OfficePrOPerty Market OverviewiNDiaQUarterLy UPDate | JaNUary | 2012Accelerating success.
4Q 2011 | THE KNOWLEDGEREsEARCh & fORECAsT REpORTsYDNEY CENTRAl BusINEss DIsTRICTRESEARCH & FORECAST REPORTINDIA OFFICE MA...
THE KNOWLEDGE | 4Q 2011 | Office | MUMbai                                                                                 ...
THE KNOWLEDGE | 4Q 2011 | Office | DeLhi                                                                                  ...
Office property market overview jan 2012
Office property market overview jan 2012
Office property market overview jan 2012
Office property market overview jan 2012
Office property market overview jan 2012
Office property market overview jan 2012
Office property market overview jan 2012
Office property market overview jan 2012
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Office property market overview jan 2012

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Colliers International is pleased to release the latest quarterly report: OFFICE PROPERTY MARKET OVERVIEW, INDIA - JAN 2012.
During 4Q 2011, the demand for commercial properties was restrained as compared to previous three quarters of the year since occupiers were cautious about committing to use real estate space. Rental values for grade ‘A’ office space remained stable in almost all the major markets across India. Looking forward, demand is likely to witness moderate growth amid a weaker global economic outlook.

For feedback on this report please contact:
Surabhi Arora MRICS
Associate Director, Research
surabhi.arora@colliers.com

Sachin Sharma
Assistant Manager, Research
Sachin.sharma@colliers.com

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Office property market overview jan 2012

