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City report - Bangalore Office Market - Q3 2010

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• Developers are upbeat because of increasing demand for Grade \'A\' office space from the IT/ITeS sector in the SBD and PBD …

• Developers are upbeat because of increasing demand for Grade \'A\' office space from the IT/ITeS sector in the SBD and PBD
• Vacancy levels in PBD expected to rise due to increase in the stock by around 5 million.
• Vacancy in CBD and SBD expected to decrease due to lack of supply

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  • 2. BNP Paribas Immobilier– 13 boulevard du Fort de Vaux, 75017 Paris – France SAS au capital de 225 205 616 € - RCS Paris 692 012 180 – Code NAF 4110BBNP Paribas Real Estate All the buildings blocks In India our specialists bring you our expertise in Transaction Advisory, Valuation, Consulting. With our international scope and on-the-ground presence, you’ll find the perfect partner that can ensure the success of your real estate project. With BNP Paribas Real Estate, all the pieces come together. BNP Paribas Real Estate and Infrastructure Advisory Services Pvt. LtdYour contact in India: Bangalore: +91 80 4030 0334 - Mumbai: +91 22 6138 8088 - Delhi: +91 11 4959 8800 info.india@bnpparibas.com www.realestate.bnpparibas.com
  • 3. CONTENTSSummary p. 4Macroeconomic Context p. 5Bangalore Map p. 6Central Business District (CBD) p. 7Secondary Business District (SBD) p. 8Periphery Business District (PBD) p. 9Rental Values & Capital Values p. 10Key Projects p. 10Key Transactions p. 11Glossary p. 12 CITY REPORT BANGALORE OFFICE MARKET - Q3 2010
  • 4. SUMMARYThe rental and capital values remained stable during Q3 The rental values in the CBD may see an increase in the2010 mainly due to the absorption of second generation coming months as the availability of large grade Aspaces and lack of completion of projects in all the three commercial office space is less in comparison to the othermicro markets. The total area leased during the third quarter micro markets and there is substantial enquires fromwas around 3.7 million sq ft which is around 3% more than organizations. Some of the developers are experiencingthe previous quarter. Given this performance, the first 3 vacancies in their properties as the rentals quoted by themquarters have witnessed transaction volumes of 9.2 million are far above the market levels.sq ft. Major portions of the transactions took place in theTech parks and SEZs located in the Outer Ring Road and The rental values in the SEZs are expected to rise marginallyWhitefield precincts. The vacancy levels in the PBD region as there is lack of sufficient supply to match the currentremained high due to availability of large SEZ spaces across demand for SEZ. The rental values are expected to witness athe city which the developers are providing at competitive correction during the second half of 2011 when substantialrentals in the micro markets. amount of inventory would be added to the current stock. The Bangalore Metro Rail Project is on track as the testing ofThe vacancy levels are expected to decrease in the next few the railway line from Byappanahalli to MG road section hasquarters as the number of enquiries from reputed blue-chip commenced. Other infrastructure projects such ascompanies are on the rise and the developers are confident construction of Flyovers and subways on the Outer Ring roadof closing large transactions due to the increasing demand are on full swing and expected to get completed on time. Soiland lack of new completions in the different micromarkets. testing for the Elevated Expressway from Hebbal to the New International Airport is underway and the construction is expected to commence in early 2011. CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I4I
