Investment in housing and property is beset by many uncertainties in the prevailing real estate scenario. The investment and transaction decisions in this sector are characterized by uncertainties due to a low level of information.
NAREDCO’s mission is to improve the confidence level of both investors and consumers by bringing in fair practices through self-regulation. The rating of Real Estate developer and project would enhance the comfort levels of the consumers while making investment decisions, and also help developers to mobilize funds for their projects. A number of rating mechanisms are available in the market, but their acceptance and adherence by the consumers and developers are hindering the progress of the real estate industry. The rating parameters developed by NAREDCO on the basis of the Haryana Model need to be widely discussed and debated to bring quality products to the market, which can qualify for the topmost grades. A unique aspect of NAREDCO rating is the introduction of real estate industry experts in the process of rating prior to assigning the grades by the rating agencies.
NAREDCO rating is not restricted to only one rating agency (presently only with CRISIL). NAREDCO looks forward to the interaction with all such agencies in India & abroad. Shortly, NAREDCO would be signing a memorandum of Understanding with ICRA (another premier rating agency in India) for a rating real estate developer and projects.
CRISIL – NAREDCO Rating Rating of Real Estate Projects and Developers
National Real Estate Development Council (NAREDCO) is the apex national body for Real Estate Development, with Hon’ble Minister of Urban Development and Food & Consumer Affairs, Public Sector organizations and all practitioners of real estate sector, for self-regulation of industry and bringing ethics and code of conduct in this profession. NAREDCO’s mission is to improve the confidence level of lenders, investors, and consumers by bringing in professional practices. One of the highly professional methods is to develop a system of rating developers and real estate projects to enhance the confidence levels of lenders, investors, and consumers while making lending and/or investment decisions.
Credit Rating Information Services of India Ltd., established in 1987, has come a long way in pioneering the concept of credit rating in India. Today, it is the market leader with a dominant share in the rating business in India and is instrumental in developing the framework and methodology for rating rupee-denominated debt obligations of Indian corporates and financial institutions along with the debt issues of large infrastructure projects. Individuals, institutional investors, and lenders use CRISIL ratings as a benchmark for framing investment and lending policies.
CRISIL as part of their rating service has developed a rating methodology for the Real Estate Sector and has completed a large number of projects rating across the country. NAREDCO, being the apex body representing the real estate sector, concern has been invited by the government to be the agency for rating the developers/ real estate projects, Based on this, NAREDCO entered into a Memorandum of Association with CRISIL for carrying out the rating of Real Estate Projects and Developers. The methodology and symbols for