need to think about:
1. Who is the developer?
2. Is the project a self development / partnership or joint venture?
3. Past business / trading history
4. The location of the proposed project
5. Basic amenities
6. The growth prospects of the neighborhood development
7. Industrial and business development in the locality
8. Price comparison analysis
9. Future property price valuation
10. What are the returns on your investment?

Affordability is a key consideration when making any purchase. One should factor
additional expenses such as electricity and property taxes to get a complete idea
of how much can be afforded.

[21]


An integrated service model offering end-to-end - 360 Realty
Services to cater to the diverse needs of corporate & developers in
project management & execution. Managing realty projects right
from identification to marketing is a lengthy process replete with
many challenges. You may be keen to execute realty projects for
commercial / residential purposes but may not be equipped with
the right skill-sets / know-how for the undertaking.
Build-One offers you with a integrated service model meeting the
entire realty business needs to help you successfully undertake
your realty projects. Build-One offers you with a unified value-chain
of core realty services with critical forward & backward integration
of other value-added services. The services are effectively
streamlined enabling steady progression of the projects, right from
idea conceptualization to profit generation / hand-over,
encompassing all functional & operational tasks.

[22]


1. Market study:
Market study refers to detailed analysis of
market and locations in different regions within the specific area.
One has to look the trend and path of the property market in the
area where he want to set up the project. A marketability study tries to
create a market area demand model based on available demographic information
and the application of common sense to develop a picture of the current and future
market area trends that may effect demand.
2. Feasibility Study:
Market Study
Feasibility
Study
Property
Identification
Title
Check/Legal
Work
Property
acquisition
Planning &
Designing
Budgeting
Regulatory
Approvals
Project Mgt. /
Construction
Marketing
Plans
Selling, Leasing
& Hand over
360* Degree Firms significant Functions pertaining to Construction Project.
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Feasibility Study typically involves testing
geographic locations for a real estate development project, and
usually involves packages of real estate land. Developers often
conduct feasibility studies to determine the best location within a
jurisdiction, and to test alternative land uses for given packages.
Jurisdictions often require developers to complete feasibility
studies before they will approve a permit application for retail,
commercial, industrial, manufacturing, housing, office or mixed-
use project. Market Feasibility takes into account the importance
of the business in the selected area. Could the project be built?, Can the
site support a building structure that is planned?, etc. should be check out.
3. Property Identification:
Property identification refers to the type of project which the builder
has to plan. It mean whether put residential or row house or to put specific
commercial project looking at the locations and demand for the market. Property
identification generally is driven by demand of type of property in the market.

4. Title clear/Legal work:
Title clear is the phrase used to state that the owner of
real property owns it free and clear of encumbrances. In a more
limited sense, it is used to state that, although the owner does
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not own clear title, it is nevertheless within the power of the
owner to convey clear title. For example, a property may be
encumbered by a mortgage. This encumbrance means that no
one has clear title to the property. However, standard terms in a
mortgage require the mortgage holder to release the mortgage if a
certain amount of money is paid. Therefore, a buyer with enough
money to satisfy both the mortgage and the current owner can
get clear title.

5. Property Acquisition:
Generally, property acquisition refers to a person or other entity
acquiring title to real property by a deed. A deed is the legal instrument used
to transfer ownership in real estate. Real property can also be acquired by
inheritance and by a court order.

6. Planning & Designing of Project:
Planning and designing is carried out only after finishing the above
legal works. It is concerned with the proper plans and the design of the project
that the developer is going to construct. Here, builder can approach architects
to develop plan and design as per the requirements of builder.

7. Budgeting:
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This point is also important to be considered by a builder. The budget
of the real estate project should be optimal as per the plan and designs of the
structure. Budgeting needs to analyze the size of the projects.

8. Regulatory Approval:
After the plans and design of the projects, it needs to be submitted
the same at the concerned govt. authority (Municipal Corp./Municipality) for
further verifications and approval for the project. If authority finds no
objections, then after they can arrive at decision for approval and sanction of
project.

