As soon as I sat down to pen the
first post for RealT Horizon, I was
bombarded with several areas of concern which need to be addressed here. To start
with, I decided to go with the basics. So let’s look at the overview of the
Value Chain of this sector.
Real Estate Value Chain typically comprises of 5 broad levels:
Figure 1: Broad levels of Real
Estate Value Chain
These 5 steps more-or-less comprise
all the possible activities that one can associate with the development and transaction
of a property. Of course some of the blocks shown above do interchange their positions
sometimes, depending on the usage category. I will try to touch on that aspect
later, or in the following posts. But before that, the usage categories:
Whether the 5 levels shown in
figure 1 will remain intact or some of them will get merged or eliminated
depends totally on the 3 usage categories. If, for instance, the category is ‘Residential’ and that too for single
housing, probably the ‘Transactions’
level can be skipped.
Let me dig a little deeper in the
value chain. If expanded, the chain will take the following shape:
Figure 2: Detailed Generic Real
Estate Value Chain
As can be seen in the above
figure, each level can be further fragmented into several components. This is
the multiplicity that results in all the complexities that this sector is
facing currently in India and probably in various other developing nations.
This sector needs treatment, and
it will be possible only if there is a subtle understanding of its basics ingrained in all the investors. I will cover all the components individually in my future
posts. So stay tuned and pour in your comments & suggestions to help me
analyze RealT Sector more effectively!
Forward detailed links to each level:
Forward detailed links to each level:
- Ownership - Holding a RealT
- Financing - Funding a RealT
- Financing the RealT by Equity
- Construction of a RealT Project
- Transacting & Using your RealT
- - - - - Thanks for reading J - - - - -
