India office property market overview april 2014

Office Property Market Overview
INDIA
April 2014

research & forecast Report
SYDNEY CENTRAL BUSINESS DISTRICT
Research & Forecast Report
India I Office | April 2014
2 Research & Forecast Report | April 2014 | Office | Colliers International
www.colliers.com
Mar-13 Mar-14
Repo rate 7.50% 8.00%
CRR 4.00% 4.00%
WPI1
5.65% 4.68%
PLR2
9.70%-10.25% 10.00%-10.25%
Deposit Rate3
7.50%-9.00% 8.00%-9.25%
Exchange Rate
INR - USD 54.28 61.35
INR- Euro 70.37 85.34
Mar-13 Mar-14 YoY %
Change
Gold 29,348 30,382 3.52%
Silver 53,859 46,262 -14.11%
Equity
(BSE Sensex)
19,428 21,810 12.26%
Realty Index 2,048 1,388 -32.25%
Return on Alternative Investments
MACRO ECONOMIC OVERVIEW
India’s economic growth decreased to•
4.7% in 4Q 2013 from 4.8% in 3Q 2013. On
a positive note, the Business Confidence
Index (BCI) rose to 54.9 in 4Q 2013 from
45.7 in the previous quarter showing an
increase in business confidence levels.
The volatility in the rupee exchange rate•
has reduced significantly in the surveyed
quarter ensuring continued foreign
institutional investor interest in Indian
financial securities.
Net export figures reflecting both export•
growth and import compression suggest
that export-led sectors such as
information technology and
pharmaceuticals are performing better in
2014.
About 8 million sq ft. of office space was•
leased across the eight major cities in
India showing a 7% increase on QoQ
basis. All markets, with the exception of
Mumbai, Chennai and Pune, have
witnessed increase in office absorption.
Bangalore and NCR topped the chart
contributing 75% in the total
absorption.
COLLIERS VIEW : Occupiers are looking
beyond the CBD and SBD markets for
more strategic opportunities. In 2014, we
should see a continuation of this trend,
as players in search of more cost-effective
solutions will move towards the PBD.
With positive signals emanating from the
global economy, which finds resonance
in our improved export performance, we
anticipate that after the elections, the
office market will start seeing a revival in
terms of absorption, supply and new
project launches.
ECONOMIC BAROMETER
Source: Colliers International India Research
Note: All values in the above tables are as on 15th of March
2013 and 2014
1
Wholesale Price Index
2
SBI Prime Lending Rate
3
SBI interest rate < INR 1 crore Term Deposits for ≤1 Year
INRCrore
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Jul-09
Jul-10
Jul-11
Jul-12
Jul-13
Oct-10
Oct-11
Oct-12
Oct-13
Oct-09
Business Confidence Index
10
20
30
40
50
60
70
80
0
2,000
12,000
14,000
16,000
8,000
10,000
4,000
6,000
2008-09
2012-13
Apr-Jan2014
2010-11
2011-12
2009-10
2005-06
2006-07
2007-08
FDI in Real Estate
BSE Sensex Realty Index* Rebase to 100
BSE Sensex & Realty Index
90
80
100
110
60
70
50
120
130
1-Jan-14
12-Jan-14
23-Jan-14
3-Feb-14
14-Feb-14
25-Feb-14
8-Mar-14
19-Mar-14
30-Mar-14
InPercentage
4.0%
6.0%
8.0%
10.0%
12.0%
Jan-Mar09
Apr-Jun09
Jul-Sep09
Oct-Dec09
Jan-Mar10
Apr-Jun10
Jul-Sep10
Oct-Dec10
Jan-Mar12
Apr-Jun13
Jul-Sep13
Oct-Dec13
Jan-Mar13
Oct-Dec12
Jun-Sep12
Oct-Dec11
Jul-Sep11
Apr-Jun11
Jan-Mar11
Gross Domestic Product at Factor Cost
0.0%
2.0%
Apr-Jun12

3
During 1Q 2014, the Mumbai office•
markets witnessed a further decline
in office space absorption indicating
cautious occupier sentiment. This lack of
demand can be attributed to a low level
of IT/ITeS sector participation in the
overall absorption, which is currently
the primary demand generating sector
across the cities.
