India office property market overview october 2013

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The macroeconomic overview of India continues to show weakness by registering GDP rate of 4.5% in April-June 2013 which was the slowest quarterly growth rate in the last 4 years. Rising inflation, volatile equity markets and depreciation of rupee further intensified the economic risk in Indian markets. As well, upcoming elections in 2014 further raises question marks for the future of Indian economy and its recovery. All these factors leads to adoption of more conservative approach by businesses and resulted in overall demand softening in commercial real estate markets. According to the 3Q 2013 research report, relocation and consolidation were the primary demand generators for commercial office space. The six major cities - Mumbai, NCR, Bengaluru, Chennai, Kolkata and Pune recorded an overall absorption of around 6.2 million sq. ft. which is approximately 20% lesser than the last quarter absorption of around 8 million sq. ft.
Project completions were rather weak this quarter totalling to approximately 3.1 million sq. ft. of grade A office space across all markets. More than 60% of this supply was added in cities like Bangalore and NOIDA. A few new projects were launched during 3Q totalling approximately to over 5 million sq. ft. of office space mainly in NOIDA, Bangalore and Delhi and are expected to be delivered within 2015-2017 period. Overall, rental rates remained stagnant throughout all markets with exception of few micro market in Kolkata and Gurgaon which saw downward pressure on rentals in the range of 1 to 7% QoQ.
As the economic environment in India is expected to remain uncertain due to overall global economic conditions and upcoming elections in 2014. Office tenants will continue to relocate to consolidate office space by postponing their expansion plans and rather adopting a wait-and-watch strategy for the rest of 2013 and mid 2014 until the market regains momentum. In view of the above, we anticipate moderate leasing demand across the cities in upcoming quarters. Limited supply will keep the rentals stable as developers deferring completion of their projects and refrained from adding more speculative supply in the market.

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  • CHENNAI GST ROAD - ON ROAD PROPERTY - WITHSTOOD THE ONSLAUGHT. FOR SALE - MAIN ROAD PROPERTY - IN CHENNAI, TAMIL NADU - ENTRY FROM NH-45. Prime Vacant Land 5.8 Grounds (13940 sq.ft.) in Singaperumal Koil, Chennai, India on Main GST Road with direct entry from GST Road. Mahindra World City is 1.2 Kms. on one side and Ford Motor Co. is 3.2 Kms. on the other side. Plot with direct entrance from Wide National Highway NH-45. Frontage Width is 46 feet, Rear Width is 56 feet and length is 286 feet. Companies like BMW, Nissan-Renault, Daimler, Enfield, Nokia, Siemens, Hyundai, Ford are in close proximity to this place. The Property has a Security Room with 3-Phase Power Supply and has a Compound Wall of about 11 feet on all sides with a 15 feet gate in the front. Since the Land is located amidst various International Companies, it will be ideally suited for Offices, IT/ITES/BPO Companies, Residential Apartments, etc. Very Ideally suited for Investment Purposes, Immediate Construction of Residential Apartments, Show Rooms, Departmental Stores, Hospitals, Logistics, etc. Appreciation Guaranteed on Investment. In case of interest, please contact:- Mr. K.Aravamudan, Mob:- 0 – 94440 12056. e.mail : hiraytech@yahoo.co.in VERY IMPORTANT NOTE:- The above Site is not affected by the heavy Rains and Thunder Storms that lashed Chennai just recently.
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India office property market overview october 2013

  1. 1. Office Property Market Overview INDIA QUARTERLY UPDATE | OCTOBER | 2013 Accelerating success.
  2. 2. 3Q 2013 | OFFICE Research & forecast report SYDNEY CENTRAL BUSINESS DISTRICT research & forecast Report India office market MACRO ECONOMIC OVERVIEW ECONOMIC INDICATORS • India’s GDP growth rate was 4.5% in AprilJune 2013. This is the slowest growth rate in the last 4 years. 12.0% 4.50% 4.00% INFLATION (WPI)1 8.07% 6.46% PLR2 9.75% - 10.50% 9.70% - 10.25% DEPOSIT RATE3 8.00% - 9.25% 7.50% - 9.00% • Slowing economic growth, rising inflation, depreciating rupee and volatile equity markets further intensified the economic risk in Indian markets. Concerned with the increasing inflation, the Reserve Bank of India increased the repo and reverse repo rate by 25 basispoints. Apr -Jun13 Oct - Dec 12 Jan - Mar 13 Apr - Jun 12 Jun - Sep 12 Jan - Mar 12 Jul - Sep 11 Oct - Dec 11 Apr - Jun 11 Jan - Mar 11 Jul - Sep 10 Oct - Dec 10 Apr - Jun 10 Jan - Mar 10 Jul - Sep 09 Oct - Dec 09 Apr - Jun 09 Jan - Mar 09 8,000 6,000 4,000 2,000 0 2012-13 CRR 10,000 Apr-July 2013 6.50% 2011-12 7.00% 14,000 12,000 2010-11 REVERSE REPO RATE FDI in Real Estate 16,000 2009-10 7.50% • The rupee slumped during the quarter and touched a record low of 68.85 per US Dollar, however, in the subsequent weeks the rupee recovered and currently, hovering between INR 62-63 per US dollar. This volatility in the exchange rated caused a major concern to foreign investors and Indian importers. 