1. Institutionalizing best practices and
professionalism in Indian Real Estate
Sachin Sandhir
Managing Director and Country Head
RICS India
2. Why change?
“It is not the strongest of the species that survives, nor
the most intelligent that survives. It is the one [most
responsive] to change.”
Charles Darwin
3. We need to realize and appreciate that the world of
property is changing …it is becoming
More global
More efficient
More advanced
4. From traditional mud and bricks…to light
transmitting concrete that helps save energy!
5. From traditional apartments…
...to all kinds of portable modular units
1 2
High density trailer
4 parks in the sky
3
6. 2 Smart
1 Augmented
Reality for Windows that
Real Estate generate
electricity
You can select
settings from bright
to dark and the
windows will actually
generate electricity
from sunlight
Imagine pointing
your mobile
phone camera at 3 Self-Healing
a property for sale
and being able to
Concrete for
call up all the Safer, More
relevant listing Durable
information Infrastructure
Now possible! A concrete material that can heal itself
when it cracks. When it's strained, the
Users can point a Layar-enabled cellphone concrete bends and many micro-cracks
camera at any Parisian building to show the are formed instead of one large crack that
estimated financial value of that property causes it to fail.
7. Masdar City – the world’s first zero carbon city
A £14bn zero-carbon,
zero-waste city.
Covering 6km sq, it will
rely entirely on
renewable energies.
Home to 50,000
people, 1,500
businesses, 40,000
First section of Masdar City has been completed daily commuters
• Meticulously planned to be highly functional and low consumption
• Narrow streets to increase shading and tall wind towers that funnel air - will make the
city feel 20ºC cooler and halve its energy needs
• 90% of electricity from photovoltaics
• Other renewable sources of power – geothermal, hydrogen & wind
• 80% of water will be recycled
• An underground network – for computer-driven electric cars
8. Shreepati Arcade
2002
153 m
From tallest building of 150 m height in 2002…
….to tallest tower of 450 m height by 2014
Under construction
Completed Proposed
Planet Godrej
2004-2006
181 m
Palais Royale
2005-2011 est.
320 metres
The Imperial
skyscrapers
2005-2010
210 m World One
2014 est.
442 metres
Rising aspiration of putting India on the global world map
9. Beyond imagination…
Sky-Terra skyscrapers – a network of interconnected towers
This envisioned skyscraper superstructure provides a new city layer – covered in public
parks, amphitheaters, fields, and public pools and bathhouses
10. Looking within - India Real Estate - today
• Poor image
• Low consumer confidence
• Increasing skepticism
• Tightening liquidity
• Delayed project delivery
• Increasing input costs
• Increasing shortage of labour
• Import of skills for sophisticated projects
What solutions have the potential of changing
all this? What will drive change and help us
achieve our ambitions?
11. Possible solutions How will we achieve all this?
• Winning consumer confidence • Many things..
– Sourcing capital
• Enhancing professional skills for
– Innovative & efficient
better delivery
construction techniques
• Managing and reducing project costs – Use of technology
• Completing projects on time
• Things that I will focus on today
• Winning trust of banks and investors – Higher standards of
professional practice
• Thinking long term investments – Specialized skill-sets and
instead rather than short term profit professionals
• Rising to be a national or
international player of repute
12. What kind of standards – some examples
• Standards that will increase confidence in consumers (and lenders)
• Brokerage standards
• Standards in area measurement
• Complaint redressal – eg Ombudsman service in UK
• Developer’s service standards – eg consumer code for home builders
• Transparency and Information – eg Home buyer report
• Standards that will win investor confidence & improve functioning of
the property market
• Property valuation
• Construction cost estimation – eg NRM,BCIS
• Sustainable development throughout property lifecycle, SKA ratings
14. What will help increase consumer confidence?
The basic ingredients Additional measures
• Quality product (property)
and price
• Reputation of the
developer
• Good home buying
experience
• A professional broker
• Accurate and complete
information
15. Good home buying experience
supported by real estate agency and brokerage standards
RICS Blue Book RICS Global
Residential Standards for
Applicable in UK estate agency Real Estate
standards Applicable in India
Brokerage
Detailed practice Focus on core
standards with principles & good
legislative practice across the
requirements world
• Follows the workflow of an estate agent • Comprises high level principles - a
and set out mandatory requirements of culture of fairness and transparency in
the relevant legislation (Estate Agents all agent activities
Act 1979, the Property Misdescriptions • Agents, and companies providing
Act 1991) agency services, must approach all their
• Provides guidance to agents on good activities in accordance with the
practice overarching principles.
