The knowledge report india office property market overview 1 q 2012

1,187 views

Published on

Colliers research has come up with its latest knowledge report India Office Property Market Overview, April 2012. You might find it interesting to note that as per our research, office inventory is forecasted to increase due to new developments that are expected to be completed in a span of 2-3 years. However, rental rates are forecasted to remain stable in the near future due to the equilibrated situation of office demand and supply in most of the markets.
For more detailed information kindly download the report. I am sure you will find the report an interesting and informative read.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,187
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
16
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

The knowledge report india office property market overview 1 q 2012

  1. 1. OfficeProperty Market OverviewINDIAQUARTERLY UPDATE | APRIL | 2012Accelerating success.
  2. 2. 1Q 2012 | THE KNOWLEDGEResearch & forecast reportSYDNEY CENTRAL BUSINESS DISTRICTresearch & forecast ReportIndia office market MACRO ECONOMIC OVERVIEW ECONOMIC INDICATORS • During 4Q 2011 GDP grew at 6.9 percent in real terms suggesting a moderation in growth Gross Domestic Product at factor cost in comparison to preceding two quarters. The 10.0% 9.0% finance minister presented India’s Union 8.0% Budget 2012 -13 this quarter projecting a GDP 7.0% 6.0% growth rate of 7.6% for 2012-13. 5.0% 4.0% 3.0% • The headline inflation figure moderated from 2.0% 8.3 percent in December 2011 to 6.6 and 1.0% 0.0% 6.95% in January and February 2012, 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 Jan - Dec 11 ECONOMIC BAROMETER respectively. Keeping in view the moderation in inflation rate the Reserve Bank of India Mar-11 Mar-12 (RBI) has softened monetary policy for the FDI in Real Estate first time since one and a half year . This has 16,000 REPO RATE 6.50% 8.50% been done by reducing CRR (Cash Reserve 14,000 Ratio) by 50 basis points in January and a 12,000REVERSE REPO RATE 5.50% 7.50% 10,000 further reduction of 75 basis point in March 8,000 CRR 6.00% 4.75% 2012. The current CRR rate is 4.75%. 6,000 4,000 INR Crore INFLATION 9.68% 6.89% • The Budget remained silent on most of the 2,000 0 major real estate related issues. It did however 2005 - 06 2006 - 07 2007 - 08 2008 - 09 2009 - 10 2010 - 11 April - Jan 2012 PRIME 8.25% - 9.50% 10.00% - 10.75% LENDING Rate mentioned that efforts are on to arrive at a DEPOSIT RATE political consensus on the issue of allowing 7.75% - 9.50% 8.50% - 9.25% (>1 YEAR) 51% Foreign Direct Investment (FDI) in multi-Foreign Exchange brand retailing. 160 BSE Sensex & Realty Index 45.02 50.39 150 INR - USD 140 • The Budget aims to provide impetus to 130 INR- Euro 59.12 65.89 affordable housing by providing various 120 110 incentives to both developers and end users. 100 For example the external Commercial 90Return on Alternative Investments Borrowings (ECB) is allowed for low cost 80 70 affordable housing projects which would help 2-Jan-12 11-Jan-12 20-Jan-12 29-Jan-12 7-Feb-12 16-Feb-12 25-Feb-12 5-Mar-12 14-Mar-12 23-Mar-12 1-Apr-12 Mar-11 Mar-12 YoY % developers to raise debt at lower cost. Change * Rebase to 100 BSE Sensex Realty Index Note: As of 1st August 2011 Gold 20,730 27,300 31.69% • From an end user perspective, the budget provides few incentives including, Service tax 110 Exchange Rates SILVER 52,450 56,014 6.80% exemption for construction service related to 105 EQUITY (BSE residential dwelling and low cost mass 100 housing up to an area of 60 sq mtr under the 95 SENSEX) 18167.64 17,675.85 -2.71% scheme of affordable housing. The existing 90 REALTY INDEX 2053.69 1821.35 -11.31% scheme of interest subvention of 1% for 85 housing loans up to INRs 15 lakh (where the 80 75 cost of the house does not exceed INR 25 2-Jan-12 11-Jan-12 20-Jan-12 29-Jan-12 7-Feb-12 16-Feb-12 25-Feb-12 5-Mar-12 14-Mar-12 23-Mar-12 1-Apr-12 lakhs), was extended by one more year. US$ Euro * Rebase to 100 Note: As of 1st August 2011 Source: Colliers International India Researchwww.colliers.com
  3. 3. THE KNOWLEDGE | 1Q 2012 | OFFICE | Mumbai MUMBAI AVAILABLE Supply in Prime Areas • In Mumbai, approximately 10 million sq ft of grade ‘A’ office space was available for lease Goregoan / JVLR 8% Kalina 1% in 1Q 2012. Out of the total available supply Navi Mumbai 6% Powai 5% around 64% was IT/ITeS office space mostly Worli / Prabhadevi 1% Thane / LBS 21% concentrated in the Lower Parel and Thane Malad 5% micro-markets. CBD 1% • Project launched during this quarter was “Equinox Business Park-Tower IV” by Equinox Lower Parel 20% Realty & Infrastructure Private Limited. The Andheri East 24% project has a gross leasable area of BKC 8% approximately 0.5 million sq ft and is located off BKC. Another mixed use project “Island City Centre” was also