2008-09 8.00% 0.0% 2007-08 REPO RATE 2.0% 2006-07 Sep-13 6.0% 4.0% 2005-06 Sep-12 8.0% INR Crore ECONOMIC BAROMETER 10.0% In Percentage • Headline inflation, based on the wholesale price index was recorded at 6.46% for the month of September 2013 as compared to 6.10% for August 2013. Gross Domestic Product at Factor Cost BSE Sensex & Realty Index SILVER 63,188 48,475 -23.28% EQUITY (BSE SENSEX) 18,542 19.742 6.47% REALTY INDEX 1,735 1,292 -25.79% Note : All values in the above tables are as on 15th of September 2012 and 2013 1 Wholesale Price Index 2 SBI Prime Lending Rate 3 SBI interest rate < INR 1 crore Term Deposits for ≤1 Year www.colliers.com BSE Sensex * Rebase to 100 29-Sep-13 19- Sep-13 9- Sep-13 30-Aug-13 Realty Index Exchange Rates COLLIERS VIEW : The economic environment in India is expected to remain uncertain due to overall global economic conditions and upcoming elections in 2014. We anticipate moderate leasing demand across the cities in next coming quarters. Inspite of moderate demand, rental values are expected to remain stable due to limited supply as developers deferring completion of their projects and refrained from adding more speculative supply in the market. 80 75 70 65 60 55 50 USD 29-Sep-13 -7.05% 19-Sep-13 29,675 9-Sep-13 31,925 30-Aug-13 Gold 20-Aug-13 Change 50 20-Aug-13 YoY % 10-Aug-13 Sep-13 70 60 10-Aug-13 Sep-12 90 80 31-Jul-13 Return on Alternative Investments 110 100 31-Jul-13 84.17 21-Jul-13 71.30 21-Jul-13 INR- Euro 11-Jul-13 63.30 11-Jul-13 54.31 130 120 1-Jul-13 INR - USD • In 3Q 2013, relocation and consolidation were the primary demand generators for commercial office space. Overall demand for leasing commercial real estate softened due to the conservative expansion plans of most companies. The six major cities i.e. Mumbai, NCR, Bengaluru, Chennai, Kolkata and Pune recorded an overall absorption of around 6.2 million sq ft which is approximately 20% lesser than the last quarter absorption of around 8 million sq ft. 1-Jul-13 Exchange RATE Euro Source: Colliers International India Research
  3. 3. INDIA | 3Q 2013 | OFFICE MUMBAI AVAILABLE Supply in Prime Areas • The Mumbai commercial market remained sluggish during 3Q 2013. Except for few large deals (75,000 - 150,000 sq ft), demand in the primary market remained moderate. The market recorded absorption of approximately 0.65 million sq ft of Grade A office space, which is comparatively less than the last two quarter’s absorption of 1.8 and 1.5 million sq ft. • Vacancy levels remain stable due to moderate demand and limited addition of new supply in the market. About 8 million sq ft of commercial Grade A space was available for fit-out, which is approximately 2% less than in the last quarter. 0% -3% 90 - 125 0% 0% 225 - 320 0% 1% 140 - 180 0% -3% Malad 80 - 90 0% 0% Navi Mumbai 55 - 75 0% 0% Powai 100 - 120 0% 0% Worli/ Prabhdevi 175 - 225 0% 0% 80 - 110 0% 0% Kalina Goregaon/ JVLR 175 - 210 0% 0% Thane / LBS 50 - 100 0% • Demand and supply equilibrium had kept the overall price levels in check, and rental and capital values remained stable during the surveyed quarter. • COLLIERS VIEW : A number of corporate are looking for consolidation and relocation options in order to optimise their real estate costs. Overall rental values are expected to remain stable except for SBD where a marginal increase can be witnessed in premium projects due to limited supply. 0% Thane / LBS Kalina Goregaon / JVLR Powai Worli/ Prabhdevi Navi Mumbai Malad BKC 250 30,000 Forecast 25,000 200 20,000 150 15,000 100 10,000 50 5,000 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. KEY MARKET TRANSACTIONS CLIENT Building Name CGG Veritas Reliable Tech Park 18,000 DHFL TCG Financial Center 30,000 BKC Lease HSBC India Bulls Finance Center 72,000 Lower Parel Lease AREA (Sq. Ft.) LOCATION TRANSCATION TYPE Navi Mumbai Lease PVR Pictures India Lotus Corporate Park 12,000 Jogeshwari Lease Rabo Bank Peninsula Business Park 30,000 Lower Parel Lease Sandwell Nitco Business Park 20,000 Thane Lease KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME Developer Fulcrum Hiranandani Group 342,000 Green Span BK Birla Group 320,000 Lower Parel 2013 Zillion Kanakia Spaces 525,000 Kurla 2014 AREA (Sq. Ft.) LOCATION Expected Completion Andheri East 2014 Source: Colliers International India Research Colliers International | p. 3 Capital Values -INR Per Sq.ft. 225 - 260 AVERAGE RENTAL AND CAPITAL VALUE TREND 1Q2015F Lower Parel YoY 1Q2014F BKC QoQ 1Q2013 Andheri East % Change 0 1Q2012 CBD Rental Values 5,000 1Q2011 Capital Value 15,000 10,000 Lower Parel Rental Value 25,000 20,000 1Q2010 Construction Micro Market 30,000 1Q2009 Absorption Grade a Capital Values 35,000 CBD Vacancy Andheri East 24% BKC 15% Andheri East 4Q 2013F CBD 1% Lower Parel 20% Rental Values -INR Per Sq.ft. Per Month 3Q 2013 Thane / LBS 21% 1Q2008 CITY OFFICE BAROMETER Malad 6% Capital Values -INR Per Sq.ft. MumBAI • The third quarter saw no major new completions of Grade A commercial office projects except “Sahar Business Center” by The Continental Group at Andheri, measuring about 0.1 million sq ft. Projects launched during this quarter include, “Fulcrum” by Hiranandani Developers at Andheri (East) having more than 0.3 million sq ft of Grade A commercial office space. The project is likely to be completed by 2Q 2014. Navi Mumbai 2% Worli / Goregoan / Prabhadevi JVLR Kalina 4% 2% Powai 1% 4%
  4. 4. INDIA | 3Q 2013 | OFFICE DELHI AVAILABLE Supply in Prime Areas Connaught place 2% • he Delhi commercial office market continued T to see sluggish occupier demand in 3Q 2013. Only a few mid-sized deals were concluded in Connaught Place, Jasola and Saket, resulting in 0.15 million sq ft of Grade A office space absorption during the quarter. YoY Connaught Place 231 - 475 0% -7% Nehru Place 150 - 250 0% 8% Saket 140 - 190 0% 3% Jasola 100 - 125 0% 9% 65 - 75 0% 0% Netaji Subhash Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. • Rental values for Grade A office space remained unchanged during the quarter. Capital values remained stable, as the city witnessed almost no strata-title sales in secondary markets due to increased circle rates. COLLIERS VIEW : Amid economic uncertainties, occupiers are likely to remain cautious, thus demand is expected to remain moderate in the coming quarter. Rental and capital values are expected to remain stable with an upward bias due to limited supply of