City Report Mumbai Office Market Q3 2009

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City Report Mumbai Office Market Q3 2009

  1. 1. CITY REPORT MUMBAI OFFICE MARKET Q3 2009
  2. 2. Summary Summary p. 3 Macroeconomic Context p. 4 Mumbai Office Market p. 5 Central Business District (CBD) p. 6 Extended Central Business District (ECBD) p. 7 Alternate Central Business District (Alternate CBD) p. 8 Secondary Business District (SBD) p. 9 Periphery Business District (PBD) p. 10 Prime Rents p. 11 Capital Values p. 12 Key Transactions p. 13 Key Projects p. 14 Glossary p. 15 CITY REPORT MUMBAI OFFICE MARKET - Q3 2009
  3. 3. SUMMARY Cautious investing is on the anvil, albeit increasing supply In Mumbai, the demand for commercial space in the third quarter A lot of opportunistic buying is on the anvil as domestic and NRI (July - September), marginally increased over the second quarter. investors are now finding the valuations a bit interesting. These There is a general perception among corporate occupiers that investors are seeking net returns in excess of 12% per annum. rents have “bottomed out”. The take up improved significantly There are also many fence sitters , still, who feel that there is a especially in the suburbs, though there is an increasing supply scope for 5-10% of further correction, by the end of December. being added in the market. The vacancy rates in CBD area of Most of the development companies, are only offering properties Nariman point continue to increase further and now is forcing the for lease and are not releasing any commercial office space for owners to become more flexible in their commercial terms. The sale. Since there is an availability of 10 million sq.ft. of new, fund flow situation of large real estate developers improved modern supply of office space in Mumbai, our assessment is there dramatically as they were able to successfully raise capital via will be downward pressure on rents and capital values at least for Qualified Institutional Placement’s (QIP) and other alternate the next 6 months. investment vehicles promoted by international capital market advisors. However the small and medium scale developers are still facing liquidity issues and have therefore delayed the the construction of their projects by at least 6 months. CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I3I
  4. 4. MACROECONOMIC CONTEXT Gross Domestic Product (GDP) 12.00% GDP growth rate beat all estimates. Records 7.9% 10.00% 10.10% 9.70% 9.30% 9.30% India recorded a GDP growth of 7.9 % in the quarter – July –September of 9.20% 8.80% 8.80% 2009, which is more than estimated rate of 6.1%. In fact, this is the highest 8.00% 7.90% 7.90% growth in GDP rate ever since 1996. The key factors are increase in domestic 7.60% 6.10% consumption, global recovery and abundant liquidity in the system. The 6.00% manufacturing and service sector grew by more than 9% . Despite the weak 5.80% 5.30% credit demand, the banking and financial sector also showed a healthy 4.00% growth. The agriculture sector showed the highest growth, however the perception among the industry leaders is that the harvest shortfall will get 2.00% captured in the next quarter and therefore the overall GDP will be lower for the next quarter. There is also a perception that the central bank is now 0.00% poised to increase the Cash Reserve Rate (CRR) Ratio and Reverse Repo Rate Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 as the inflation is expected to breach central bank's comfort level by January 2010. The finance ministry has also made a statement that it will review the Source: Confederation of Indian Industries situation in February 2010. Major business chambers feel there's a need for the government to continue with the existing monetary and fiscal policies to sustain the process of economic recovery. The high GDP rate indicate that the government policy measures have been successful in reversing the impact of the global slowdown. It is expected that Wholesale Price Index (WPI) the recovery