launched by WadiaMUMBAI Group’s real estate venture Bombay Realty 1Q 2012 GRADE ‘A’ AND GRADE ’B’ spreading over 45 acres of land at Dadar. RENTAL VALUESCITY OFFICE BAROMETER • Following the previous quarter trend 300 construction activities remained slow, no new 250 4Q 2011 1Q 2012 grade ‘A’ office space was added to the city’s 200 total inventory this quarter. INR Per Sq ft Per Month 150 VACANCY • Occupier demand remained steady in almost 100 ABSORPTION all of the micro markets and few large space 50 commercial leases were signed during the 0 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 quarter. Rental values for grade ‘A’ office space remained stable across Mumbai baring RENTAL VALUE Nariman Point, the CBD of Mumbai, as Grade A Grade B occupiers are gradually shifting towards newly developed areas like Lower Parel, Bandra Kurla Complex (BKC) and Andheri due to better accessibility and state of an art GRADE ‘A’ AVERAGE RENTAL VALUE prime office space rental trend infrastructure. 245 Forecast • Looking ahead demand is likely to be remained 420 210 moderate, however due to limited supply 370 rentals are expected to remain stable. 320 175 270 INR per Sq ft per Month 220 140 • As part of the State Government’s plan to 170 105 120 make Wadala a business hub in lines of theINR per Sq ft per Month 70 70 BKC; MMRDA has invited consultants to 20 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 35 1Q2012 prepare a detailed development plan for approximately 110 hectares of land. 0 CBD Andheri East Malad BKC 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012F 3Q2012F 4Q2012F 1Q2013F Lower Parel Navi Mumbai Powai Worli / Prabhadevi Goregaon Kalina Thane / LBS / JVLR MARKET TRANSaCTIONS CLIENT building name AREA LOCATION TRANSACTION TYPE (Sq. Ft.) Altisource Vishwaroop IT Park 137,000 Vashi Lease ANZ Bank Boomerang 6,000 Andheri Lease Liberty Insurance Peninsula Business Park 30,000 Lower Parel Lease L’Oreal Marathon Futurex 71,000 Lower Parel Lease Naaptol.com Sigma IT Park 32,000 Navi Mumbai Lease Star Union Dai-ichi Life Insurance Vishwaroop IT Park 67,000 Vashi Lease Source: Colliers International India Research Colliers International | p. 3
  4. 4. THE KNOWLEDGE | 1Q 2012 | OFFICE | delhi DELHI AVAILABLE Supply in Prime Areas • More than 1 million sq ft of grade ‘A’ office space was available for lease in Delhi in Connaught Place 2% 1Q 2012. Most of this available supply was Nehru Place 10% concentrated in Jasola and Saket. • No new supply was added to the city’s grade Saket 29% ‘A’ inventory. Similarly, no new grade ‘A’ office projects was launched during this quarter. Jasola 59% • Absorption remained relatively subdued as only a few small office spaces leases were signed in locations such as Connaught Place, Saket and Nehru Place. This can primarily be attributed to the shift in demand from the CBDdelhi and SBD to areas in as Gurgaon and NOIDA 1Q 2012 GRADE ‘A’ AND GRADE ’B’ on account of better quality office and lower RENTAL VALUES real estate cost.CITY OFFICE BAROMETER 400 • Rental values witnessed marginal pressure 350 300 4Q 2011 1Q 2012 across the micro markets and a decrease in 250 the range of 1 to 4% was observed for grade 200 VACANCY ‘A’ office space. INR per Sq Ft per Month 150 100 ABSORPTION • In mid term rentals are expected to remained 50 CONSTRUCTION under pressure on account of lesser demand. 0 Nehru Place Jasola Saket Netaji Subhash Place Connaught RENTAL VALUE • To encourage development of non polluting small and medium scale industries in the Grade A Grade B city Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) is planning to set up a multi level manufacturing GRADE ‘A’ AVERAGE RENTAL VALUE hub in Rani Khera in north west Delhi with an prime office space rental trend estimated cost of INR 3100 crore. The work on another knowledge based industrial park 280 Forecast in Baprola has already started. 450 400 245 350 210 • In an another infrastructure related intiative 300 175 the Delhi Development Authority(DDA) has 250 140 planned to develop three Urban Extension 200 INR per Sq ft per Month 105 Roads (UERs). These link roads will facilitate 150INR per Sq ft per Month 70 smooth travelling between two States — 100 35 Delhi and Haryana — Dwarka-Palam Vihar, 50 0 Najafgarh-Dhansa and Nelson Mandela Road- 2Q2008 3Q2008 4Q2008 1Q2008 2Q2009 3Q2009 4Q2009 1Q2009 2Q2010 3Q2010 4Q2010 1Q2010 2Q2011 3Q2011 4Q2011 1Q2012 0 MG Road. 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012F 3Q2012F 4Q2012F 1Q2013F Nehru Place Jasola Cannaught Saket place Netaji Subhash MARKET TRANSaCTIONS CLIENT building name AREA LOCATION TRANSACTION TYPE (Sq. Ft.) Hitachi Eros Corporate Tower 3,000 Nehru Place Lease Mizuho Bank DLF Capitol Point 16,000 C.P. Lease Pragati Equity Advisors Southern Park 1,500 Saket Lease Snap Deal Southern Park 22,000 Okhla-III Lease Source: Colliers International India Researchp. 4 | Colliers International

×