  • 5. CRR & SLR MACROECONOMIC CONTEXT 30 The Central Bank takes a more sophisticated approach: 25 maintains status quo on CRR & SLR 20Percent The Reserve Banks Review of Monetary Policy on July 27, 2010 expressed 15 concerns over the global outlook. Indicators of economic activity in 10 advanced economies continue to suggest that the recovery is slowing and 5 that the second half of 2010 will post slower growth than the first, although expectations have generally not been revised downwards since end-July. 0 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Under the Liquidity Adjustment Facility (LAF), the RBI has increased the repo rate by 25 basis points from 5.75% to 6.0% and also hiked the reverse repo SLR CRR rate by 50 basis points from 4.5% to 5.0% with immediate effect. This will help maintain financial conditions conducive to sustaining growth, Repo & Reverse Repo Rate according to the RBI. 7 India’s GDP during the quarter starting July 2010, rose to 8.8%. Although 6 some of this is attributable to a favourable base effect, the growth rate 5Percent indicates that the recovery is consolidating and the economy is rapidly 4 3 converging to its trend rate of growth. Inflation remains the dominant 2 concern in macroeconomic management. The main priority of the Reserve 1 Bank is to curb the ongoing inflation, which peaked at 11% in the month of 0 August. Interest rates have been increased by the banks to contain the 22-May-09 22-Jun-09 23-Jul-09 23-Aug-09 23-Sep-09 24-Oct-09 24-Nov-09 25-Dec-09 25-Jan-10 25-Feb-10 19-Mar-10 20-Apr-10 20-May-10 20-Jun-10 2-Jul-10 27-Jul-10 20-Aug-10 16-Sep-10 inflation, but it could slow down the growth of the Indian economy in the coming months. But even though there has been a rise in the interest rates, Repo Reverse Repo there hasnt been much change in the distribution of loans, the Indian customer is hardly affected with the hiked interest rates. Overall, even as the global environment continues to be a cause for caution, the big picture has Gross Domestic Product (GDP) not worsened significantly since July.12.00% India has replaced the US as the second most important Foreign Directive10.00% 9.30% 8.80% 8.60% 8.80% Investment (FDI) destination for transnational corporations during 2010- 8.80% 7.90% 8.00% 7.60% 2012, according to a survey conducted UNCTAD. In its latest World 7.90% 5.80% Investment Prospects Survey 2010-2012, the United Nations Conference on 6.00% 6.00% 6.10% 5.30% Trade and Development said transnational corporations remain buoyant 4.00% about investment prospects in China, India and Brazil. According to the 2.00% survey, India is the most important FDI destination next only to China. 0.00% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Sales (In INR / In million) Profits (In INR / In million) Major Real Estate 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 Companies in Q on Q Q on Q India Q3 2010 Q2 2010 Q3 2010 Q2 2010 Change % Change % DLF Limited 23,690 20,285 17% 4,186 4,110 2% Unitech 6,445 8,286 -22% 1,740 1,800 -3% Wholesale Price Index (WPI) India Bulls 5,414 4,337 25% 1,745 1,336 31%18.00% Sobha Developers 4,257 3,156 35% 589 343 72%16.00% Peninsula Land 1,226 1,483 -17% 638 500 28%14.00% Parsvnath12.00% 1,955 2,528 -23% 579 318 82% Developers10.00% Pheonix 443 404 10% 221 183 21% 8.00% Omaxe Limited 3,544 2,529 40% 368 217 69% 6.00% Mahindra 4.00% 890 679 31% 247 145 70% Lifespace 2.00% Anantraj 1.329 1,034 28% 480 459 5% 0.00% Ackruti City 1,624 1,765 -8% 550 421 31% Jan-09 Apr-09 Jul-09 Oct-09 Jan-07 Apr-07 Jul-07 Oct-07 Jan-10 Apr-10 Jul-10 Apr-06 Jul-06 Oct-06 Jan-08 Apr-08 Jul-08 Oct-08 Ansal Properties 3,197 2,508 27% 228 369 -38% Source: Confederation of Indian Industries CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I5I
