India office property market overview april 2013

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• In 1Q 2013, Mumbai, NCR, Bangalore, Chennai Kolkata and Pune recorded an overall absorption of more than 8 million sq ft. Bangalore saw the highest absorption, followed by the Mumbai and NCR markets however, Kolkata and NOIDA markets witnessed relatively weaker demand. We anticipate stability in rental values across the major markets due to large inventory in pipeline despite recovery in demand.

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India office property market overview april 2013

  1. 1. OfficeProperty Market OverviewINDIAQUARTERLY UPDATE | APRIL | 2013Accelerating success.
  2. 2. www.colliers.comMACRO ECONOMIC OVERVIEWGDP growth was recorded at 4.5% in 4Q• 2012, the lowest in the last decade. Theeconomic growth in the first nine months offiscal year 2012-13 stood at 5%, much lowerthan 6.6% recorded during the same periodlast year. Headline inflation, based on the wholesale• price index, stood at 5.96% for the month ofMarch 2013 as compared to 7.96% for thecorresponding month of previous year. Thereduction in the inflation was primarily due tolow food inflation.The Reserve Bank of India reduced the CRR• (Cash Reserve Ratio) of scheduled banks by25 basis points from 4.25 to 4%, effectivefrom January 2013, to induce immediateliquidity in the market. The central bank alsoreduced the repo rate by 50 basis points intwo tranches in January and March thisquarter.The Indian Rupee remained under pressure• and closed at 54.28 to the USD and 70.37 tothe Euro as on 15 March 2013.The commercial office market showed signs• of revival in almost all markets. The six majormarkets, i.e. Mumbai, NCR, Bangalore, ChennaiKolkata and Pune recorded an overallabsorption of around 8 million sq ft in 1Q2013. Bangalore saw the highest absorption,followed by the Mumbai and NCR markets.The Kolkata and NOIDA markets to witnessedrelatively weaker demand. IT/ITeS and BFSIremained the key demand drivers this quarterin almost all major markets.COLLIERS VIEW: The prevailing recovery inoccupier demand is anticipated to continue inmedium term. We anticipate stability in rentalvalues across the major markets due to largeinventory in pipeline despite recovery indemand.ECONOMIC BAROMETERReturn on Alternative Investmentsresearch & forecast ReportSYDNEY CENTRAL BUSINESS DISTRICTIndia office marketResearch & forecast reportMar-12 Mar-13REPO RATE 8.50% 7.50%REVERSE REPORATE7.50% 6.75%CRR 4.75% 4.00%INFLATION (WPI)17.69% 5.96%PLR210.00% - 10.75% 9.70% - 10.25%DEPOSIT RATE38.50% - 9.25% 7.50% - 9.00%Exchange RATEINR - USD 50.39 54.28INR- Euro 65.89 70.37Mar-12 Mar-13 YoY %ChangeGold 27,300 29,348 7.50%SILVER 56,014 53,859 -3.85%EQUITY (BSESENSEX) 17,676 19,428 9.91%REALTY INDEX 1,,822 2,048 12.46%Source: Colliers International India ResearchECONOMIC INDICATORSINRCroreInPercentage2005-062006-072007-082008-092009-102010-112011-12April-Feb13FDI in Real Estate02,0004,0006,0008,00010,00012,00014,00016,0004.0%5.0%6.0%7.0%8.0%9.0%10.0%Jan-Mar09Apr-Jun09Jul-Sep09Oct-Dec09Jan-Mar10Apr-Jun10Jul-Sep10Oct-Dec10Jan-Mar12Oct-Dec12Jun-Sep12Oct-Dec11Jul-Sep11Apr-Jun11Jan-Mar11Gross Domestic Product at Factor Cost0.0%1.0%2.0%3.0%1Q 2013 | OFFICE7080120130100110901-feb-20131-Mar-201315-feb-20131-Jan-201315-Jan-201330-Jan-201315-Mar-2013BSE Sensex & Realty IndexBSE Sensex Realty Index* Rebase to 100USD EuroExchange Rates657055605075801-Jan-1315-Jan-1330-Jan-1315-Feb-131-Feb-131-Mar-1315-Mar-12Note : All values in the above tables are as on 15th of March2012 and 20131Wholesale Price Index2SBI Prime Lending Rate3SBI interest rate < INR 1 croreTerm Deposits for ≤1YearApr-Jun12