This quarter only about 0.42 million sq•
ft of Grade A office space was leased
with a few mid-sized deals concluded in
Central and Western Suburbs, and Navi
Mumbai.
Construction activities remained slow.•
No projects / phases of projects were
completed this quarter. Developers also
refrained from launching new projects
due to low demand.
More than 7.5 million sq ft of Grade A•
commercial office space was available
for fit-out during the surveyed quarter
of which, about 80% was concentrated
in micro-markets like Andheri East,
Lower Parel, BKC and Thane / LBS Road.
Vacancy remained almost stable due
to the limited addition of new supply.
Rents and capital values for Grade A
office space remained stable in all of the
micro-markets.
COLLIERS VIEW:• Sectors like BFSI
and FMCG, have become cautious
in office uptake. This coupled with
reduced IT/ITeS absorption is likely to
result in lower demand in 2014. Rents
and capital values are thus expected to
remain stable; however, micro-markets
such as Andheri, BKC (Bandra-Kurla-
Complex) and Lower Parel could see an
upward movement in the range of 1 - 2%
QoQ due to continued interest from the
occupiers.
Mumbai
Micro Market Rental
Values*
% Change
QoQ YoY
CBD 226 - 260 0% 0%
Andheri East 91 - 125 0% 0%
BKC 226 - 320 0% 1%
Lower Parel 141 - 180 0% 0%
Malad 81 - 90 0% 1%
Navi Mumbai 56 - 75 0% 1%
Powai 101 - 120 0% 0%
Worli/ Prabhadevi 176 - 225 0% 0%
Goregaon/ JVLR 81 - 110 0% 1%
Kalina 175 - 211 0% 0%
Thane / LBS 51 - 100 0% 1%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
CITY OFFICE BAROMETER
KEY UNDER CONSTRUCTION PROJECTS
Building Name Developer AREA (Sq. Ft.) LOCATION POSSESSION
Chromium Tech-Pro Projects (KGA) 200,000 JVLR. Off Powai 2014
One BKC Wadhwa Developers 1,200,000 BKC 2015
Newa Bhakti Knowledge City Park New Tech City Group 600,000 Airoli 2015
TOP 5 TRANSCATIONS OF THE QUARTER
CLIENT Building Name AREA (Sq. Ft.) LOCATION LEASE/SALE
GS Engineering Lodha iThink 30,000 Thane Lease
Merck Pharma Lighthall 70,000 Andheri East Lease
Phillip Capital Urmi Estate 20,000 Lower Parel Lease
Temple Packaging Lotus Corporate Park 20,000 Goregaon East Lease
Teradata Mindspace SEZ 30,000 Airoli Lease
Andheri East
24%
Thane / LBS
21%
CBD
1%
Worli /
Prabhadevi
1%
Goregoan /
JVLR
4%
Powai
4%Navi Mumbai
2%
Malad
6%
Lower Parel
20%
BKC
15%
Kalina
2%
AVAILABLE SUPPLY IN PRIME AREAS
1Q2008
1Q2009
1Q2010
1Q2014F
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
50
5,000
0 0
100
10,000
150
15,000
200
20,000
250
25,000
30,000
AVERAGE RENTAL AND CAPITAL VALUE TREND
RentalValues-INRPerSq.ft.PerMonth
CapitalValues-INRPerSq.ft.
Note:
Available Supply: Total Grade A office space being mar-
keted for sale or lease in surveyed quarter.
Average Rental/Capital Values: Market average of indicative
asking price for Grade A office space.
Forecast
* Indicative Grade A rents in INR per sq ft per month.
0.00
0.50
1.00
1.50
2.00
2.50
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
QUARTER WISE ABSORPTION
Million Sq.ft.

Delhi witnessed improved demand as•
office absorption nearly doubled this
quarter amounting to approximately
0.3 million sq ft. Approximately 60%
of this total absorption is contributed
by large office space occupiers such as
Moser Bear, Snapdeal and VFS Global.