9. Project Mgt./Construction:
If government regulatory approvals and project get sanctioned by
authority, then after builder can take step further to start initial work of
construction. A project management team also has to form for various aspects
of the project of residential or commercial. At regular interval of time, govt.
executives checks the work whether is going as per the criteria.

10. Marketing Plan:
While developer put the marketing plan for the project he has put. On
the bases of demand for the housing and location. As a promotional efforts
and marketing for the project Hoardings, newspaper ads. attractive schemes,
agent/ broker approach has to be followed.

11. Selling, Leasing and Handover:
Builder may sell the entire project to other party, or he may sell the
project on leasing bases. Another option he may adopt is he can hand over to
the party who want to handle this project.

[26]











Below are some of the main points that were made along the way:
Real estate investments fall into one of the four following categories: private
equity, public equity, private debt and public debt. Your choice of which one to
invest in depends on the type of exposure you are seeking for your portfolio.
You can invest in either income-producing properties or non-income-producing
properties. Any leased property is income producing, and vacant properties are
non-income producing. You can still earn a capital return on a non-income
producing property, just as you would on an investment in a home. .
Real estate can produce income (like a bond) and appreciate.
[27]

Real estate is tangible, so it requires ongoing management. On the other hand,
you also have an increased ability to influence the performance of a single
investment as compared to other asset classes.
Some of the benefits of adding real estate to a portfolio include: diversification,
yield enhancement, risk reduction and inflation-hedging capabilities. However,
real estate also has high transaction costs, can be difficult to acquire and it is
challenging to measure its relative performance.
Buying real estate requires substantial due diligence to ensure that you're
getting what you expect after you close.
The way to determine the value of your property (other than actually selling it) is
to have it appraised by an accredited appraiser.







5.4 ADVANTAGES AND DISADVANTAGES OF REAL ESTATE
INVESTMENTS:

ADVANTAGES:
[28]

Investing in real estate is as advantageous and as attractive as investing in stock
market. Here are the main benefits of investing in property market.

Real Estate Investments are Less Risky:
As compared to other investments, less of misadventure is involved in a real
estate property.. Real estate investments are traditionally considered a stable and
rich gainer, provided if one takes it seriously and with full sagacity. The reasons
for the real estate investments becoming less risky adventure primarily relate to
various socio-economic factors, location, market behavior, the population density
of an area; mortgage interest rates stability; good history of land appreciation,
less of inflation and many more.

No Need for Huge Starting Capital.
A real estate property can be procured for an initial amount as low as $8,000 to $
15,000, and the remaining amount can be taken on holding the property as
security. This is what you call High Ratio Financing. If you don't have the idea as
to how it works, then let explain with the help of an example.

Honing Investment Skills
[29]

A real estate investment, especially when you buy a condo for yourself, will be a
pleasurable learning experience. It gives you the opportunity to learn and when
you went ahead with your first real estate property.

Not a time taking Adventure
Real estate investment will not take out all your energies, until you are prepared
and foresighted to take the adventure in full swing. You can save hell lot of time,
if you are vigilant enough to know the techniques of making a judicious
investment in the right time and when there are good market conditions
prevailing at that point of time.

Leverage is the Right Way
The concept of leverage in real estate is not a new one. It implies investing a part
of your money and borrowing the rest from other sources, like banks, investment
companies, finance companies, or other people's money (OPM). There have been
many instances where people have become rich by practically applying OPM
Leverage Principal. Moreover, in case the lender is interested in selling the
property, the net proceeds resulting from the sale of the property should
comfortably cover the mortgage amount.

Real Estate Appreciation
An appreciation is an average increase in the property value over original capital
investment, taking place over a period. There are some neglected real estate
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properties that have an appreciation below the average mark, whereas, some of
the properties located in maintained geographical areas, showing high demand,
have an above average appreciation. In such centrally located and high demand
areas, the average appreciation can reach up to 25% in a year.

