Pradip Chopra feels there is a lot of scope for the real estate professional in this era of property boom. FIFTY-TWO per cent of Indias population is below 25 years of age. It therefore does not require an economist to predict that there will be an increased demand of houses shortly. The population at present faces an acute shortage of housing. The Ninth Five-Year Plan estimates the urban housing shortage at 16.75 million and the rural housing shortage at16.25 million.
The total investment required for covering this shortage and for the urban infrastructure investment would roughly be Rs 4,000 billion. An investment of this magnitude would demand the best of professional talent in all areas of the business strategising, constructing, project management, marketing and managing. An increase in investment in housing will most certainly be accompanied by a demand for other real estate property such as commercial, industrial, retail and leisure centers. With the rapid growth in urbanization in present times, the Indian government has increased the focus on real estate and housing by policy initiatives. Large investments are likely to flow into the sector over the coming decades in consonance with the governments policy of improving housing and infrastructure. The pace of real estate development is much faster than it was a decade ago. The vast property market in India has witnessed a sea change. This industry is all set to usher in a new era, thanks to foreign direct investment in real estate development. In addition, real estate venture funds are now flocking to India, where the demand for commercial and residential space has been ballooning since April 2004, after the Securities and Exchange Board of India allowed venture funds to invest in local real estate.
Tishman Speyer Properties, which owns the New York Times building and the Rockefeller Centre in New York, formed a joint venture in April last year with the private equity arm of ICICI bank to fund new commercial ventures. The $250-million based Maia started its operation in May last year while the UK- based Dawney Day entered the market in April. Singapores Ascendas Fund, which has developed commercial space in Bangalore and Hyderabad, is now ready to develop spaces in Pune and Kolkata. The list is long. In a recent report, Price Waterhouse Coopers predicted that a venture capital of between seven and eight billion dollars is expected flow into Indian real estate over the next couple of years.
Why real estate education? The mega-crore investments in real estate development will need large numbers of professionals trained in various aspects of this field. It is expected that there will be a huge demand for real estate professionals who are able to coordinate and create a system for real estate business that takes into account all aspects of property investment development, legal aspects, finance, marketing, project and property management. Unfortunately, there are hardly any trained professionals in the field. The working of foreign investors is based on projected time frames. When they start development programmes, there is a stipulated time frame to complete the project and market it in a given time. This new aspect enhances the demand for property experts.
So the need of the hour is to promote such institutes that cater to this industry. Industry leaders, trade associations and the government should create institutions that teach and train candidates for the purpose. Real estate is not only a fast growing industry but also an area where there is much competition. Indian firms should, therefore, ideally have ingeniously trained manpower to handle emerging areas that require specialized knowledge expertly. There can be much scope for employment as real estate portfolio managers, researchers, retail and commercial property specialists, project managers, insurance professionals with real estate domain knowledge, property managers, international brokerage and strategists in real estate. All these personnel would primarily require managerial competencies with a comprehensive understanding of business environment variables like the economic, social, fiscal, political and technological framework that the real estate sector operates in.
According to the Indian Infrastructure Report (1996), the trained manpower requirement of construction and related industries is nearly three million people, of which only five per cent is currently fulfilled. There is, therefore, much opportunity of employment of qualified human resources trained not only in operational skills but also capable of providing managerial thought and strategic direction to firms in India. Real estate education scenario Historically, real estate education has been non-existent in the Indian context. Even the concept of real estate is a formal one and has been in parlance only since the last decade. Real estate education is yet to find popularity in the curricula of educational institutions. In India, anybody desirous of pursuing this subject academically opts to study civil/construction engineering, architecture, surveying, law and so on in order to adequately cover the core aspects of the subject.
It is worth noting that real estate education is popular and much in demand in the developed countries like the USA, UK, Australia, Singapore and many other European nations. Before making a study of why real estate education had been so popular in reputed institutes worldwide, it would be prudent to define the term. Real estate is defined as the land on, below and above the surface of the earth, and all resources attached to them, natural (trees, minerals) and artificial (buildings, landscapes), residential, commercial and industrial buildings whether owned, rented or leased are different forms of real estate. Real estate is one of the investment options that an individual or institution can make. However, unlike stocks and fixed deposits, this form of property has the maximum consumption utility attached to it. In the USA, UK, Europe and Australia there are a number of institutes that conducting specialized courses in real estate.
In fact the canvas is vast and the scope unlimited for professionals trained in real estate management, marketing and finance. In India, the Heritage Institute of Technology along with CREDAI has recently started a real estate management course. It is a six-month diploma course covering all aspects of real estate management, including project management, finance, real estate marketing, legal issues pertaining to properties, Income- tax issues and all other aspects pertinent to the field. The syllabus of the course is designed to make participants become expert real estate professionals or even become self-employed in the field of real estate promotion and broking. For successful graduates in the discipline, the proverbial sky is the limit.