Projects are nothing but a group housing enclaves developed to leverage place & cost to build multiple homes. They can be of different types of statutory approvals, funding, projects, ratings, bank approvals etc for specific types of projects.
A. Different types of projects
Open Land/Plotted/Villa developments
These can be either one single development or phase wise developments extending into a township. They can be a pure empty plot or with construction of an independent home (Villa)
Example:
Row Houses/Villaments
These are basically attached homes constructed from ground up with common walls.
Builder floor apartments
These are blocks of residential units built in a combination of 3 or 4 plots, usually less than 5000 sq. ft. with a maximum of 3 to 4 floors & less than 20 units. These homes will have very basic amenities.
Example:
Multi-storey apartments
– Usually large projects built on large parcel of land with multiple floors, usually above 4 and with varied amenities.
High rise apartments
– Usually signature project offered with more than 20 floors in one or two towers options with ultra-luxury amenities targeted at luxury segment.
B. Development Authorities
This is purely location-based. Projects located in a certain location will attract the concerned development authority. For ex., all projects located mainly in central areas of Bengaluru city are approved by the BDA (Bengaluru Development Authority). Projects falling outside BDA limits, but in urban Bengaluru are approved by BBMP (Bengaluru Mahanagara Palike). Similarly, all projects falling under rural Bengaluru are approved by BMRDA (Bengaluru Metropolitan Rural Development Authority) BMRDA consists of around 7 town planning authorities.
Under a development authority, the development of residential areas, commercial areas, civic areas as well as green areas are marked under different zoning. In BDA for example, residential activities are permitted under the yellow or red zone as per the MASTER PLAN also called as CDP (Comprehensive Development Plan) of the urban body.
Based on local development authorities, the quantum of development of a particular land area is defined in their bylaws in respect of what is known as Floor Area Ratio (FAR) or Floor Space Index (FSI)
FSI refers to the maximum permitted area on a piece of land for construction. The FSI is the ratio of floor area covered to the available land area.
FAR and FSI are two different ways to indicate the same quantifiable characteristic, i.e., the area’s density. However, FAR is always expressed with the help of a decimal value, while FSI is a per cent value.
For example – FAR of 1.2 denotes that the FSI of that particular land is 120%.
- FAR Calculation
Let’s assume a builder has 10000 sq. ft. land to be developed & if the local/development authority bylaws permit a FAR of 2.5, then the total built-up area the builder can construct is 2.5 x 10000 = 25000 sq. ft.
In this case, the FSI becomes 250%
In the above similar scenario, one can assume the builder can build around 25 apartments, each measuring a salable area of 1000 sq. ft.
C. Statutory Approvals for the Project
A typical multi-storied or high-rise project needs the following approvals from concerned departments. This list is not conclusive & can vary depending upon each project & statutory laws applicable to that project.
D. Project Funding
Most of the builder floor apartments are funded by the builder from his internal accruals or with an individual or group of HNI investors pitching in.
In the modern era, most of the medium & large scale projects are executed under a special purpose vehicle in which the builder and an institutional investment partner bring in the equity to develop & monetize the project. These institutional investors can be a Investment fund, a Bank, a PE investors, an NBFC, a family office etc.
You need to check the project advertisement for remarks like ‘Project financed by’, ‘Investment Partner’ etc.
E. Project approvals by Banks for home loans
Most of the projects, especially projects approved by RERA, are scrutinized legally & a single approval is provided to a project legal standing viz. the land title, construction permission, construction plans, budgeted revenues etc. for enabling individual buyers avoid legal scrutiny every time a new buyer wants to avail the loan. Sample is as below
F. Independent bodies ratings
– CRISIL Real Estate Star Grading, IGBC etc.
There are certain govt. as well as independent agencies that rank & certify a particular project based on varied parameters like the construction quality, environment impacts, green concepts, financial viability, builder’s financial strength etc.
Examples are CRISIL Real Estate Star Grading, IGBC home ratings, CIBIL company ratings, etc. You can visit the below links to know more about these ratings.
The ratings give a developer the edge to promote them as a feasible project backed by sound financials & ability to deliver the project as per specifications mentioned in their submissions to RERA.
https://igbc.in/igbc/redirectHtml.htm?redVal=showGreenNewBuildingsnosign