  3. 3. Note:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.Colliers International | p. 3INDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchMUMBAI During the surveyed quarter, about 8.2 million• sq ft of Grade A commercial office space wasavailable for fit-out. More than 65% of thisavailable space was concentrated in LowerParel, Andheri East and Thane.No new major Grade A commercial office• supply was added to the city’s officeinventory.During the quarter, office space absorption• was recorded at around 2.17 million sq ft. Anumber of large-sized (40,000 – 100,000sq ft) leases were signed. BFSI and IT/ITeSwere the primary sectors contributing to thisdemand.No major movement in capital values were• recorded across the submarkets, except inBandra Kurla Complex (BKC) and Lower Parel,where capital values increased in the range of2 -5% QoQ. Average rental values remained stable in• almost all micro–markets, except for amarginal decrease in the range of 1 -3% inareas like Nariman Point and Lower Parel.In this quarter, construction work on the• Eastern Freeway project was completed.The 16 km long elevated road connects southMumbai to Wadala and continues onwards toGhatkopar in the eastern suburbs.COLLIERS VIEW: In 1Q 2013, occupier demandis expected to remain healthy with micro-markets like Andheri, BKC and Lower Parelcontinuing to be the preferred destinationfor the occupiers. Overall rentals acrossthe micro-markets are expected to remainunchanged, while rentals for premium officespace may increase slightly due to limitedavailability.Andheri East25%CBD1%Thane / LBS21%Worli / Prabhadevi1%Goregoan / JVLR5%Powai4%Malad6%Navi Mumbai5%Lower Parel22%BKC9%Kalina2%AVAILABLE Supply in Prime Areas4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital ValueCITY OFFICE BAROMETERMicro Market RentalValues% ChangeQoQ YoYCBD 225 - 260 -3% -3%Andheri East 90 - 125 0% 0%BKC 225 - 315 0% 3%Lower Parel 140 - 180 -3% -3%Malad 80 - 90 0% 0%Navi Mumbai 55 - 75 0% 0%Powai 100 - 120 0% 0%Worli/ Prabhdevi 175 - 225 0% 0%Goregaon/ JVLR 80 - 110 0% -5%Kalina 175 - 210 0% 0%Thane / LBS 50 - 100 0% 0%AndheriEastBKCLowerParelMaladNaviMumbaiPowaiWorli/PrabhdeviGoregaon/JVLRKalinaThane/LBSCBD05,00010,00015,00020,00025,00030,00035,000Grade a Capital ValuesCapitalValues-INRPerSq.ft.1Q20081Q20093Q20083Q20093Q20101Q20103Q2013F1Q20133Q2014F1Q2014F3Q20121Q20123Q20111Q201150 5,0000 0100 10,000150 15,000200 20,000250 25,000300 30,000AVERAGE RENTAL AND CAPITAL VALUE TRENDForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.Note:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.KEY UNDER CONSTRUCTION PROJECTSBUILDING NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionGodrej One Godrej & Boyce 758,000 Vikhroli 2013Marathon Futurex Phase III Marathon Group 360,000 Lower Parel 2013iThink Techni Campus C wing Lodha Developer 212,700 LBS Marg 2013KEY MARKET TRANSACTIONSCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPEAditya Birla Minacs Worldwide Ltd. Symphony IT Park 30,000 Andheri East LeaseAxis Securities Ltd. Phoenix Market City 40,000 Kurla LeaseBarclays Nirlon 180,000 Goregaon LeaseColgate Palmolive India Ltd. L&T Business Park 100,000 Andheri East LeaseFuture Generali India Insurance Co. Ltd. iThink 27,000 Thane LeaseTata Group Lodha Simtools 100,000 Thane SaleMumBAI
