Part A

INTRODUCTION TO THE PROJECT

Real Estate Sector

Globally, real estate is one of the recognized sector. In India, real estate is the second
largest employer after agriculture and is expected to grow at 30 per cent over the next 10
years.

The Indian real estate has become one of the favored destinations in the Asia Pacific as
overseas funds accounted for around 50 per cent of all investment activity in India in
2014 compared with 26 percent in 2013.

The real estate sector mainly have four sub sectors which are housing, retail, commercial
and hospitality. The growth of this sector is well complemented by the growth of
corporate environment and demand for office space as well as urban and semi urban
environment. It is also slated that real estate will incur more Non Resident Indian (NRI)
investments in both the short term and long term. Bangalore is estimated to be the most
favoured property investment destination for NRIs, followed by Ahmadabad, Pune,
Chennai, Goa, Delhi and Dehradun.

Market Size

By 2020, the Indian real estate market is estimated to touch US$ 180 billion. Housing
sector contributes around 5-6 per cent to the country's Gross Domestic Product (GDP).

In the period between 2008-20, the market size of this sector is expected to increase at a
Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality and
commercial real estate are also growing rapidly, providing the much-needed
infrastructure for India's growing needs.

During the first nine months ie from January to September of 2015, PE funds invested
about US$ 2.4 billion in the real estate sector, across 53 transactions compared US$ 1.3
 billion across 57 transactions in the same period last year. In 2015 the deal sizes also
increased, and residential projects both luxury and affordable have attracted a large
amount of capital.

Private Equity (PE) funds and Non-Banking Financial Companies (NBFCs) in India are
seen jointly investing heavily in real estate projects, in order to evade risk and undertake
bigger transactions.

In India, Mumbai is the best city for commercial real estate investment, with returns of
12-19 per cent mostly in the next five years, followed by Bangalore and Delhi-National
Capital Region (NCR). Also, Delhi-NCR is one of the biggest office market in India with
110 million sq. ft., out of which 88 million sq. ft. were occupied. Sectors such as IT and
ITeS, retail, consulting and ecommerce have accounted high demand for office space in
recent times.

India's office space incorporation stood at 35 million sq ft during 2015, which is the
second highest figure in the India's history after 2011, and was driven by corporate
implementing their growth plans.

India had the strongest activity in office leasing space in Asia and accounted for half of
Asia’s total office leasing in third quarter of 2015, with Delhi being the most active
market.

Current Scenario

In India, commercial real estate sector is in boom. In the last fifteen years, post liberalization of
the economy, Indian real estate business has taken an upturn and is estimated to grow from the
current USD 14 billion to a USD 102 billion in the next 10 years. This growth can be attributed
to favorable demographics, increasing purchasing power, survival of customer friendly banks &
housing finance companies, professionalism in real estate and favorable reforms initiated by the
government to attract global investors.
2. Brief Company Profile

2.1 Organization History in brief.

National Real Estate Development Council (NAREDCO) was established as an autonomous self-
regulatory body in 1998 under the aegis of Ministry of Housing and Urban Affairs, Govt. of
India. It is in this year that the Government of India redrafted the National Housing & Habitat
Policy, giving due importance to the Housing and Real Estate sector, thereby declaring housing
for all citizens by the year 2010. The Indian housing and real estate sectors and the allied
industries hailed the establishment of NAREDCO, as the apex national body for the real estate
industry and visualized it as a single platform where Government, industry and public would
discuss various problems and opportunities face to face which would result in speedy resolution
of issues. It was formed with the mandate to induce transparency and ethics in real estate
business and transform the unorganized Indian real estate sector into a matured and globally
competitive business sector.

The National Real Estate Development Council strives to be the collective force influencing and
shaping the real estate industry. It seeks to be the leading advocate of developing standards for
efficient, effective, and ethical real estate business practices, valued by all stakeholders of real
estate sector and viewed by them as crucial to their success. NAREDCO works to create and
sustain an environment conducive to the growth of real estate industry in India, partnering
industry and government alike through advisory and consultative processes.
2.2 Brief details of the Top Management

National Executive Committee

Shri Hardeep Singh Puri

Chief Patron
Hon'ble Minister of State (Independent Charge) Ministry of Housing and Urban Affairs,
Govt. of India

Shri Rajeev Talwar

Chairman
MD, DLF Ltd.