  • 6. BANGALORE MAP ad Hin rab du Do de pu dB Hy Harohalli r alla -7 NH pur Bangalore So Rd International uth Airport e Yelahanka Major Roads rn Kere River / Water Bodies Ra ilw ay Rd Roads ry Yelahanka Park / Green Area lla New Town Be Yeshvantp ur Rd Railway Station CBD Chikka Bommasandra Agrahara Airport SBD Outer / Inner Ring Road PBD N Sou ther Rajiv Gandhi Bellary Rd n Ra Nagar Chikka Bana ilwa y Kodigehalli Bagalakunte Kodigehalli K Byatarayanapura Rachana v Kere Halli od gehall Kere i i Rd ar Rd Defence BEL Colony SoNH-4 Rd ut Esteem Mall -4 h NH er li al n 16 Hebbal ah Ra Jalahalli Kere Nagavara J al ilw Lottegollahalli Kere ay d Bupasandra Rd ain R Tum Nagavara 403, The Estate, Rd ku Lottegollahalli M rR 8 n Mattikere 121, Dickenson Road ai oa vara M Peenya d 4 u Hennuru Rd ur Naga li Rd as nn banhal Yeshvantpur Yeshvantpur dr Kariro He Suburb NH Anandapuram d Ma Ol Bel Road -4 Bhattarahalli lli R Yellarnallappachetty Ramanamaharishi Rd 16 Kere anaha Chikkabanhalli 17 12 C 14 4 VR Ramamurthy H- Bhattara Kamm Mattadahalli N halli am Nagar Old an Krishnarajapura Rd d Tu R lli R mku d Munireddypalya Domsandra Banaswadi i Channasandra ganaha B Channasandra ad Belatur r asw Belatur Rd Rd Hegganahalli Malleshvaram 11 n Krishnaraja 15 Ba Devasandra Sadarmangal Rd eg e Rd Bangalore Puram Pinelin Jayamahal Sta H Chord Palace Bangalore tio d West of Palace East di Rd nR Chord Rd Wh ugo Kodugodi Rd Baiyyappana ite Kod d Cox field r Halli eele Town Rd Cantonment -4 Rajaji NH Wh adi R d Nagar 1 Whitefield Mag Taj 10 Ou Westend Hoodi Whitefield Link Rd ter d Rd as R in Rd r Chord Rd ce Course Road Raj d Mad Rin Ra Bhavan Chinnaswamy ield R Bangalore City Ulsoor Ma Race Cricket Lake Old gR gad Railway Station Seshad Course d 1 Ma i Rd ri Rd Vidhan Stadium Brigade Tech sity R oa Cubbon Whitef Soudha Park d KSRTC High Rd Magadi Rd Bus Terminal Court 6 2 Main Rd Univer Rd Brigade Rd Cubbon 3 8 4 9 WHITEFIELD ba C Majestic Park 9 ur hik 3 st 11 d 5 6 Ka pe rd R te Chikpete Rd hanro Dodda Borewell Rd Su Victo yR d ria Kodihalli LB Shastri o Cho ra Rd Nekkundi RM ed Rd 7 Nagar nja Elevat Victoria Channapanhalli ind Albert Victor Rd 2 HAL as oad 1 Rd R Urvashi 18 Vijay re Lal B 7 Vimanpura so Vartur Rd Bull Temple Rd Nagar agh My Chamarajpet Fo Bangalore Vartur Rd rt Marattahalli Southern Rd HAL K R Road Lal Golf Course Airport Un Bagh Innovative Multiplex Vartur ive Bangalore University Kere rsi y Railway ty ilwa Basavangudi Rd Ra 2 Vartur rn he pura Rd ut Marig Bellandur Soul Space So ow da 13 Tank 10 Rd Salarpuria Softzone 16 d Kanak rR 2 tu Hosakerehalli Bellandur r Va Kere Banashankari 3 Sarjapur Rd Agara Mandivala Kere South End Rd Outer Rin Adarsh Palm g Ro ad Retreat l li Rd JP 5 ha Nagar HSR Layout ra Sar NH U tta Mandivala jap ur -7 16 Tank Rd d U ttarahalli R Uttarahalli Bommanahalli Kambipu as V d antp aR u ra R Ho ur d ra Rd kp Chandrapura Chikka sur na Nayakamahalli Ka Rd Begur Rd Ele Road Kudlu ctro Dodda Chunchgatta Bannerghatta Kalsandra Begur 1 n Ma ic du Kudlu Rd ura Sale Anekal rai C kp ity m na Ka Central Business District Secondary Business District Periphery Business District 1. Cunningham Road 8. St Marks Road 1. Airport Road 10. Jaya Nagar 2. Adugodi 11. Jayamahal Rd 1. Electronic City 2. Langford Road 9. Ulsoor 2. Mysore Road 3. Lavelle Road 10. Vasanth Nagar 3. Banerghatta Road 12. Kammanahalli 4. Bellary Road 13. Koramangala 3. Whitefield 4. MG Road 11. Vitthal Malya 5. Residency Road Road 5. BTM Layout 14. Mekhri Circle 6. Richmond Road 6. CV Raman Nagar 15. Old Madras Road 7. Richmond Town 7. Domlur 16. Outer Ring Road 8. Hebbal 17. R T Nagar 9. Indiranagar 18. Shanti Nagar CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I6I
  • 7. CENTRAL BUSINESS DISTRICT (CBD) Limited supply expected to keep upward pressure on rentalsMajor areas that constitute CBD include:-• MG Road Supply & Vacancy Trend• Residency Road The total transaction volume recorded in the CBD during Q3 2010• Richmond Road was around 0.48 million sq ft. This was mainly due to the movement• Cunningham Road of organizations towards the Peripheral Business District and availability of vacant stock in the CBD. There was an addition of 0.16 million sq ft to the stock which currently stands at 6.2 million sq ft. Approximately 0.45 million sq ft of commercial office space is under construction in this micromarket, most of which is expected to be Supply & Vacancy Trend completed by Q2 2011. The under construction buildings are 6,500 4.0% distributed across 4 buildings ranging between 30,000 and 250,000 sq ft. 6,000 3.5% Many developers like Nitesh Estates, Raheja Group etc are in the 5,500 3.0% process of developing star rated hotels to help bridge the demand-Stock (’000 sq. ft) supply gap for hotel rooms. Vacancy Rate 5,000 2.5% 4,500 2.0% Supply & Vacancy Trend for the past 6 Quarters 4,000 1.5% Stock Vacancy 3,500 1.0% (000 sq ft) 3,000 0.5% Q2 2009 5,651 1.6% Q3 2009 5,651 1.6% 2,500 0.