  4. 4. p. 4 | Colliers International4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital ValueINDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchDELHI In 1Q 2013, more than 1.5 million sq ft of• Grade A office space was available for fit-out.The majority of this supply was located in theJasola and Saket micro-markets.During 1Q 2013, the completion of Red Fort• Capital Parsvnath Towers by ParsvnathDevelopers added approximately 0.5 millionsq ft of Grade A new supply to the CBD.Commercial projects launched in 1Q 2013• include Prime Towers at Okhla by DLF Ltdmeasuring 0.7 million sq ft. The project isexpected to be completed by the end of 2014.Steady occupier demand was noticed during• the quarter. A few mid-sized (15,000 to50,000 sq ft) leases were concluded in micro-markets such as Netaji Subhash Place, MintoRoad and Okhla Phase I. The city witnessedabsorption of approximately 0.1 million sq ftduring the quarter.The investment market continued to remain• sluggish with no major sales transactionsconcluded this quarter.Rental values in new buildings completed• recently in the CBD are commanding higherthan the market rentals due to their state-of-the-art facilities and amenities. However, theoverall rents and capital values for Grade Aoffices remained stable in all micro-markets.COLLIERS VIEW : Not much supply isanticipated in Delhi except in Aerocity, anemerging location near the InternationalAirport. Demand is expected to remain steady,the limited supply of Grade A office space willkeep overall rents at the same levels.Jasola59%Nehru Place10%Saket29%Connaught place2%CITY OFFICE BAROMETERAVAILABLE Supply in Prime AreasMicro Market RentalValues% ChangeQoQ YoYConnaught Place 330 - 384 0% 5%Nehru Place 180 - 192 0% 9%Netaji SubhashPlace65 - 75 0% 1%Jasola 112 - 130 0% -4%Saket 162 - 180 0% 3%NehruPlaceConnaughtPlaceJasolaSaketNetajiSubhash010,00020,00030,00040,00050,00060, 000Grade a Capital ValuesCapitalValues-INRPerSq.ft.50 5,0000 010010,00015015,00020020,00025025,00040035030030,00035,00045,00040,000AVERAGE RENTAL AND CAPITAL VALUE TRENDForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.Note:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.KEY UNDER CONSTRUCTION PROJECTSBUILDING NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionCaddie Commercial Tower Caddie Hotel 100,000 Aerocity 2013DLF Towers DLF Ltd. 420,000 Okhla 2013NBCC Plaza NBCC 350,000 Okhla 2013KEY MARKET TRANSACTIONSCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPEEssilor A-3 15,000 Okhla Phase I LeaseOTIS Cyber Plaza II 14,896 Netaji Subhash Place LeaseEbay Statesman House 5,850 Barakhamba Road LeaseVFS Global Konnectus 50,000 Minto Road LeaseGeorge Institute Splendor Forum 3,000 Jasola LeasedelhiNote:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.1Q20081Q20093Q20083Q20093Q20101Q20103Q2013F1Q20133Q2014F1Q2014F3Q20121Q20123Q20111Q2011
  5. 5. Colliers International | p. 5INDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchMG Road4%Institutional Sectors /Sushant Lok8%Manesar23%DLF Cyber City4%NH8/Udhyog Vihar21%Golf Course Road/Ext /Sohna Road42%CITY OFFICE BAROMETERAVAILABLE Supply in Prime AreasGolfCourseRoad/Ext/SohnaRoadNH8/UdhyogViharInstitutionalSectors/SushantLokGolfCourseRoad/Ext/SohnaRoad(IT)NH8/UdhyogVihar(IT)Manesar(IT)ManesarMGRoad05,00010,00015,00020,00025,000CapitalValues-INRPerSq.ft.20 2,0000 040 4,00060 6,00080 8,000100 10,000120 12,000ForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.Grade a Capital ValuesAVERAGE RENTAL AND CAPITAL VALUE TRENDNote:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.KEY UNDER CONSTRUCTION