will be sustainable, as investment and consumption are 14% showing an upswing, and with policy guidance a growth rate of 7% can be 12% achieved in the current financial year. 10% 8% 6% 4% Real Estate 2% Most of the real estate development companies showed high growth rate 0% both in sales and profits. This is fuelled by lowering of interest rates on home 05-Jan-09 05-Feb-09 05-Mar-09 05-Apr-09 05-May-09 05-Jun-09 05-Jul-09 05-Aug-09 05-Sept-09 05-Jul-08 05-Aug-08 05-Sept-08 05-Oct-08 05-Nov-08 05-Dec-08 -2% loans by banks & financial institutions and further lowering of property -4% prices. Most of the growth is due to higher sales in residential developments and also in certain cases, due to sale of land which have resulted in windfall Source: Confederation of Indian Industries profits for certain companies in this quarter. In the stock markets, the stocks of major listed real estate development companies saw a surge both in terms of price and volumes. It is expected that the demand for commercial real estate development will pick up across the country, in the next two quarters both in terms of sales and leasing. Sensex & Nifty 25,000 Major Real Estate Sales (In INR / In Million) Profits (In INR / In Million) Companies in Q3 09 Q2 09 Q on Q Q3 09 Q2 09 Q on Q India Change % Change % 20,000 DLF Limited 16,498.6 17,509.4 -6% 3,960 4,397.4 -10% Unitech 5,094.9 5,149 -1% 1,778.6 1,577.7 13% 15,000 India Bulls 2,965.9 3,245.3 -9% 711.3 719 -1% Sobha Developers 2,236 1,771 26% 275 127 117% 10,000 Peninsula Land 1,687.2 1,154 46% 728.7 328.5 122% 5,000 Parsvnath 1,684.7 1,137.2 48% 614.3 138.1 345% Developers Pheonix 263.9 247.9 6% 175.4 153.3 14% 0 13-Jan-09 13-Feb-09 13-Mar-09 13-Apr-09 13-May-09 13-Jun-09 13-Jul-09 13-Aug-09 13-Sept-09 13-Aug-07 13-Sept-07 13-Oct-07 13-Nov-07 13-Dec-07 13-Jan-08 13-Feb-08 13-Mar-08 13-Apr-08 13-May-08 13-Jun-08 13-Jul-08 13-Aug-08 13-Sept-08 13-Oct-08 13-Nov-08 13-Dec-08 Omaxe Limited 2,239.2 1,189.1 88% 225.1 149.7 50% Mahindra 635.2 472.6 34% 173.4 104.2 66% Lifespaces Sensex Nifty Ananthraj 871.3 824.8 6% 712.7 689.3 3% Source: Confederation of Indian Industries Ackruti City 782.9 409 91% 297.9 100.2 197% Ansal Properties 1,768.4 1,367.4 29% 316 103.2 206% CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I4I
  5. 5. MUMBAI OFFICE MARKET Borivali East Borivali West ¤ ¤ Sanjay Gandhi National Park Tulsi Lake Thane Goregaon v ¤ ya hw H ig v Airoli s p res Ex ¤ Andheri East Ghansoli v Powai n ¤ Powai ter Lake Andheri West¤ Ville Parle ¤ ¤ Ville Parle East Eas West ¤ Vikhroli ¤ Koperkhairne v Airport ¤ Ghatkoper ] Santacruz ¤ Chembur East v Sanpada ¤ Bandra Bandra Kurla ] Vashi v Turbhe v West Complex Bandra ¤ Sion ] i Sea - Worl East Link ¤King Circle v Nerul Kharghar v dr a Dadar ¤ Dadar East Ban West W WorliW ¤ Sewri Trombay v W ¤ Parel New Panvel Mahalaxmi W Lower Parel Tardeo W W Pedder Road Breach X Candy CST X Fort Churchgate X XEstate Ballad Nariman Point X Cuff Parade X Gateway of India N X Colaba a) Central Business b) Extended Central c) Alternate Central d) Secondary Business e) Periphery Business District Business District Business District District (SBD) District (PBD) Ballard X Estate Dadar W West Santacruz ] East ¤ Andheri ¤ Sewri Airoli v Turbhe v Breach Candy X W Parel Lower (Kalina) ¤ Bandra West ¤ Sion Ghansoli v Vashi v Churchgate X Mahalaxmi W Bandra ] Kurla ¤ Borivali ¤ Chembur Kharghar v Thane v Complex Koperkhairne v Colaba X W Road Pedder ¤ Goregaon ¤ Ghatkoper ] East Bandra X Parade Cuffe Tardeo W ¤ Vile Parle ¤ Powai Nerul v Fort X Worli W ¤ King Circle ¤ Vikhroli New Panvel v Nariman Point X ¤ Parel Sanpada v CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I5I
