module 1 real estate development & land management

8/3/2019 Module 1 Real Estate Development & Land Management

1/40

REAL ESTATE DEVELOPMENT & LAND MANAGEMENT

INTRODUCTION TO REAL ESTATE MANAGEMENT

MODULE - 1

Meaning and Scope

Goals

Objectives

Principles

Trends

1


2/40


3/40

In different countries example:

UK R.E. as real property or properties refers to land and fixtures

real estate is used mostly in the context of probate (it is the Act)

(official sanction for executing of will) law, meaning all interests in

land held by a deceased person at death.

Mexico and Central America Ref. to legal formalities tax need to

be paid

India Great Importance land purchase development land or

building purchase sale, related law.

3


4/40

b) Real Estate Development

Multifaceted business ranges from renovation, re-lease of existingbuildings purchase of raw land sale of improved parcels to others

Developers Coordinators of activities converting ideas on paper in

to real property.

Differs from construction buy land, finance the deal best buildersbuild at a fixed cost, create, imagine, control and orchestrate the

process of development from beginning to end.

Take greatest risk, receive greatest rewards.

Typically Purchase parcel of land, determine the marketing of

property, develop the building program and design, obtain necessary

public approval and financing, building structures, lease or sell,

manage and ultimately sell it.Contd..

4


5/40

b) Real Estate Development

Work with many different counter parts along each step of process

includes: Architects, city planners, engineers, surveyors, inspectors,contractors, leasing agents and more.

In some situations R.E. refers to the land and fixture (some thing

permanent) together refers to ownership of land and appurtenances,

including structures, trees, minerals, and the interest, benefits, andinherent rights thereof.

Law broadly distinguishes between real property (land and anything

affixed to it) personal property (everything else e.g.: Clothing,

furniture)

Oldest use of the term R.E. that has been preserved in historical records

was in 1666 reflects the ancient and feudal preference for land and

the ownership.

5


6/40

Statutory definitions of Development

Mostly defined in various acts in India

1. Karnataka Town and Country Planning Act 1961

Development with its grammatical variations means the carrying out of building , engineering, mining, orother operations in, on over or under land or making of any material change in any building or land or in the

use of any building or land and includes sub division of any land.

2. Karnataka Urban Development Authorities Act 1987

Development with its grammatical variations means the carrying out of building, engineering or other

operations in or over or under land or making of any material change in any building or land and building

including planning and development.

3. Bangalore Development Authority Act, 1976

Development with its grammatical variations means the carrying out of building, engineering or other

operations in or over or under land or making of any material change in any building or land and includes

redevelopment.

4. The Jaipur Development Authority Act 1982

Development with its grammatical variations, means the carrying out of building, engineering, mining or

other operations in or over or under any land (including land under river, lake or any other water) or the

making of material change in any building or land or in the use of any building or land and includes

redevelopment and layout, and sub- division of any land and also the provision of amenities and projects and

schemes for development of agriculture, floriculture, forestry, dairy development, poultry farming, piggery,

cattle breeding, fisheries and other similar activities and to develop shall be constructed accordingly.6


7/40

Statutory definitions in other countries

In U.K- Development is defined by statute in T & CP Act 1990 as The carrying

out of building, engineering, mining or other operations in, on, over or under

land, or making of any material change in use of any building or other land.

Paths for entering the development field- no single path- developers come

from variety of disciplines- real estate, brokerage, mortgage banking,

consulting, construction, lending, architecture, landscape architecture, legal

services.

Recently Specialized programmes that award Master of RED Degree- others

include:

(1) Graduate Programmes in real estate development.

(2) Master of Science in R.E or an MBA.

Organizing for Development- several ways- includes many services from

architecture to engineering- some times might consist of one principal and a

few staff who hire or contract with other companies and professionals for

each services as need.

Developer success depends on ability to co-ordinate - series of interrelated

activities efficiently and at the appropriate time.

7


8/40

Statutory definitions Development process: requires skills of many professionals- architects- landscape

architects, civil engineers, site planners, market consultants to determine demand and

project economics, attorney to handle agreements and Government approvals,

environmental consultants and soil engineers to analyze sites physical limitations and

environmental impacts, surveyors and title companies to provide legal descriptions of

property and lenders to provide financing.

Land Development:-

a. Speculative development- purchasing unused land for a potential development.

b. Sub- division of land- for development of communities- convert raw land intodeveloped land- mix of land uses- infrastructure development- includes roads,

drainage system, water, sewerage and public utilities.

Land development is the riskiest and most profitable- involves public

sector approval, infrastructure, involves long investment period-

sometimes with no positive cash flow.

Uses- residential, commercial, industrial and others.