16. Good home buying experience
supported by complaints redressal mechanism
Example – Ombudsman Schemes for Estate Agents in UK
• Consumers, Estate Agents and Redress Act 2007 (CEARA), makes it compulsory for
residential estate agents and property developers to belong to a complaint redress
scheme approved by the Office of Fair Trading
• Surveyors Ombudsman Service (SOS) – approved by OFT, set up
by RICS to provide a dispute resolution service to its members
– Deals with complaints made against RICS members as well as non members
– Ombudsman provides independent redress if the complaint cannot be resolved between the
firm and the consumer
– Any failure or refusal to implement the remedies is reported to RICS, which may bring
disciplinary action on the member or firm in question
– Service is run by an independent Council that appoints ombudsman and reviews
performance
A similar self regulatory model may be considered for
brokers and development firms in India…
17. Accurate and complete information
supported by area measurement standards
Various ambiguous definitions RICS Code of Measuring Practice
open to subjectivity and • Clear explanation
interpretations • Shows areas included/excluded
• Practical advice for applying
Carpet Area: This is the area of the apartment that does not
include the area of the walls i.e. the area of the apartment that • Full illustration examples
a carpet can cover.
Built-Up Area: This is the area of the apartment that includes
the area covered by the walls.
Super Built-Up Area: This includes the built-up areas such
as the lobby, lifts, stairs etc. This term is therefore only
applicable for multi-dwelling units, such as flat complexes.
RICS is assisting Dubai’s Real Estate
Regulatory Authority with a Code of
Measuring Practice so as to streamline the Used for accuracy in multiple uses
process within Dubai.
• Building cost estimation
An MoU has also been signed aimed at • Estate agency
improving the quality of real estate • Valuation
professionals and enhancing the • Property management
standards of regulation. • Town planning
18. Standards that will win investor
confidence and improve functioning
of the property market
19. What will ensure timely delivery of high quality
projects and within costs?
Skilled professionals!
• Experts in different areas…evaluating
economic feasibility of development
projects, planning, design, execution,
cost management, project management,
monitoring quality
• Qualified for these specialized jobs
• Constantly learning from experiences
and advancements in their respective
It is the skills and expertise of
fields
professionals that helps realize the
• Adhere to good practice guidelines – developer’s vision in any project
precision and performance in their work
20. Developer’s professional team
all specialists in different areas
• + development surveyor; • + mechanical, electrical and public
• + project management surveyor; health services engineer;
• + valuation surveyor; • + structural engineer;
• + planning surveyor/consultant; • + environmental consultants (including
• + accountants; specialists in acoustics, traffic
• • management and planning);
+ legal and tax advisers;
• • + information technology consultants;
+ land agents;
• • + archaeologist;
+ architect;
• • + marketing consultants;
+ landscape architect;
• • + public relations consultants;
+ construction (design and
management) (CDM) co-ordinator; • + insurance consultants; and
• + interior designers; • + facilities management.
• + quantity surveyor;
21. Property valuation
underpinned by uniform RICS Red Book:
Valuation
global standards Standards
Valuation for development appraisal and feasibility
• Property valuation is required for development • Compliant with International Valuation
appraisals (Gross Development Value) to test Standards (IVS)
the viability of proposed projects • In harmony with national legislation
• RICS ethical requirements
• Project success depends on accuracy
• Mandatory rules and best practice
• Essential for lenders & investor confidence guidance for RICS members
• Voluntarily adopted by non-members
Property valuation also required for:
• Acquiring public land or disposing private land
• Secured bank lending
• Internal accounting • Large valuation professional firms
• Capital gains/ wealth tax, etc undertake valuations in accordance
Huge amount of transaction volumes are with the IVS compliant Red Book
underpinned by valuations • Is recognized by international clients
Trust and Confidence in and investors – considered the gold
standard – instills trust and confidence
valuation is essential…
22. Example 2 - Project cost and risk management
underpinned by quantity surveyors and supporting tools
RICS New Rules of Measurement Standards
• Used by most global cost consultants
• Deal with ‘total’ costs of delivering a building project; ‘Not’ merely
construction costs
• Define the information required by cost manager to prepare order of
cost estimates and cost plans.