Remaining 40% of the leases were
small office spaces (5,000 - 10,000 sq
ft) occupied by the corporate offices
of BFSI, airlines, real estate and media
companies.
In the surveyed quarter, the city added•
0.8 million sq ft of new, Grade A office
supply. Projects contributing this supply
were Hyatt Commercial Block by Asian
Hotels in Bhikaji Cama Place; Ambience
TowerbyAmbienceDeveloperinRohini;
and Prime Tower by DLF in Okhla
Phase I.
The total Grade A supply available for fit-•
out this quarter was about 2.5 million sq
ft, mainly concentrated in Jasola, Saket
and Connaught Place.
Averagerentandcapitalvaluesremained•
unalteredduring1Q2014,howeversome
new buildings demanding above-market
prices due to their premium location and
amenities offered.
COLLIERS VIEW:• Occupiers will remain
cost-conscious and prefer small Grade
A properties for their corporate offices
in the CBD area. The upcoming new
supply in Aero City near the airport
is expected to have an impact on the
market dynamics with nearly 0.9 million
sq ft forecasted to get operational in
2014. The location is expected to attract
a significant number of occupiers due to
itsadvantageouslocationandavailability
of Grade A buildings with state-of-the-
art amenities.
Delhi
Micro Market Rental
Values*
% Change
QoQ YoY
Connaught Place 175 - 450 -2% -12%
Nehru Place 175 - 225 0% 8%
Saket 160 - 190 6% 2%
Jasola 95 - 130 2% -7%
Netaji Subhash 65 - 75 0% 0%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
NBCC Plaza NBCC Ltd. 350,000 Okhla 2014
NBCC Redevelopment NBCC Ltd. 1,300,000 Kidwai Nagar 2016
Parsvnath 27 Parsvnath Ltd. 150,000 K.G. Marg 2016
H&M India Religare Building 11,500 Saket Lease
LG Electronics Religare Building 24,150 Saket Lease
Moser Baer Okhla Phase 3 70,000 Okhla Lease
Snapdeal Okhla Phase 3 50,000 Okhla Lease
VFS Global Bharti Worldmark 70,000 Aero City Sale
0.00
0.10
0.15
0.20
0.25
0.30
0.05
0.35
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
1Q2008
1Q2009
1Q2010
1Q2014
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
50
5,000
0 0
100
10,000
150
15,000
200
20,000
250
300
25,000
40,000
35,000
30,000
Note:
Forecast
Jasola
34%
Nehru Place
4%
Saket
34%
Connaught place
28%
Million Sq.ft.

5
In 1Q 2014, occupiers leased more than•
1.6 million sq ft of Grade A office space
in Gurgaon, a modest increase of 5%
from last quarter. This marginal increase
in the office space absorption figure is
an indication of the reviving occupier
confidence level.
IT/ITeS and BFSI were the most active•
occupiers leasing large office spaces.
The total available stock for lease or sale•
was approximately 16 million sq ft. New
supplyenteringthemarketaccountedfor
approximately 1.5 million sq ft. Projects
contributing to this new supply include
Palm Square and Eros Tower, located at
Golf Course Extension Road; and Palm
Spring Plaza and One Horizon Centre at
Golf Course Road.
Projects launched this quarter include•
Gateway by Unitech Ltd and Biosphere
by Emmar MGF, both located on MG
Road; and KST Tower by KST Group
on the Dwarka Expressway. All of these
projects will add approximately 1 million
sq ft to the city’s Grade A inventory by
2018.
Rents and capital values remained flat•
compared to last quarter. However,
MG Road and the institutional sectors
witnessed marginal decreases in the
range of 1 to 3% QoQ. Limited availability
of large floor plate Grade A office space
resulted in low demand in these micro-
markets
COLLIERS VIEW:• In 2014, it is likely that
lease volumes will increase. Stock in
cost-effective locations, like Golf Course
Extension Road and Sohna Road, will be
preferred,primarilybecauseofoccupiers
interest in high-quality assets at cheaper
rents.