  1. 1. OfficePrOPerty Market OverviewiNDiaQUarterLy UPDate | JaNUary | 2012Accelerating success.
  2. 2. 4Q 2011 | THE KNOWLEDGEREsEARCh & fORECAsT REpORTsYDNEY CENTRAl BusINEss DIsTRICTRESEARCH & FORECAST REPORTINDIA OFFICE MARkET MACRO ECONOMIC OVERVIEW ECONOMIC INDICATORs • As per the latest Reserve Bank of India (RBI) projections GDP growth rate was 6.9% for 4Q Gross Domestic product at factor cost 2011. The estimates by various agencies 10.00% 9.00% project the growth rate within a range of 7.0 8.00% to 8.0% for 2011-2012, suggesting a 7.00% 6.00% moderation in the economic growth. 5.00% 4.00% 3.00% • Provisional Wholesale Price Index as reported 2.00% by Ministry of Finance was 9.34% for 1.00% 0.00% December 2011. This quarter there was a Jan - Mar 09 Apr - Jun 09 Jul - Sep 09 Oct - Dec 09 Jan - Mar 10 Apr - Jun 10 Jul - Sep 10 Oct - Dec 10 Jan - Mar 11 Apr - Jun 11 Jul - Sep 11 ECONOMIC BAROMETER slight decrease in primary inflation due to the decrease in food inflation which stood at Dec-10 Dec-11 -3.36%. fDI in Real Estate 16,000 REPO RATE 6.25% 8.50% • In 4Q 2011, RBI refrained from increasing 14,000 repo rates. It further stated that there will 12,000 REVERSE REPO RATE 5.25% 7.50% 10,000 likely not be any increase to the policy rates, 8,000 CRR 6.00% 6.00% provided inflation moderates as is expected. 6,000 The repo rate is currently 8.5%. 4,000 INR Crore INFLATION 9.47% 9.34% 2,000 0 • The Department of Industrial Policy and 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11 April - Oct 2011 TREASURy BOND RATE 7.19% 8.39% Promotion (DIPP) recorded FDI inflow for the FIxED DEPOSIT (= 1yEAR) 8.50% 9.25% period April to October, 2011 in Housing & Real Estate at INR 2,130 crores; which is FOREIGN ExCHANGE 2/3rd in volume as compared to years 2008- 130 BsE sensex & Realty Index INR - USD 45.02 54.96 09 and 2009-10. The Housing and 120 INR- EURO 59.12 71.52 Construction contribution to the total FDI has 110 also reduced to 2.31% compared to 7% in the 100 previous financial year. 90 80RETuRN ON AlTERNATIVE INVEsTMENTs • In 4Q 2011, Indian Rupee (INR) depriciated 70 further by approximately 10% against the US 1-Aug-11 7-Aug-11 13-Aug-11 19-Aug-11 25-Aug-11 31-Aug-11 6-Sep-11 12-Sep-11 18-Sep-11 24-Sep-11 30-Sep-11 6-Oct-11 12-Oct-11 18-Oct-11 24-Oct-11 30-Oct-11 5-Nov-11 11-Nov-11 17-Nov-11 23-Nov-11 29-Nov-11 5-Dec-11 11-Dec-11 17-Dec-11 23-Dec-11 29-Dec-11 Dec-10 Dec-11 YoY % Dollar to close at INRs 54.40 to 1.00 USD on Change 29th December 2011. The INR also weakened * Rebase to 100 Note: As of 1st August 2011 BSE Sensex Realty Index GOLD 20,496 28,041 36.81% against the Euro dropping by approximately 5% to close the quarter at INRs INR 70.99 to 115 Exchange Rates SILVER 45,346 51,168 12.84% 1.00 Euro. 110 EQUITy (BSE 105 • Qualified Foreign Investor (QFIs) can now SENSEx) 20,389 15,836 -22.33% 100 directly invest in the Indian Equity Market. The 95 REALTy INDEx 2,856 1,497 -47.57% investment limit has been aggregated to 5 and 10% for individual and QFIs of their paid up 90 capital of the Indian company that they 85 1-Aug-11 7-Aug-11 13-Aug-11 19-Aug-11 25-Aug-11 6-Sep-11 12-Sep-11 18-Sep-11 24-Sep-11 30-Sep-11 6-Oct-11 12-Oct-11 18-Oct-11 24-Oct-11 30-Oct-11 5-Nov-11 11-Nov-11 17-Nov-11 23-Nov-11 29-Nov-11 5-Dec-11 11-Dec-11 17-Dec-11 23-Dec-11 29-Dec-11 establish in India. US$ Euro * Rebase to 100 Note: As of 1st August 2011 Source: Colliers International India Researchwww.colliers.com
  3. 3. THE KNOWLEDGE | 4Q 2011 | Office | MUMbai MuMBAI AVAIlABlE supplY IN pRIME AREAs • During 4Q 2011, more than 10.5 million sq ft of grade “A” office space was available for Most Navi Mumbai 7% Goregoan / JVLR 8% kalina 1% of this available stock was concentrated in Powai 5% Andheri, Lower Parel and Thane in the form Worli / Prabhadevi 1% Thane / LBS 21% of IT / ITeS office space. Malad 5% • No major new projects / phases of projects CBD 1% were completed this quarter in Mumbai. Increased cost of construction due to high Lower Parel 22% inflation and interest rates has delayed the Andheri East 24% delivery of many under construction projects BkC 5% by a few quarters. No new projects were launched during 4Q 2011.MUMBAI • Demand for commercial properties was 4Q 2011 GRADE ‘A’ AND GRADE’B’ restrained as occupiers were cautious about RENTAl VAluEs committing to occupy real estate space, due toCITY OffICE BAROMETER the uncertainty in the economic scenario. 300 Transaction volumes thus decreased. 