PROJECTSBUILDING NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionCorporate Green - Tower 1 DLF 660,000 NH-8 2013Digital Greens Tower A Emmar MGF 350,000 Golf Course Ext Rd. 2013Unitech Infospace, Phase 2 Building 7 Unitech 432,000 NH-8 2013KEY MARKET TRANSACTIONCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPECarlsberg Paras Twin Tower 15,000 Golf Course Road LeaseClairvolex Unitech Infospace 12,000 Dundahera LeaseDaffodil World Tech Centre 22,000 Silokhera - NH8 LeaseMacy’s Plot no 32 10,000 Sector 44 LeaseToshiba Building-10 25,000 DLF Cyber City LeaseXerox Bestech Park 40,000 Sohna Road LeaseGurgaon4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital ValueMicro Market RentalValues% ChangeQoQ YoYM. G. Road 112 - 121 1% -1%Golf Course Rd./Ext /Sohna Rd.55 - 108 -1% -11%NH8/UdhyogVihar110 - 140 0% 10%Manesar 45 - 62 0% 0%InstitutionalSectors /Sushant Lok60 - 117 0% 21%Note:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.GURGAON More than 17 million sq ft of Grade A office• space was available for fit-out during 1Q 2013.Most of the available supply was concentratedalong Golf Course Road and its extension,Sohna Road, Udyog Vihar and NH-8,up toManesar.More than 1.5 million sq ft of Grade A office• space was added to the city’s total inventory. In 1Q 2013, a number of commercial projects• were launched, including Elvedor by ImperiaStructures in Sector 37D; Capital Cyberscapeby Capital Builders at Sector 59; GPL TradeTowers by GPL Group and Business Club byAIPL Group, both of which are located on GolfCourse Extension Road. All of these projectsare expected to contribute around 1.5 millionsq ft to the city’s Grade A office space by theend of 2015.The office take-up rate in this quarter was• around 1 million sq ft. Demand from both newtenants and existing tenants seeking to expandincreased, especially in the IT/ITeS sector.Rental values posted moderate growth in• the range of 1 to 2% QoQ in micro-marketssuch as NH-8, Udhyog Vihar and M.G. Road;however other micro-markets remained stableon account of huge supply availability.COLLIERS VIEW : The office market shallwitness increased vacancy due to the massivenew supply in the pipeline expected to becompleted in the next 12 months. The officerental value growth will be capped due toexisting vacancy and the forthcoming newsupply. Moreover, due to the cost-cautiousapproach taken by most occupiers, micro-markets with affordable rents will remain thepreferred location.1Q20081Q20093Q20083Q20093Q20101Q20103Q2013F1Q20133Q2014F1Q2014F3Q20121Q20123Q20111Q2011
  6. 6. p. 6 | Colliers InternationalINDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchnOIDAIn 1Q 2013, around 8.8 million sq ft of Grade• A and Grade B office space was available forfit-out. About 90% of this available spacewas IT/ITeS office space located primarily inSectors 16A and 62, and Sectors 125 to 143along the NOIDA Expressway.More than 1 million sq ft of Grade A office• space was added to the city’s total inventory.Two new commercial projects were launched• in 1Q 2013: Mist Avenue by Bhasin Group atSector 143; and Cosmic Corporate Park IIby Cosmic Group at Sector 140. These twoprojects together will contribute about 1.4million sq ft of Grade A office space by theend of 2015.Occupier demand from the traditional demand• drivers IT/ITeS in the city remained mutedand very few large floor-plate deals wereexecuted during the quarter. Total absorptionof around 0.5 million sq ft was recorded in thesurveyed quarter.Following last quarter’s trend, the