Gurgaon
Micro Market Rental
Values*
% Change
QoQ YoY
MG Road 95 - 135 -2% -4%
Golf Course Rd 90 - 140 2% 18%
Institutional Sect.
(18,32,44) 50 - 65 0% -6%
Golf Course Rd
Ext./Sohna Rd 50 - 65 2% 2%
NH8 50 - 125 0% 0%
Manesar 40 - 42 0% 2%
DLF Cyber City 78 - 80 0% 5%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
Biosphere Emaar MGF 350,000 MG Road 2018
KST KST Group 350,000 Dwarka Expressway 2018
Unitech Gateway Unitech Ltd. 350,000 MG Road 2018
Accenture Unitech Infospace 120,986 Sector 21, Dundahera Lease
Aricent Group Unitech Infospace 550,000 Sector 21, Dundahera Lease
Copal Partners Plot 267 120,000 Udyog Vihar - Phase 2 Lease
Oracle One Horizon Centre 90,000 Golf Course Road Lease
WNS DLF Silokhera 145,000 NH-8 Lease
0.00
0.40
0.20
0.60
1.00
0.80
1.40
1.20
1.80
1.60
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
1Q2008
1Q2009
1Q2010
1Q2014F
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
20 2,000
0 0
40 4,000
60 6,000
100
80 8,000
120
10,000
12,000
Note:
Forecast
MG Road
5%
Golf Course Road
11%
DLF Cyber City
4%
Institutional Sec-
tors (Sec44, 32, 18)
3%
Manesar
25%
National Highway 8
17%
Udyog Vihar &
Industrial Sectors
4%
Golf Course Road
Ext./Sohna Road
31%
Million Sq.ft.

The total volume of office absorption•
in 1Q 2014 in NOIDA was recorded at
0.21 million sq. ft. dominated mostly
by consulting, Engineering and BFSI
segments in sector 62 and Sector 127.
Share of sector 62 in the total absorption
pie has increased as corporate are able
to get better deals with more options at
competitive rentals.
The delivery of World Trade Tower in•
Sector 16 and two individual buildings
in Sectors 6 and 125 contributed
approximately 0.9 million sq ft of new
space to the market.
Despite low absorption levels,•
developers continued to launch new,
commercial Grade A towers in their
mixed-use projects in sectors along the
NOIDA Expressway. New launches this
quarter include Downtown by Sikka
Developer, and Cosmic Corporate Park
III by Cosmic Developers. These projects
will contribute another 1.5 million sq
ft of Grade A non-IT office space to the
city’s inventory by 2019.
Rents in almost all micro markets•
remained stable due to low transaction
volumes. Sectors along the NOIDA
Expressway command premiums in
terms of rents due to the location and
connectivity advantages.
COLLIERS VIEW:• NOIDA is expected to
witness new office space completions of
approximately 4.5 mn sq. ft. by the end
of 2014. Most of this upcoming supply is
non-IT/ITeS office space. The addition
of Grade A non-IT/ITeS office space is
expected to attract corporate occupiers
to this market.
NOIDA
Micro Market Rental
Values*
% Change
QoQ YoY
Institutional
Sectors (Non IT) 50 - 90 0% 5%
Institutional
Sectors (IT) 30 - 75 0% 9%
Comercial
Sectors
95 - 100 -5% 0%
Industrial
Sector
18 - 48 5% 20%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
Cosmic Corporate Park III Cosmic Group 500,000 Sector 154 2016
Downtown Sikka Group 450,000 Sector 104 2019
K Rasa - K8 K Rasa 500,000 Sector 129 2019
eGain India Unitech Infospace 11,000 Sector 62 Lease
Media Tek S B Tower 30,000 Sector 16 Lease
RDB Insurance A-31 108,000 Sector 64 Lease
Tata Consultancy Engineering Ltd. Green Boulevard - Tower B 15,785 Sector 62 Lease
Tata Consultancy Engineering Ltd. Green Boulevard - Tower C 15,786 Sector 62 Lease
0.00
0.20
0.40
0.60
1.00
0.80
1.20
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
1Q2009
1Q2010
1Q2014
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
20
10
2,000
0 0
40
30
4,000
50
6,000
70
60
8,000
80 12,000
10,000
Note:
Forecast
Commercial Sectors
(Sec 18) (Grade B)
0.6%
Industrial Sectors
(Sec. 1-9, 57-60, 63-65)
(Grade B)
15.8%
Commercial Sectors
(Sec 18) (Grade B)
0.2%
Institutional Sectors
(Sec.16A, 62, 125-142
83.3%
Million Sq.ft.

