FAST FORWARD FUTUREof SURAT REAL ESTATE

- Sumant KachruDirector, ACT Co.Pvt.Ltd.

Sumant Kachru, Director, ACT Company Pvt. Ltd., Surat

• B.E. (Construction), CEPT Ahmedabad• MBA (Real Estate), University of Cincinnati, USA• Development Manager, Creative Choice Homes, Florida, USA• Vice President Real Estate, JHM Hotels, Surat• Selected Landmark Projects:

• Crossroads Mall, Tardeo, Mumbai• Manatee Springs Apartments, Chiefland, Florida, USA• Buena Vista Villas, Las Vegas, USA• Hickory Hills Apartments, Tallahassee, Florida, USA• Ambassador North Apartments, Houston, Texas, USA• Silas Oaks, Suwannee County, Florida, USA• Luxury Resort & Residences, Singer Island, USA• Anderson Terrace, Spring Hills, USA• The Gateway Taj Hotel - Expansion & Renovation, Surat• AURO University, Surat

• Real Estate Expertise:• Turnkey Real Estate Development• Deal Structuring & Negotiation• Land Development Strategy (Colonizing)• Socio-Economic Development (Revitalization)• Innovation - New Product/Market Creation

FAST FORWARD FUTURE1. Visualize the Future2. Understand the Present3. Draw a roadmap for reaching the Future4. Build the road – Fast5. Start the journey – Forward

1. NICHE HOUSING PRODUCTS

– Active Adult (Empty Nesters)– DINKS (Double Income No Kids)– Affordable Housing (combined with TOD)– Service Apartments – Condo-Hotel– Working women housing

Active Adult CommunityTarget: 60+ Empty NestersModel:• Smaller Units• Maintenance Free• Several Hobby/Activity Centers• Age appropriate amenities• Guest house for visiting family• Common Services:

– Laundry– Housekeeping– Doctor on call– Security– Car Hire– Shuttle Bus to nearby shopping, city center– 24/7 Paramedics for medical emergency– Food & beverage (dining, eat-in)

                                                                         

Love at 50: Never too old for a live-in!Ankur Jain & Parth Shastri, TNN | Nov 21, 2011, 08.37AM IST

AHMEDABAD: The Mehndi Nawaz Jung Hall, one of the oldest auditoriums in Ahmedabad, could well become the ground zero of a social revolution in India.

Such was the success of the country's first live-in mela for 50-plus people here on Sunday that the organizers have now decided to hold it in Bhopal, Pune, Delhi, Kolkata and Mumbai in the next six months. At least seven couples from as far away as Assam, Karnataka and Gujarat found prospective live-in partners during the event. Many of them are planning to go on dates for a few days before they finally start living in.

"Some call our event radical, but we see it as the new thought," said Natubhai Patel, founder of Vina Mulya Amulya Seva, the NGO which organized the mela. Patel will take the live-in couples to Rajpipla on a picnic next month, where they can spend some private time.

The sharp rise in human life expectancy over the years has resulted in a very substantial increase in the number of older persons. The demographic profile depicts that in the years 2000-2050, the overall population in India will grow by 55 per cent whereas population of people in the age bracket 60 years and above will increase by 326 per cent and those in the age group of 80 plus by 700 per cent — the fastest growing group.

HOUSING FOR ELDERS . . . A niche product with growing demand

DINKS (Double Income No Kids)Target: 25-35 young married professionals

Model:• Smaller Units• Maintenance Free• Several Hobby/Activity Centers• Club style amenities• Guest house for visiting family• Common Services:

– Laundry– Housekeeping– Security– Food & beverage (dining, eat-in)

Affordable Housing (Transit Oriented)• Target: Workforce (LIG & MIG)

• Affordable:– To buy: upto Rs.10 Lacs per unit– To rent: upto Rs.3,000 per month

• Location:– Close to BRTS, Metro, or Railway station that connects to City Center,

Industrial or commercial hub

• Why is it needed?– Industry & commerce needs manpower and if they have decent

accommodation with less commute time then productivity increases & attrition decreases. Success of industry & commerce directly enhances real estate demand.

