Preface

• In the real estate industry in India, varied definition for area is used for the purpose of planning, statutory approvals, execution of the project, and sales. It is important to understand what each of the terminologies mean, their applications and how these are inter linked. This handbook explains definition, inter-relation, methodology to measure and statutory documents that verify FAR area, saleable area, built up area, carpet area and unit built-up area, within Bengaluru Metropolitan Region (BMR). The data has been referenced using the applicable IS Codes, prevailing byelaws, and market practice.
• Cost of a project can be categorized into two major heads – land cost and development cost. Land cost is dependent on the prevailing market value and is proportionate to the development potential of the land. Development cost includes construction cost and other costs namely – cost towards development approvals, sales and marketing, administrative expenses, consultant fees, finance cost, overheads. The handbook provides detailed break-up of development cost and the cashflow workings for residential developments. The development cost has been further compiled based on the development size, building height and project specifications. The report also captures variation in cost on account of technology used in the construction and procurement model engaged for the construction.
• Various parameters applicable to arrive at the project profitability have been benchmarked for an apartment, villa, or a row-house, and plotted development. Project profitability has been computed based on the estimated equity infusion, gross margin, and Return on Equity (ROE) for two scenarios – self-development or Joint Development Agreement (JDA)

This handbook covers the following:

• Definition of FAR area, saleable area, built-up area, carpet area, and RERA carpet area
• Inter-relation between FAR area, saleable area, and built-up area for residential and a commercial development and method to measure these
• Development cost for an apartment basis project specifications - premium, luxury, mid-segment, and budget segment. Further, the cost has been computed for apartment up to 15 M height, 15 - 45 M and above 45 M height
• Profitability and ROE computation for an apartment, villa, row-house, and plotted development developments

This handbook is prepared for benchmarking purpose and the information provided has been referenced using IS Codes (wherever applicable), prevalent market practice and our interactions with various stakeholders – developers, architects, property owners, investors, liaison personnel and construction or project managers, along with our own proprietary research.