The Fundamentals of Real Estate Market by Mr. Ashutosh Limaye

Mr. Limaye, Director Advisory and Valuations at Anarock spoke to the students at Meghnad Desai Academy on 17th September 2019. Beginning with the origins of the term real estate as composed of physical and real assets he gave an overview of the real estate sector as an industry vertical.

Mr. Limaye delineated the process of project development leading from the economic inputs such as land, capital and labour and the process of project development. With inputs of land and opportunity evaluation at sites and locations is followed by financing and planning and by approvals and sanctions that lead to development of finished goods and ultimately production for the consumer. The process involves a number of stakeholders at various levels of the development process. A brief list would include the landowner, the bank/nbfc/pvt institutions, the sales and marketing team, the contractor, the architect & engineer, the government and the customer. Project level microeconomics would look at transforming inputs mentioned to outputs such as flats, offices, warehouses etc. These products are then exchanged with the final consumers through marketing that finally lead to firm profits.

Discussion also included the role of generating a strong financial plan as a means to a sound project, Mr. Limaye suggested that a good project encompasses numerous possibilities of sales, risk, finance and accounting possibilities, thereby mitigating project risk.

Mr. Limaye further elaborated on ways to become a real estate professional. This included learning the skill sets of planning, project management, financial management among others. He suggested that a good way to develop expertise in the real estate space is through reading. He also suggested developing a general knowledge of real estate through local newspapers specifying the real estate section and articles from sector experts. He mentioned that an internship would help bolster the practical understanding of the space through real life case studies

Mr. Limaye also stressed on general observation and curiosity as a means to develop critical opinion about the sector. He gave examples of observable indicators such as site activity, location of the site, accessibility, brand equity etc. For example, Hiranandani has a good market equity and active sites, this provides them a competitive edge over other companies such as Runwal. Furthermore, there was a discussion on property rates, the meaning of total area versus carpet area and of FSI, FAR, loading etc. He explained real estate strategies such as the subvention scheme and its benefits to the builder as well as the consumer.

He spoke of the increasing demand for the advisory services of his firm as the country undergoes structural changes pushing real estate from an informal to a corporate activity. He spoke briefly of REITs as new investment opportunities for individuals looking for alternative investments. In conclusion he added that he looked forward to welcoming a few students for internship and placement at Anarock.

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