Service ApartmentsTarget: Corporates/Professionals looking for monthly rentals

Model: Same as DINKS + Furniture

Financial Options: • Developer can keep ownership for long term rental income & appreciation• Developer can sell the units to corporates/investors while retaining the

ownership of common elements

Condo-HotelTarget: HNI, Executives, NRI

Model: Ultra Luxury Service Apartment with all amenities of Luxury Hotel

Financial Options: • Developer sells ownership of individual Units• Buyers use the unit whenever they feel like and rest of the time give it

back to the Hotel to rent out• Buyer get a Luxury Property with hassle free rental income• Developer gets upfront unit-sale proceeds, revenue share from rental

income of these units and revenue from all the Hotel Amenities like SPA, Gym, Restaurants, etc..

Working Women Housing• Target: Single Working Woman

• Model:– Studio or 1BHK apartments– Security with Access Management system– Women centric Amenities & Activity center– Centralized common services like Laundry, etc..

Why is it needed:• Educated women as part of overall qualified workforce is increasing

rapidly and hence becoming an important part of corporate HR policy• Lack of proper housing discourages their in-migration and in turn reduces

companies likeness to expand in such city

12 NOV, 2011, 12.29PM IST, ANSHUL DHAMIJA & SHRABONTI BAGCHI,TNN 

Single women in India are investing in real estate for stabilityBANGALORE: Single young women in India have earthier tastes and believe in serious asset-creation, which perhaps explains why an increasing number of those below 35 are investing in their own homes before marriage in a trend that many believe is a reflection of our changing socio-economic landscape. 

For 33-year-old Shalini Natraj, "investment and stability" were the prime reasons for buying a 1,300-sqft 2BHK apartment in Jakkur, a suburb of Bangalore, for Rs 50 lakh. "I'd been living on rent for some time and I wanted to own a space. I didn't enjoy the idea of someone coming up to me and asking me to vacate or being told not to make any changes to the house," Shalini, a senior HR manager at American retailer Target's Bangalore office, says. "Owning a flat gives me an immense sense of pride and achievement. It feels great to have used my money in a good way. I feel in control of things." 

2. Much Needed Concepts• Title Insurance

• Association Rules & Regulations

• Multiple Listing System (MLS)

• Fair Housing

• Collective Purchasing Power

• Title Insurance: Insurance that covers the loss of an interest in a property due to legal defects

• Types:– Lender Policy– Owner Policy

• Why is it needed?To decrease the financial risk of a legal challenge to the property’s title.

Association Rules & Regulations (Standardized)

Association Rules and Regulations are adopted for the benefit of the Unit Owners and Tenants of Apartments. They are intended to contribute to preserving a clean, attractive and peaceful environment. They are not intended to unduly restrict or burden the use of property.The essence of these regulations, rules and recommendations is for each Unit Owner and Tenant to treat each other with respect and courtesy and exercise common sense, so Apartment community can be an outstanding place to live.

Why is it needed?With increase in buildings per apartment community there needs to a standardized set of rules that the Association adopts while taking over from the developer. The Owner’s Association can make changes that suits them in due course but the Developer’s standardized set of rules will provide an excellent reference point. The long term success of Developer lies in how successful his previous built communities are and such a set of Association Rules will help in that.