Low Inflation
Inflation is the rise in the prices of the products, commodities and services, or
putting it another way, it is the decrease in your capacity to buy or hire the
services. Supposing, a commodity was worth $10 a decade back, will now cost $
100 as the result of inflation. Comparatively, real estate sector has minimum rate
of inflation.

Tax Exemptions

You get various tax exemptions on your principal and investment income
property. The tax exemptions available in real estate property investment are
more than available in any other investment. In other investments, you lose
terribly on the investments in your bank in the form of inflation and high taxes
therein, but in real estate; you don't actually have such hindrances.
There are several beneficial provisions in the Income-tax Act, 1961 which
promote investment in residential properties, having regard to the need for
[31]

housing millions of citizens. Of course, only those who pay taxes can take
advantage of the appropriate incentives given under the law.
Interest payable on loans taken for purchase or construction of house is
deductible to the extent of Rs 1.5 lakh every year, though the annual value of one
self-occupied residential property is exempt from income-tax. In addition,
repayment of the installment of housing loan is deductible to the extent of Rs 1
lakh per annum under section 18-C.
High Return on Investments
Real estate investment gives you potentially high Rate of investment before and
after the taxes levied on your income. In fact, investing in real estate gives you
high ROIs after the taxes
Net Positive and High Income is Generated.
Increased demand for properties.







DISADVANTAGES

[32]

Beside the large potential of return on Investments, there are certain levels of
Disadvantages. These disadvantages can be easily taken off, if you have an insight
about the limitations of real estate investment and what can be its short term as
well as long-term repercussions.

Taking Wrong Decisions

People going for the real estate investment property take decisions in haste.
Make a firm decision when you go for purchasing your first real estate property, is
just not easy man. If you are swayed by emotions, you will be ruined.

No readily available Liquidity:

With your real estate investment, you need to know one thing
straight, and that is you simply cannot aspire hard cash immediately. You have to
wait and watch the market movements and other socio-economic and politico
economic factors before selling your real estate property, like a mall or your
home.

Eats away your time and energy:

[33]

Real estate investment can get you real fatigue. It is a lethargic time consuming
process that makes you feel almost laid back. You need to plan and have those
instincts to get going with your property. You will learn more on about making
you real estate investments more time efficient in later part of the chapters.

A Risk full decision can harm:

Investing in a real estate property can be a risky and costly even, if you
are not prepared before, you will make losses. Not just losses but, but you will
become a pauper. Remember, as I said in my earlier statements, Real estate
market is speculative.
No Stringent Comparison Methodologies

Real estate market is variable. The price of two real estate properties can
vary a great deal, provided you keep other factors such as time and location,
constant. No two real estate properties can have exact. There always exists kind
of variation and this need to be taken into account. Though, you do have the
existing rule of thumbs and set strategies, but all these are workable, if tried in
combination.

Guided and Drawn on Government Policies:
[34]


Government policies and regulations play an indispensable role in
deciding on the real estate investment. These policies and regulations include
control the zone based bylaws, construction activities; property prices; rent
control procedures; license dispensations and property transfers; taxes etc.














[35]

5.5 The Factors that affects the Real Estate market:


Micro factors;

There are certain Micro factor that influences the property
market and its aspects. Suppliers, Cost of materials, firms competitors and also
marketing intermediary are the major elements that have effect on property
business.

Macro Factors:

Factors like political, legal, social, global and demographic are the
Macro environment with generally influences reeal estate industry in large scale.
Real Estate Micro
Macro
Supplier,
Cost,
Competitor
Marketing
Intermediary
Social,
Legal,
Political
Global and
Demographic
[36]











5.6 Government regulations in Real Estate sector:



Much of the over 100 laws governing various aspects of real estate in India
dates back to the 19th century and major amendments to existing laws are
required to make them relevant to modern day requirements. The Central laws
governing real estate include:

Registration Act, 1908

[37]

The purpose of this Act is the conservation of evidence, assurances, title, and
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.