rental• values further declined by 2% in most ofthe Commercial and Industrial sectors, whilerental values in the Institutional sectorsremained stable.COLLIERS VIEW : Demand decreasedmarginally for the third consecutive quarter inNOIDA. Further a large commercial supply isexpected to hit the market by the end of 2013and in early 2014, we anticipate that the rentalvalues will remain stable in the near future.This is primarily because the rental valueshave already reached levels at which there isnot much scope for further reduction.Commercial Sectors (Sec18) (Grade B)0.7%Industrial Sectors(Sec. 1-9, 57-60, 63-65)(Grade B)8.6%Commercial Sectors(Sec 18) (Grade B)0.2%Institutional Sectors(Sec.16A, 62, 125-14290.5%CITY OFFICE BAROMETERAVAILABLE Supply in Prime AreasMicro Market RentalValues% ChangeQoQ YoYInstitutionalSectors (Non IT)61 - 72 0% -11%InstitutionalSectors (IT)46 - 50 0% -6%ComercialSectors95 - 105 -2% -0%IndustrialSector23 - 32 -2% 2%InstitutionalSectors(NonIT)InstitutionalSectors(IT)CommercialSectors03,0006,0009,00012,00015,000Grade A Capital ValuesCapitalValues-INRPerSq.ft.20 3,0000 040 6,0009,0006012,0008015,000120100AVERAGE RENTAL AND CAPITAL VALUE TRENDForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.KEY UNDER CONSTRUCTION PROJECTSBUILDING NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionAmigo Cyber Park Amigo 250,000 NOIDA Expressway 2013Corporate Park Ansal API 200,000 NOIDA Expressway 2013Oxygen SEZ Tower F 3C Group 250,000 NOIDA Expressway 2013KEY MARKET TRANSACTIONSCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPEACL Mobile Express Trade Tower 18,000 Sector 132 LeaseHCL Individual Building 98,000 Sector 1 LeaseFiserv DLF IT Park 200,000 Sector 62 LeaseSunguard Financial Services Advant IT Park 10,000 Sector 142 LeaseNote:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.noida4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital ValueNote:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.1Q20093Q20093Q20101Q20103Q2013F1Q20133Q2014F1Q2014F3Q20121Q20123Q20111Q2011
  7. 7. Colliers International | p. 7KEY UNDER CONSTRUCTION PROJECTSPROJECT NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionPurva Moneta Puravankara Projects 300,000 Guindy 2013Ramanujan IT City Little Wood Tower Block D Tata Realty & Infrastructure 600,000 Taramani 2013SP InfoCity Shapoorji Pallonji Group 1,200,000 OMR 2013INDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchCHENNAIApproximately, 13.5 million sq ft of Grade• A office space was available for fit-out thisquarter. More than half of this supply waslocated along the OMR IT corridor.The city has not witnessed any major• completions this quarter. Developers haveadopted a cautious approach due to highvacancy levels, and have slowed the pace oftheir construction works•Demand in special economic zones (SEZs)remained upbeat and a number of medium tolarge floor plate size deals (40,000 – 200,000sq ft) were concluded this quarter. The totaloffice space absorption was recorded ataround 1 million sq ft. More than 60% of thetotal absorption has taken place in SEZs.BFSI and IT/ITeS were the primary sectorscontributing to this demand.