Special Investment Regions – New Real Estate Investment Opportunities

Every real estate investor keeps on looking for new opportunities for investments, but often ignores the ones standing right in the front. This post is just to throw some light on one such opportunity.

What are Special Investment Regions?

Most of us know about SEZs and their recent outburst in India, but very few of us are aware of the upcoming prospects being offered by the new development plans of Government of India – Special Investment Regions (SIRs). These are meant to be gigantic projects which spans to the tune of several thousand hectares. Just to show it in a hierarchy:

As is quite evident from the above categorization, the size and extent of SIRs is unmatched. The potential for infrastructure and real estate development in these regions can only be judged by the example of upcoming project - Dholera SIR in Gujarat, India.

Dholera SIR – Quick Insights 

• Total Area : 800 sq. kms: a green field location
• Developable Area: 500 sq. kms.
• World-class infrastructure & connectivity: within & outside
• Central spine express way & Metro Rail to link the SIR with mega cities
• Airport & Sea Port in the vicinity
• Proximity to mega cities: Ahmedabad, Bhavnagar, Vadodara
• Capable to cater to both International & Domestic Market
• Close to Gujarat International Finance TechCity (GIFT)
• Logistic support of the Dedicated Freight Corridor (DMIC)
• Benefits of the high impact Delhi Mumbai Industrial Corridor (DMIC) 

Dholera SIR is a project planned along the Delhi-Mumbai Dedicated Freight Corridor:

As shown in the above map, Dedicated Freight Corridor (DFC) spans through 6 states with a length of 1483 kms:

• Uttar Pradesh-22 km (1.5%)
• NCR of Delhi- 22 km (1.5%)
• Haryana- 148 km (10%)
• Rajasthan- 578 km (39%)
• Gujarat- 565 km (38%)
• Maharashtra- 148 km (10%)

This scale of the DFC offers a lot of industrial, commercial and subsequently residential development along its length. In order to make full use of this opportunity, Gujarat government has initiated a mega SIR project along the DFC – Dholera SIR.

This visionary approach will offer a lot of real estate development opportunities in this region. Some of the planned RealT & infrastructure developments include:

The above representation indicates just few of many possible developments that are going to take place with the upcoming SIRs in India. These are mega projects that require decades to complete and fully implement, hence giving investors ample horizon for investment. Dholera SIR, for instance is planned to roll out in 3 phases:

Closing Remarks: With the announcement of Special Investment Regions, there has been a huge anticipation of investment opportunities among investors. The other upcoming SIRs include the one between Mumbai-Bangalore DFC. RealT Horizon is keeping an eye on these developments, are you??

---- Thanks for reading. Your comments will help us improve our analysis. J ----

Transacting & Using your Real Estate Asset

After a project is constructed, it is time for actual transactions and possessions to happen. There are various intricacies involved in these seemingly simple stages. Let's see how.

Transactions

The sell and purchase transactions in the real estate sector follow several innovative methods. More often than not, builders initiates the transaction process much before the actual project is constructed - as soon as from the concept stage. Just to have a better picture of this look at the following chart:

The above chart is a snapshot of one of the prevalent schemes that builders follow for selling off the constructed property. This process of interval payments ensures that ready supply of funds is available with the builder which can be used to service the operational costs of the project.

Usually the process of transactions is carried out by:

1. Brokers
2. In-house marketing
3. Word of mouth publicity

Out of the above 3 channels, brokers are the most prevalent and considered-effective means of carrying out transactions. In Indian scenario, especially, brokers form an integral part of the real estate value chain. Although they are the most convenient means of sell/purchase of properties but having brokers in the transaction process gives rise to a plethora of additional costs for both the parties - buyers and the sellers.

Of course having brokers for this process reduces the time-to-possession and do not divert builder's attention from his main job, but if some other effective channel can be devised for this process, we are sure that a lot of costs can be saved in every project - nearly to the tune of approximately 5-10%!

Usage

As already discussed by us in our first post - Understanding the reality in RealT – Generic Real Estate Value Chain, usage can be divided into following 3 categories, depending on the nature of use.

There are different norms and procedures for acquiring the possession of all the above mentioned categories, but more or less the underlying process is the same.

Ending Notes: With this post, we have completed an eagle-eye view of all the phases of value chain which are involved in any, literally ANY, real estate project. We will now cover various topics which we think will be benefitial for a first-time investor in understanding how one can make money here ;-)

----- Till then, Keep reading RealT Horizon :-) -----