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 5,933 2.7% 2009 2009 2009 2010 2010 2010 Q1 2010 6,050 3.6% Stock Vacancy Rate Q2 2010 6,050 3.8% Q3 2010 6,243 3.6% Source: BNP Paribas Real Estate, India Rental & Capital Values Rental & Capital Values There was no change in the rental and capital values in the CBD over Q2 2010 values. This was mainly due to balance in the 90 9,000 absorption and supply of stock during Q3 2010. The rentals are Rental Value (INR/sq.ft/month) expected to rise during the next quarter as the number of enquires 85 8,500 for large grade A commercial office space from large Capital Value (INR/sq.ft) multinationals are increasing and a substantial amount of leasing 80 8,000 activity is taking place in this micro market. 75 7,500 The average headline rentals & capital values for the last 6 quarters 70 7,000 are as follows:- 6,500 Rental & Capital Values over the Past 6 Quarters 65 Rental Values Capital Values 60 6,000 (INR / sq. ft / month) (INR / sq. ft) 55 5,500 Q2 2009 70 7,200 Q2 Q3 Q4 Q1 Q2 Q3 Q3 2009 70 7,200 2009 2009 2009 2010 2010 2010 Q4 2009 73 7,508 Capital Value Rental Value Q1 2010 75 8,333 Q2 2010 75 8,333 Q3 2010 75 8,333 Source: BNP Paribas Real Estate, India CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I7I
  • 8. SECONDARY BUSINESS DISTRICT (SBD) Preference for SEZ as a space option on the rise Supply & Vacancy TrendMajor areas that constitute SBD include:- SBD witnessed a completion of 0.12 million sq ft of grade A office• Koramangala space during Q3 2010. The vacancy level in the SBD increased to• Indiranagar and CV Raman Nagar 4.8% from the previous quarters 3.7% as many of the occupiers who• Old Madras Road had occupied large spaces in this micromarket have migrated to the• Airport Road peripheral areas due to competitive rentals and also availability of• Banerghatta Road SEZ and built-to-Suit options. Currently the total stock in SBD is• Outer Ring Road estimated to be around 28.3 million. SBD witnessed leasing of• Hebbal around 2.1 million sq ft in Q3 2010 and most of the occupiers• Bellary Road occupied the 2nd generation spaces and SEZ spaces in areas like Outer Ring road and Koramangala. Supply & Vacancy Trend 28,000 9% Supply & Vacancy Trend for the past 6 Quarters 26,000 8% Stock Vacancy (000 sq ft) 24,000 7% Q2 2009 24,794 7.8%Stock (’000 sq.ft) 22,000 6% Vacancy Rate Q3 2009 24,904 7.8% 20,000 5% Q4 2009 25,899 7.5% 18,000 4% Q1 2010 26,419 6.1% 16,000 3% Q2 2010 27,333 3.7% Q3 2010 27,445 3.7% 14,000 2% Source: BNP Paribas Real Estate, India 12,000 1% 10,000 0% Q2 Q3 Q4 Q1 Q2 Q3 2009 2009 2009 2010 2010 2010 Rental & Capital Values The rental and capital values have remained stable during Q3 2010 Stock Vacancy Rate as compared to the previous quarter. Every year the rentals have increased by around 22.5%. The rental and capital values are expected to remain stable during the next quarter as there is substantial demand in the market and there also is supply to sustain that demand. Of the total 2.1 million sq ft, 1.7 million sq ft was leased in SEZ and the rest in STPI and other commercial Rental & Capital Values developments. The capital value remained stable at INR 4,450 per sq ft.Rental Value (INR/sq.ft/month) 51 5,100 The average headline rentals & capital values for the last 6 quarters Capital Value (INR/sq.ft) 49 4,900 are as follows:- 47 4,700 Rental & Capital Values over the Past 6 Quarters 45 4,500 Rentals Capital Values 43 4,300 (INR / sq. ft / month) (INR / sq. ft) 41 4,100 Q2 2009 40 4,000 Q3 2009 40 4,000 39 3,900 Q4 2009 45 4,409 37 3,700 Q1 2010 47 4,250 35 3,500 Q2 Q3 Q4 Q1 Q2 Q3 Q2 2010 49 4,450 2009 2009 2009 2010 2010 2010 Q3 2010 49 4,450 Capital Value Rental Value Source: BNP Paribas Real Estate, India CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I8I