  6. 6. CENTRAL BUSINESS DISTRICT (CBD) Repositioning of old stock has started to happen In the CBD area, no fresh suppy was added. However a few old 600 buildings are being refurbished and repositioned as the new Grade- Rental Values (in Rs / sq.ft / month) A supply. One such example is Express Towers in Nariman point, located at walking distance from Trident – Oberoi Hotel. The letting 500 rates have now stabilised, though the owners have become more flexible in offering long term leases (9 years). There is an 400 opportunistic demand from small and medium investors to own offices between 3,000- 10,000 sq.ft. in the Nariman point/ Fort/ Cuffe Parade area. However, no fresh supply is recorded in this area. There 300 is a demand for office space in excess of 50,000 sq.ft. from 4-5 corporates in the banking and financial services industry. 200 100 RENTALS OVER THE PAST 6 QUARTERS Q2 Q3 Q4 Q1 Q2 Q3 0 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2009 2009 2009 2008 2008 2008 2009 2009 2009 Ballard Estate 450 400 300 275 250 250 Cuffe Parade 350 280 250 225 200 200 Nariman Point Ballard Estate Fort 300 250 170 150 150 150 Cuffe Parade Fort Nariman Point 500 450 375 350 325 325 Source: BNP Paribas Real Estate, India 70,000 Capital Values (in Rs / sq.ft) 60,000 50,000 40,000 30,000 20,000 10,000 CAPITAL VALUES OVER THE PAST 6 QUARTERS Q2 Q3 Q4 Q1 Q2 Q3 — 2008 2008 2008 2009 2009 2009 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2009 2009 2009 Ballard Estate 45,000 42,000 38,000 35,000 35,000 35,000 Cuffe Parade 35,000 32,000 32,000 30,000 30,000 30,000 Nariman Point Ballard Estate Fort 30,000 27,500 25,000 22,500 22,500 22,500 Cuffe Parade Fort Nariman Point 60,000 50,000 45,000 40,000 40,000 40,000 Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I6I
  7. 7. EXTENDED CENTRAL BUSINESS DISTRICT (ECBD) Aggressively competing with old and weary CBD stock The new and modern supply, especially in Lower Parel is creating new level of interest from corporate occupiers mostly in the banking and financial services industry. With aggressive price positioning, superior and modern building quality, the area is taking up major tenants from CBD area of Nariman point. There is fresh supply to the tune of 2 million. sq.ft which will come up by end of 2009 and 600 therefore will keep the letting and selling rates on a stable mode. Rental Values (in Rs / sq.ft / month) There is good amount of enquires from investors, to buy properties in 500 this micro market, however there is very less stock available for sale. The area was expected to record some large ticket transactions of upwards of 50,000 sq.ft. from 3-4 tenants, which has got postponed 400 to next quarter. We expect that this area will witness some major letting transactions from corporate occupiers in the next six months. 300 200 RENTALS OVER THE PAST 6 QUARTERS 100 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2009 2009 2009 0 Lower Parel 300 280 250 180 180 180 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2009 2009 2009 Mahalaxmi 225 225 200 150 150 150 Worli Prabhadevi Prabhadevi 325 325 280 250 250 250 Lower Parel Mahalaxmi Worli 450 400 375 300 300 300 Source: BNP Paribas Real Estate, India 60,000 Capital Values (in Rs / sq.ft) 50,000 40,000 30,000 20,000 CAPITAL VALUES OVER THE PAST 6 QUARTERS 10,000 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2009 2009 2009 — Q2 Q3 Q4 Q1 Q2 Q3 Lower Parel 30,000 28,000 25,000 18,000 18,000 18,000 2008 2008 2008 2009 2009 2009 Mahalaxmi 22,500 22,500 20,000 15,000 15,000 15,000 Worli Prabhadevi Prabhadevi 32,500 32,500 28,000 25,000 25,000 25,000 Lower Parel Mahalaxmi Worli 45,000 40,000 37,500 30,000 30,000 30,000 Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I7I
  8. 8. ALTERNATE CENTRAL BUSINESS DISTRICT (ALTERNATE CBD) Take up nudged marginally higher There is a marginal increase in leasing activity and investment activity in Bandra Kurla complex as some medium size lettings (15,000-25000 sq.ft.) have been recorded. The ready office supply availability is levelling off and we foresee a shortage of ready space in the next 6 months. However, there are unconfirmed news that Bharat Diamond bourse campus, which consists of 8 buildings and about 2,500 offices and is ready will be available for occupation by 500 end of December. This will change the supply dynamics in this area and will put pressure on letting rates. The area has also witnessed 450 some investment activity, as banks like ICICI Bank are reported to Rental Values (in Rs / sq.ft / month) 400 have sold some of their properties in this area. There are also reports that Kotak Bank, who acquired a property in Bandra Kurla complex is 350 planning to move its corporate office in this area. The Standard 300 Chartered bank who bought approx. 