7
In Chenani, leasing transaction volumes•
continued to remain below average.
Total absorption was 0.56 mn sq. ft.
during the quarter. The majority of leases
signed were for smaller, sub-25,000 sq ft
office spaces. Micro-markets like Old
Mahabali Puram Road and Guindy
remained the standout performers this
quarter. Having quality office space
on offer combined with affordability
has enabled these micro-markets to be
preferred destinations for occupiers.
A few projects / phases of projects•
were completed this quarter, including
Ramaniyam ISHA by RamaniyamGroup
at Thoraipakkam; KPR Towers at
Nungambakkam; and VikramVikra at
Vadapalani. All of these projects together
add 0.09 million sq ft of Grade A office
space to the city’s total inventory.
New project launches continued to•
remain limited. A phase of about 0.25
million sq ft in DLF IT SEZ-Block 2,
located at Manapakkam, was launched
by DLF Ltd this quarter and is expected
to be completed by the end of 2015.
The lack of major tenant moves and•
expansions by large occupiers has seen
rentscontinuetoremainsteadyinalmost
all micro-markets.
COLLIERS VIEW:• The outlook for the
leasing market across Chennai over
the next 9 months is more positive than
the previous two quarters. Improving
sentiment and prospects for the global
economy as well as rising business
and consumer confidence should all
combine to boost the sentiment of IT/
ITeS tenants who make up the bulk of
tenants in Chennai.
Chennai
Micro Market Rental
Values*
% Change
QoQ YoY
CBD 65 - 85 0% 0%
Guindy (SBD) 50 - 60 0% 0%
Ambattur 25 - 30 0% 0%
OMR
(IT Corridor)
25 - 45 0% 8%
GST road 35 - 40 0% 0%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
DLF IT SEZ - Block 2 DLF Ltd. 250,000 Manapakkam 2015
Infinite Square SKCL Ltd. 84,000 Guindy 2014
Rajkamal Suites Khivraj Group 66,000 Nugambakkam 2014
Athena SP Infocity 65,000 OMR Lease
Cash Edge Prestige Polygon 25,000 Anna Salai Lease
Equitus Spencer Plaza 37,000 Anna Salai Lease
Isuzu Prestige Centre Court 30,000 Vadapalani Lease
Kone Prestige Centre Court 30,000 Vadapalani Lease
0.00
0.40
0.20
1.00
0.60
0.80
1.40
1.60
1.20
1.80
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
1Q2008
1Q2009
1Q2010
1Q2014
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
10
1,000
2,000
3,000
5,000
4,000
6,000
8,000
7,000
0 0
20
30
40
70
60
50
Note:
Forecast
Guindy (SBD)
8%
CBD
16%
GST Rd
3%
Velachery
1%
OMR (IT Corridor)
47%
Ambattur
24%
Million Sq.ft.