Grade A office space in Delhi. Netaji Subhash Saket AVERAGE RENTAL AND CAPITAL VALUE TREND 300 40,000 Forecast 35,000 250 30,000 200 25,000 150 20,000 15,000 100 10,000 50 5,000 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. KEY MARKET TRANSACTIONS CLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPE Kensar Rasvilas 1,500 Saket Lease Oriflame Corporate One 50,000 Jasola Lease Raheja Developer Rectangle One 10,000 Saket Lease Samsung Data M6 Plaza 21,500 Jasola Lease Yes Bank TDI 8,500 Jasola Lease KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME Developer NBCC Plaza NBCC Ltd. 350,000 NBCC Commercial Complexes NBCC Ltd. 1,300,000 Parsvnath 27 Parsvnath Ltd. AREA (Sq. Ft.) 150,000 LOCATION Expected Completion Okhla 2014 Kidwai Nagar 2016 K.G. Marg 2016 Source: Colliers International India Research p. 4 | Colliers International Capital Values -INR Per Sq.ft. QoQ 1Q2015F % Change 1Q2014F Rental Values 1Q2013 Micro Market Jasola Capital Value 0 1Q2012 Rental Value 10,000 1Q2011 Construction 20,000 Connaught Place • Due to supply - demand equilibrium, the city witnessed stable vacancy levels QoQ. Approximately, 1.7 million sq ft of Grade A commercial office space was available for fit-out primarily concentrated in Saket and Jasola. 30,000 1Q2010 Absorption 40,000 Nehru Place Vacancy 50,000 1Q2009 4Q 2013F Grade a Capital Values 60, 000 1Q2008 3Q 2013 Saket 29% Capital Values -INR Per Sq.ft. CITY OFFICE BAROMETER Jasola 59% Rental Values -INR Per Sq.ft. Per Month delhi • There were no major new completions in Delhi in 3Q 2013. However, a commercial project was launched by Parsvanath Ltd in KG Marg in the CBD, called “Parsvnath 27”. Infrastructure Leasing & Financial Services Limited (ILFS) also announced a commercial development at East Kidwai Nagar under the “National Buildings Construction Corporation Ltd. (NBCC) Redevelopment Scheme”. These projects together will add more than 1.4 million sq ft of Grade A commercial office supply to the city’s total inventory by the end of 2016. Nehru Place 10%
  5. 5. INDIA | 3Q 2013 | OFFICE GURGAON AVAILABLE Supply in Prime Areas • Gurgaon observed persistent occupier demand during 3Q 2013. The city’s overall absorption was approximately 1.6 million sq ft which is double that of the last quarter. However, this increase in absorption was primarily attributed to the 0.8 million sq ft of office space leased by “Aon Hewitt” in the Unitech Infospace SEZ. -2% -2% Golf Course Rd 85 - 140 0% 13% 50 - 65 -4% -9% Institutional Sect. (18,32,44) Golf Course Rd Ext./Sohna Rd 48 - 65 -2% -10% NH8 97 - 125 0% 13% Manesar 45 - 50 0% -17% Cyber City 75 - 78 2% 2% Udyog Vihar & Industrial Sectors 45 - 65 0% 10% Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. • Despite consistent demand, the rental values witnessed downward pressure in the IT/ITeS driven micro-markets such as Golf Course Road and Sohna Road, and rents declined 2 5% QoQ. Rents for non-IT/ITeS office space remained stable due to limited availability. COLLIERS VIEW : Demand will be primarily driven by corporate looking for large facilities to consolidate their business operations. Considering the large vacant stock and costconscious occupiers, rental values for IT/ ITeS office space will remain stable with a downward bias. However, rental values in commercial office space may see marginal appreciation. Manesar (IT) National Highway 8 (IT) Udyog Vihar & Industrial Sectors (IT) Manesar Golf Course Road Ext./Sohna Road (IT) 120 12,000 Forecast 100 10,000 80 8,000 60 6,000 40 4,000 20 2,000 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. KEY MARKET TRANSACTION CLIENT Building Name AREA (Sq. Ft.) 800,000 LOCATION TRANSCATION TYPE Aon Hewitt Unitech Infospace Sohna Road Lease CB&I DLF Infinity Towers 94,450 DLF Cyber City Lease Fluor Daniel DLF Building No. 10B 70,000 DLF Cyber City Lease GSK One Horizon Centre 68,400 Golf Course Road Lease Michelin Orchid Business Park 73,400 Sohna Road Lease LOCATION Expected Completion Sector 63A 2016 KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME Developer Paras Square Paras Group 250,000 Spaze Arrow Spaze Group 300,000 Sector 78 2016 Spaze Forum Spaze Group 250,000 Sector 70 2016 AREA (Sq. Ft.) Source: Colliers International India Research Colliers International | p. 5 Capital Values -INR Per Sq.ft. 95 - 140 1Q2015F MG Rd AVERAGE RENTAL AND CAPITAL VALUE TREND 1Q2014 YoY 1Q2013 QoQ Udyog Vihar & Industrial Sectors % Change 1Q2012 Rental Values National Highway 8 Micro Market 0 • Vacancy in Grade A office space has increased marginally; approximately 15.6 million sq ft of Grade A commercial office space was available for fit-out in 3Q 2013. 1Q2011 Capital Value 5,000 Golf Course Road Ext./Sohna Road Rental Value 10,000 Institutional Sectors (Sec44, 32, 18) Construction 15,000 1Q2010 Absorption 20,000 1Q2009 Vacancy Institutional Sectors (Sec44, 32, 18) 3% Grade a Capital Values MG Road 4Q 2013F MG Road 5% DLF Cyber City Golf Course Road 4% 4% 25,000 Golf Course Road • Projects launched during 3Q 2013 include “Paras Square” by Paras Group at Sector 63A; “Spaze Arrow” and “Spaze Forum”, both by Spaze Group located in Sectors 78 and 70, respectively. These projects together will contribute more than 0.8 million of Grade A commercial office space to the city’s inventory by the end of 2016. Golf Course Road Ext./Sohna Road 36% 1Q2008 3Q 2013 • The city witnessed completion of 0.5 million sq ft of Grade A office space. Projects contributing this supply were “BPTP Centra One” developed by BPTP Ltd at Sector 61 and “Splendor Trade Tower” developed by Splendor Group at Sector 65. Capital Values -INR Per Sq.ft. CITY OFFICE BAROMETER Manesar 26% Rental Values -INR Per Sq.ft. Per Month Gurgaon Udyog Vihar & Industrial Sectors 4% National Highway 8 18%