After sub- division- marketing land to a home builder.

Plotted, gatted, group housing, villa

Recent trend is towards integrated townships.

8


9/40

Selection of Land - Development

- Government policy- investment

- Town- cities

- Within the town- city

- Master plan

- Growth trend

- Identification of prospective customers

9


10/40

Selection of land- Shape of the property

10


11/40

REAL ESTATE LAND MANAGEMENT

Definition: Land Management is the process of managing theuse and development ( both in urban and suburban settings) of

land resource in a sustainable way.

Land resource used for a variety of purpose which interact and

may compete with one another, therefore, it is desirable toplan and manage all uses in an integrated manner.

11


12/40

12

Land Management Why ?

India has 18% of world population.

2% of geographical area.

1% of forest area.

15% of livestock.

0.5% of pasture land.

Per capita availability of forest 0.08ha (world 0.08ha)

Land resource subject to variety of pressures.

Tendency towards over exploitation.


13/40

13

Development Process

Improvement of raw land or property. make money ? Createvalue

Highly creative process

Physical ingredients such as land and buildings are effectively

combined

Financial and marketing resources


14/40

14

Types of Development Approaches/ Concepts

Traditional Development

Concept many people use. Identification of sites comes out

with idea, pulls together a team, signs contracts, builds building,

leases it and sales it nothing wrong with this approach.

Idealistic development concept optimization of consumer

satisfaction care minimize cost of production.

Pragmatic development political factors constrained bypolitical factors, (zoning), short term solvency, status of real

estate technology.


15/40

15

GOALS, OBJECTIVE and PRINCIPLES

Goals and objectives- depends on developer, project-

customer satisfaction.

Principles

Quality Timely delivery

Reasonable rate.

Follow Act provisions rules and Regulations.

Marketable title to the land. All legal documents to the purchaser.


16/40

CATEGORIES OF ESTATE

Four basics categories:

1. Freehold Estate- right of ownership- right of inheritance- ownership forduration of some ones life.

2. Leasehold Estate- right of possession and use but not ownership

a. Estate for years.

b. Periodic month to month.

c. Estate at will- no fixed time.

d. Tenancy at sufferance- tenant remains after lease expire.

3. Statutory Estate- created by law- interest of wife in property of husband.

4. Equitable Estate- neither ownership nor possession - only easement.

16


17/40

Contents Advantage India

Market overview

Industry Infrastructure

Investments

Policy and regulatory framework

Opportunities

Industry associations

Trends

17


18/40

18


19/40

. 26.53 million houses shortage (2007 2012)

19


20/40

Real Estate

Sector

Commercial

Office

Space

Residential Retail Space

Special

Economic

Zone

Hospitality

Plotted Development

Group Housing

Apartments

Villas

Row Housing

In recent years, the industry has evolved from a highly fragmented and unorganized market into

a semi-organized market. The sector can be divided into residential, commercial, retail and hospitality asset classes.

Resi. largest urbanization dominated shift towards organized (20 %)

Com 60 % new demand

SEZ 120,000 SFT in urban areas

Advancement skills discount gifts outside contracts

Vastu ?

20


21/40

21


22/40

22


23/40

23


24/40

24

. International retailers are present through the franchise (e.g.: fast food)

was


25/40

25


26/40

26


27/40

27


28/40

28


29/40

29


30/40

30


31/40

31


32/40

32


33/40

33


34/40

34


35/40

35


36/40

36


37/40

37


38/40

38

AdvisesThree Main Parts

1 2 3

Creation of Business Execution of Business Processing of Business

Release of information

Agent centered system - A Team Approach

Client Centered system -

What is target market ?

What is the average sale price in your target market ? What is the average commission per transaction ?

How many transactions must you close to earn your target income

Listing of properties

Task Master

Organizing your data base

Reference from the past client - Spread by word of mouth Market research

Organizing events to promote real estate

Media exposure for real estate marketing

Internet marketing for real estate website of your own.

Any body can become real estate developer.


39/40

Govt. Initiatives

100 % FDI allowed in townships, housing, built-up infrastructure and

construction.

100 % FDI is allowed under automatic route in development of SEZ

subject to provisions of SEZ Act 2005 and SEZ policy of dept. of commerce.

FDI is not allowed in real estate business.

Allocation increased by more than 75 %, on urban development.

Allocation for urban poverty alleviation raised US $ 183.4 m to US $

215.8 (2010 11)

1 % interest subvention on housing loan

Rajiv Awas Yojana allocation US $ 32.4 m.

Revision of norms for lending loan by RBI to urban banks.

39


40/40

Thank you

40

module 1 real estate development & land management

Documents