Crisil launches real estate ratings

Credit ratings agency Crisil today launched the first real estate ratings in India to help common buyers make informed purchases in the sector.

The Crisil Real Estate Star Ratings (CREST) that works on project-specific basis, will rate a project on a scale of one to seven stars after comparing it with alternatives available in the same city, Crisil's Managing Director and Chief Executive Director, Roopa Kudva said.

The agency also made public its assessments of 21 projects spread across nine Tier-I and II cities.

"A developer commissions Crisil and gives us access to various details needed for assessment. We take into account our parameters and rate the project. Once the developer accepts the rating, we go public with the rating and the project analysis, which is to be given to common buyers for free," Kudva said.

Crisil's parameters include past record of the developer company, assessment of the infrastructure it's creating, its timely completion, cost overruns, after-sales service, legal issues like title and project innovations like green buildings.

The rating will be given mid-way through the project and will be under surveillance till project completion, during which it can be revised, she said.

Kudva said there was a growing need in the market for objective, independent and credible assessment of real estate projects, which led Crisil to launch the new product.

"As disposal incomes rise, real estate is the biggest non-finance investment and there are inherent issues of the sector", she said, adding that the agency would soon complete 50 project ratings.