Bengaluru (Bangalore)
Micro Market Rental
Values*
% Change
QoQ YoY
CBD 80 - 100 0% 0%
Hosur Rd. 20 - 40 0% 0%
EPIP Zone/
Whitefield 28 - 36 0% 16%
Electronic City 23 - 32 0% -7%
Bannerghatta Rd. 50 - 60 0% 8%
Outer Ring Rd. 50 - 60 0% 3%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
Pritech - Block 14 Primal Group 600,000 ORR - Marathahalli Sarjapur 2015
RMZ ECO WORLD - APPL - 4A RMZ CORP 990,000 Marathahalli Sarjapur 2015
RMZ ECO WORLD - APPL - 7 RMZ CORP 790,000 ORR - Marathahalli Sarjapur 2015
Capgemini Divyasree Technopark 440,000 Whitefield Lease
IBM Embassy Business Park 770,000 Hebbal Lease
Sony RMZ Eco World 240,000 Outer Ring Road Lease
TCS Global Axis 300,000 Whitefield Lease
Titan Industries Divyasree Technopolis 163,000 Yamalur Lease
1Q2008
1Q2009
1Q2010
1Q2014
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
10 1,500
0 0
20 3,000
30 4,500
40 6,000
50
60
7,500
9,000
Note:
Forecast
Strong demand for Grade A office space•
witnessed during 1Q 2014 resulted
in a 35% QoQ increase in absorption
in the Bengaluru market. IT/ITeS
remained the primary demand driver
contributing approximately 80% in the
total absorption of 3.8 million sq ft. This
includes approximately 1.7 million sq ft
pre-commitment deals from companies
like IBM, Ericson and Hindustan Coca
Cola Beverages for expansion purposes.
During the quarter, many large scaled•
projects / phases of projects were
completed and added over 2.9 million
sq ft of Grade A office space to the city’s
total inventory.
Enthused by this demand, a number of•
developers launched additional towers
in their existing projects, including
Divyasree Technopolis-Block D; Mantri
Cornerstone-Block B; Pritech-Block 14
and RMZ ECO WORLD – Towers 4A, 4B
and all of these projects together will add
over 4.8 million sq ft office space to city’s
inventory by the end of 2015.
Withdemandandsupply complementing•
each other, vacancy levels remain
unaltered and about 11 million sq ft of
Grade A stock was available for fit-out
during the quarter.
The capital and rental values also•
remained steady in almost all micro-
markets in the city.
COLLIERS VIEW:• The strong software
export figures indicate increase in IT/
ITeS uptake in the coming quarters in
the city. We anticipate modest increases
in rents in micro-markets like Outer
Ring Road and CBD due to occupier
preference to other micro-markets like
Whitefield and Electronic City.
AVAILABLE Supply in Prime Areas
Hosur Road
3%
CBD
9%
Bannerghatta Road
2%
Electronic City
16%
EPIP Zone/
Whitefield
41%
Outer Ring Road
29%
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
0.00
0.50
1.50
1.00
2.00
3.50
3.00
2.50
4.00
Million Sq.ft.

9
The city witnessed improved demand•
this quarter and recorded Grade A
absorption of about 0.18 million sq
ft. More than 90% of these deals were
concluded in the Salt Lake-Sector V and
New Town micro-markets. This quarter,
various local occupiers have relocated
from their old structures to new and
better facilitated structures.
Construction activities remained slow•
during the quarter and only a few
properties were completed including
Pecon Tower by Pecon Group and Rishi
Techpark by Mittal Group, both of which
areatNewTown.Together,theseprojects
contributed about 0.1 million sq ft of
Grade A commercial office supply.
Projects launched this quarter include•
Weston by Siddha Group at Bentinck
Street; Arya Hub by Arya Realty at
Taratala; and Pressman House by
Pressman at New Town. The projects are
expected to be completed by 2017 and
will contribute about 0.47 million sq ft of
Grade A commercial office space in the
city.
Rental values declined in the range of 1•
to 4% QoQ in most of the micro-markets,
except SBD where rents remained stable.
During the same quarter, capital values
remained stable, except for Sector V
where capital values decline by 3% QoQ.
COLLIERS VIEW:• Upcoming
infrastructure developments like metro
corridors will improve the overall
connectivity of the city. Micro-markets
like Salt Lake-Sector V and New Town
will continue to see occupier interest.
Rents and capital values are expected to
remain under pressure due to prevailing
high vacancy in suburban micro-
markets.