  6. 6. INDIA | 3Q 2013 | OFFICE nOIDA AVAILABLE Supply in Prime Areas • Demand in NOIDA office market decreased marginally in the third consecutive quarter. The city witnessed absorption of approximately 0.4 million sq ft primarily from IT/ITeS sector followed by banking and financial services sector. QoQ YoY 0% 3% Institutional Sectors (Non IT) 50 - 90 Institutional Sectors (IT) 30 - 75 0% 6% Comercial Sectors 90 - 110 0% 3% Industrial Sector 18 -45 0% 13% Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. • Rental and capital values remained stable across all the micro markets barring few premium projects which recorded marginal increase in capital values. COLLIERS VIEW : Looking ahead, corporate occupiers are expected to largely remain cost cautious and incline towards deferring expansion plans due to uncertain economic sentiments. However, leasing will remain moderate due to demand for consolidation and relocation. Rentals are expected to remain stable with downward bias due to large supply availability. Industrial Sectors Commercial Sectors AVERAGE RENTAL AND CAPITAL VALUE TREND 80 10,000 Forecast 70 8,000 60 50 6,000 40 4,000 30 20 2,000 10 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. KEY MARKET TRANSACTIONS CLIENT Building Name Alpha Media MMR Towers 80,000 80,000 AREA (Sq. Ft.) LOCATION TRANSCATION TYPE Sector 126 Lease Sector 142 Lease Sector 9 Lease HCL Advant IT Park Honnex NCPL Web Tower Pearson VUE SB Tower 9,400 Sector 16A Lease Standard & Poor Stellar IT Park 2,000 Sector 62 Lease LOCATION Expected Completion 5,300 KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME Developer Amigo Cyber Park Amigo AREA (Sq. Ft.) 250,000 NOIDA Expressway 2013 Oxygen SEZ Tower F 3C Group 250,000 NOIDA Expressway 2013 NOIDA One KLJ Group 600,000 Sector 62 2016 Source: Colliers International India Research p. 6 | Colliers International Capital Values -INR Per Sq.ft. % Change 1Q2015F Rental Values 1Q2014 Micro Market 0 1Q2013 Capital Value 3,000 1Q2012 Rental Value 6,000 Institutional Sectors (IT) Construction 9,000 1Q2011 • Grade “A” & “B” office space vacancy rate remained unchanged in 3Q 2013. About 8.6 million sq ft of Grade A & B office space was available for fit-out primarily located in Institutional Sectors 16A, 62 and Sectors 125 to 143 along with NOIDA Expressway. Absorption 12,000 Institutional Sectors (Non IT) Vacancy Grade A Capital Values 15,000 1Q2010 4Q 2013F Commercial Sectors (Sec 18) (Grade B) 0.2% 1Q2009 3Q 2013 Commercial Sectors (Sec 18) (Grade B) 10.6% Capital Values -INR Per Sq.ft. CITY OFFICE BAROMETER Industrial Sectors (Sec. 1-9, 57-60, 63-65) (Grade B) 1.0% Rental Values -INR Per Sq.ft. Per Month noida • Developers abstained from adding more speculative supply in the market and no new office project was launched during this quarter. However, a few projects located in sector 62 were completed this quarter including “Okaya Blue” by Okaya Group “Jagran IT Park” by Dainik Jagran Group and “Highway Tower by Sun Ramified Solutions Pvt. Ltd. & Capital Broadcasting Company Pvt. Ltd. All of these projects contributed around 1.2 million sq ft of grade A office space. Institutional Sectors (Sec.16A, 62, 125-142 90.5%
  7. 7. INDIA | 3Q 2013 | OFFICE CHENNAI AVAILABLE Supply in Prime Areas • The Chennai commercial market witnessed increased demand this quarter. The overall absorption of Grade A office space was approximately 1.68 million sq ft compared to 1.67 and 1.02 million sq ft in the previous two quarters. This increase in absorption is attributed to the few large floor size deals registered in the SEZ (Special Economic Zone) in Manapakkam and Taramani. QoQ YoY 65 - 85 0% 0% Guindy (SBD) 50 - 60 0% 4% Ambattur 25 - 30 0% 0% OMR (IT Corridor) 25 - 40 0% 0% GST road 35 - 40 0% 0% Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. OMR (IT Corridor) Ambattur 60 • Despite increased demand, rental and capital values for Grade A office space remained stable across all micro-markets due to persistent large vacancy levels. COLLIERS VIEW : Despite a revival in overall occupier demand, rental values are expected to remain stable in view of large accumulated vacant stock. Vacancy levels are expected to dip marginally due to limited prime office supply in the pipeline in next three months. Rental Values -INR Per Sq.ft. Per Month CBD AVERAGE RENTAL AND CAPITAL VALUE TREND 8,000 Forecast 7,000 50 6,000 40 5,000 30 4,000 3,000 20 2,000 10 1,000 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. KEY MARKET TRANSACTIONS CLIENT Building Name Amazon S P Infocity Bank of New York Mellon DLF SEZ E&Y DLF SEZ Fidelity Ramanujam IT SEZ 270,000 Kotak Mahindra Bank TVH Agnitio L & T Infotech DLF SEZ AREA (Sq. Ft.) LOCATION TRANSCATION TYPE Perungudi Lease 70,000 Manapakkam Lease 73,000 Manapakkam Lease Taramani Lease 60,000 Perungudi Lease 189,000 Manapakkam Lease 645,000 KEY UNDER CONSTRUCTION PROJECTS PROJECT NAME Developer Chennai One (BPO Park) Phase 2 ETL AREA (Sq. Ft.) 1,100,000 LOCATION OMR Expected Completion 2013 Ramanujan IT City Little Wood Tower Block D Tata Realty & Infrastructure 1,340,000 Taramani 2013 SP InfoCity Shapoorji Pallonji Group 1,200,000 OMR 2013 Source: Colliers International India Research Colliers International | p. 7 Capital Values -INR Per Sq.ft. % Change 1Q 2015F Rental Values 1Q 2014 Micro Market 0 1Q 2013 Capital Value 2,000 1Q 2012 Rental Value 4,000 Guindy (SBD) Construction • During the surveyed quarter, overall vacancy levels remained stable, except for Taramani and Perungudi, which witnessed a marginal increase due to the addition of new supply in the previous quarter. More than 13.5 million sq ft of Grade A commercial office space was available for fit-out. About 65% of this available supply was concentrated in OMR IT and Ambattur. 6,000 1Q 2011 Absorption 8,000 1Q 2010 Vacancy Grade a Capital Values 10,000 CBD 4Q 2013F Guindy (SBD) 7% 1Q 2009 3Q 2013 CBD 14% Ambattur 24% 1Q 2008 CITY OFFICE BAROMETER GST Rd 3% Velachery 1% Vadapalani 0% Capital Values -INR Per Sq.ft. chennai • New project completions this quarter include “Centre Point 2” at Guindy and “Padmavati” at Nungambakkam. These projects together add approximately 0.2 million sq ft of Grade A office supply to the city’s inventory. Projects launched this quarter were “Rajkamal Suites” at Nungambakkam and “Srikanth” at Ekkaduthangal measuring 0.1 million sq ft. OMR (IT Corridor) 50%