  • 9. PERIPHERY BUSINESS DISTRICT (PBD) Competitive rentals in comparison to other business districts is translating into large space Major areas that constitute PBD include:- requirement from occupiers • Whitefield • Electronic City Supply & Vacancy Trend • Mysore Road The PBD market witnessed a total leasing of around 0.8 million sq ft during the third quarter of 2010. Medium to large sized spaces were absorbed ranging between 5,000 and 400,000 sq ft. Significant amount of stock is under development in this micro market and is expected to be completed by the end of 2011. The total addition to stock in this region was around 1.1 million sq ft. There was an increase of around 1.4% in the vacancy levels over the previous quarter. This was mainly because of the addition of 1.1 Supply & Vacancy Trend million sq ft to the existing stock. The vacancy levels are expected to subside over the next few quarters as there is significant demand 25,000 25% for grade A office space in this micro market and there is no major completion expected till end of 2011. 20,000 20%Stock (’000 sq.ft) Supply & Vacancy Trend for the past 6 Quarters Vacancy Rate Stock Vacancy 15,000 15% (000 sq ft) Q2 2009 16,680 16.2% 10,000 10% Q3 2009 16,680 16.2% Q4 2009 17,280 17.3% 5,000 5% Q1 2010 17,752 19.5% Q2 2010 19,221 22.14% 0 0% Q3 2010 20,416 23.50% Q2 Q3 Q4 Q1 Q2 Q3 2009 2009 2009 2010 2010 2010 Source: BNP Paribas Real Estate, India Stock Vacancy Rate Rental & Capital Values The rental value marginally rose by around 2% from Q2 2010 and is currently stable at INR 28 per sq ft per month. The increase in the rentals can be attributed to the rise in demand for grade A commercial office space in the region. Rental & Capital Values The capital values too increased marginally on account of 35 3,500 increasing demand for grade A office space in the region. The capitalRental Value (INR/sq.ft/month) value currently stands at INR 2,350 per sq ft Capital Value (INR/sq.ft) 30 3,000 The average headline rentals & capital values for the last 6 quarters are as follows:- 25 2,500 Rental & Capital Values over the Past 6 Quarters 20 2,000 Rentals Capital Values (INR / sq. ft / month) (INR / sq. ft) 15 1,500 Q2 2009 25 2,200 10 1,000 Q3 2009 25 2,150 Q4 2009 26.5 2,328 5 500 Q1 2010 27.5 2,300 Q2 Q3 Q4 Q1 Q2 Q3 2009 2009 2009 2010 2010 2010 Q2 2010 27.5 2,300 Capital Value Q3 2010 28 2,350 Rental Value Source: BNP Paribas Real Estate, India CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I9I
  • 10. RENTAL VALUES FOR Q3 2010 CAPITAL VALUES FOR Q3 2010Micro Rent Q on Q Micro Q on Q INR / sq.ftMarket INR/ sq.ft/ month Change Market Change CBD 75 0% CBD 8,333 0% SBD 49 0% SBD 4,450 0% PBD 28 2% PBD 2,350 2%KEY PROJECTS New Supply – Year 2010 Micro Total built up Completion DateProperty Location Market area (sq ft) (expected)Prestige Shanthiniketan Whitefield PBD 3,100,000 Q4 2010Bearys Global Research Triangle Whitefield PBD 1,250,000 Q4 2010Brigade World Trade Centre Yeshwantpur SBD 1,100,000 Q4 2010(North Star)Bhoruka IT Park Phase II Whitefield PBD 423,000 Q4 2010GVR Tech Park Whitefield PBD 480,000 Q4 2010Salrpuria Symphony Hosur Road PBD 160,000 Q4 2010Source: BNP Paribas Real Estate, India CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I10I
  • 11. KEY TRANSACTIONS Q3 2010 Space Micro Building Occupiers Location (sq.ft) Market Divyashree Chambers Vatika 25,000 CBD Langford Road Embassy Icon Sunguard 25,774 CBD Infantry Road Salarpuria Cambridge Mall Autonomy 26,000 CBD Cambridge Layout Brigade South Parade Quintiles 29,800 CBD MG Road Salarpuria Cambridge ACI Global 45,000 CBD Cambridge Layout Vaswani Centropolis Swiss Re 116,162 CBD Langford Road Corniche Al Latheef Inatech Info. Solutions Pvt. Ltd 18,000 CBD Cunningham Road ACR Towers Mott Macdonald 12,403 CBD Residency Road Prestige Nebula Cenduit 17,000 CBD Cubbon Road Omnicare Clinical Research HM Towers 19,900 CBD Brigade Road India Pvt. Ltd. Vrindavan Tech Village Brocade 90,000 SBD Outer Ring Road Vrindavan Tech Village Altisource 100,000 SBD Outer Ring Road IBC Golf View Homes Volvo 100,000 SBD Wind Tunnel Road Vrindavan Tech Village Nokia 126,000 SBD Outer Ring Road Pritech Park Hewlett Packard (hp) 170,000 SBD