150,000 sq.ft. is also expected to move in this area. Further, the immediate suburbs of Kurla and 250 Ghatkopar , where a lot of campus style office developments are 200 taking place will aggressively compete on price with the Bandra Kurla complex stock. 150 100 RENTALS OVER THE PAST 6 QUARTERS 50 Q2 Q3 Q4 Q1 Q2 Q3 0 2008 2008 2008 2009 2009 2009 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2009 2009 2009 Bandra - Kurla 450 350 350 250 250 250 Complex Bandra - Kurla Complex Kalina Bandra East 250 230 225 175 175 175 Bandra East Kalina 300 275 250 200 200 200 Source: BNP Paribas Real Estate, India 50,000 45,000 Capital Values (in Rs / sq.ft) 40,000 35,000 30,000 25,000 20,000 15,000 CAPITAL VALUES OVER THE PAST 6 QUARTERS 10,000 Q2 Q3 Q4 Q1 Q2 Q3 5,000 2008 2008 2008 2009 2009 2009 — Bandra - Kurla 45,000 35,000 35,000 25,000 25,000 25,000 Q2 Q3 Q4 Q1 Q2 Q3 Complex 2008 2008 2008 2009 2009 2009 Bandra East 25,000 23,000 22,500 17,500 17,500 17,500 Bandra - Kurla Complex Kalina Kalina 30,000 27,500 25,000 20,000 20,000 20,000 Source: BNP Paribas Real Estate, India Bandra East CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I8I
  9. 9. SECONDARY BUSINESS DISTRICT (SBD) Letting activity has increased, but fresh supply is rapidly increasing too This area is witnessing leasing activity especially in Powai and LBS marg area. A lot of large format letting ( 50,000 sq.ft.-200,000 sq.ft. ) has happened in the area. However the supply is increasing rapidly 250 and increasing the demand –supply gap further. The ongoing work of Rental Values (in Rs / sq.ft / month) Metro line in the Andheri - Versova Airport link, is creating lot of traffic pandemonium due to which the demand from corporate 200 occupiers has significantly dipped especially in the Andheri east area. There is good demand from corporate investor to buy properties located on western express highway especially between 150 Andheri and Goregaon. 100 RENTALS OVER THE PAST 6 QUARTERS Q2 Q3 Q4 Q1 Q2 Q3 50 2008 2008 2008 2009 2009 2009 Andheri E 175 150 130 120 120 120 0 Q2 Q3 Q4 Q1 Q2 Q3 Andheri W 150 130 120 110 110 110 2008 2008 2008 2009 2009 2009 Borivali 60 60 50 50 50 50 Vile Parle Malad Malad 110 110 100 90 90 90 Andheri East Vikhroli Powai 130 130 100 90 90 90 Vikhroli 95 95 80 65 65 65 Andheri West Borivali Powai Vile Parle 175 160 160 120 120 120 Source: BNP Paribas Real Estate, India 25,000 Capital Values (in Rs / sq.ft) 20,000 15,000 10,000 CAPITAL VALUES OVER THE PAST 6 QUARTERS Q2 Q3 Q4 Q1 Q2 Q3 5,000 2008 2008 2008 2009 2009 2009 Andheri E 17,500 15,000 13,000 12,000 12,000 12,000 — Andheri W 15,000 13,000 12,000 11,000 11,000 11,000 Q2 Q3 Q4 Q1 Q2 Q3 Borivali 6,000 6,000 5,000 5,000 5,000 5,000 2008 2008 2008 2009 2009 2009 Malad 11,000 11,000 10,000 9,000 9,000 9,000 Vile Parle Malad Powai 13,000 13,000 10,000 9,000 9,000 9,000 Andheri East Vikhroli Vikhroli 9,500 9,500 8,000 6,500 6,500 6,500 Andheri West Borivali Vile Parle 17,500 16,000 16,000 12,000 12,000 12,000 Powai Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I9I