Shri Parveen Jain

Vice Chairman
CMD Tulip Infratech Pvt. Ltd.

Dr Niranjan Hiranandani,
President
Founder-Chairman, Hiranandani Group and CMD, Hiranandani Communities

Shri R Chalapathi Rao

President - Elect
Managing Partner, Sirisampada Constructions

Shri Ashok Patni

Vice President - Central
CEO, The Trading Corporation of Rajasthan & Vice Chairman, Rajasthan State Real
Estate Development Council
Shri Rajan N Bandelkar
Vice President - West
Director Unnathi Estate (Raunak Group), NAREDCO West Foundation

Shri Gaurav Jain,

Joint Vice President - North
MD, SAMYAK Properties & Infrastructure Pvt. Ltd.

Shri Anil Suri

Joint Vice President - North
Chairman, Anil Suri & Associates

Shri Prem Kumar Polavarapu

Vice President - South
Chairman, Doyen Constructions Pvt. Ltd.

Shri Rajesh Arora

Member Finance
Chairman, Arora & Associates Realty Ltd.

Brig. (Retd.) R R Singh

Director General
Director General, NAREDCO
2.3 Size of organization

2.4 Vision and Mission of the organization.

I To promote excellence and high standards of operations based on just and equitable
principles in transactions relating to various operations of real estate business including
building, construction and marketing.

II To evolve criteria of real estate and construction industry and its various allied operations
and to formulate a Code of Ethics for observance by all real estate developers, builders and
marketing operators and to evolve a suitable ombudsman mechanism for investigating
departures there from.

III Rating of developers and their projects through CRISIL/ ICRA supported by NAREDCO-
NHB rating mechanism.

IV Establishment of data bank, which will collect and circulate information on all matters
connected with the real estate sector.

V To set up a National Institute of Real Estate Development (NIRED) as a center for studies,
research, training and certification.

VI To promote, encourage, facilitate and assist the establishment of state bodies of

NAREDCO in various parts of the country, REDCOs.

VII Promotion and encouragement of co-operation among all enterprises dealing with and
engaged in various aspects of real estate development.

VIII Participation in the formulation of national policies and agenda for real estate development
and fiscal reforms.

IX To organize meetings, symposia, workshops, seminars and conferences on issues relating

to real estate, building construction and allied activities.

X To identify and strengthen industry's role in the economic development of the country

XI To act as a catalyst in bringing about the growth and development of Indian Real Estate
 Industry

XII To create awareness and support industry's efforts on quality, environment and consumer
protection

XIII To promote cooperation with counterpart organizations

3. Industry Analysis

3.1 PESTEL

Political:-

The smart city project.

The make in India initiative.

Brihanmumbai Municipal Corporation (BMC) has introduced a single-window clearance for

construction.

The securities and exchange board of India (SEBI) has proposed easier regulations for real estate
investment trust (REITS).

The rajya sabha or the government of India has brought into force the real estate (regulation and
development) Act, 2016.

Sociological environment -:

Demographic: - India represents 17.5% of the global population.

Education: - the adult literacy rate in 2006 was 62.8%.

Health:- In India 29.8% population lives below the national poverty line in 2010.

Job in India: - the employment rate in 2011 for the population aged 15 and above is 53.6%. The
unemployment rate of labour focus in of 3.6%.
Environmental analysis:-

Economical:- NAREDCO is a developers association so it comes as a NGO or NPO nonprofit

organization.

Social:- NAREDCO is doing

Technological:-

Environmental: - An initiative by NAREDCO in association with government of Maharashtra.

More than 2 lakh trees planted under the CSR activity of NAREDCO in the year 2016 & 2017 at
various part of Mumbai.

Legal:-

3.2 Porter’s Five Forces Analysis

3.3. Porter’s Generic Strategies

4. Company Analysis

4.1 SWOT

Strengths

Govt. backing

NAREDCO is a self-regulatory Non- Profit organization started under the aegis of Ministry of
housing and urban affairs. As it is totally backed by the Govt., so if there is any legal obligations
faced by the member builders, then NREDCO gives a wonderful platform to quickly resolve the
issues with the Govt.

Even the builders in the board of directors of NAREDCO experience the power decision making
and legal alternations in real Estate domain.

