module 1 real estate development & land management
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REAL ESTATE DEVELOPMENT & LAND MANAGEMENT
INTRODUCTION TO REAL ESTATE MANAGEMENT
MODULE - 1
Meaning and Scope
Goals
Objectives
Principles
Trends
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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.
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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..
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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.
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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
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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.
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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.
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Selection of Land - Development
- Government policy- investment
- Town- cities
- Within the town- city
- Master plan
- Growth trend
- Identification of prospective customers
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Selection of land- Shape of the property
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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.
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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.
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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
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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.
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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.
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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.
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Contents Advantage India
Market overview
Industry Infrastructure
Investments
Policy and regulatory framework
Opportunities
Industry associations
Trends
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. 26.53 million houses shortage (2007 2012)
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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 ?
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. International retailers are present through the franchise (e.g.: fast food)
was
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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.
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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.
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Thank you
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