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. ...

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 Office property market overview jan 2012 Document Transcript

    • OfficePrOPerty Market OverviewiNDiaQUarterLy UPDate | JaNUary | 2012Accelerating success.
    • 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
    • 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
    • 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
    • THE KNOWLEDGE | 4Q 2011 | Office | GUrGaON GuRGAON AVAIlABlE supplY IN pRIME AREAs • Over 9.5 million sq ft of grade ‘A’ office stock was available for lease this quarter in Gurgaon. More than 60% of this stock was IT / ITeS NH8/ Udyog Vihar 31% office space, located at Golf Course Road, Golf Manesar 24% Course Road Extension, Sohna Road, National Highway-8, Udyog Vihar, Cyber City and Manesar. DLF Cyber City 6% • Projects / phases of projects which saw Institutional Sectors / Sushant Lok completion this quarter were “Veritas” Golf Course Road/ 10% developed by Realtech Group on Golf Course Ext /Sohna Road 25% MG Road 4% Road, “Platina” developed by Salcon Group on M.G. Road, and “Professional Point” by Vatika Group on Golf Course Road Extension. All of these projects contributed approximately 0.4GURGAON 4Q 2011 GRADE ‘A’ AND GRADE’B’ million sq ft of grade ‘A’ office space to the RENTAl VAluEs city’s inventory.CITY OffICE BAROMETER • A number of new commercial projects 140 120 were launched during the quarter including, 100 3Q 2011 4Q 2011 “Commercial Centre” by Unitech Ltd. at 80 INR per sq ft per month Sector-71, “Time Arcade” by Dhoot Group at 60 VACANCY Sector 37-C and “VSR” a project by VSR Group 40 in Sector-114 on Dwarka Expressway. These 20 ABsORpTION 0 projects are expected to be completed by the NH8/Udyog Vihar Manesar DLF Cyber City NH8/Udyog Vihar Manesar MG Road Golf Course Road /Ext /Sohna Road Institutional Sectors / Sushant Lok Sohna Road CONsTRuCTION end of 2014 and will together contribute about 0.6 million sq ft of grade ‘A’ office space. RENTAl VAluE • Gurgaon continued to remain as the preferred Grade A Grade B location for corporate and IT/ITeS companies to set up their office but absorption was restrained in 4Q 2011 compared to previous GRADE ‘A’ AVERAGE RENTAl VAluE two quarters due to overall cautious pRIME OffICE spACE RENTAl TREND sentiments prevailed in the market. 180 120 110 Forecast • Grade A office space rental values observed a 160 100 correction in the range of 2 to 6% across all 140 90 120 80 micro-markets, except in a few locations such 100 as DLF Cyber City, M.G. Road, NH8 / Udhyog INR per sq ft per month 70 80 60 50 Vihar and Manesar. 60INR per Sq ft per Month 40 40 30 • In order to improve connectivity between 20 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 20 4Q2011 10 Delhi and Gurgaon a new metro corridor 0 from Dwarka Sector-21 to IFFCO Chowk was MG Road Golf Course Road/Ext /Sohna Road DLF Cyber City (IT) Golf Course Road/ 2Q2008 4Q2008 2Q2009 4Q2009 3Q2008 3Q2009 2Q2010 4Q2010 1Q2009 2Q2012 3Q2010 3Q2012 4Q2012 1Q2010 2Q2011 1Q2012 4Q2011 3Q2011 1Q2011 Ext /Sohna Road (IT) proposed, which is expected to be operational Institutional Sectors /Sushant Lok NH8/Udyog Vihar (IT) Manesar NH8/Udyog Vihar by 2016. Manesar (IT) MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) Aircel Spazeedge 75,000 Sohna Road Lease John keel DLF Building 14B 25,000 Cyber City Lease Mckinsey Vatika Business park 180,000 Sohna Road Lease Panasonic ABW Tower 13,000 MG Road Lease William E Connor Vipul Square 39,000 Sohna Road Lease Source: Colliers International India Research COllIERs INTERNATIONAl | p. 5