•No majormovement of capital and rentalvalueswere recorded, across all micro-markets.In 1Q 2013, the Chennai Corporation Council• approved the proposed property tax forbuildings that accommodate IT companies.This will increase tax rates in the range of 50-200%.COLLIERS VIEW: In 1Q 2013, the citywitnessed moderate leasing activities, withdemand mostly driven by IT/ITeS occupantsin SEZs. We anticipate the same levelof absorption momentum in the comingquarters. With controlled supply in the nearfuture, rental values are expected to remainat current levels in preferred micro-marketssuch as the CBD, OMR and Guindy. However,there will be downward pressure in locationson the fringes of the city due to lower demandfor such locations.CBD14%Guindy (SBD)6%Velachery1%Vadapalini0%GST Rd3%OMR (IT Corridor)51%Ambattur24%CITY OFFICE BAROMETERAVAILABLE Supply in Prime AreasMicro Market RentalValues% ChangeQoQ YoYCBD 65 - 85 0% 0%Guindy (SBD) 50 - 60 0% 4%Ambattur 25 - 30 0% 0%OMR (ITCorridor)25 - 40 0% 0%GST road 35 - 40 0% 0%Guindy(SBD)AmbatturOMR(ITCorridor)CBD02,0004,0006,0008,00010,000CapitalValues-INRPerSq.ft.01Q20081Q20093Q20081Q20103Q20101Q20113Q20111Q20123Q20121Q20133Q20133Q20091Q2013F3Q2013F200402,0004,00060 6,00080 8,000100 10,000ForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.KEY MARKET TRANSACTIONSCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPEADP India Tamarai IT Park 41,000 Gunidy LeaseAltimetrik Ascendas 24,000 OMR LeaseBarclays India DLF SEZ 69,000 Guindy LeaseFlextronics RMZ Millennia Business Park 80,000 OMR LeaseMindtree Ramanujam IT SEZ 200,000 OMR LeaseTata Consultancy Services Ramanujam IT SEZ 100,000 OMR LeaseNote:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.Grade a Capital ValuesAVERAGE RENTAL AND CAPITAL VALUE TRENDchennai4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital ValueNote:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
  8. 8. p. 8 | Colliers InternationalINDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchBENGALURU (BANGALORE)About 11.2 million sq ft of Grade A office space• was available for fit-out. Most of this availablesupply was concentrated in areas such as theEPIP Zone, Whitefield, Outer Ring Road (ORR)and Electronic City.During 1Q 2013, construction activities in• Bangalore remained active, resulting innumerous completions. More than 1.5 millionsq ft of Grade A office space was added to thecity’s total inventory.Following last quarter’s trend, most of the• demand was generated by small and mediumenterprises in the IT/ITeS sector, in micro-markets such as Whitefield, Electronic Cityand ORR. More than 2.6 million sq ft of GradeA office space was absorbed during thisquarter.Despite healthyoccupierdemand, rentalvalues• remained stable across all the micro-markets.This is primarily due to the supply/demandequilibrium in the city’s office market.COLLIERS VIEW : In 1Q 2013, we witnessedimproved absorption from the IT/ITeS sector,the traditional driver of office demand in thecity. We anticipate that in the short to mediumterm, rental values will remain stable onaccount of supply/demand equilibrium. Therewill be limited additional supply in the near tomedium term, as developers are refrainingfrom speculative development due to theuncertainty in the future performance of theIT/ITeS sector, and competitive developmentsin from other locations such as Pune andHyderabad.Hosur Road3%CBD7%Bannerghatta Road2%Electronic City12%EPIP Zone/ Whitefield46%Outer Ring Road30%CITY OFFICE BAROMETERAVAILABLE Supply in Prime AreasMicro Market RentalValues% ChangeQoQ YoYCBD 80 - 100 0% 6%Hosur Rd. 20 - 40 0% 0%EPIP Zone/Whitefield23 - 32 0% -2%Electronic City 25 - 35 0% 7%Bannerghatta Rd. 48 - 54 0% -4%Outer Ring Rd. 47 - 60 2% 5%-HosurRoadEPIPZone/WhitefieldElectronicCityBannerghattaRoadOuterRingRoadCBD05,00010,00015,00020,000CapitalValues-INRPerSq.ft.20 2,0000 040 4,0006,0006080 8,000100 