Kolkata
Micro Market Rental
Values*
% Change
QoQ YoY
CBD 95 - 120 -4% -10%
SBD 70 - 80 0% -6%
Sector V/
New Town
46 - 50 -2% -2%
PBD 34 - 37 -1% -3%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
Arya Hub Arya Realty 85,000 Taratala 2017
Pressman House Pressman 140,000 New Town 2015
Weston Sidhha Group 250,000 Bentinck Street 2017
Disha Palm Mall 16,000 Gariahat Lease
Serco Global BIPL 38,000 Sector-V Lease
SGS Eco Space 15,000 New Town Lease
Sterling Ferrero Net Guru 10,400 Sector-V Lease
Vasan Eye Care Individual 10,000 Chetla Lease
0.00
0.20
0.10
0.30
0.40
0.60
0.50
0.70
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
1Q2008
1Q2009
1Q2010
1Q2014F
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
40
20 2,000
0 0
60
4,000
80
6,000
100
8,000
120
10,000
12,000
Note:
Forecast
NEW SUPPLY IN PRIME AREAS
Sector V
33%
PBD
31%
SBD
36%
Million Sq.ft.

Pune
Micro Market Rental
Values*
% Change
QoQ YoY
Baner 45 - 55 0% 0%
Bund Garden 50 - 65 0% -12%
Airport Rd. /
Pune station 42 - 63 3% -2%
Aundh 45 - 60 0% 9%
Senapati Bapat 55 - 85 0% -10%
Bavdhan 35 - 45 0% -2%
Kalyani Nagar 45 - 60 0% 0%
Nagar Rd. 40 - 60 0% 11%
Hinjewadi 32 - 45 3% 7%
Hadapsar/
Fursungi 33 - 50 4% 8%
Kharadi 32 - 65 0% 18%
1Q 2014 2Q 2014F
Vacancy
Absorption
Construction
Rental Value
Capital Value
Siddhivinayak Vision Siddhivinayak Group 200,000 Tathawade 2014
The Melange Cosmos Group 70,000 Fugewadi 2015
W One U.D. Developers 80,000 Wanowari 2015
BMC Business Bay 251,000 Yerwada Lease
Compucom Software Limited S P Infocity 45,000 Phursungi Lease
Fundtech AG Trade Center 87,000 Bavhdan Lease
Gallaghar Giga Space Delta 2 34,900 Viman Nagar Lease
Geometric Limited Blue Ridge 27,000 Hinjewadi Lease
0.00
0.40
0.20
0.80
0.60
1.00
1.20
1.40
1.60
1.80
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Million Sq.ft.
1Q2008
1Q2009
1Q2010
1Q2014
1Q2013
1Q2015F
3Q2015F
1Q2012
1Q2011
20
10 1,000
0 0
30
2,000
50
40
3,000
70
60
4,000
80
5,000
8,000
7,000
6,000
Note:
Forecast
Pune has witnessed more than 0.85•
million sq ft of absorption in 1Q 2014,
which is relatively less than the last
quarter’s net absorption of 1.55 million
sq ft. However, more than 65% of
the transactions were for expansion
indicating rebounding business
confidence levels.
About 1 million sq ft of new Grade A•
supply was added to the city’s total
inventory. Of this 0.8 million sq ft was
contributed by Business Bay Tower I by
Panchshil Realty, located at Yerwada.
Total Grade A total supply available•
for fit-out was about 5.7 million sq ft.
mainly concentrated in the Hinjewadi
and Kharadi micro-markets. This is an
increase of about 1.19 million sq ft of
Grade A office space over the previous
quarter indicating increasing vacancy in
peripheral areas.
In most of the micro-markets rents and•
capital values remained unchanged,
however a few micro-markets like
Airport Road, Hinjewadi, Hadapsar
and Fursungi witnessed an increase in
the range of 3 - 4% on a quarterly basis.
This is primarily due to the availability
of grade A office space with a low rental
base as compared to the other parts of
the city.
COLLIERS VIEW:• IT/ITeS will continue
tobethemajoroccupierofGradeAoffice
space in the city. Despite the demand
/ supply equilibrium in the city, rents
in micro-markets located towards the
north-west and south-east will see a rise
in the range of 3 - 5% on a yearly basis.
This is because of the large floor-plate of
the Grade A inventory with ready social
infrastructure that will continue to lure
occupiers in the near future.