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 meters (sq. m).
Excess vacant land is either to be surrendered to the Competent
[38]

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.

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.

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
[39]

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.

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.





[40]


RESEARCH OBJECTIVE
Primary objective:
The Report has been prepared with certain goals. The Following are the Main
objective of study of the report.
To analyze the investment in real estate.
Comprehensive study of overview and Trends in Real Estate sector
Investment.
To study the advantages of investment in properties, prospects of
investment.
SCOPE OF THE STUDY:
The operational jurisdiction of the research is limited to Central bank of India. The scope
covers all loan schemes of CBI.
The study is mainly concentrated on the lending practises pattern and influence in the
organisation performance.
This project is mainly concerned with the lending practises in the nationalised bank of
issuing various securities.
The study enables the company to know its current position.
To know and to set its objectives and goals.
The study helps in ascertaining peoples response on bank lending.
RESEARCH METHODOLOGY:
This refers to the method of data description. Descriptive research includes surveys and fact
finding enquire of different kinds. The major purpose of descriptive research is description of
the state of affair as it exists at present. In business research we quite often use the term export
facto research for descriptive research studies.
[41]

The main characteristics of this method is that the researcher has no control over the variable, he
can only report what has happened or what is happening. The method of research utilised in
descriptive research are survey methods of all kinds including comparative and correlation
methods.
DATA COLLECTION TOOLS:
Data mainly collected from both primary and secondary sources.
PRIMARY DATA: Primary data are freshly gathered for a specific purpose or for a specific
research project. Primary data was collected by way of discussion with company officials.
Mainly with bank manager. It has colled through the interim schedule, discussion and by
interacting with the officials of the organization or the respondents.
SECONDARY DATA: Secondary data that were collected through published materials like
pamphlets, company books and from the official website that is www.centralbankofindia.co.in
TOOLS AND TECHNIQUES:
Information has to be collected on the basis of the questionnaire distributed to the borrowers
Internet/ prominent search engines have been used for collecting the Data, market watch is also
used to some extent for interpretation analysis.
All data collected are carefully classified, tabulated for the purpose of research and interpreted
on the basis of charts and tables.
Sampling Design
1. Sampling Area:
For this survey I have covered the credit department of the organization Central bank of India
2. Sampling Population:
In order to take a reasonable sample size and not to disturb the functioning of the organization, a
sample size of reasonable strength of the Company has been taken in order to arrive at the
present practices of training in the Company.
[42]

Accordingly, 7 officers and 10 workers have been selected at random from all the departments of
the organization and feedback forms (questionnaire) have been obtained. The data has been
analyzed in order to arrive at present training practices in the organization.
3. Sampling Design

There are four steps involve in the sampling design process. These steps are closely interrelated
and relevant to all aspects of the marketing research project. These steps are as follows:




3.7.1 Define the target population

The target population is the collection of elements or objects that possess the information sought
by the researchers and about which the inferences are to be made. The target population
represents the Delhi/NCR regions. The people were from different professional backgrounds.




3.7.2 Select a sampling technique

The sampling technique used in this project is Convenient Sampling Technique. It is because
equal opportunity should be provided to every kind of people in order to obtain better
result to understand the consumer perception. The selection of sampling units is left primarily
to the interviewer. Often, respondents are selected because they happen to be on right place at
the right time.


3.7.3 Determine of the sample size

Sample size refers to the number of units or respondents to be included in the study. One of the
important considerations in the sample size determination is the sample size used in the similar
studies and the resource constraints. In the study, sample size is influenced by the target
population. So, sample size of 100 customers, to obtain better results for analyzing the
perception of consumers.


[43]
















Q1. On which bank you depend for your regular transaction?

