Real estate and housing is increasingly emerging as a sector of national importance. Besides entities having core real estate experience, other entities / corporates having diverse/related businesses have also forayed into real estate development either by themselves or through joint ventures. To an extent this has increased the number of corporate developers, which has been a positive factor for the industry. In this context the joint-sector experience in Kolkata deserves special mention. Also, some of the real estate developers operate through a number of group companies that often involve a host of intercorporate transactions. While buying a property an understanding of the group dynamics as well as strengths and weaknesses of the group business that may have an impact on the project need to be assessed. Expert advise in this matter may be helpful.

Adequate financial strength of the developer is crucial for completing the project within the contractual schedule. While the industry is facing deep Real Estate Boom in India , the trend has been to finance major share of the funding through customer advances on account of easy availability of housing loans, the developer’s ability to bridge cash flow deficits during development is critical for uninterrupted project development and timely completion. The funding support that the developer can provide to a project is a function of its financial strength and ability to raise finances from the market.

Repayment capability of the developer for the loans raised for funding the project is also equally important for smooth delivery to the customers. In addition to the financial strength of the developer, the pattern of utilisation of the booking proceeds / loans raised by a developer for a particular project also indicate the extent of financial discipline it maintains. The practice of channelising the funds raised through booking of a particular project for development of that project only reflects good financial discipline. An opinion on the financial capability and discipline of the developer would support the buyer’s decision-making process. While price of property has traditionally been the key factor affecting the purchase decision, an objective analysis based on these 10 factors vis-à-vis the price will indicate the real value to the buyer in the long term.