    • THE KNOWLEDGE | 4Q 2011 | Office | NOiDa NOIDA AVAIlABlE supplY IN pRIME AREAs • In 4Q 2011, approximately 5.3 million sq ft of grade ‘A’ and grade ‘B’office space was Industrial Sectors available for sale or lease. About 65% of this (Sec. 1-9, 57-60, 63-65) 49% available supply was IT / ITeS office space Commercial Sectors (sec 18) 1% located in Institutional Sectors like 16A, 62, 125 - 142, etc. • More than 1 million sq ft of grade ‘A’ office supply was added in NOIDA this quarter. Institutional Sectors Commercial Sectors Projects / phases of projects constituting this (Sec.16A, 62, 125-142) 48% (Sec 18) (Grade B) 2% supply were, “Technotouch” developed by Touchmind Infra in Sector-125 and “Technova” developed by Logix Group in Sector-142.NOIDA • In this quarter new project launches were, “Supernova” by Supertech in Sector- 4Q 2011 GRADE ‘A’ AND GRADE’B’ RENTAl VAluEs 94, “Timetech Park” by Dhoot Group andCITY OffICE BAROMETER “Splendor IT Park” by Splendor Group both 100 at located at Sector-142. All of these projects 90 80 3Q 2010 4Q 2011 were expected to be completed by the end of 70 2014, and will add approximately 2 million sq 60 50 INR Per SqFt Per Month VACANCY ft of grade ‘A’ office space to the city’s total 40 30 stock. 20 ABsORpTION 10 • Following the trend of the previous quarter, 0 Commercial Sectors (Sec 18) Institutional Sectors (Sec.16A,62, 125-142 ) Institutional Sectors (Sec 16A,62 ,125- 142) (IT) Industrial Sectors (Sec 1-9,57 -60, 63 -65) CONsTRuCTION overall demand for grade ‘A’ office space RENTAl VAluE remained subdued and only a few transactions were observed in locations such as NOIDA Grade A Grade B Expressway and Institutional Sectors. • Rental values for grade ‘A’ IT/ITeS office space remained stable in almost all of the micro- GRADE ‘A’ AVERAGE RENTAl VAluE pRIME OffICE spACE RENTAl TREND markets in NOIDA, however, rental values for commercial properties witnessed an increase 80 Forecast in the range of 2 to 5% due to very limited 140 supply of grade ‘A’ commercial space. 70 120 100 60 50 • Going forward the rentals for IT/ITeS office 80 INR Per SqFt Per Month space are expected to remain stable however, 60 40 40 rentals of commercial office space and specialINR per Sq ft per Month 30 20 20 economic zones may witness marginal 0 10 upward movements as most of the grade ‘A’ 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 0 under construction commercial projects are 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 expected to be completed only by end of year Industrial Sector Commercial Sectors Institutional Sectors (IT) Institutional Sectors (Non IT) 2013. MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) Galaxy Stellar 16,000 Sector 62 Lease kPMG Advant IT Park 90,000 NOIDA Expressway Lease Vcustomer Advant IT Park 60,000 NOIDA Expressway Lease Wipro A-3 90,000 Sector 3 Lease Source: Colliers International India Researchp. 6 | COllIERs INTERNATIONAl
    • THE KNOWLEDGE | 4Q 2011 | Office | cheNNai ChENNAI AVAIlABlE supplY IN pRIME AREAs • This quarter approximately 10.0 million sq ft of grade ‘A’ office stock was available for sale or lease in Chennai. Out of this total available OMR (IT Corridor) 38% stock 90% was IT / ITeS office space primarily located at OMR and Ambattur. GST Rd 3% Velachery 1% • In 4Q 2011, projects / phases of project that saw completion were “Prestige Palladium” CBD by Prestige Group at Greams Road, “Fagun 15% Chambers” by Fagun Company Pvt. Ltd Ambattur 33% at Egmore and “Central Square 2” by Sri Guindy (SBD) 9% kausalya Construction Ltd SkCL at Guindy. All of these projects together contributed approximately 0.5 million sq ft to the city’sCHENNAI grade ‘A’ office inventory. 