• Divide cost estimates into ‘five’ principal cost estimates:
1. Works estimate
2. Project/ design team fees estimate
3. Other development/ project costs estimate
4. Risk allowances estimate and
5. Inflation estimate
• Step by step guidance on how to calculate each facet
Use of the rules to frame cost estimates will give greater
confidence to banks and other lenders that requests for
funds have been properly considered
23. Example 2 - Project cost management
supported by Building Cost Estimation Service (BCIS)
• Leading provider of cost information to the Data used by consultants,
construction industry - a technology clients and contractors
platform that enables the following: to produce
• Structured database environment to – specific estimates for
maintain standardised Schedules of Rates appraisals
– business case
• Construction price book customised for
development,
construction work
– budget and
• Analyse e-procurement system data to benchmark projects
provide: cost anaylsis creation from
tenders; benchmarking; regional indices; – early cost advice, cost
economic indices; inflation indices; planning
analysis of rate data and; key – Benchmarking, whole
performance indicators (KPIs) relating to life costing,
cost and programme, etc. – value engineering,
• Statistics based upon tender returns from – facilities and
suppliers maintenance
budgeting
24. Example 3 – Energy efficient fit-outs in buildings
underpinned by facility managers, energy managers and
green rating tools
Ska Rating rewards organisations for green fit-outs
• Ska is a standard method for environmental impact
assessment and certification of fit-out, refurbishment and
retrofit projects in non-domestic buildings
• Anybody interested in fitting out an office building in a more
environmentally sustainable way can use the method to:
– Carry out a free, informal self assessment of the
environmental performance of their fit-out
– Commission a quality assured assessment and
certificate from an RICS accredited Ska assessor Some of the global
– Obtain clear guidance on good practice in fit-out and organisations who are
how to implement it using Ska: GE,
– Benchmark the performance of fit outs against each Westpac, Bank of
other and the rest of the industry. China, Gazprom, WPP,
PwC, Macquarie, RFIB,
Morgan Stanley
25.
26. Sustainable property
development And many other best
practices and guidance
that helps professionals
deliver better
Construction
procurement
27. Valuing
change….to
water..to trees
apart from
properties
Land
surveying
and GIS
Facilities
management
28. Where does India stand?
• Do we have the necessary skilled professionals?
– No, huge shortage of skilled manpower across levels
– RICS research to be released shortly will highlight the magnitude
of this problem and recommend way forward
• Do we have any institutional set up for knowledge transfer,
compiling and sharing best practice?
– No, only few individual efforts by forward looking firms
– Institutional efforts need to be strengthened
• Endorsed by Government and regulators
• Supported and adopted by industry
29. Last words…
Higher standards of Encourage your staff to
professional practice adopt home grown as well
as international best
practices
Help institutionalize good
practice in Indian industry
Specialized property Invest in learning and
professionals development of your staff
Help in building
specialized skills within
the country
Hinweis der Redaktion
To survive in a fast changing world, it is critical to respond to changes that surround us
Showcased in World Expo 2010 in Shanghai - An Italian company has developed a new type of cement which (by bonding special resins into a newly conceived mix) allows the manufacturing of solid insulated yet light-transmitting construction panels. Thanks to its capacity to transport light, the “transparent cement” makes it possible to save electricity for lighting the inside of buildings thus contributing to energy saving.
