Transcript Experience India
India Institute of Real Estate
India
One Nation. Diverse Destination
Advantage INDIA Democracy
Amongst the most vibrant in the world with well established judicial system and free press
Demographic Profile
Total Population below 25 years of age – 547 Million
Advantage INDIA Real Estate Market Size
• US$ 12 Billion and growing at 30 percent annually • 100% Foreign Direct Investment permitted in Integrated townships
Strengths Advantage INDIA
• After United States, India is home to largest English speaking manpower • The Indian Economy is now ranked 12th in the world in terms of GDP • Large and growing domestic Market; increasing purchasing power and consumerism • Provides opportunities for competitive advantage (low cost sourcing of products and services, exceptional quality, intellectual skills, etc.)
Weakness Advantage INDIA
• Bureaucratic hurdles and government processes resulting in a difficult operating environment • Low average disposable income, a highly dispersed population and distinct tastes from the rest of the world • Weak infrastructure in terms of roads, power, and port facilities
Advantage INDIA
The advantages of investing in India (Mumbai – The Commercial capital) as compared to investing in International Markets…
• Estimated achievable Return on Investment (ROI) per annum at current capital valuations (Rental): 8% to 12% pre-tax • Estimated Capital appreciation on possession (18-24 months): 25 -35%
India Institute Of Real Estate & The National Association of Realtors ® Bilateral Agreement • Our Tie up with the National Association of Realtors has in a big way elevated the standard of Property Consultants in India • Instead of re-inventing the wheel we tied up with `The National Association Of Realtors - USA’ (NAR) for an educational module and International Certification
…IIRE & NAR
What sets one apart is the recognition as a `Qualified Professional’. It is like separating the men from the boys.
Comparison of the roles played by the Property Consultant in India & USA… • Unlike in the United States where you have one agent for one property - in India there is nothing like that • Most buyers and sellers both talk to several brokers with regard to their intention • There is no recognized MLS system in spite of being technologically advanced • The brokers in USA need to have a license to practice - in India we have no such law • Brokers in India are not qualified to handle government documentations etc. and depend on a solicitor / lawyer
Comparison of the roles played by the Property Consultant in India & USA…
Commission:
• Our commissions were supposed to be 2% of the purchase/sale value. But has been slashed by half to 1% due to competition between International agents who entered the country around 1995. The likes of Cushman & Wakefield, Colliers, Knight Frank, CB Richard Ellis, JLL amongst others have their presence in India • Commission is charged to both parties, buyer and seller. At times we do manage to get our full dues @ 2% from at least one of the parties • If there is more than one agent involved (which is in most cases) commission is shared on mutually agreeable terms
Experience India
(As a Foreign National)
Expectations
• Independent House / Bungalows • Easily affordable
vis a vis
Reality
• Apartments / Buildings • VERY expensive – especially Mumbai! • Poor Infrastructure Quality • Extensive Travel Time
Difference in Property Style & Living between India & U.S.A.
• Weather conditions & pollution makes city living in Mumbai relatively more demanding on basic health & fitness • Layout of most of the existing, older apartments is designed for the Indian way of life, except for the emerging apartment blocks & serviced apartments which have a global appeal.
(According to country needs)
• More of apartments than independent houses in Mumbai • Emergence of apartment blocks & serviced apartments focused purely on lease to expatriates
Difference in Property Style & Living between India & U.S.A.
• Dependence on stand-alone recreation clubs for amenities such as club house, pool & recreation for kids - except for a select few projects • Intra-city travel is an ever growing challenge on your time schedules, although the state is doing its best to ease the same by building flyovers & sub-ways • Lack of City Planning as demand for residential & commercial properties far outpaces supply. Except for South of Mumbai, the rest of the city has not followed a global benchmark • Daily needs Supplies: In an emerging era of super & hyper markets - local stores still rule owing to their absolute proximity to residential hubs