Multiple Listing System (MLS):• Owner intending to sell gives exclusive “Listing” to broker• Listing Broker enters the property data in MLS• Other Brokers seeking property for their clients search the MLS• Buyer Broker contacts seller Broker if the property data matches their Client’s

requirement

Why is it needed?• There is no formal system to exchange property “for-sale” information• Without exclusive listing Brokers hesitate to share specific/detailed

information on for-sale properties• Without specific/detailed information, Buyer’s brokers have hard time

shortlisting for their Clients• MLS provides organized, validated and faster exchange of information

regarding sale/rent properties

Fair Housing

• Equal opportunity to rent & buy real estate• No discrimination based on:

– Race/Religion/Faith– Eating Habits– Marital Status– Native Region/State

Why is it needed?– Cohesive Social Set up increases real estate demand

Collective Purchasing Power

• Consolidated demand for basic materials: Cement, Steel, Bricks, Aggregates, etc..

• Much higher negotiation power with manufacturers & suppliers to derive:– Lower Cost– Timely Delivery– Higher Quality– Trend awareness

• Why is it Needed:– Cost (Saving=Earning)– Quality Control– Time (avoiding delay

due to shortage)

Example

3. STRATEGIC OUTLOOK

- 5 Forces - Power of Association

5 Forces Model (Porter)

Internal Competition

Bargaining Power of Suppliers

Bargaining Power of

Customers

New

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STRATEGIC POSITION

Internal Competition

Bargaining Power of Suppliers

Bargaining Power of

Customers

New

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With more power, better technology, organized & efficient

Travelling Tower Crane Standardized Shuttering

Organized LABOR

BIGGERFASTER

EFFICIENTCOMPETITIVE

STRATEGIC POSITION

Internal Competition

Bargaining Power of Suppliers

Bargaining Power of

Customers

New

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Subs

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With more power, better technology, organized & efficient

IT enabled collective power to buyer groups.More aware & demanding clientele.

Buying in Groups for Deep Discounts – Collective Purchase Power

Buyers can find and interact with each other ONLINE - Collective Power

STRATEGIC POSITION

Internal Competition

Bargaining Power of Suppliers

Bargaining Power of

Customers

New

Entr

ants

Subs

titut

e Pr

oduc

ts

With more power, better technology, organized & efficient

IT enabled collective power to buyer groups.More aware & demanding clientele.

Changes is business models need new-products. Changes in life-style will require new housing products.

Bungalow

Apartments

Shops

Malls

STRATEGIC POSITION

Internal Competition

Bargaining Power of Suppliers

Bargaining Power of

Customers

New

Entr

ants

Subs

titut

e Pr

oduc

ts

With more power, better technology, organized & efficient

IT enabled collective power to buyer groups.More aware & demanding clientele.

Changes is business models for retail or office will need new-products. Changes in life-style will require new housing products.

Directly impacts input cost and hence profitability. Artificial Shortages can delay projects and create Client attrition risk

Price rise, labour scarcity hit Gujarat realty sectorPRESS TRUST OF INDIASHARE · PRINT · T+ NEW DELHI, NOV. 22: A steady rise in the price of construction material such as cement, steel and bricks, coupled with a shortage of skilled labourers, has hurt the realty sector in Gujarat, a senior officer-bearer of the State's real estate developers' association has said.Soaring raw material prices, shortage of labour and other factors are leading to delays or cancellation of projects across Gujarat, Mr Vipul Thakkar, the Vice-President of the Gujarat wing of the Confederation of Real Estate Developers Associations of India (CREDAI), said.Mr Thakkar said the realty business in big cities, such as Ahmedabad, Vadodara, Rajkot, Surat, Jamnagar and Bhavnagar, has been hit as a result.He said cement prices had been hiked four times during the past year. “This has made construction of a housing project a very costly affair. The cost of cement per bag has gone up to Rs 270 from Rs 170 over the past one year,” he said.

OTHER FORCES

REGULATIONS

ECONOMY

INFRASTRUCTURE

POWER OF ASSOCIATION

• United Influence:• Regulations• Suppliers• Buyers• Utility/Infrastructure providers

• Awareness:• Research• Seminars• Trade-shows• Image building

• Ombudsman:• Dispute resolution within members• Upholding Codes of Conduct

• Representation:• National & International Groups• Government

FUTURE

QUESTIONS