1. Recycled shipping containers Recycled shipping containers have provided a starting point for many modular accommodation designers, in the UK and abroad. Eco Modular Living Ltd provide a two storey mid terraced, two bed, one bathroom home, made using a containerised housing / building system which are factory fitted-out and delivered to site. They are designed for small plots of 1000m²–2000m², over levels of four or five storey high to provide the intercommunicating complexes of 100 to 250 pods, with the further options to add on more accommodation when needed. Generally used for accommodation for students, budget hotels and temporary housing 2. Spacebox accommodation in the Netherlands Spacebox is a lightweight modular building system from The Netherlands for semi-permanent and permanent solutions. Each unit is built up with five composite panels, consisting of a fire resistant material, a Resol® foam core and a very smooth polyester exterior finish. The units can be connected horizontally or vertically in any desired combination and it is possible to produce and erect up to 10 units per day. Life expectation of units is 30–60 years, depending on specification. Gainsgrove Ltd owns the rights for Spacebox in the UK and Ireland. Currently, approximately 1000 Spacebox units have been placed at several locations in The Netherlands. 3. Floating Homes – Germany The future may also not be restricted to homes on the land. Homes and buildings that float on water are already available in Germany and other countries, and can form a stylish and efficient way to live. AquaDomi is similar in principle, but is more of a houseboat of the future, based on flexible modules which allow you to create your home exactly the way you want it. 4. High density trailer parks in the sky Brazilian architect Felipe Campolina is proposing high-density trailer parks in the sky: steel-framed skyscrapers that look a bit like huge CD racks, into which modular homes can be slotted as required. The homes would be built from standard 1.2m x 2.4m oriented strand board panels and could telescope in and out for transportation or installation. Each one-bedroom unit would have thermo-acoustic insulation, water recycling, a combined heat-and-power unit, and tempered glass windows.
1. Augmented Reality for Real Estate Imagine pointing your mobile phone camera at a property for sale and being able to call up all the relevant listing information. This is one of the exciting possibilities offered by augmented reality technology. The world’s first augmented reality browser, Layar, was unveiled last summer and this technology is already being used to build real estate apps Users can point a Layar-enabled cellphone camera at any Parisian building to show the estimated financial value of that property, with prices displayed per square metre in euros. The idea behind this free application is to allow sellers to safely price their property and identify the best brokers to carry out the sale. http://www.remonline.com/home/?p=4668 2. Smart Windows that generate electricity A company called Peer +, has developed a new type of energy-generating smart glass that can change its opacity to filter sunlight, significantly reducing the energy costs of solar over-exposure. You can select settings from bright to dark to private and the windows will actually generate electricity from the blocked sunlight. Pretty nifty! 3. Self-Healing Concrete for Safer, More Durable Infrastructure Under development for the past 15 years, a concrete material has been developed at the University of Michigan that can heal itself when it cracks. No human intervention is necessary—just water and carbon dioxide More flexible than traditional concrete, the bendable engineered cement composite (ECC) acts more like metal than glass. Traditional concrete is considered a ceramic. Brittle and rigid, it can suffer catastrophic failure when strained in an earthquake or by routine overuse. But flexible ECC bends without breaking. This new substance could make infrastructure safer and more durable. By reversing the typical deterioration process, the concrete could reduce the cost and environmental impacts of making new structures http://www.sciencedaily.com/releases/2009/04/090422175336.htm
Announced as ‘the world’s first zero-carbon city’ in 2007, many believed Foster + Partners’ 6km sq desert development would be a sustainable dream too far. But the first section of Masdar City (below) has now been completed – a 15,000m sq area surrounding a sustainability research institute – and the first residents are moving in. Everything about Masdar has been meticulously planned to be highly functional and low consumption . By incorporating ideas such as narrow streets to increase shading and tall wind towers that funnel air, the project team aims to make the city feel 20ºC cooler and halve its energy needs. Around 90% of Masdar’s electricity will be from photovoltaics – a 200,000m sq solar farm will be built just outside the city – with the rest from incinerating waste. But a zero-carbon city wouldn’t live up to its name without getting rid of the gas-guzzling car. So as well as being closed to combustion-engine vehicles, an underground network is being built where residents will be able to use hundreds of pod-shaped, computer-driven electric cars .
