Presentation on the India Real Estate Outlook Report highlighting the residential and office real estate scenario in Bengaluru.

1. Bengaluru
July – Dec 2014

2. Residential
July – Dec 2014

3. Residential Launches, Absorption and Price Trends
RESIDENTIAL
10% fall in H2 2014 vs. H2 2013
H2 2013 – 36,145 units
H2 2014 – 32,589 units
11% rise in H2 2014 vs. H2 2013
H2 2013 – 25,522 units
H2 2014 – 28,445 units
7% rise in price
Y-O-Y in 2014
New launches in H2 2014 plummet Y-O-Y–
a decline of 10%

4. RESIDENTIAL
Residential Market in Bengaluru in Year 2014
Sales
volume
fell
by
3%
55,701 units sold vs.
57,366 units in 2013
New
launches
dropped
by
13%
68,134 units launched vs.
78,300 units in 2013

5. South Bengaluru sees a severe decline in launches,
North Bengaluru holds strong
RESIDENTIAL
241units
26units
55units
9,469units
8,221units
8,973units
4,917units
7,024units
11,008units
18,555units
16,107units
8,260units
2,962units
4,162units
4,293units
Micro-market-wise residential launches – Share in %

6. Not much of a difference in the share of absorption
during 2013 and 2014
RESIDENTIAL
97units
63units
48units
6,887units
6,961units
6,681units
4,932units
5,247units
7,439units
11,747units
13,050units
12,003units
1,858units
1,936units
2,275units
Micro-market-wise residential absorption – Share in %s

7. Nearly 24 months to exhaust the existing unsold
inventory
RESIDENTIAL

8. North and South continue to suffer – South has the
largest unsold inventory while North has the oldest
RESIDENTIAL
Total Unsold Units
100,968
as on December 2014

9. Hebbal witnesses the highest price rise backed by
infrastructure initiatives
RESIDENTIAL
Location Micromarket
Price range in H1 2014
(`/sq ft)
12-month
change
6-month
change
Langford Town Central 15,000–20,000 10% 6%
Lavelle Road Central 22,000–30,000 10% 4%
K.R. Puram East 4,000–6,500 8% 5%
Whitefield East 4,500–8,000 11% 4%
Marathahalli East 4,500–6,800 7% 5%
Indiranagar East 9,000–12,000 5% 0%
Yeshwanthpur West 6,500–9,500 6% 0%
Malleswaram West 9,000–12,000 6% 0%
Rajajinagar West 8,500–13,500 6% 0%
Tumkur Road West 4,000–4,700 10% 3%
Yelahanka North 4,500–7,000 8% 0%
Hebbal North 5,000–9,500 12% 4%
Hennur North 4,200–6,000 8% 5%
Thanisandra North 4,000–7,000 8% 0%
Sarjapur Road South 4,200–7,000 7% 0%
Electronics City South 4,000–6,300 11% 3%
Kanakapura Road South 4,300–6,000 10% 6%
Bannerghatta Road South 4,200–7,000 9% 0%

10. Concluding Remarks
 Residential market on sticky wicket as sales head South – 3%
decline Y-O-Y in 2014
 Launches down by 13% but North Bengaluru is an outlier
 Prices have risen by 7% in H2 2014 Y-O-Y, although overall
momentum in price rise seems to have lost its steam in the last six
months, as the IT industry failed to offer sufficient pay hikes.
RESIDENTIAL

11. Going forward
 Launches to decline by 4% in the Jan – Jun 2015 period but sales
will see a growth of 11%
 Price during Jan – Jun 2015 will increase by 3% Y-O-Y indicating
signs of recovery
 Demand for residential units is likely to be concentrated in and
around North and South East corridor in the coming months
RESIDENTIAL

12. Office
July – Dec 2014

13. At 102.3 mn. sq. ft., Bengaluru records the highest
occupied stock in the country
OFFICE

14. Vacancy level to drop to a single digit
of 9.6% during Jan – Jun 2015
OFFICE

15. E-Commerce drives space consolidation;
IT / ITeS takes a beating in share
OFFICE

16. ORR continues to lead in total office space absorption
OFFICE
10%
19%
39%
33%
0%
3%
9%
59%
24%
4%
0%
10%
20%
30%
40%
50%
60%
70%
CBD & Off CBD SBD ORR PBD East PBD South
H2 2013 H2 2014
Business District-wise Absorption Split
479,283sq.ft.
145,968sq.ft.
923,835sq.ft.
407,950sq.ft.
1,888,612sq.ft.
2,633,937sq.ft.
1,596,067sq.ft.
1,077,520sq.ft.
4,888sq.ft.
169,388sq.ft.

17. E-Commerce and IT / ITeS to drive rise in rentals in
the next 6 months
OFFICE

18. Concluding Remarks
• Bengaluru market gains steams; Records highest
occupied stock in the country
• Absorption in 2014 recorded a 9% growth over 2013; New
completion also grew by 4% Y-O-Y
• The weighted average rental values witnessed a nominal
increase of 3%, from INR 47/sq ft/month in H2 2013 to INR
48.5/sq ft/month in H2 2014

19. Going Forward
 E-Commerce to drive office market; more jobs in the
anvil
 IT rebound to aid office growth in Bengaluru; big ticket
deals expected
 Vacancy level to touch a single digit 9.6% during Jan –
Jun 2015

20. Contact
knightfrank.india@in.knightfrank.com
research@in.knightfrank.com