  10. 10. PERIPHERY BUSINESS DISTRICT (PBD) Demand from IT back office is on the rise There is some demand witnessed from IT back offices in this area. However this has not been converted into occupation as of now. There is a lot of supply which is getting added in the Rental Values (in Rs / sq.ft / month) 80 area especially in Thane area as lot of industrial estates are 70 being converted and repositioned as low cost occupation 60 structures. The liquidity issues with the developers are still very evident in this area and this may result in delay of certain 50 key IT developments in this area. 40 30 20 RENTALS OVER THE PAST 6 QUARTERS Q2 Q3 Q4 Q1 Q2 Q3 10 2008 2008 2008 2009 2009 2009 0 Q2 Q3 Q4 Q1 Q2 Q3 Airoli 45 40 35 35 35 35 2008 2008 2008 2009 2009 2009 Thane 50 45 40 40 40 40 Vashi Thane Airoli Vashi 75 75 70 65 60 60 Source: BNP Paribas Real Estate, India 8,000 Capital Values (in Rs / sq.ft) 7,000 6,000 5,000 4,000 3,000 CAPITAL VALUES OVER THE PAST 6 QUARTERS 2,000 Q2 Q3 Q4 Q1 Q2 Q3 1,000 2008 2008 2008 2009 2009 2009 — Airoli 4,500 4,000 3,500 3,500 3,500 3,500 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2009 2009 2009 Thane 5,000 4,500 4,000 4,000 4,000 4,000 Vashi 7,500 7,500 7,000 6,500 6,000 6,000 Vashi Thane Airoli Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I10I
  11. 11. PRIME RENTS Q3 2009 Region Rent Q on Q INR/ sq.ft/ month Change Ballard Estate 250 0% Central Business District (CBD) Cuffe Parade 200 0% Fort 150 0% Nariman Point 325 0% Q3 2009 Region Rent Q on Q INR/ sq.ft/ month Change Lower Parel 180 0% Extended Central Business Mahalaxmi 150 0% District (ECBD) Prabhadevi 250 0% Worli 300 0% Q3 2009 Region Rent Q on Q INR/ sq.ft/ month Change Bandra - Kurla Alternate Central Business 250 0% District (Alternate CBD) Complex Bandra East 175 0% Kalina 200 0% Q3 2009 Region Rent Q on Q INR/ sq.ft/ month Change Andheri E 120 0% Andheri W 110 0% Borivali 50 0% Secondary Business District (SBD) Malad 90 0% Powai 90 0% Vikhroli 65 0% Vile Parle 120 0% Q3 2009 Region Rent Q on Q INR/ sq.ft/ month Change Airoli 35 0% Periphery Business District (PBD) Thane 40 0% Vashi 60 0% Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I11I
  12. 12. CAPITAL VALUES CAPITAL Q3 2009 Region INR / sq.ft Q on Q Change Ballard Estate 35,000 0% Central Business District (CBD) Cuffe Parade 30,000 0% Fort 22,500 0% Nariman Point 40,000 0% CAPITAL Q3 2009 Region INR / sq.ft Q on Q Change Lower Parel 18,000 0% Extended Central Business Mahalaxmi 15,000 0% District (ECBD) Prabhadevi 25,000 0% Worli 30,000 0% CAPITAL Q3 2009 Region INR / sq.ft Q on Q Change Bandra - Kurla Alternate Central Business 25,000 0% District (Alternate CBD) Complex Bandra East 17,500 0% Kalina 20,000 0% CAPITAL Q3 2009 Region INR / sq.ft Q on Q Change Andheri E 12,000 0% Andheri W 11,000 0% Borivali 5,000 0% Secondary Business District (SBD) Malad 9,000 0% Powai 9,000 0% Vikhroli 6,500 0% Vile Parle 12,000 0% CAPITAL Q3 2009 Region INR / sq.ft Q on Q Change Airoli 3,500 0% Periphery Business District (PBD) Thane 4,000 0% Vashi 6,000 0% Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I12I
  13. 13. KEY TRANSACTIONS Q3 2009 Building Tenant Space Type Location (in sq.ft) 1 India Bulls Centre Marsh India 25,000 Extended CBD Lower Parel Lodha, I think Techno Share Khan 40,000 SBD Kanjur marg Park Nirlon Knowledge Morgan Stanley 150,000 SBD Goregaon East Park Kensington Wipro 100,000 SBD Powai Hiranandani JP Morgan 215,000 SBD Powai Business Park Free Press House Morgan Stanley 5,000 CBD Nariman Point Nariman Bhawan Axis Bank 10,000 CBD Nariman Point Lodha Excelus KPMG 1,22,000 Extended CBD Mahalaxmi MMTC House Trans Union 3,000 Alternate CBD Bandra Kurla Complex Vibgyor Towers BASF 20,000 Alternate CBD Bandra Kurla Complex JPMC Tower (earlier JP Morgan 1,44,000 Alternate CBD Kalina known as IRIS) Platina SAP Labs 15,000 Alternate CBD Bandra Kurla Complex Platina Wyeth 27,000 Alternate CBD Bandra Kurla Complex Techniplex Etisalat 1,20,000 SBD Goregaon West Leela Business Park Milward Brown 11,000 SBD Andheri East Kalpataru Square Varian Medical System 10,500 SBD Andheri East Kalpataru Square Ingersoll Rand 14,621 SBD Andheri East Solaris INX Media 15,000 SBD Andheri East Hiranandani Credit Suisse 59,000 SBD Powai Business Park Nirlon Knowledge LRN Technology 24,675 SBD Malad Delphi Building Kellog India 14,100 SBD Powai Gigaspace Capita 40,000 PBD Navi Mumbai Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I13I