( ) No. of People
CENTRAL BANK OF INDIA 50%
ICICI 20%
PUNJAB NATIONAL BANK 20%
OTHER 10%
TOTAL NO. OF PEOPLE 100


[44]




It has been observed that approximately 50% correspondents are using the service of CBI for their
daily transaction, around 20% of people are using ICICI Bank for their transaction, 20% & 10% of
people are using HDFC & other Bank service respectively in New delhi It also shows that CBI have
the highest market position in Delhi as per my sample
Q2. Are you aware of products & services provided by CBI?

YES

85%
NO 15%
Total No. of People 100

50%
20%
25%
5%
SALES
CBI ICICI PUNJAB NATIONAL BANK OTHER
[45]



From the above data it is clear that most of the customers (around 85%) of Delhi have the idea about
the product & services of CBI, the rest 15% have the idea about the product they are using. In this
15% most of the people are from typical rural area (Farmers).



Q3. If yes are you aware of the advance products (Loan segments) of CBI?


YES 95%
NO 5%
TOTAL NO. OF PEOPLE 100
YES
85%
NO
15%
[46]




It is clear that most of the people have the idea about the advance product of CBI. Almost all the 95%
people who have the idea about the advance product are the user of CBI product & service.

Q4. Which bank you prefer for taking loans?


CBI
75%

ICICI 15%
PUNJAB NATIONAL BANK 8%
95%
5%
% OF PEOPLE
YES
NO
[47]


OTHER 2%
TOTAL NO. OF PEOPLE 100



According to my sample size 75% of people prefer CBI for loan product, but some people prefer
ICICI, PNB or OTHER Bank for loan because they are working with that bank & it is easier for them
to get loan from their bank & it easier for them to pay the interest because it is less as compare to
other bank because they are the employee of that bank.
Q5. If you prefer CBI for taking loan than what influence you to take Loan from CBI?
Most of the people said that they prefer CBI for taking loan because of the transparency and the
lowest interest rate for any kind of loan product. And it is easy to get loan from CBI as compare to
other bank because less paper work is require and as it is the largest govt. bank in India and having
partnership with RBI (Reserve Bank of India) and other association, it is easier for CBI to give loan
to people with a longer repayment period.
Q.6 Which loan product of CBI you have used?
50%
20%
25%
5%
SALES
CBI ICICI PUNJAB NATIONAL BANK OTHER
[48]

HOME LOAN 40%
EDUCATIONAL LOAN 30%
CAR LOAN 15%
PERSONAL LOAN 10%
OTHER 5%
TOTAL NO. OF PEOPLE 100


From the sample size 85% of people are using the CBI loan product. From the 100 people 40% of
people took home loan from CBI. 30% of people took education loan for their children, 10% of
people took car loan from CBI. Some of the customer took 2 type of loan from CBI like both car &
educational loan and home & car loan. 5% of people took personal loan.

Q7. What do you feel about the services providing by CBI in advance product?

Bad 0%
Satisfactory

2%
Good 55%
40%
30%
15%
10%
5%
SALES
HOME LOAN EDUCATION LOAN CAR LOAN PERSONAL LOAN OTHER
[49]


Excellent

43%
TOTAL NO. OF PEOPLE

100


From this it is clear that the service provide by CBI in its advance product is good in between the
customer. All of them satisfy with the product provide by CBI. 55% of people said that the service
provide by CBI is good & 43% said it is excellent & just 2% of people said that it is satisfactory.

Q8. Which features you like most in Loan segments of CBI?

