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An Exploratory Study on The Critical Factors Impacting The Real Estate Projects of Residential Community with Special Reference to Malabar Districts of Kerala
1. Introduction
Real estate is defined as the land and any permanent structures, like a home, or improvements attached to the land, whether natural or human-made. Real estate is a form of real property. It differs from personal property, which is not permanently attached to the land, such as vehicles, boats, jewelry, furniture, and farm equipment. Real estate is considered real property that includes land and anything permanently attached to it or built on it, whether natural or human-made. There are five main categories of real estate which include residential, commercial, industrial, raw land, and special use. Investing in real estate includes purchasing a home, rental property, or land. Indirect investment in real estate can be made via REITs or through pooled real estate investment. Land refers to the earth’s surface down to the center of the earth and upward to the airspace above, including the trees, minerals, and water. The physical characteristics of land include its immobility, indestructibility, and uniqueness, where each parcel of land differs geographically. Real estate encompasses the land, plus any permanent human-made additions, such as houses and other buildings. Any additions or changes to the land that affects the property’s value are called an improvement. Once land is improved, the total capital and labor used to build the improvement represent a sizable, fixed investment. Though a building can be razed, improvements like drainage, electricity, water and sewer systems tend to be permanent. Real property includes the land and additions to the land plus the rights inherent to its ownership and usage. Real estate sector is one of the most globally recognized sectors. It comprises of four sub sectors – housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. In India, the real estate sector is the second-highest employment generator, after the agriculture sector. It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. By 2040, real estate market will grow to Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021 and contribute 13% to the country’s GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs.
India’s real estate sector saw over 1,700 acres of land deals in the top 7 cities in 1 year. Foreign investments in the commercial real estate sector were at US$ 10.3 billion from 2017-21. As of February 2022, Developers expect demand for office spaces in SEZs to shoot up after the replacement of the existing SEZs act. As per ICRA estimates, Indian firms are expected to raise >Rs. 3.5 trillion (US$ 48 billion) through infrastructure and real estate investment trusts in 2022, as compared with raised funds worth US$ 29 billion to date. The office market in the top eight cities recorded transactions of 22.2 msf from July 2020 to December 2020, whereas new completions were recorded at 17.2 msf in the same period. In terms of share of sectoral occupiers, Information Technology (IT/ITeS) sector dominated with a 41% share in the second half of 2020, followed by BSFI and Manufacturing sectors with 16% each, while Other Services and Coworking sectors recorded 17% and 10%, respectively. Around 40 million square feet were delivered in India in 2021. It is expected that the country will have a 40% market share in the next 2-3 years. India is expected to deliver 46 million square feet in 2022. According to Savills India, real estate demand for data centres is expected to increase by 15-18 million sq. ft. by 2025.
In 2020, the manufacturing sector accounted for 24% of office space leasing at 5.7 million square feet. SMEs and electronic component manufacturers leased the most between Pune, Chennai and Delhi NCR, followed by auto sector leasing in Chennai, Ahmedabad and Pune. The 3PL, ecommerce and retail segments accounted for 34%, 26% and 9% of office space leases, respectively. Of the total PE investments in real estate in Q4 FY21, the office segment attracted 71% share, followed by retail at 15% and residential and warehousing with 7% each. India’s gross leasing volume in the top 8 cities stood at 16.2 this was 12.4% quarter to quarter growth in 2021. India’s net absorption of the office market stood at 11.56 million square feet in quarter four of 2021. This was an 86% rise QoQ. Between July 2021 and September 2021, a total of 55,907 new housing units were sold in the eight micro markets in India (59% YoY growth). In the third quarter of 2021 (between July 2021 and September 2021), new housing supply stood at ~65,211 units, increased by 228% YoY across the top eight cities compared with ~19,865 units launched in the third quarter of 2020. In 2021-22, the commercial space is expected to record increasing investments. For instance, in October 2021, Chintels Group announced to invest Rs. 400 crore (US$ 53.47 million) to build a new commercial project in Gurugram, covering a 9.28 lakh square feet area. According to the Economic Times Housing Finance Summit, about 3 houses are built per 1,000 people per year compared with the required construction rate of five houses per 1,000 population. The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the country’s urban population.