Outer Ring Road Pritech Park Accenture 200,000 SBD Outer Ring Road Kalyani Magnum Oracle 285,000 SBD Bannerghatta Road Bagmane World Trade Emphasis 85,000 SBD Outer Ring Road Center Mallikarjuna Building Cross Domain 50,000 SBD Yeshwanthpur Pritech Park Nous System 43,000 SBD Outer Ring Road Adarsh Eco Place Infinite 30,000 PBD Whitefield Kalyani Platina APC 35,000 PBD Whitefield Salarpuria GR Tech Park Sapient 65,000 PBD Whitefield Kalyani Platina EFI 70,000 PBD Whitefield Prateek Tech Park HP 71,000 PBD Electronic City Global Axis TCS 400,000 PBD Whitefield First Technology Place JP Morgan Chase 26,340 PBD Whitefield RMZ Centennial O&M 21,380 PBD Whitefield Ozone Manay Tech Park ACS 17,200 PBD Hosur RoadSource: BNP Paribas Real Estate, India CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I11I
  • 12. GLOSSARYQ3: Quarter 3 of the financial year (July - August - September) ORR: Outer Ring RoadAbsorption: Occupied Stock (n) – Occupied Stock (n-1); Where “n” is the specified Major Refurbishment: Building which has undergone structural alteration less than 5period (quarter, year etc.) years ago, subject to planning permission.Bare Shell: Premises consisting of basic structure with lifts, power supply to junction Renovated: Building which has undergone renovation work not requiring for planningbox, water supply line, toilets permission less than 5 years ago.BPO: Business Process Outsourcing Modern: High-performance building over 10 years old.BUA: Built up area Old: Low-performance building over 10 years old. CCI (Cost of construction index): Index that makes quarterly measurements ofSuper Built-up Area (SBUA): Built-up area + common area including lifts area, common construction prices for new house building. It is the price after VAT paid by the owner topassages, utilities, terrace etc. & varies from building to building. construction companies. It excludes land-related prices and costs (site development,Carpet Area: Actual usable area, and does not include any common areas, area special foundations, etc.), fees and financial costs.occupied by walls etc. Demand: A search for premises expressed to BNP Paribas Real Estate. The analysisCompleted Stock: Either the building has received occupancy certificate or the client pertains only to the flow of new demand expressed.has moved in and occupied space and started working in a particular 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 theEPIP: Export Promotion Industrial Park 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 of Under construction: Buildings on which construction has effectively begun. Prior15,000 sq. ft., Car Parking ratio of atleast 1 per 1000 sq. ft., Floor-to-ceiling height in demolition work is not taken into account.excess of 3.75 m, Power provision of 1.25KVA per 100 sq. ft. with 100% power-backup Planning permission granted: Authorisation to build obtained, generally booked afterwherever applicable and professionally managed facilities settlement of third party claims.Ground Coverage: It is the total covered area on ground by the built component and is Planning permission submitted: Planning permission requested, being processed.expressed as a percentage of the plot area Pre-letting: Transaction by an occupier more than 6 months before the delivery of theHard Option: Real estate space reserved by the lessee for future occupation within a building.particular time frame and at a pre-decided rental Headline rent: Monthly rent per square feet, charged on super built-up area basis,INR: Indian National Rupees featured on the lease, and expressed excluding fitouts, taxes, deposits, advances, maintenance charges and does not take into account building efficiency (super built upPre-lease: Space committed for lease before completion of construction area - carpet area ratio). Further it does not include attached premises such as parkingSpeculative Stock: The stock which can be leased and excludes Built-to-Suit (BTS) and areas, archives, staff canteens, etc. If the rental is progressive, the value applied is theCampus facilities. average for the first 3 years or the fixed term of the