250 3Q 2011 4Q 2011 200 • In a recent transaction, HDIL was reported to INR Per Sq ft Per Month 150 VACANCY have sold a 15.5-acre land parcel located at 100 Turbhe. ABsORpTION 50 0 • Rental values for grade ‘A’ office space CBD Andheri East BkC Lower Parel Malad Navi Mumbai Powai Worli/Prabhdevi Goregaon / JVLR kalina Thane / LBS Andheri East (IT) Lower Parel (IT) Malad (IT) Navi Mumbai (IT) Powai (IT) Goregaon / JVLR (IT) Thane / LBS (IT) CONsTRuCTION remained stable in almost all the SBD RENTAl VAluE locations. However, CBD and few peripheral markets such as Navi Mumbai, Thane and Grade A Grade B Goregaon observed marginal downward pressures on rentals in the range of 2 to 5%. GRADE ‘A’ AVERAGE RENTAl VAluE • Going forward rental values are expected to pRIME OffICE spACE RENTAl TREND remain under pressure due to prevailing 245 economic sentiment and lesser demand. 420 Forecast 370 210 • The State Government has hiked the ready 320 175 reckoner rates by 5 to 25% in various areas 270 INR per Sq ft per Month 220 140 with effect from 1 Jan 2012. 170 105 120INR per Sq ft per Month 70 70 20 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 35 4Q2011 0 CBD Andheri East Malad BkC 3Q2009 4Q2010 2Q2008 4Q2008 2Q2009 4Q2009 2Q2012 4Q2012 3Q2008 3Q2012 2Q2010 1Q2008 1Q2009 3Q2010 2Q2011 1Q2012 4Q2011 3Q2011 1Q2010 1Q2011 Lower Parel Navi Mumbai Powai Worli / Prabhadevi Goregaon kalina Thane / LBS / JVLR MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) Dow Chemical Godrej IT Park 55,000 Vikhroli Lease E Clinical Works Boomerang 75,000 Andheri Lease Franklin Templeton India Bulls Financial Centre 40,000 Lower Parel Lease L’Oreal India Mighty Majestic 80,000 Chembur Lease Vodafone One India Bull 50,000 Lower Parel Lease Source: Colliers International India Research COllIERs INTERNATIONAl | p. 3
  4. 4. THE KNOWLEDGE | 4Q 2011 | Office | DeLhi DElhI AVAIlABlE supplY IN pRIME AREAs • In 4Q 2011 approximately 1.2 million sq. ft. of grade ‘A’ office space was available for Connaught Place 2% sale/lease. Most of this available stock was Nehru Place 10% concentrated in suburban business districts such as Jasola and Saket. Saket 29% • A mixed use project in CBD, “Capitol Point” developed by DLF Ltd was completed this quarter, adding about 0.07 million sq ft Jasola 59% of grade ‘A’ office space to Delhi’s total inventory. • In this quarter the National Buildings Construction Corporation Ltd (NBCC) launchedDELHI a commercial project “NBCC Plaza” at Okhla, 4Q 2011 GRADE ‘A’ AND GRADE’B’ and Parsavnath Group started construction of RENTAl VAluEs a commercial grade ‘A’ project in ConnaughtCITY OffICE BAROMETER Place along kasturba Gandhi Marg. 400 350 300 3Q 2011 4Q 2011 • Amid global and domestic economic 250 uncertainties, moderate demand was observed 200 VACANCY in all of the micro-markets. A minor correction INR per Sq Ft per Month 150 in the range of 1 to 2% was observed in rental 100 ABsORpTION values of grade ‘A’ office space across all of 50 CONsTRuCTION the micro-markets. 0 Nehru Place Jasola Saket Netaji Subhash Place Connaught RENTAl VAluE • Looking forward, demand is likely to witness Grade A Grade B moderate growth, however, owing to limited grade ‘A’ supply the rentals are expected to remain largely stable across all the micro markets. GRADE ‘A’ AVERAGE RENTAl VAluE pRIME OffICE spACE RENTAl TREND • The Delhi cabinet has hiked the circle rates 280 for the second time this year. The rates has 450 245 Forecast been revised from 100 to 250% in areas 400 210 falling under various categories. Earlier this 350 year in February 2011, the circle rates were 300 175 250 140 increased upto 100%. The increase in circle 200 INR per Sq ft per Month 105 rates resulted in very limited activity in resale 150INR per Sq ft per Month 70 commercial markets as the margins went 100 35 down significantly due to higher capital gain 50 0 tax and stamp duty. 2Q2008 3Q2008 4Q2008 1Q2008 2Q2009 3Q2009 4Q2009 1Q2009 2Q2010 3Q2010 4Q2010 1Q2010 2Q2011 3Q2011 4Q2011 0 4Q2012 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 2Q2008 Nehru Place Jasola Cannaught Saket place Netaji Subhash MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) Birla Sun Life Aggarwal Tower 10,000 Rajendra Place Lease HRD Vijaya Building 24,000 Connaught Place Lease L&T DCM Building 19,000 Connaught Place Lease Red Hat Copia 8,000 Jasola Lease Wipro Mohan Cooperative 60,000 Mohan Cooperative Lease Source: Colliers International India Researchp. 4 | COllIERs INTERNATIONAl

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