  14. 14. KEY PROJECTS New Supply – Year 2009 Building Type of Location Location Space (in sq.ft.) Completion date ( expected ) Lodha Excelus Extended CBD Lower Parel 4,00,000 Q4 2009 One India Bulls Centre Extended CBD Lower Parel 7,00,000 Q4 2009 India Bulls Financial Extended CBD Lower Parel 5,00,000 Q4 2009 Centre Bandra Kurla Cresenzo Alternate CBD 5,77,000 Q4 2009 Complex Ackruti Iris Alternate CBD Andheri East 6,00,000 Q4 2009 Bandra Kurla Ackruti Gold Alternate CBD 66,000 Q4 2009 Complex Urbania Alternate CBD Ghatkopar 90,000 Q4 2009 Western Edge SBD Borivali 4,50,000 Q4 2009 Rustomjee Natraj SBD Andheri East 2,86,000 Q3 2009 Silver Uthopia SBD Andheri East 4,00,000 Q3 2009 Rustomjee Aspire SBD Sion 1,24,000 Q4 2009 IT Park, Ajmera SBD Andheri East 11,00,000 Q4 2009 R Tech Park SBD Goregaon 4,00,000 Q3 2009 City Park SBD Marol 1,40,000 Q4 2009 The Chambers SBD Vile Parle 1,00,000 Q4 2009 Universal Majestic SBD Chembur 5,00,000 Q4 2009 Hiranadani Knowledge SBD Powai 3,00,000 Q3 2009 Park Supreme Chambers SBD Andheri West 2,40,000 Q3 2009 Andheri East Ackruti Star SBD 4,00,000 Q4 2009 (MIDC) HCC 247 IT Park SBD Vikhroli 18,00,000 Ready Corporate Tech Park PBD Thane 10,60,000 Ready Asher IT Park PBD Thane 7,00,000 Q4 2009 Reliable Tech Park PBD Airoli 10,00,000 Q4 2009 Source: BNP Paribas Real Estate, India CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I14I
  15. 15. GLOSSARY Q3: Quarter 3 of the financial year NRI: Non Resident Indian. Absorption: Occupied Stock (n) – Occupied Stock (n-1); Where “n” is the specified New: Building built within the last 5 years. period (quarter, year etc.) Major Refurbishment: Building which has undergone structural alteration less Bare Shell: Premises consisting of basic structure with lifts, power supply to than 5 years ago, subject to planning permission. junction box, water supply line, toilets Recent: Building less than 10 years old. BPO: Business Process Outsourcing Renovated: Building which has undergone renovation work not requiring for BUA: Built up area planning permission less than 5 years ago. CBD: Central Business District Modern: High-performance building over 10 years old. ECBD: Extended Central Business District Old: Low-performance building over 10 years old. ACBD: Alternate Central Business District CCI (Cost of construction index): Index that makes quarterly measurements of SBD: Secondary Business District construction prices for new house building. It is the price after VAT paid by the owner to construction companies. It excludes land-related prices and costs (site PBD: Periphery Business District development, special foundations, etc.), fees and financial costs. Completed Stock: Either the building has received occupancy certificate or the Demand: A search for premises expressed to BNP Paribas Real Estate. The client has moved in and occupied space and started working in a particular analysis pertains only to the flow of new demand expressed. premises For the occupier: Operation undertaken by an occupier for its own purposes. DU: Dwelling Unit New Supply: Any new building and/or heavily refurbished building that adds to EPIP: Export Promotion Industrial Park the existing stocks. These are analysed according to progress. FAR: Floor Area Ratio (BUA/ Plot Area) Completed new supply: Buildings on which construction work is finished. Grade A: Space Office Space with efficiency in excess of 75%, floor plate in excess Under construction: Buildings on which construction has effectively begun. Prior of 15,000 sq. ft., Car Parking ratio of atleast 1 per 1000 sq. ft., Floor-to-ceiling demolition work is not taken into account. height in excess of 3.75 m, Power provision of 1.25KVA per 100 sq. ft. with 100% power-backup wherever applicable and professionally managed facilities Planning permission granted: Authorisation to build obtained, generally booked after settlement of third party claims. Ground Coverage: It is the total covered area on ground by the built component and is expressed as a percentage of the plot area Planning permission submitted: Planning permission requested, being processed. Hard Option: Real estate space reserved by the lessee for future occupation