10,000ForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.KEY UNDER CONSTRUCTION PROJECTSBUILDING NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionDivyasree Tech Park Divyasree Developers 650,000 Whitefield 2013Vaswani Presidio Vaswani Group 125,000 Outer ring road 2013RMZ Eco World 5A & 5B RMZ Corp 500,000 Outer ring road 2013KEY MARKET TRANSACTIONSCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPEGoodrich Aerospace Netra Tech Park 45,000 Whitefield LeaseLinkedin Prestige Tech park 80,000 Outer Ring Road LeaseMicrochip Technology Renaissance First Face 155,000 Whitefield LeaseSAP RMZ Nxt 34,765 Whitefield SaleSiemens India Golden Supreme Tech Park 240,000 Electronic City LeaseVM Ware RPS Green Space 60,000 JP Nagar LeaseGrade a Capital ValuesAVERAGE RENTAL AND CAPITAL VALUE TRENDNote:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.bengaluru4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital ValueNote:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.1Q20081Q20093Q20083Q20093Q20101Q20103Q2013F1Q20133Q2014F1Q2014F3Q20121Q20123Q20111Q2011
  9. 9. Colliers International | p. 9INDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchKOLKATA About 0.5 million sq ft of new Grade A office• supply was added to the city’s office inventory.Most of this new supply was located in thePBD micro-market such as Sector – 5 andSonarpur.During the quarter a few mid sized projects• such as “Arihant Square” by Arihant Group(at Park Street), and “Primarc Tower” byPrimarc Group (at Sector 5 in Saltlake) werelaunched.Occupier demand remained bleak during• the surveyed quarter and a limited numberof small-sized leases were concluded,predominately in micro-markets like ParkStreet, Rajarhat and Saltlake. The citywitnessed total absorption to the tune ofapproximately 0.15 million sq ft.Due to poor uptake of commercial stock, rental• values declined in the range of 5 - 7% QoQ inmicro-markets like Ballygunge Circular Roadand Sector-5, however other micro-marketsremained stable.Capital values remained stable during the• quarter with the exception of New Town –Rajarhat, which recorded a decline of 6% incapital values QoQ.COLLIERS VIEW: Rental values declinedin few micro-markets in 1Q 2013; othermicro markets are also facing considerabledownward pressure due to low occupierdemand. We anticipate that demand willcontinue to remain low in the near term andrental may further decline in the range of 2 -5% QoQ.Sector-586%PBD (Narendrapur, Sonarpur,VIP, Madhyamgram)14%CITY OFFICE BAROMETERAVAILABLE Supply in Prime AreasMicro Market RentalValues% ChangeQoQ YoYCBD (ParkSt,CamacSt,AJC BoseRoad)110 - 130 0% 4%BallygungeCircular Rd.100 - 110 -5% -5%East Kolkata 75 - 85 0% 0%Sector-5 48 - 50 -7% -7%PBD (New Town,Rajarhat)34 - 39 0% 0%CBD(ParkSt,CamacSt,AJCBoseRoad)BallygungeCircularRoadEastKolkataSector-5PBD(NewTown,Rajarhat)05,00010,00015,00020,000CapitalValues-INRPerSq.ft.20 2,0000 040 4,00060 6,00080 8,000100 10,000120 12,000ForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.KEY UNDER CONSTRUCTION PROJECTSBUILDING NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionAcropolis Merlin Group 500,000 EM Bypass 2013IT Godrej Simocco Phase 2 Godrej Waterside 1,000,000 Salt Lake Sector V 2013Unitech Infospace, Kolkata Phase 3 B Unitech Ltd. 1,306,800 Rajarhat 2013KEY MARKET TRANSACTIONSCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPEGeneral Motors Apeejay Tower 3,300 Ruby LeaseHP Apeejay Surrendra 30,000 Taratala LeaseITC Limited Apeejay Surrendra 60,000 Taratala LeasePrax Air DLF IT Park 1 6,000 New Town, Rajarhat LeaseReliance Industries Eco Space 50,000 New Town, Rajarhat LeaseSanofi Pharma Apeejay House 10,000 Park Street LeaseGrade a Capital ValuesAVERAGE RENTAL AND CAPITAL VALUE TRENDNote:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.Kolkata4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital ValueNote:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.1Q20081Q20093Q20083Q20093Q20101Q20103Q2013F1Q20133Q2014F1Q2014F3Q20121Q20123Q20111Q2011