4Q 2011 GRADE ‘A’ IT AND NON IT RENTAl VAluEs • Absorption remained moderate and few largeCITY OffICE BAROMETER floor-plate leases were concluded during 80 the quarter; the demand was primarily in 70 3Q 2011 4Q 2011 special economic zones driven by the IT / 60 50 ITeS, automobile and service sectors. Overall INR per sq ft per month 40 VACANCY vacancy levels decreased marginally, primarily 30 due to significant drop in the vacancy levels in 20 ABsORpTION Special Economic Zones (SEZs). 10 0 CONsTRuCTION Ambattur Guindy (SBD) OMR (IT Corridor) GST road CBD • Rental values remained largely unchanged RENTAl VAluE across all the micro-markets and a minor IT NON IT correction in the range of 1 to 2% was observed in OMR (IT Corridor) primarily due to the large available supply. GRADE ‘A’ AVERAGE RENTAl VAluE • In the near future the overall rentals are pRIME OffICE spACE RENTAl TREND expected to remain stable, as most of the 60 upcoming supply anticipated in near future is 90 55 Forecast of Special Economic Zones (SEZs) for which 50 80 45 demand is on rise. 70 40 35 60 INR per sq ft per month 30 50 25INR per Sq ft per Month 40 20 15 30 10 20 5 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 0 2Q2008 4Q2008 2Q2009 4Q2009 3Q2008 3Q2009 2Q2010 4Q2010 1Q2008 1Q2009 2Q2012 3Q2010 4Q2012 3Q2012 1Q2010 2Q2011 1Q2012 4Q2011 3Q2011 1Q2011 Ambattur GST road CBD Guindy (SBD) OMR (IT Corridor) MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) ABB Prestige Palladium 20,000 Greams Road Lease ABB Jayanth Tech Park 48,000 Nandambakkam Lease Apollo Hospitals Prestige Palladium 20,000 Greams Road Lease Fidelity Investment Services HDFC 75,000 Sholinganallur Lease Foster & Wheeler Ascendas 1,00,000 Taramani Lease kalpathy Group Ran Tech Park 1,80,000 Sholinganallur Sale Source: Colliers International India Research COllIERs INTERNATIONAl | p. 7
    • THE KNOWLEDGE | 4Q 2011 | Office | beNGaLUrU BENGAluRu AVAIlABlE supplY IN pRIME AREAs • Approximately 11 million sq ft of grade ‘A’ office space was available for fit-out in Bengaluru Electronic City 9% this quarter. More than 80% of this available stock was in the form of IT / ITeS office space Bannerghatta Road 2% concentrated in peripheral business districts Outer Ring Road such as the EPIP Zone, Whitefield, Electronic 10% City, Bannerghatta Road and Outer Ring CBD 8% Road. • Projects / phases of projects launched in EPIP Zone/ Whitefield 64% Hosur Rd 7% Bengaluru this quarter include “Embassy Vogue” located in Vasanth Nagar by Embassy Developers, “Premia” in Outer Ring Road by Sattva Group, “The Hub” at Sarjapur RoadBENGALURU and Spectrum in Bannerghatta Road by SJR 4Q 2011 GRADE ‘A’ AND GRADE’B’ Group. These projects together will add RENTAl VAluEs approximately 1.5 million sq ft of grade ‘A’CITY OffICE BAROMETER office space to the city’s inventory by the end 90 80 of 2012. 70 3Q 2011 4Q 2011 60 • This quarter no new supply was added to the 50 INR Per SqFt Per Month VACANCY city’s grade ‘A’ inventory. 40 30 20 ABsORpTION • Absorption remained upbeat during the quarter 10 0 CONsTRuCTION however, a large share of this absorption CBD Hosur Road EPIP Zone/ Whitefield Electronic City(IT) Bannerghatta Road Outer Ring Road was in the form of preleased hard options RENTAl VAluE primarily in special economic zones and IT Grade A Grade B parks located at peripheral and secondary micro markets. • Following the trend of the previous quarter, GRADE ‘A’ AVERAGE RENTAl VAluE rental values remained stable in most of the pRIME OffICE spACE RENTAl TREND micro-markets barring Bannerghatta Road 50 and Outer Ring Road. Rental values in this 100 Forecast area witnessed an appreciation in the range 90 80 45 of 4 to 5% QoQ, because of occupiers interest 70 60 40 in the area and limited supply. 50 INR Per SqFt Per Month 35 40 30 30 • The much awaited Bengaluru Namma Metro 20INR per Sq ft per Month 25 commenced operations this quarter. In a 10 0 positive development, a few underpasses and 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 20 15 fly-overs on the Outer Ring Road were open CBD Bannerghatta Road for commuters this quarter. 