1.1 Types of Real Estate
2. Overview of Real Estate Business in Malabar District
It is widely acknowledged that NRIs are really the strongest foundation of Kerala’s economy. The human development index (HDI) in terms of health, education and standard of living is always above the national average and even higher than that of most developed countries. Kerala has attained a near total literacy along with negligible dropout rate in primary and secondary education. The infant mortality rate is the lowest in Kerala together with a higher life span. Many a great factor worked behind this exemplary social and economic growth. One of the deciding factors that contributed substantially to the socio-economic progress of Kerala is the remittance of NRIs. A major chunk of NRI population of India is Keralites who contributes around 25% of the economic output of the state thereby participating in the growth process of Kerala economy. The Gulf countries altogether had a Keralites population of more than 2.5 million. In 2015 remittance from NRIs crossed an all-time high of INR 1,00,000 crores. The number of Non-Resident Indians and their quantum of remittances in the Kerala state have been increasing at a remarkable rate. The surveys conducted by the Directorate of Economics and Statistics, Kerala (Pravasi Malayali Census-2013) and the Kerala Migration Survey (KMS-2014) by Prof Zachariah and Prof. Irudaya Rajan (CDS, Kerala) reveals that remittances sent by the NRIs provides exodus support to at least one-sixth of the total population of the Kerala state. Kerala state receiving an alarming quantity of remittance of NRIs, but it is sure that these contributions are not productively channelized by concerned government. The lion’s portion of NRIs remittances are merely goes to discernible consumption like palatial houses, luxury cars, liquor, gold, expensive weddings etc. at the same time, when the state is flush with NRI money, infrastructure projects in the state are in struggle due to lack of funds. The state’s agro-sector is limping, and the manufacturing sector is drooping for want of investment and political favor. All these facts indicates that there is a requirement of structural framework for diverting this “Alibaba’s remittance” to the productive and active investment avenues. In order to get an idea in this behalf, a detailed study of investment behavior of NRIs, the factors influencing such behavior, mediating role of various socio- economic variable is essential. The massive growth in the IT department is making Kerala the perfect place to be. This is why there are many youngsters of India who are moving closer to the south. Kerala’s employment opportunities rate in 2020 was 21%. More and more people are moving to Kerala for a better style of living. Hence, in this scenario of more and more people, the need for houses will be broadening. Since the real estate in Kerala has been developing with more and more builders investing in the land of Kerala cities. One of the major investors of the property in Kerala is international buyers and NRIs. As a society are used to living with other people as a community and when that opportunity arises to have that society with like-minded education, we want to grab that opportunity especially when it is coming with a dream house. The rapid development in the major cities of Kerala has produced a splurge of residential complexes. These affordable housings have led people to have comfortable homes with breathing space and co-working spaces existing at the same time. Also, read meditation space in a small apartment. Kerala land prices are getting lower day by day. The falling rupee gives a boost to India’s property market for Non-Resident Indian investors. It is considered to be a wise decision financially to invest in the houses of Kerala. Places like Kochi is the hub of the IT zone of the south, it also has several shopping centers like Lulu Mall and Oberon Mall which and more such places making it one of the major attractions for tourism. According to the recent statistics, popular localities like Marine Drive, Edappally, Kadavanthra have had a price rise of 71.3%, 225.6%, and 61.9% respectively. Thus, this is the reason why it is the best place to make their business grow, even more, providing a good investment opportunity. These places are attracting more and more investors as well because they provide great returns.
3. Statement of The Problem
A residential community is an organization of all owners of separate units of a residential or business-residential building which provides facility consisting of private residential units that delivers a managed group living environment, including housing and services. Determined real estate projects delivers residential communities, which is getting much popular in Malabar districts of Kerala. There are various dimensions of real estate project management to deliver residential community structures and systems.
It is evident that the real estate project management for building residential communities is inconsistent with various challenges to achieve effective and efficient results. Thus this study aspires to explore the critical factors impacting the real estate projects of residential community with special reference to Malabar districts of Kerala.
4. Objective of The Study
The objectives of the study are as below mentioned:
5. Methodology
| Sampling Method | : | Simple Random Sampling Technique |
| Source of Data Collection | : | Primary and Secondary Data Collection |
| Data Collection Tool | : | Structured Questionnaire |
| Proposed Tools for Data Analysis | : | Structured Questionnaire |
| Henry Garrett Ranking Technique | ||
| Independent sample t –test | ||
| One Way Anova Analysis | ||
| Chi-Square Test | ||
| Correlation Analysis | ||
| One Sample t test | ||
| Multiple Regression Analysis |
6. Study Outcome
The outcomes of this study are below mentioned:
7. Limitations of The Study
The study suffers from the following limitations.
Hence, it may be considered that the generalization of the findings of the study arrived at is subject to the above limitations
An Exploratory Study by Ar. Ahammed Aflah E
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