within a particular time frame and at a pre-decided rental Pre-letting: Transaction by an occupier more than 6 months before the delivery of the building. INR: Indian National Rupees Headline rent: Annual rent per square meter, featured on the lease, and Rs: Rupees expressed excluding taxes and charges. Does not include attached premises such PBD: Peripheral Business District as parking areas, archives, staff canteens, etc. If the rental is progressive, the value applied is the average for the first 3 years or the fixed term of the lease. Pre-lease: Space committed for lease before completion of construction Average headline rent: Weighted average of rented area. The average featured is Speculative Stock: The stock which can be leased and excludes Built-to-Suit a moving average over 3 quarters, to smooth out the changes. (BTS) and Campus facilities. Underlying rent: Annual rent per square meter expressed free of tax and charges Stock: Cumulative Supply and excluding advantages agreed by the owners (rent incentive building works, Supply: New construction in a particular specified period etc). Tier I Cities: NCR, Mumbai and Bangalore Prime rents: Represents the top headline rent (excluding non significant Tier II Cities: Chennai, Hyderabad, Pune, Kolkata transactions) for an office unit:- of standard size, of the highest quality and specification, in the best location in each market. Transaction Volumes: Total number of transaction in a particular specified period Top rent: Represents the top headline rent for an office unit. It is not necessarily a Vacancy: Total vacant space in the completed stock prime rent. Warm Shell: Premises consisting of power backup, high side A.C., common area fit Second hand premises: Premises that have been previously occupied by an outs and fitted out toilets occupier for vacant for more than 5 years. Q on Q: Quarter on Quarter Renovated: Premises that have been renovated for the new occupier. y-o-y: year-on-year (All growth figures in this report are y-o-y unless otherwise Very good condition: High-performance premises of high quality. mentioned Existing state of repair: Low-performance premises that can be rented as they IT: Information Technology are. ITES: Information Technology Enabled Services (includes various services To be renovated: Low performance premises that need renovation. ranging from call centres, claims processing, medical transcription, e-CRM, SCM to back-office operations such as accounting, data processing, and data mining) Supply available within 1 year: All premises and buildings available within 1 year including the supply available immediately, new supply that has not been pre-let NCR: National Capital Region (includes urban agglomeration of Delhi, Gurgaon, and second hand supply that will be vacated definitively (notable terminated Faridabad, Noida, Gaziabad etc.) leases). ORR: Outer Ring Road Take-up: Rental or sale of a property asset, finalised by the signature of a lease or Repo Rate: Rate that an eligible depository institution (such as a bank) is charged a bill of sale including turnkey transactions and owner-occupier. The transaction to borrow short term funds directly from the central bank through the discount is only taken into account once any existing conditional clauses have been lifted. window Vacancy rate: Ration measuring the relationship between the supply Reverse Repo Rate: Interest rate that a bank earns for lending money to the immediately available and the existing stock. Reserve Bank of India in exchange for government securities SEC A, B, C & D Socio: Economic Classification; SEC A represents the highest BNP Paribas Real Estate cannot be held responsible if, despites its best efforts, propensity to spend and SEC D represents the lowest propensity to spend. the information contained in the present report turns out to be inaccurate or Sq.ft: Square Feet incomplete. This report is released by BNP Paribas Real Estate and the information in it is dedicated to the exclusive use of its clients. The report and the Stamp Duty: Form of tax charged on instruments (written documents) requiring a information contained in it may not be copied or reproduced without prior physical stamp (for government legality) to be attached to or impressed. permission from BNP Paribas Real Estate. CITY REPORT MUMBAI OFFICE MARKET - Q3 2009 I15I