1Q2008 4Q2012 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 Hosur Road Electronic City EPIP Zone / Whitefield Outer Ring Road MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) Flipkart Essae Summit 40,000 koramangala Lease Goodrich Aerospace Netra Tech Park 80,000 Whitefield Lease IMS The Millenia 25,000 CBD Lease Mercedez Whitefield Palm 200,975 Whitefield Lease Novo Nordisk Prestige Featherlite 18,500 Whitefield Lease Pega System Pritech SEZ 50,000 Outer Ring Road Lease Source: Colliers International India Researchp. 8 | COllIERs INTERNATIONAl
    • THE KNOWLEDGE | 4Q 2011 | Office | kOLkata KOlKATA NEW supplY IN pRIME AREAs • In 4Q 2011, approximately 0.20 million sq ft of grade ‘A’ office space was added to the total inventory. The projects / phases of projects which contributed to this new supply were “Diamond Prestige” by Diamond Group at AJC Bose Road and “Godrej Genesis” by CBD Sector -5 Godrej Properties at Salt Lake. 50% 50% • Projects launched in this quarter were “Mani Casadona” by Mani Group at New Town, “DN 13” by a local developer and “Infinity Magnacon” by Infinity Group at Sector-5. All of these projects will have more than 2 million sq ft of gross leasable area and are expectedkOLkATA to be completed by the end of 2014. 4Q 2011 GRADE ‘A’ AND GRADE’B’ RENTAl VAluEs • An appreciation in the range of 4 to 8%CITY OffICE BAROMETER was observed in the PBD in locations such 140 120 as Ballygunge Circular Road and Sector-5, 100 3Q 2011 4Q 2011 However the CBD and East kolkata rental 80 values remain stable. INR per sq ft per month 60 VACANCY 40 • In the near future the market is expected to 20 ABsORpTION remain stable in terms of rental values. 0 Ballygunge -Circular RD PBD (New Town, Rajarhat East kolkata CBD (Park St, Camac St,AJC Bose Rd) Sector-5 Sector-5 (IT) PBD New Town, Rajarhat (IT) CONsTRuCTION • In a major decision, the government has RENTAl VAluE cleared Infosys’ plans for setting up its second Grade A Grade B campus in the satellite township of Rajarhat. The government has also planned to set up a financial hub at Rajarhat and the first phase of the project, to be set up on 25 acres, will entail GRADE ‘A’ AVERAGE RENTAl VAluE an investment of about INR 250 crores. pRIME OffICE spACE RENTAl TREND 160 90 Forecast 140 80 120 70 100 60 INR per sq ft per month 80 50 60 40INR per Sq ft per Month 30 40 20 20 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 4Q2011 3Q2011 10 0 CBD (Park St,Camac St, East kolkatta 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 AJC Bose Rd) Ballygunge Circular Rd Sector 5 PBD (New Town, Rajarhat MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) Deltapower Netguru 7,500 Sector-V Lease Glaxo Ambuja Ecospace 10,000 New Town, Rajarhat Lease Sarda Group Netguru 7,900 Sector-V Lease Sparsh BPO Shivshakti 25,000 Madhyamgram Lease Source: Colliers International India Research COllIERs INTERNATIONAl | p. 9
    • THE KNOWLEDGE | 4Q 2011 | Office | PUNe puNE AVAIlABlE supplY IN pRIME AREAs • In 4Q 2011 over 9.5 million sq ft of grade ‘A’ office space was available for lease. Out of Hinjewadi 13% Hadapsar/Fursungi 8% this total supply, most was concentrated on kharadi 5% Nagar Road, Hinjewadi, Airport Road and the Bund Garden 1% Hadpasar / Fursungi micro-markets in the Airport road 10% form of IT / ITeS office space. Aundh 1% Senapati Bapat Rd 1% Bavdhan 2% • No fresh supply was added to the Pune kalyani Nagar 5% commercial market this quarter as many developers have slowed down construction Nagar Road 55% due to moderate demand. Similarly no new launches were seen in this quarter. However, a mixed-use project was proposed by DSk builders in Fursungi.PUNE 4Q 2011 GRADE ‘A’ IT AND NON IT • Due to restrained demand and the anticipated RENTAl VAluEs large upcoming supply, rental values remainedCITY OffICE BAROMETER stable across all micro-markets. Absorption 90 was primarily from the BFSI, manufacturing 80 70 3Q 2011 4Q 2011 and IT / ITeS sectors and more than 50% of 60 the total absorption was in Special Economic 50 INR Per SqFt Per Month VACANCY Zones (SEZ). 