lease.Stock: Cumulative Supply Average headline rent: Weighted average of rented area. The average featured is a moving average over the quarter, to smooth out the changes, exclusive of all taxes,Supply: New construction in a particular specified period deposits, advances & maintenance charges..Transaction Volumes: Total number of transaction in a particular specified period Underlying rent: Annual rent per square meter expressed free of tax and charges andVacancy: Total vacant space in the completed stock excluding advantages agreed by the owners (rent incentive building works, etc).Warm Shell: Premises consisting of power backup, high side A.C., common area fit outs Prime rents: Represents the top headline rent (excluding non significant transactions)and fitted out toilets for an office unit:- of standard size, of the highest quality and specification, in the best location in each market.Q on Q: Quarter on Quarter Top rent: Represents the top headline rent for an office unit. It is not necessarily a primey-o-y: year-on-year (All growth figures in this report are y-o-y unless otherwise rent.mentioned Second hand premises: Premises that have been previously occupied by an occupier forIT: Information Technology vacant for more than 5 years.ITES: Information Technology Enabled Services (includes various services ranging from Very good condition: High-performance premises of high quality.call centres, claims processing, medical transcription, e-CRM, SCM to back-office Existing state of repair: Low-performance premises that can be rented as they are.operations such as accounting, data processing, and data mining) To be renovated: Low performance premises that need renovation.Repo Rate: Rate that an eligible depository institution (such as a bank) is charged to Supply available within 1 year: All premises and buildings available within 1 yearborrow short term funds directly from the central bank through the discount window including the supply available immediately, new supply that has not been pre-let andReverse Repo Rate: Interest rate that a bank earns for lending money to the Reserve second hand supply that will be vacated definitively (notable terminated leases).Bank of India in exchange for government securities Take-up: Rental or sale of a property asset, finalised by the signature of a lease or a billSEC A, B, C & D Socio: Economic Classification; SEC A represents the highest propensity of sale including turnkey transactions and owner-occupier. The transaction is onlyto spend and SEC D represents the lowest propensity to spend. taken into account once any existing conditional clauses have been lifted.Sq.ft: Square Feet Vacancy rate: Ratio measuring the relationship between the supply immediately available and the existing stock.Sq.mt: Square MeterMn: Million Disclaimer: This report is released by BNP Paribas Real Estate & Infrastructure AdvisoryStamp Duty: Form of tax charged on instruments (written documents) requiring a Services and the information in it is dedicated to the exclusive use of its clients. Thephysical stamp (for government legality) to be attached to or impressed. report and the information contained in it should not be copied or reproduced withoutNew: Building built within the last 5 years. prior permission from BNP Paribas Real Estate and Infrastructure Advisory Services. The facts of these reports are believed to be correct at the time of its release but cannotRecent: Building less than 10 years old. be guaranteed. Please note the findings, projections, conclusions andSEZ: Special Economic Zone having special tax exemptions / incentives to corporate recommendations are based on information gathered in good faith from both primaryoccupiers and secondary sources, whose accuracy we are not always in a position to guarantee. BNP Paribas Real Estate & Infrastructure Advisory Services cannot be held responsibleBFSI: Banking & Financial Services Industry if, despite its best efforts, the information contained in the present report turns out toSLR: Statutory Liquidity Ratio be inaccurate or incomplete.CRR: Cash Reserve RatioFSI: Floor Space Index CITY REPORT BANGALORE OFFICE MARKET - Q3 2010 I12I