  8. 8. INDIA | 3Q 2013 | OFFICE BENGALURU (BANGALORE) AVAILABLE Supply in Prime Areas Bannerghatta Road 3% • The Bengaluru commercial market witnessed weakening demand this quarter. The absorption of Grade A commercial office space was approximately 1 million sq ft, which is significantly less than the previous two quarter’s absorption of 2.9 and 2.7 million sq ft. This decline in absorption is primarily due to circumscribed demand from the IT/ITeS occupiers during the quarter. YoY 80 - 100 0% 0% Hosur Rd. 20 - 40 0% 0% EPIP Zone/ Whitefield 24 - 33 0% 4% Electronic City 23 - 32 0% 0% Bannerghatta Rd. 50 - 60 0% 4% Outer Ring Rd. 50 - 60 0% 1% Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. • The vacancy rate increased marginally and approximately 11.5 million sq ft of Grade A commercial office space was available for fitout. • Both rental and capital values were remained largely stable across the micro-markets owing to large vacant stock and cautious demand. COLLIERS VIEW : The fourth quarter is expected to witness a moderate level of absorption as decision-making is expected to remain slow by corporations due to economic and political uncertainties. Considering the large available stock and cautious occupier demand, the price levels are likely to remain steady with marginal downward bias. Outer Ring Road Bannerghatta Road Electronic City AVERAGE RENTAL AND CAPITAL VALUE TREND 60 9,000 Forecast 50 7,500 40 6,000 30 4,500 20 3,000 10 1,500 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. KEY MARKET TRANSACTIONS CLIENT Building Name Accenture Prestige Technopolis 250,000 Adobe Prestige Platina Tech Park Genpact Pritech Park AREA (Sq. Ft.) LOCATION TRANSCATION TYPE HMT Layout Lease 250,000 Outer Ring Road Lease 120,000 Outer Ring Road Lease Global Edge Global Village 40,000 Mysore Road Lease Happiest Mind Suhas Tech Park 70,000 Electronic City Lease Qualcomm Prestige Tech Park 60,000 Outer Ring Road Lease KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME Developer Brigade Summit - Annexe Brigade Group AREA (Sq. Ft.) 550,000 Gopalan Axis - SEZ Gopalan Group 536,000 Prestige Platina Tech Park Prestige Group 1,000,000 LOCATION Expected Completion Whitefield 2015 Whitefield 2014 Outer Ring Road 2015 Source: Colliers International India Research p. 8 | Colliers International Capital Values -INR Per Sq.ft. QoQ 1Q2015F % Change 1Q2014F CBD Rental Values 1Q2013F Micro Market 1Q2012 Capital Value 0 EPIP Zone/ Whitefield Rental Value 5,000 1Q2011 Construction Hosur Road Absorption 10,000 1Q2010 • Projects launched during this quarter include, “Brigade Summit - Annexe” by Brigade Group and “Gopalan Axis – SEZ”, both located at Whitefield. The projects are expected to be completed by the end of 2015 and will contribute around 1 million sq ft of Grade A office space in the city. 15,000 CBD Vacancy Grade a Capital Values 20,000 1Q2009 4Q 2013F EPIP Zone/ Whitefield 44% 1Q2008 3Q 2013 Hosur Road 5% Capital Values -INR Per Sq.ft. CITY OFFICE BAROMETER CBD 6% Rental Values -INR Per Sq.ft. Per Month bengaluru • The third quarter saw completion of approximately 1 million sq ft of Grade A commercial office space. Projects completed this quarter include; “Mind Comp Tech Park” by Sattva Group at Whitefield; “Pritech – STPI” by Primal Group; and “Embassy Tech Square - Omega Block” by Embassy Group, both at Outer Ring Road (ORR). Outer Ring Road 30% Electronic City 12%
  9. 9. INDIA | 3Q 2013 | OFFICE KOLKATA NEW Supply in Prime Areas • olkata’s office market remained sluggish due K to the overall negative economic scenario. The city recorded absorption of approximately 0.2 million sq ft. The micro- markets that remained most active were the Sector 5, Salt Lake and New Town. YoY 100 - 125 -6% -6% 90 - 105 -7% -11% East Kolkata 70 - 80 -6% -6% Sector-5 48 - 50 0% -7% New Town, Rajarhat 34 - 38 -1% -1% CBD Ballygunge Circular Rd. Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. • Rental values declined in the range of 1 - 7% QoQ in almost every micro-market, other than the CBD and Sector 5; where they remained stable. COLLIERS VIEW : In the coming quarter, overall office leasing is expected to remain moderate. Due to the prevailing high vacancy levels in the peripheral micro-markets, such as Sector 5 Salt Lake and Rajarhat, rentals are expected to remain under pressure. PBD (New Town, Rajarhat) Sector-5 East Kolkata AVERAGE RENTAL AND CAPITAL VALUE TREND 120 12,000 Forecast 100 10,000 80 8,000 60 6,000 40 4,000 20 2,000 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. KEY MARKET TRANSACTIONS CLIENT Building Name Acclaris Ambuja Eco Space Ericsson Ambuja Eco Space IFK BPO BIPL AREA (Sq. Ft.) 10,000 9,000 20,000 LOCATION TRANSCATION TYPE New Town Lease New Town Lease Sector 5, Saltlake Lease Jacobs Infinity Lagoon 70,000 Sector 5, Saltlake Lease KPMG Godrej Water Side 20,000 Sector 5, Saltlake Lease PWC South City Pinacle 46,000 Sector 5, Saltlake Lease KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME Developer IT Godrej Simocco Phase 2 Godrej Genesis AREA (Sq. Ft.) 1,000,000 LOCATION Expected Completion Sector 5, Saltlake 2013 Primac Tower Pasari Group 40,000 Sector 5, Saltlake 2014 Window Technology Window Technology 20,000 Sector 5, Saltlake 2013 Source: Colliers International India Research Colliers International | p. 9 Capital Values -INR Per Sq.ft. QoQ 1Q2015F % Change 1Q2014F Rental Values 1Q2013 Micro Market 1Q2012 Capital Value 0 1Q2011 Rental Value 5,000 Ballygunge Circular Road Construction 10,000 1Q2010 Absorption • A few projects were launched during the quarter, including “Arora Water Front” by Arora Group, “Primac Tower” by Pasari Group and “Window Technology” by Window Technologies Ltd. Together, these projects will contribute more than 0.5 million sq ft of Grade A commercial office space to the city’s total inventory by 1Q 2017. CBD (Park St,Camac St,AJC Bose Road) Vacancy 15,000 1Q2009 4Q 2013F 1Q2008 3Q 2013 Grade a Capital Values 20,000 Capital Values -INR Per Sq.ft. CITY OFFICE BAROMETER Sector-5 52% Rental Values -INR Per Sq.ft. Per Month Kolkata • This quarter, various small commercial office projects were completed, including “APJ Tower” by APJ Group at Ruby, “Arihant Benchmark” by Arihant Group at Topsia, “Credent Tower” by Credent Group at Salt Lake, “Neighbourhood Tower” by Neighbourhood Group at Ballygunje Circular Road and “Lemon Eco” by Lemon Group at New Town. Together, all of these projects contributed more than 0.1 million sq ft of Grade A commercial office space to the city’s total inventory. East Kolkata 48%
  10. 10. INDIA | 3Q 2013 | OFFICE PUNE AVAILABLE Supply in Prime Areas Kharadi 25% • Steady occupier demand from the IT/ITeS sector kept Pune’s office market steady during 3Q 2013. The city witnessed absorption of approximately 0.85 million sq ft, which is about 15% less than the 1 million sq ft absorbed in both the previous quarters. An increasing trend of relocations and consolidations was seen in the market and resulted in a few large transactions (60,000 - 300,000 sq ft) in some micro-markets, such as Yerwada and Hadapsar. 0% 11% Bund Garden 50 - 60 0% -8% Airport Rd. / Pune station 42 - 60 0% -3% Aundh 45 - 60 0% 24% Senapati Bapat 55 - 85 0% 7% Bavdhan 35 - 45 0% 7% Kalyani Nagar 45 - 60 0% 0% Nagar Rd. 40 - 60 0% 18% Hinjewadi 30 - 45 0% 7% Hadapsar/ Fursungi 30 - 50 0% -6% Kharadi 32 - 65 0% 8% Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month. • Rents and capital values remained unchanged across every micro-market during the surveyed quarter. COLLIERS VIEW : Overall leasing is expected to remain upbeat during the next quarter. However, the majority of this demand is expected to come from corporate looking to optimise costs through consolidation and relocation in peripheral locales because of the lower rents and quality space that is available there. Under these circumstances, we expect rents to remain stagnant across the micromarkets in the coming quarters. Kharadi Hinjewadi Hadapsar/ Fursungi Nagar Road Bavdhan Kalyani Nagar Aundh 80 8,000 Forecast 70 7,000 60 6,000 50 5,000 40 4,000 30 3,000 20 2,000 10 1,000 0 0 Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties. KEY MARKET TRANSAcTIONS CLIENT Building Name Barclays EON AREA (Sq. Ft.) 100,000 LOCATION Kharadi TRANSCATION TYPE Lease Cummins Cummins IOC 700,000 Balewadi Lease Deutsche Bank Biz Bay 300,000 Yerwada Lease Principle Pentagon 560,000 Hadapsar Lease The Event Panchshil Tech Park 42,000 Yerwada Lease ZS Associates Pentagon 560,000 Hadapsar Lease LOCATION Expected Completion KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME Developer Business Bay Tower D Panchshil Cummins BTS Panchshil Realty Nyati Corporate Nyati Group AREA (Sq. Ft.) 800,000 Yerwada 2013 1,2000,000 Balewadi 2014 350,000 Yerwada 2014 Source: Colliers International India Research p. 10 | Colliers International Capital Values -INR Per Sq.ft. 45 - 55 AVERAGE RENTAL AND CAPITAL VALUE TREND 1Q2015F Baner 0 1Q2014F YoY 2,000 1Q2013 % Change QoQ 4,000 1Q2012 Rental Values 6,000 1Q2011 Micro Market • Developers continued to refrain from adding more speculative supply to the market. Only two small projects that totalled 140,000 sq ft of Grade A office space were launched during the quarter – “Pride Gateway” by Pride Purple Group and “Raikar” by Chaitanya Group. Both projects are located at Baner. 8,000 Senapati Bapat Road Capital Value 10,000 Airport road/ pune station Rental Value Grade a Capital Values 1Q2010 Construction Kalyani Nagar 10% 12,000 1Q2009 Absorption Nagar Road 14% Baner Vacancy 2% Senapati Bapat Road 3% Bavdhan 1% Bund Garden 4Q 2013F Bund Garden 6% Airport road/ pune station 1% Aundh 1Q2008 3Q 2013 Hinjewadi 24% Capital Values -INR Per Sq.ft. CITY OFFICE BAROMETER Baner 10% Rental Values -INR Per Sq.ft. Per Month pune • As no major projects were completed during the quarter, the city’s vacancy rate declined marginally. The city has approximately 5.1 million sq ft of Grade A commercial office space available for fit-out. Most of this space is concentrated in certain micro-markets, such as Kharadi, Hinjewadi, Nagar Road, Kalyani Nagar and Baner. Hadapsar/Fursungi 4%
  11. 11. INDIA | 3Q 2013 | OFFICE OFFICE SUBMARKETS 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 submarkets. 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 also emerging 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 and 125-142, 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. Pune The prime office sub-markets of Pune include Deccan Gymkhana, 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. Kolkata The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge circular Rd, East Kolkata), 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. City Barometer Increasing as compared to previous quarter Decreasing as compared to previous quarter Remained stable from previous quarter Colliers International | p. 11