AVAILABLE Supply in Prime Areas
Bavdhan
2%
Kalyani Nagar
7%
Senapati Bapat Road
3%
Aundh
2%
Baner
11%
Bund Garden
7%
Airport road/
pune station
11%
Hinjewadi
20%
Nagar Road
13%
Kharadi
17%
Hadapsar/Fursungi
7%

11
Mumbai
The major business locations in Mumbai are the CBD (Nariman
Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower
Parel and Parel), Bandra Kurla Complex (BKC) and Andheri
Kurla stretch. Powai, Malad and Vashi are the preferred IT/
ITES destinations, while Airoli at Navi Mumbai and Lal Bahadur
Shastri Marg are emerging as new office and IT/ITES submakets.
Delhi
The commercial areas in New Delhi metropolitan area can be
broadly classified into the CBD (Connaught Place), SBD Nehru
Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola and
Saket .
Gurgaon
The prime business locations in Gurgaon are MG Road, Golf
Course Road, Cyber City and Udyog Vihar. Manesar on the
outskirts of Gurgaon is alsoemerging as the city’s new office
destination.
NOIDA
NOIDA market is comprised of sectors broadly classified as
institutional, industrial and commercial sectors. Institutional
sectors include sec 16A, 62 and125-142, industrial sectors include
sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed
commercial sector.
Chennai
Prime office properties in Chennai are located in four principal
sub-markets: the CBD, the IT Corridor, the SBD and the PBD.
The SBD comprises Guindy,Manapakkam, Velachery and other
areas. The PBD primarily includes Ambattur and GST Road,
while the IT Corridor is the Old Mahaballipuram Road (OMR) in
south Chennai.
Bengaluru (Bangalore)
Prime office properties in Bengaluru can be divided into three
principal sub-market— CBD, the SBD consisting of Banerghatta
Road & Outer Ring Road(ORR) and PBD including Hosur Road,
EPIP Zone, Electronic City and Whilefield.
Kolkata
The major business locations in Kolkata are CBD (Park Street,
Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge
circular Rd, East Kolkata) and PBD (New Town & Rajarhat). The
area around Park Street, Camac Street and AJC Bose road houses
number of high-rises commercial buildings such as Chatterjee
International Centre, Tata Centre, Everest House and Industry
House among others.
Pune
Theprimeofficesub-marketsofPuneincludeDeccanGymkhana,
Bund Garden Road, Senapati Bapat Road & Camp (CBD), while
the Off CBD includes Aundh, Airport Road and Kalyani Nagar,
among other locations. The eastern corridor, along with Nagar
Road and Kharadi, have emerged as a preferred location for
financial and IT/ITES companies.
Office Submarkets
CITY BAROMETERS
Increasing as compared to previous quarter
Decreasing as compared to previous quarter
Remained stable from previous quarter

Copyright © 2014 Colliers International.
ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult
their professional advisors prior to acting on any of the material contained in this report.
About Colliers International
colliers.com
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$2.1
billion in
annual revenue
1.46
billion square feet
under management
15,800
professionals
Primary Authors:
Surabhi Arora I Associate Director
Research
surabhi.arora@colliers.com
+91 124 456 7500
Mumbai: George Mckay I South Asia Director
george.mckay@colliers.com
Delhi / NCR: Ajay Rakheja I Director
ajay.rakheja@colliers.com
Vikas Kalia | National Director
vikas.kalia@colliers.com
Amit Oberoi I National Director
Valuation & Advisory Services & Research
amit.oberoi@colliers.com
Sachin Sharma I Assistant Manager
Research
sachin.sharma@colliers.com
Technopolis Building, 1st Floor,
DLF Golf Course Road,
Sector 54, Gurgaon - 122 002
TEL +91 124 456 7500
Bengaluru: Yogesh Bheemaiah I Director
yogesh.bheemaiah@colliers.com
Pune: Rishav Vij I General Manager
rishav.vij@colliers.com
Chennai: Kaushik Reddy I Director
kaushik.reddy@colliers.com
Kolkata: Ajay Rakheja I Director
ajay.rakheja@colliers.com
485

India office property market overview april 2014

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