LESS PAPER WORK 3%
ATTRACTIVE INTEREST RATE 35%
0% 2%
55%
43%
CUSTOMER PERCEPTION TOWARDS THE SERVICE
PROVIDE BY SBI IN ADVANCE PRODUCT
BAD
SATISFACTORY
GOOD
EXCELLENT
[50]

TRANSPARENCY 20%
SIMPLE AND FAST PROCESSING 2%
LONGER REPAYMENT PERIOD 40%
TOTAL NO. OF PEOPLE 100


Most of the people like the attractive interest rate & longer repayment period. Its easier for people to
repay the whole loan amount with its interest with low interest rate and with longer repayment
period.
PAST YEAR BALANCE SHEET

Mar '14 Mar '13 Mar '12


12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 2,967.44 2,661.58 2,353.12

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
LESS PAPER WORK ATTRACTIVE
INTEREST RATE
TRANSPARENCY SIMPLE & FAST
PROCESSING
LONGER
REPAYMENT
PERIOD
FEATURES LIKE BY CUSTOMER
[51]

Equity Share Capital 1,350.44 1,044.58 736.12

Share Application Money 0.00 0.00 0.00

Preference Share Capital 1,617.00 1,617.00 1,617.00

Reserves 12,821.12 12,651.27 8,201.45

Revaluation Reserves 0.00 0.00 1,896.96

Net Worth 15,788.56 15,312.85 12,451.53

Deposits 240,068.99 226,038.31 196,173.33

Borrowings 22,079.78 18,305.51 12,919.60

Total Debt 262,148.77 244,343.82 209,092.93

Other Liabilities & Provisions 11,558.90 8,472.87 8,255.29

Total Liabilities 289,496.23 268,129.54 229,799.75


Mar '14 Mar '13 Mar '12


12 mths 12 mths 12 mths

Assets

Cash & Balances with RBI 11,926.63 13,560.17 13,114.18

Balance with Banks, Money at Call 451.40 532.04 1,012.42

Advances 177,315.17 171,935.84 147,512.85

Investments 86,135.14 72,603.79 59,243.27

Gross Block 2,804.39 2,684.75 3,770.80

Accumulated Depreciation 0.00 0.00 1,296.89

Net Block 2,804.39 2,684.75 2,473.91

Capital Work In Progress 0.00 0.00 0.00

Other Assets 10,863.49 6,812.95 6,443.11

Total Assets 289,496.22 268,129.54 229,799.74

Contingent Liabilities 96,224.25 46,881.78 50,885.06

Bills for collection 0.00 18,732.82 14,183.44

Book Value (Rs) 104.94 131.11 121.42


FINDINGS
[52]

From this project it is found that CBI advance product having the 1
st
place in the market at
New delhi, there is a great opportunity to compete with ICICI Bank & to retain its customer
by fulfilling the requirement of customer in CBI advance product.
It has been observed that approximately 85% correspondents are using advance product of
CBI and 15% are not using any type of advance product of CBI in New delhi
All of CBI customers are satisfied with the services provided by the bank.
Many of these customers satisfied with the low interest rate and longer repayment period of
the advance product.
Most of the customers at Bhubaneswar prefer to take loan from CBI.
Approximately 43% of advance product users said that the service of CBI in advance product
is excellent.
A response from customer care is so clear & good.
Many customers have no time to call customer care so that they are not able to know about
the service & features of CBI advance product.
Most customers are shifted from other banks advance product to CBI because of hidden
charges, high interest rate, less repayment period.
Government employees are more concern than private employees for advance product.


REASONS FOR HIGHLY USE OF CBI ADVANCE PRODUCT:
LESS PAPER WORK
ATTRACTIVE INTEREST RATES
TRANSPARENCY
SIMPLE & FAST PROCESSING
LONGER REPAYMENT PERIOD
QUICK PROCESSING

LIMITATIONS OF THE STUDY

[53]

Although the study was carried out with extreme enthusiasm and careful planning there are
several limitations, which handicapped the research viz,
1. Time Constraints:
The time stipulated for the project to be completed is less and thus there are chances that some
information might have been left out, however due care is taken to include all the relevant
information needed.
2. Sample size:
Due to time constraints the sample size was relatively small and would definitely have been more
representative if I had collected information from more respondents.
3. Accuracy:
It is difficult to know if all the respondents gave accurate information; some respondents tend to
give misleading information.
4. It was difficult to find respondents as they were busy in their schedule, and collection of data
was very difficult. Therefore, the study had to be carried out based on the availability of
respondents