  12. 12. INDIA | 3Q 2013 | OFFICE Colliers International (India) provides property services to property Investors and Occupiers. We deliver customised service solutions utilising local and global knowledge in partnership with our clients via our property Investment and Occupier service lines. These service lines include - Office Services, Facility Management, Project Management, Residential Services, Investment Services and Valuation & Advisory Services. www.colliers.com/india 482 offices in 62 countries on 6 continents United States: 140 Canada: 42 Latin America: 20 Asia Pacific: 195 EMEA: 85 For national offices services related queries please contact: $2.0 billion in annual revenue George Mckay, South Asia Director Office & Integrated Services George.mckay@colliers.com Tel: +91 22 4050 4553 1.1 billion square feet under management Vikas Kalia, National Director Office Services Vikas.kalia@colliers.com Tel: +91 124 456 7531 Over 13,500 + professionals Mumbai : Vaibhav Kumar, Office Director Vaibhav.kumar@colliers.com IndiaBulls Finance Centre, 1701-A, 17th Floor, Tower 3, Elphinstone Mills, Senapati Bapat Marg, Mumbai- 400 013. Tel : +91 22 4050 4527, fax : +91 22 2351 4272 Delhi NCR : Ajay Rakheja, Office Director Ajay.rakheja@colliers.com AUTHORS Amit Oberoi MRICS National Director, Valuation & Advisory; Research Email: Amit.oberoi@colliers.com Surabhi Arora MRICS Associate Director, Research Email: Surabhi.arora@colliers.com New Delhi : tatesman House, 4th Floor, Barakhamba Road, Connaught Place, S New Delhi, India - 110001 Tel : +91 11 3044 6423, fax : +91 11 3044 6500 Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 456 7500, fax : +91 124 456 7502 Bengaluru : Goutam Chakraborthy, Office Director Goutam.chakraborthy@colliers.com Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru, India - 560 042 Tel : +91 80 4079 5500, fax : +91 80 4112 3131 Sachin Sharma Assistant Manager, Research Email: Sachin.sharma@colliers.com Heliana Mano Assistant Manager,Valuation & Advisory Email: Heliana.mano@colliers.com For general queries and feedback : India.Research@colliers.com Tel: +91 124 456 7580 Pune : Suresh Castellino, Office Director Suresh.castellino@colliers.com Hotel Le Meridian, 101, R.B.M. Road, Pune, India - 411 001 Tel : +91 20 4120 6438, fax : +91 20 4120 6434 Chennai : Kaushik Reddy, Office Director Kaushik.reddy@colliers.com Heavitree Complex, Unit 1C, 1st floor, 23, Spurtank Road, Chetpet, Chennai, India - 600 031 Tel : +91 44 2836 1064, fax : +91 44 2836 1377 Kolkata : Soumya Mukherjee , Office Director Soumya.mukherjee@colliers.com Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1, Block EP & GP, Salt Lake Sector V, Kolkata - 700 091 West Bengal, India Tel : +91 33 2357 6501, fax : +91 33 2357 6502 This report and other research materials may be found on our website at www.colliers.com/India. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. © Copyright 2012 - 2013 All Rights Reserved. Recent Reports : India office India reSIDENTIAL GLOBAL RETAIL BENGALURU RESIDENTIAL MARKET GLOBAL INDUSTRIAL iNDIA bUDGET REAL ESTATE BENGALURU RESIDENTIAL MARKET HEAT’S UP Global | Retail | 2013 HIGHLIGHTS O Tourists and Brands Flock to High Streets > Slower economic growth in China did not make a lasting dent on tourist spending in Hong Kong. Retail sales have rebounded from the lows of Q3 2012. The latest figures from the Hong Kong Tourism Board show that Hong Kong received a total of 12.5 million inbound visitors during the three-month period ending May 2013, an 11.8% year-over-year increase. Nine million of those visitors were from Mainland China. > Combined with the arrival of international brands such as Apple, Zara, and Topshop, in addition to luxury brands expanding their presence, the Australian CBD is once again a popular shopping destination. Pitt Street Mall in Sydney was ranked the 8th most expensive in Colliers’ High Street survey. > Demand for flagship space in London continues to exceed supply, OFFICE PROPERTY MARKET OVERVIEW INDIA QUARTERLY UPDATE | JUlY | 2013 Residential Property Market Overview INDIA QUARTERLY UPDATE | AUGUST | 2013 driven largely from international retailers seeking a share of the spoils. This is leading to some notable rental growth in the West End’s core locations, with Regent Street witnessing double digit annual rental growth. > São Paulo and Rio de Janeiro remain leaders in shopping quality and diversity, achieving the most expensive rents and the focus of growth for luxury brands. Brazil’s High Street rents are the most costly in Latin America. São Paulo’s luxury shopping street Rua Oscar Freire saw a 15% growth in asking rents over the previous year. Rua Garcia D´Avila in Rio de Janeiro saw rents grow by 6.7%. Top Ten Global Retail Rents USD/SqFt/Year $3,052 New York, NY, Fifth Avenue $2,087 Hong Kong, Queen’s Road Central $1,994 Hong Kong, Canton Rd, Tsim Sha Tsui $1,325 New York, NY, Madison Avenue $1,223 London, Old Bond Street $1,114 Hong Kong, Causeway Bay $930 Zurich, Bahnhofstrasse $871 Sydney, Pitt Street Mall $836 Milan, Via Monte Napoleone $834 Paris, Champs Élysées All Rents in USD * Exchange Rate as of March 31, 2013 > Most U.S. high street rents grew over last year. In New York, Fifth Avenue rents grew by 11 percent. At $3,052 per square foot, Fifth Avenue rents are the most expensive in the world. On Las Vegas Boulevard, asking rents grew by 25 percent. Philadelphia’s Walnut Street showed the biggest gains in the U.S., with 33.8 percent growth. Accelerating success. Accelerating success. This book is printed on 100% Recyclable paper ver the last two decades, Bengaluru has cemented its position as the leading IT/ITeS. destination amongst top Indian cities. In 2012, Bengaluru commanded a 30% market-share of all of the commercial (office) real estate absorbed across the top seven cities (Delhi NCR, Mumbai, Pune, Chennai, Hyderabad and Kolkata). Bengaluru’s commercial absorption share was greater than Mumbai and Delhi NCR. The increase in jobs has been the primary growth-driver for residential real estate. The city’s