40 30 20 ABsORpTION • Going forward rental values are expected to 10 0 remain stable. Baner kalyani Nagar Bund Garden Airport road/ pune station Aundh Senapati Bapat Road Bavdhan Nagar Road Hinjewadi Hadapsar/Fursungi kharadi CONsTRuCTION RENTAl VAluE • The 500-metre-long Suman Nagar Flyover IT Non IT became operational this quarter which will better facilitate connectivity between Pune and Mumbai’s peripheral micro-markets such as Vashi, Navi Mumbai and Thane. GRADE ‘A’ AVERAGE RENTAl VAluE pRIME OffICE spACE RENTAl TREND 130 70 120 Forecast 110 60 100 90 50 80 INR Per SqFt Per Month 70 40 60 30 50INR per Sq ft per Month 40 20 30 20 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 10 4Q2011 0 Bavdhan Aundh Airport road/pune station 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 Bund Garden Nagar Road Baner kalyani Nagar Senapati Bapat Rd khardi Hinjewadi / Hadapsar/Fursungi MARKET TRANsACTIONs CLIENT BUILDING NAME AREA LOCATION TRANSACTION TyPE (SQ. FT.) Atlas Copco Affinity Express Bldg 30,000 Hinjiwadi Lease Crest Premedia Cybercity 44,000 Hadapsar Lease DB Zento Cybercity 44,000 Hadapsar Lease Eclerx DLF 45,000 Hinjewadi Lease System Plus Cyber City 44,000 Hadapsar Lease Source: Colliers International India Researchp. 10 | COllIERs INTERNATIONAl
    • THE KNOWLEDGE | 4Q 2011 | Office | sUbMarketsOffICE suBMARKETsMumbaiThe major business locations in Mumbai are the CBD (Nariman Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandrakurla Complex (BkC) and Andheri kurla stretch. Powai, Malad and Vashi are the preferred IT/ITES destinations, while Airoli at Navi Mumbai and LalBahadur Shastri Marg are emerging as new office and IT/ITES submarkets.DelhiThe commercial areas in New Delhi metropolitan area can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji CamaPlace, Netaji Subhash Place, Jasola and Saket .GurgaonThe 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.NoidaNoida market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62and 125-142, industrial sectors include sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector.ChennaiPrime office properties in Chennai are located in four principal sub-markets: the CBD, the IT Corridor, the SBD and the PBD. The SBD comprisesGuindy, Manapakkam, Velachery and other areas. The PBD primarily includes Ambattur and GST Road, while the IT Corridor is the Old MahaballipuramRoad (OMR) in south Chennai.BengaluruPrime office properties in Bangaluru can be divided into three principal sub-market— CBD, the SBD consisting of Banerghatta Road & Outer RingRoad (ORR) and PBD including Hosur Road, EPIP Zone, Electronic City and Whilefield.PuneThe prime office sub-markets of Pune include Deccan Gymkhana, Senapati Bapat Road & Camp (SBD), while the PBD includes Aundh, Bund Garden,Airport Road and kalyani Nagar, among other locations. The eastern corridor, along with Nagar Road and kharadi, have emerged as a preferredlocation for financial and IT/ITES companies.KolkataThe major business locations in kolkata are CBD (Park Street, Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge circular Rd, Eastkolkata), East kolkata and PBD (New Town & Rajarhat). The area around Park Street, Camac Street and AJC Bose road houses number of high-risescommercial 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