Suggestion & Recommendation

[54]

Customer awareness programme is required so that more people should attract towards
advance product.
If there are any kind of hidden charges than that must disclose to customer before giving loan
to them.
CBI must take some steps so that customers can get their loan in time. Like phone
verification by customer care that one customer is got their loan on time or not .It must be
before a certain date so necessary steps can be taken.
CBI should more concern about physical verification rather than phone verification so it will
avoid fraud or cheating.
Advance product selling agents must not give any type of wrong information regarding
advance product.
For the better service new offers would be require.
CBI customer care should more concern about the fastest settlement of customer problems.
Before deducting or charging any monetary charge CBI must consult with customer.
Agents should be trained, well educated & proper trained to convince the people about
different advance product.
It is the duty of the bank to disclose all the material facts regarding advance product, like
interest charged, repayment period, other types of charges, etc.
Special scheme should be implemented to encourage both customer and agents.
The bank should increase the period for repayment of loan.
CBI should more focus on Retaining existing customers.
SBI must focus on Segmentation based on customer knowledge Product offering based on
customer demand.
CBI must take feedbacks of customers regarding features & services.



Conclusion
[55]

From the analysis part it can be conclude that customers have a good respond towards CBI advance
products in NEW DELHI. CBI is in 1
st
position having large number of customers & providing good
services to them. The bank has a wide customer base, so the bank should concentrate on this to retain
these customers.
In present scenario CBI is the largest advance product issuer in India. Within a very short period of
time the achievement made by CBI is excellent, what a normal bank cannot expect, but it is being
done by CBI. It happens due to employee dedication towards the organization, fastest growing Indian
economy, & brand image.
To be the largest advance product issuer, CBI should focus on-
Launch Innovative product
Customized advance products
Better customer services
Fastest customers problem solving techniques
Customer retention
Apart from all the above, CBI believe in providing good customer services to their customers which
is a key factor for success in future.







Bibliography
[56]

Indian financial system Machi Raju
Credit Management Arun Chatterjee

Websites
http://www.rbi.org.in
http://www.google.com
http://www.centralbankofindia.co.in









Questionnaire
[57]

Name - _____________________________________

Occupation-__________________________________

Contact Detail -_______________________________
Q. On which bank you depend for your regular transaction?
a) CBI
b) ICICI Bank
c) PUNJAB NATIONAL BANK
d) Other Bank, Specify (_____________)

Q. Are you aware of products & services provided by CBI?
a) YES
b) NO

Q. If yes are you aware of the advance products (Loan segments) of CBI?
a) YES
b) NO

Q. Which bank you prefer for taking loans?
a) CBI
b) ICICI Bank
c) PUNJAB NATIONAL BANK
d) Other Bank, Specify (_____________)

Q. If you prefer SBI for taking loan than what influence you to take Loan from CBI?
[58]

______________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
Q. Which loan product of CBI you have used?
a) Home Loan
b) Education Loan
c) Car Loan
d) Personal Loan
e) Other Loans, Specify ( ______________ )

Q. What do you feel about the services providing by CBI in advance product?
a) Bad
b) Satisfactory
c) Good
d) Excellent

Q. Which features you like most in Loan segments of CBI?
a) Less paper work
b) Attractive interest rate
c) Transparency
d) Simple & fast processing
e) Flexibility to choose an EMI base loan or an overdraft
f) Longer tenure lone for ease of repayment
g) Specially design product for self employed
h) Any other feature, specify ( _____________ )


Q. Any suggestion you want to give for the betterment of CBI advance product.
_____________________________________________________________________________________
_____________________________________________________________________________________
____________________________________________________________________________________