The tallest structure completed back in 2002 was all of 153 metres..but the ambition of building taller in India has been rising as witnessed by 201 mtr tall imperial skyscrapers in Mumbai, to the 320 m Palais Royale under construction and the proposed 442 m tall world one tower
Even as we try advance to international standards (eg tall buildings), the bar in global property is being raised higher San Francisco-based designer Joanna Borek-Clement has envisioned these eye-popping Sky-Terra skyscrapers – not just a single building, but a network of interconnected towers that are inspired by the shape of neuron cells. This skyscraper superstructure provides a new city layer – one covered in public parks, amphitheaters, fields, and public pools and bathhouses http://inhabitat.com/sky-terra-cellular-skyscrapers-provide-public-space/
To increase consumer confidence it is important that agents work to the highest standards, and that consumers understand not only what a good agent does, but also the scope of the services available An estate agency guide for realtors and consumers to raise professional service standards and improve consumer experience in home buying and selling. RICS members are required to provide prospective clients with a copy of the Blue Book most complaints about estate agents arise from a lack of mutual understanding, specificity and even transparency in the relationship between the consumer and the realtor further concur with his suggestion to make it mandatory for the estate agent to explain the transaction process, the scope of estate agency services, commission payable and thereafter secure the consumer's written agreement. This will surely reduce the number of complaints and disputes between consumers and estate agents acting for them. Royal Institution of Chartered Surveyors (RICS) has published the Blue Book, which is essentially an estate agency guide for realtors and consumers to raise professional service standards and improve consumer experience in home buying and selling. Estate agents who are members of RICS are required to provide prospective clients with a copy of the Blue Book which, among other things, details the sale and purchase process as well as the role of the estate agent Prospective sellers and buyers familiarise themselves with the Blue Book so the duties of the agent and expectations of the consumer are adequately matched. Singapore realtors should ensure that consumers who appoint them for their services know what the transaction entails and precise service offerings. Then there will be true meeting of minds, with satisfied consumers and agents paid promptly. The Singapore Accredited Estate Agencies' downloadable Seller's and Buyer's Guides on its website can be useful resources in this.
Davis langdon - Area measurements are measured in accordance with the RICS Code of Measuring Practice
It’s the typical scenario again. The project that started with such high expectations has gradually slipped into the same category as the others—mediocre at best. The team begins second-guessing. Was this the right project to pursue in the first place? Why didn’t we see the unexpected problems earlier? Could we have avoided the problems if we focused on them earlier? Could we have avoided investing so much time and money on this project? What other projects did we pass over for this—and was one of them the real gem? How can we have failed when we overcame the most challenging hurdles with flying colors did we focus on the wrong problems? Management begins second-guessing as well. Where did the project value go? Were the initial projections merely hype? Was there real potential value that managed to slip away? Everybody wants to know why there are so many questions—but so few answers.
Professional valuations are vital to a healthy property market and a stable economy, forming the basis of performance analysis, financing decisions, transactional or development advice, dispute resolution, taxation and various statutory applications. Robust practice standards form the basis of high quality valuations ---- The Residual method of property appraisal (or Hypothetical Development Method) is used to help in assessing whether a property development project is financially viable or not. If a property has development value (it can also be known as ‘latent value’), it means that its expected future value after works exceeds the expenditure. The first value that must be established is the Gross Development Value (GDV) . This is the capital value that the completed property is expected to be worth on the open market when sold to a willing purchaser.
In addition, the rules consider the total costs of construction (see Figure 1) providing guidance on identifying and managing non-construction-related costs such as consultants’ fees and other development and project costs (e.g. the cost of acquiring land and property, fees and charges, planning contributions, decanting and relocation costs, marketing costs and the cost of finance). Cost management: Promotes budget setting using a cost limit, which includes allowances for risk - its purpose to provide a realistic cost limit for project cost control within which a construction project can proceed without further resource and time intensive authorisation requirements; Help establish more effective cost control systems; Provide essential guidance on dealing with non-construction related costs such as consultants ’ fees and other development and project costs (the cost of acquiring land and property, fees and charges, planning contributions, decanting and relocation costs, marketing costs and the cost of finance); and Provide advice on how to deal with vat, taxation allowances, taxation relief and grants. Accuracy of estimates: Define the information required by cost manager to produce cost estimates and cost plans at each formal estimating stage; and Help improve the accuracy of cost estimates and cost plans. Innovative: Deal with the total cost of delivering a building project , not simply construction costs (total cost management). Value management and value for money: Perform an essential part of a value for money framework - particularly for central government, local government, and other public funded organisations that have an obligation to demonstrate that value for money has been achieved in construction projects ; Help underpin a business case for a building project; Quantification of replacement components and building maintenance items for the purpose of whole life cycle/value assessments; Aid value management and value engineering processes ; Afford greater transparency to cost estimates and cost plans; Aid actual cost scrutiny ; and Encourage clear and effective communication between the employer and project team members.
![Why change?
“It is not the strongest of the species that survives, nor
the most intelligent that survives. It is the one [most
responsive] to change.”
Charles Darwin](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)