    • THE KNOWLEDGE | 4Q 2011Colliers International (India) provides property services to property Investors and Occupiers. Wedeliver customised service solutions utilising local and global knowledge in partnership with our 512 offices in 61 countries on 6 continentsclients via our property Investment and Occupier service lines. These service lines include - OfficeServices, Facility Management, Project Management, Residential Services, Investment Services United States: 125 Canada: 38and Valuation & Advisory Services. Latin America: 18www.colliers.com/india Asia Pacific: 214 EMEA: 117For national offices services related queries please contact: $1.55 billion in annual revenueGeorge Mckay, South Asia Director Vikas kalia, National Director 2,179 million square feet under managementOffice & Integrated Services Office ServicesGeorge.mckay@colliers.com Vikas.kalia@colliers.com Over 12,500 + professionalsTel: 91 22 4050 4553 Tel: 91 124 456 7531 AUTHORSMumbai : Prabhu Raghavendra, Office Director Prabhu.raghavendra@colliers.com Amit Oberoi MRICS 31/A, 3rd floor, Film Center, 68, Tardeo Road, Mumbai, India - 400 034. National Director, Valuation & Advisory; Research Email: Amit.oberoi@colliers.com Tel : 91 22 4050 4500, fax : 91 22 2351 4272Delhi NCR : Ajay Rakheja, Office Director Surabhi Arora MRICS Associate Director, Research Ajay.rakheja@colliers.com Email: Surabhi.arora@colliers.com New Delhi : Statesman House, 4th Floor, Barakhamba Road, Connaught Place, Sachin Sharma New Delhi, India - 110001 Assistant Manager, Research Tel : 91 11 4360 7500 - 23, fax : 91 11 2335 6624 Email: Sachin.sharma@colliers.com Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, Heliana Mano India - 122002 Assistant Manager,Valuation & Advisory Tel : 91 124 437 5807, fax : 91 124 437 5806 Email: Heliana.mano@colliers.comBengaluru : Goutam Chakraborthy, Office Director For general queries and feedback : Goutam.chakraborthy@colliers.com India.Research@colliers.com Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru, Tel: 91 124 456 7580 India - 560 042 Tel : 91 80 4079 5500, fax : 91 80 4112 3131 For Press enquiries: Poonam MahtaniPune : Suresh Castellino, Office Director National Director, knowledge System Email: India.marketing@colliers.com 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 This report and other research materials may be found on our website at www.colliers.com/India. Questions relatedChennai : kaushik Reddy, Office Director to information herein should be directed to the Research Department at the number indicated above. This document kaushik.reddy@colliers.com has been prepared by Colliers International for advertising Heavitree Complex, Unit 1C, 1st floor, 23,Spurtank Road, Chetpet, Chennai, and general information only. Colliers International makes no guarantees, representations or warranties of any kind, India - 600 031 expressed or implied, regarding the information including, Tel : 91 44 2836 1064, fax: 91 44 2836 1377 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.Kolkata : Soumya Mukherjee , Office Director Colliers International excludes unequivocally all inferred Soumya.mukherjee@colliers.com or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1, damages arising there from. Block EP & GP, Salt Lake Sector V, kolkata - 700 091 West Bengal, India Tel : +91 33 2357 6501 Extn : 206 , fax +91 33 2357 6502 © Copyright 2012 - 2013 All Rights Reserved.Recent Reports :OFFICE Residential PropertyPROPERTY MARKET OVERVIEW Market Overview ASIA PACIFIC ASIA PACIFICINDIA INDIA INDUSTRIAL MARKET OVERVIEW OFFICE MARKET OVERVIEWQUARTERLY UPDATE | OCTOBER | 2011 QUARTERLY UPDATE | OCTOBER | 2011 December 2011 3Q 2011Accelerating success. Accelerating success. Accelerating success. Accelerating success. This book is printed on 100% Recyclable paper Accelerating success. Accelerating success.