population is expected to exceed 12 million by 2020, as compared to 8.5 million in 2011. Now of course the city is experiencing a surge in investors buying real estate. In spite of increasing prices, the city still is comparatively affordable compared to other major cities such as Mumbai and Delhi. With its higher rental yields and favourable currency exchange rates, Bengaluru is emerging as one of the most promising markets in the country for Residential investment. Moreover, the professional approach of developers is also providing much needed comfort to investors as well as end users. Considering the demand potential, it is not only Bengaluru-based developers that are investing, but many national level developers are also entering in this market. The government is also actively participating in the 58 THE INTERNATIONAL INDIAN July - August 2013 Colliers Picks: “The latest Colliers International research unvails top investment destination in Bengaluru (Bangalore)” Colliers International India Research PUNE RESIDENTIAL MARKET Global | Industrial | Midyear 2013 HIGHLIGHTS Trade Flows Bolster Industrial Demand in Asia and the Americas > Despite anemic U.S. job growth, demand for North American industrial warehouse space and modern distribution centers remains strong. In Q1 2013, the North American vacancy rate declined for the eighth straight quarter, down 20 basis points to 8.20%. Canada’s vacancy rate stands at 4.13%. > Thanks in part to a recent drop in exports to the United States, Mexico Office Absorption in Million sq ft among major 7 cities in India PUNE RESIDENTIAL MARKET REAL ESTATE COLLIERS INTERNATIONAL INDIA RESEARCH has seen slowing economic growth. In Q1 2013, several Mexico City industrial warehouses were vacated, slightly increasing the vacancy rate to 3.49%. LUXURIOUS YET AFFORDABLE Global Top 10 Industrial Warehouse Rents* LONDON (HEATHROW) 21.95 HONG KONG 21.83 SINGAPORE 21.02 TOKYO 20.61 20.04 OSLO 16.20 GENEVA PARIS 14.70 14.70 HELSINKI MINSK 13.23 SYDNEY 13.23 P une is a classic example of the real estate market where commercial activities lead the residential development in the city. Pune has a large manufacturing base, with many manufacturing as well as automobile companies having large plants. In last one decade the city has also emerged as a prominent IT/ITeS destination. Residential demand in the city is mostly from the large population of working professionals and the older generation retired from the mid-management cadre from Mumbai who find this place attractive due to affordability, peace and proximity to Mumbai. The the market now appears to have stabilized into a more rational mode of sustained growth. São Paulo has seen positive net absorption, in spite of the final tally in 2012 showing a 23% decrease over the previous year. Kharadi & Wagholi in East, Baner, Hinjewadi, Wakad & Pashan, Kothrud, Bavdhan & Wajre in west and Undri & Kondhwa in the South. city also attracts students who are compelled by the city’s offering of quality education. A large share of the upcoming premium residential space in Pune is in the form of township developments, the majority of which is concentrated in and around the IT and industrial hubs. In the past, the city has seen considerable appreciation in property values. The government is also actively participating in the economic growth of the city by undertaking various infrastructure projects such as Pune Metro, Bus Rapid Transit (BRT) and High Capacity Bus Route. Factors Driving Growth reflects in demand for houses 11.1% · Gradual shift in the demographic profile with more been since 2011. Rents grew by 11.41% year-over-year as of the end of Q1 2013. Shanghai’s industrial sector remained stable, with average asking rents for ground floor premises of high quality facilities in both the logistics and workshop sectors unchanged. service professionals with higher income range LEGEND EMEA · Falling Rupee making NRI APAC > In Hong Kong, high quality warehouse buildings are nearly fully investments more lucrative 3.9% occupied. Those users seeking to expand or rationalize their real estate costs have had to consider the option of split operations in lower quality buildings. however we expect industrial activity to improve, thanks to recent government actions. These include the government-proposed National Investment and Manufacturing Zones and the newly approved 51% foreign direct investment in multi-brand retail trading. commercial developments are most attractive. Pune witnesses multidirectional growth of residential projects in various locations such as Pimpri, Chinchwad, Chakan & Talegaon in North Viman Nagar Upcoming Infrastructure Driving City’s Growth · Rising per capita income 12.5% > Demand for Beijing’s logistics properties remained as strong as it has > Indian economic growth remained sluggish through the end of 2012, For investment purpose, the new residential developments located in peripheral areas alongside the 6-Month Change in Rent** > While occupier demand for industrial property in Brazil remains strong, Favorable exchange rate (INR/USD) 1 $ = INR 56.45 Markets to witness residential real estate growth Colliers’s Pick: “The areas that will witness maximum uptake would be those having commercial or industrial activities such as Hinjewadi, Magarpatta, Viman Nagar, Kharadi, Wagholi, Chakan, Pimpri, Bavdhan, Warje & Talegaon”. PARIS 2.2% · High commercial absorption HELSINKI GENEVA indicates sustained demand TOKYO growth HONG KONG MIN SK OSL O SIN SYD GAP ORE NEY LONDON - (HEATHROW) Source: Maharashtra Economic Survey, RBI, Colliers International India Research * December 2013 Rent (USD/PSF/YR) ** Local currency 56 THE INTERNATIONAL INDIAN THE INTERNATIONAL INDIAN 57 Accelerating success. Accelerating success.

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