  • 13. . Non contractual document - Research department - Published by : Raja Kaushal - Managing Director, BNP Paribas Real Estate & Infrastructure Advisory Services Pvt. Ltd. - November 2010 Photo courtesy : Vaishnavi Group - BNP PARIBAS REAL ESTATE : Headquarters of Parent Company : 13, boulevard du Fort de Vaux - 75017 Paris - 692 012 180 RCS Paris ABU DHABI ITALY ALBANIA* JAPAN* SERBIA* Al Bateen Area Corsa Italia, 15/A Danos & Associates RISA Partners 6, Vladimira Popovica Street Plot No. 144, W-11 20122 Milan Blvd. Deshmoret e Kombit 5F Akasaka Intercity 1-11-44 Office B31 New Al Bateen Municipality Tel: +39-02-58 33 141 Twin Towers - Building 2 Akasaka, Minato-ku 11000 BelgradeINDIA Street 32 Fax: +39-02-58 33 14 39 11th Floor 107-0052 Tokyo Tel.: +381-11-2600 603BNP PARIBAS REAL ESTATE P.O. Box 2742 Tirana Tel: +81-3-5573 8011 Fax: +381-11-2601 571& INFRASTRUCTURE ADVISORY Abu Dhabi, UAE JERSEY Tel.: +355-4-2280488 Fax: +81-3-5573 8012SERVICES PVT. LTD. Tel.: +971-505 573 055 4th Floor, Conway House Fax: +355-4-2280192 SLOVAKIA* Fax: +971-44 257 817 Conway Street NETHERLANDS* Modesta (Dr. Max Huber & St HelierMUMBAI (HEAD OFFICE) AUSTRIA* Holland Realty Partners Partner Group) BELGIUM Jersey Je2 3NT704, Level 7, MMTC House, C-22, Dr. Max Huber & Partner J.J. Viottastraat 33, Heydukova 12-14 Blue Tower Tel: +44-15 34-62 90 01Bandra Kurla Complex, Bandra (E), Dr. Karl-Lueger-Platz 5 1071 JP 811 08 Bratislava Avenue Louise 326 Fax: +44-15 34-62 90 11Mumbai - 400 051 B14 Louizalaan 1010 Vienna Amsterdam, Tel.: +421-2-3240 8888Tel: +91 22 6138 8088 1050 Brussels LUXEMBOURG Tel: +43-1-513 29 39 0 Tel: +31-20-305 97 20 Fax: +421-2-3214 4777Fax: +91 22 6138 8089 Tel: +32-2-646 49 49 Axento Building Fax: +43-1-513 29 39 14 Fax: +31-20-305 97 21 Fax: +32-2-646 46 50 Avenue J.F. Kennedy 44 SWITZERLAND*BANGALORE 1855 Luxembourg BULGARIA* NORTHERN IRELAND* NaefLevel 15, Concorde Block, DUBAI Tel.: +352-34 94 84 Danos & Associates Whelan Property Consultants Avenue Eugène-Pittard 14-16UB City, Vittal Mallya Road, Emmar Square Fax: +352-34 94 73 28, Hristo Botev Boulevard 44 Upper Arthur Street Case Postale 30Bangalore – 560001 Building No. 1, 7th Floor Sofia Belfast Bt1 4GJ 1211 Geneva 17Tel: +91 80 4030 0334 P.O. Box 7233 ROMANIA Tel: +359-2-9532314 Tel: +44-28-9044 1000 Tel.: +41-22 839 39 39Fax: +91 80 4030 0400 Dubai, UAE Union International Center Fax: +359-2-9532399 Fax: +44-28-9033 2266 Fax: +41-22 839 38 38 Tel: +971-505 573 055 11 Ion Campineanu StreetDELHI Fax: +971-44 257 817 Sector 1 CANADA* POLAND* UKRAINE*Upper ground floor, Unit No 7, Bucharest 010031 Cresa Partners Brittain Hadley Europa AsteraMercantile House, 15 KG Marg, FRANCE Tel: +40-21-312 7000New Delhi 110001 Tel.: +1-617-758 6000 Warsaw Financial Centre 2a Konstantinovskaya Street 13 boulevard du Fort de Vaux Fax: +40-21-312 7001 Fax: +1-617-742 0643 13th floor 04071, KievTel: +91 11 4959 8800 75017 ParisFax: +91 11 4959 8818 Emilii Plater 53 Tel: +38-044-501 50 10 Tel: +33-1-55 65 20 04 SPAIN CYPRUS* 00-113 Warsaw Fax: +38-044-501 50 11 Fax: +33-1-55 65 20 00 María de Molina, 54 Danos & Associates Tel.: +48-22-586 31 00 28006 Madrid 35, I. Hatziosif Ave Fax: +48-22-586 31 16 USA* GERMANY Tel: +34-91-454 96 00 2027, Nicosia Cresa PartnersFor Queries / Comments Goetheplatz 4 Fax: +34-91-454 97 65 Tel.: +357-22 31 70 31 RUSSIA* 200 State Street 60311 Frankfurtemail at: Tel.: +49-69-2 98 99 0 UNITED KINGDOM Fax: +357-22 31 70 11 Astera 13th Floor Fax: +49-69-2 92 91 4 90 Chancery Lane 10, b.2 Nikolskaya Str. Boston, Massachusetts 02109info.india@bnpparibas.com London WC2A 1EU GREECE* Moscow, 109012 Tel.: +1-617-758 6000 IRELAND Tel: +44-20-7338 4000 Danos & Associates Tel/Fax: +7-495-925 00 05 Fax: +1-617-742 0643 40 Fitzwilliam Place Fax: +44-20-7430 2628 1, Eratosthenous Str. Dublin 2 11635 Athens Falcon Real Estate Tel: +353-1-66 11 233 Tel: +30-210 7 567 567 570 Lexington Avenue Fax: +353-1-67 89 981 Fax: +30-210 7 567 267 32nd Floor New York, NY 10022 Tel.: +1-212 271-5445 Fax: +1-212 271-5588 *Alliances www.realestate.bnpparibas.com