  16. 16. LOCATIONS ALLIANCES BAHRAIN ABUDHABI ALBANIA JAPAN RUSSIA Bahrain Financial Harbour Al Bateen Area Danos RISA Partners Astera West Tower Plot No. 144, W-11 Boulevard Deshmoret e Kombit 5F Akasaka Intercity 1-11-44 10, b.2 Nikolskaya Str. INDIA 16th Floor New Al Bateen Municipality Twin Towers - Tower 2 Akasaka, Minato-ku Moscow, 109012 P.O. Box 5253 Street 32 11th Floor 107-0052 Tokyo Tel/Fax: +7-495-925 00 05 Bangalore Manama P.O. Box 2742 Tirana Tel: +81-3-5573 8011 403, The Estate, Tel: +971-505 573 055 Abu Dhabi, UAE Tel: +355-4-2280488 Fax: +81-3-5573 8012 SERBIA 121, Dickenson Road, Fax: +973-17 536 506 Tel: +971-505 573 055 Fax: +355-4-2280192 Danos Fax: +971-44 257 817 Bangalore - 560 042 BELGIUM NETHERLANDS 6, Vladimira Popovica Street AUSTRIA Holland Realty Partners Belgrade 11000 Tel: +91 80 4050 8888 Blue Tower JERSEY Dr. Max Huber & Partner J.J. Viottastraat 33, 1071 JP Tel: +381-11-2600 603 Fax: +91 80 4050 8899 Avenue Louise 326 4th Floor, Conway House Dr. Karl-Lueger-Platz 5 Amsterdam, Fax: +381-11-2601 571 B14 Louizalaan Conway Street 1050 Brussels St Helier 1010 Wien Postbus 9669 Contact: Anuj Nautiyal Tel: +32-2-646 49 49 Jersey Je2 3NT Tel: +43-1-513 29 39 0 1006 GD Amsterdam UKRAINE Fax: +32-2-646 46 50 Tel: +44-15 34-62 90 01 Fax: +43-1-513 29 39 14 Tel: +31-20-305 97 20 Astera anuj.nautiyal@asia.bnpparibas.com Fax: +31-20-305 97 21 2a Konstantinovskaya Street Fax: +44-15 34-62 90 11 DUBAI BULGARIA 04071, Kiev Emmar Square LUXEMBOURG Danos NORTHERN IRELAND Tel: +38-044-501 50 10 Mumbai Building No. 1, 7th Floor EBBC, Route de Trèves 6 28, Hristo Botev Boulevard Whelan Property Consultants Fax: +38-044-501 50 11 704, Level 7, MMTC House, C-22, P.O. Box 7233 Bloc D Sofia 44 Upper Arthur Street Bandra Kurla Complex, Bandra (E), Dubai, UAE 2633 Senningerberg Tel: +359-2-9532314 Belfast Bt1 4GJ USA Mumbai - 400 051 Tel: +971-505 573 055 Tel: +352-34 94 84 Fax: +359-2-9532399 Tel: +44-28-9044 1000 Cresa Partners Fax: +971-44 257 817 Fax: +352-34 94 73 Fax: +44-28-9033 2266 100 Park Avenue, 24th Floor Tel: +91 22 6138 8088 CANADA New York, NY 10017 Fax: +91 22 6138 8089 FRANCE ROMANIA Cresa Partners POLAND Tel: +1-212-758 3131 13 boulevard du Fort de Vaux Union International Center Tel: +1-212-758 3131 Kancelaria Brochocki Fax: +1-212-980 1977 75017 Paris 11 Ion Campineanu Street Fax: +1-212-980 1977 Krakowskie Przedmiescie 14 Contact: Raja Kaushal Tel: +33-1-55 65 20 04 Sector 1 00325 Warsaw raja.kaushal@asia.bnpparibas.com Fax: +33-1-55 65 20 00 Bucharest 010031 USA Tel: +48-22-826 14 14 Tel: +40-21-312 7000 787 Seventh Avenue Fax: +48-22-828 15 45 GERMANY Fax: +40-21-312 7001 31st Floor Delhi Goetheplatz 4 New York City, NY 10019 PORTUGAL Level 4, Wing B, Statesman House, 60311 Frankfurt am Main SPAIN Tel: +49-69-2 98 99 0 María de Molina, 54 Tel: +1-917-472 4970 Fenalu Barakhamba Road, Fax: +49-69-29 29 14 28006 Madrid Fax: +1-212-471 8100 Av. Eng. Duarte Pacheco New Delhi - 110 001 Tel: +34-91-454 96 00 Torre 2 IRELAND Fax: +34-91-454 97 65 GREECE Piso 10, Sala 6/7 Tel: +91 11 3044 6406 Danos 1070-102 Lisboa 40 Fitzwilliam Place Fax: +91 11 3044 6507 Dublin 2 UNITED KINGDOM 1, Eratosthenous Str. Tel: +351-21-3833106 Tel: +353-1-66 11 233 90 Chancery Lane 11635 Athens Fax: +351-21-3833107 Contact: Arjun S. Harsh Fax: +353-1-67 89 981 London WC2A 1EU Tel: +30-210 7 567 567 Tel: +44-20-7338 4000 Fax: +30-210 7 567 267 arjun.harsh@asia.bnpparibas.com ITALY Fax: +44-20-7430 2628 Corsa Italia, 15/A 20122 Milan USA Tel: +39-02-58 33 141 787 Seventh Avenue Fax: +39-02-58 33 14 39 31st Floor New York City, NY 10019 Tel: +1-917-472 4970 Fax: +1-212-471 8100 www.realestate.bnpparibas.com

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