Big Developers of Industry on the Board

As almost all the big builders in the city is already the member of NAREDCO, it gives
NAREDCO a sheer power to dominate the sector and acts as a sole bridge between the
developers and the Govt. the strength of an associations lies in its depth and weight and
NAREDCO has it to its fullest.

MahaRERA Conciliation Forum

Under Sector 32(g) of the real estate Act, 2016 empowers MahaRERA to recommend to
Maharashtra Government measures to facilitate amicable conciliation of disputes between the
promoters and allotters through dispute settlement forum set up by the consumers or promoter
associations. NAREDCO has nominated its 10 member developers in MahaRERA Conciliation
Forum.

Weaknesses
Less brand recognition

NAREDCO has been in the business since 1998, still many developers are not yet aware of it.
NAREDCO looks less interested in brand supports, ad campaigns. They have very low brand
recognition value even in corporate world.

Less active on Digital Platform

NAREDCO uses digital media at its least. Lesser presence in social media has branded
NAREDCO as an ordinary brand as fewer players in the market are aware of its survival. Even
the authorised app is least popular even amongst the members.

Opportunities

Bulk purchasing

Revenue model of NAREDCO is membership selling and sponsorship of events. So NAREDCO

should form a committee of bulk purchasing to add some pennies in bag by having some
commissions. All the members in their respective zones can form a committee and buy the raw
materials like sand, TNT bars, cements, CA etc. on bulk. So, through this they can buy the raw
materials in cheaper rate and construction cost will be reduced. NAREDCO can bag a portion
cost reduced as commission.

Threats

Strong competition from MCHI CREDAI

Started at 1984, MCHI CREDAI had a monopoly in Real Estate market. Initially functioning on
legal issues have recently shifted their focus on events, exhibitions and seminars. Even being
entirely a private firm, it has a member base of about 1800+.

4.2. 7S framework to analyse the different aspects of the organization.

4.3. Value Chain Analysis

4.4. BCG

4.5. Ansoff’s matrix

PART B
 RESEARCH BASE PROJECT

5. Introduction

5.1 Nature of problem

5.2 Objectives of study

 To find out the current status of real estate sector.

 To understand the real estate sector from the developers point of view.
 To study the impact of RERA GST and Demonetization on real estate sector.
 To increase the members of NAREDCO.
 To study the real estate market as a whole.
5.3 Utility of study
5.4 Limitation of study

6. Methodology
6.1 Approach
Qualitative
Tool used questioner

Questionnaire (Open Ended)

1. What are your thoughts on today’s Real Estate Sector?

2. What are your opinions on market outlook for next 24 months?
3. What are the general expectations from public to buy new house?
4. Which marketing strategy you use to attract customer?
5. Is there any medium which is now not appealing to public?
6. What is your point of view for affordable housing and PMAY?
7. Your views on RERA and what are the benefits of RERA?
8. What are the challenges which you face in RERA?
9. How has the implementation of RERA changed the overall strategy of your organization?
10. After RERA, how many walk-ins or potential customer asked you for RERA Registration
Number?
11. What was the impact on sales after RERA?
12. What are the major difficulties which you have faced in last 5 years with respect to NOC,
Approvals & Sanctions
13. Has Ease of Doing Business really benefited real estate sector? If not, please give
suggestions
14. Is any sanction pertaining to environment a hindrance in any of your development
projects?
15. Are you part of Real Estate Investment Trust?

16. What are your problems faced by you for human resource and labour resource?

17. Apart from NAREDCO which other associations are you part of?

18. What changes could be made for smooth functioning of the NAREDCO?

19. Your projects belong to which of the committees? There are certain committees
formed at NAREDCO namely, SRA, MHADA, Revenue, MCGM, Aviation, Environment,
RERA, Taxations & GST, Legal, TMC, NMMC, NAINA, Membership expansion and other
various committees. As per your interest which 2 committee would you like to join?

20. Do you think even your other friends in real estate sector should become part of
NAREDCO? Can you name some .

6.2 Source of data

6.3 Method of data collection

6.4 Size of sample and method of sampling

6.5 Method of data analysis

7 Context of industry problem

8 Presentations of Data

9 Analysis & Discussion

10 Conclusions
10.1 Inferences
10.2 Managerial implications
10.3 Managerial implications

References
Annexures

Part C
Learnings and Takeaways