  10. 10. p. 10 | Colliers InternationalINDIA | 1Q 2013 | OFFICESource: Colliers International India ResearchPUNE During 1Q 2013, more than 5.8 million sq ft• of Grade A office space was available forfit-out in the city. Most of this supply wasconcentrated in the Hinjewadi, Airport Road,Kharadi and Nagar Road micro-markets.Approximately 0.8 million sq ft of Grade• A office space was added to the city’s totalinventory during this quarter.Occupier demand showed a marginal• reduction in 1Q 2013. The city witnessedmore than 1 million sq ft absorption in Grade Aoffice space. The most active micro-marketsduring the quarter were Hinjewadi, Hadapsar,Viman Nagar and Yerwada.Overall, average rentals in almost all the micro• markets remained stable in 1Q 2013. A fewnew completions in micro market such asBaner, Bavadhan, Aundh and Nagar Road wasleased above 10 to 15% above market rentalsdue to their state of an facilities and amenities.This resulted in increase of 5 to 10% in overallaverage rental values in these micro markets.The Pimpri Chinchwad Municipal Corporation• (PCMC) has planned to construct dedicatedBus Rapid Transit System (BRTS) lanes onthe Pune-Mumbai Highway and Aundh-RavetRoad, at an estimated cost of INR 12 Crore.This will improve connectivity between theMumbai & Pune.COLLIERS VIEW: Pune witnessed significantdemand from the IT/ITeS sector this quarterwhen compared to same period last year. Thedemand momentum is likely to remain thesame in the upcoming quarters. We anticipatea marginal appreciation in rental values inmicro-markets like Hinjewadi, Hadapsar,Viman Nagar, Yerwada and Kharadi.Bavdhan3%Kalyani Nagar7%Senapati Bapat Road2%Aundh3%Baner6%Bund Garden4%Airport road/pune station21%Hinjewadi21%Nagar Road11%Kharadi17%Hadapsar/Fursungi5%CITY OFFICE BAROMETERAVAILABLE Supply in Prime AreasMicro Market RentalValues% ChangeQoQ YoYBaner 45 - 55 11% 18%Bund Garden 60 - 70 8% 8%Airport Rd. 47 - 60 2% 2%Aundh 45 - 51 13% 13%Senapati Bapat 65 - 90 3% 3%Bavdhan 38 - 44 9% 9%Kalyani Nagar 45 - 60 0% 5%Nagar Rd. 40 - 50 6% 6%Hinjewadi 32 - 40 3% 31%Hadapsar/Fursungi32 - 45 -9% 10%Kharadi 32 - 50 -9% 9%BundGardenAirportroad/punestationAundhSenapatiBapatRoadBavdhanKalyaniNagarNagarRoadHinjewadiHadapsar/FursungiKharadiBaner02,0004,0006,0008,00010,00012,000CapitalValues-INRPerSq.ft.20 2,0000 040 4,00060 6,00080 8,000100 10,000ForecastRentalValues-INRPerSq.ft.PerMonthCapitalValues-INRPerSq.ft.KEY UNDER CONSTRUCTION PROJECTSBUILDING NAME Developer AREA (Sq. Ft.) LOCATION Expected CompletionMarvel Edge Marvel Realtor 500,000 Fursungi 2013DLF IT Park, Phase 2 Building 6 DLF Ltd. 750,000 Hinjewadi 2013SP InfoCity, Building 6 Shapoorji Pallonji Group 500,000 Fursungi 2013KEY MARKET TRANSAcTIONSCLIENT Building Name AREA (Sq. Ft.) LOCATION TRANSCATION TYPEAxa Technologies Marvel Edge 120,000 Viman Nagar LeaseKohler India P5 50,000 Hadapsar LeasePRAJ Industries Ltd. Vascon 111,000 Hinjewadi LeaseSiemens Embassy Tech Zone 84,000 Hinjewadi LeaseSynechron Ascendas 600,000 Hinjewadi LeaseSynygy India Business Bay 50,000 Yerwada LeaseGrade a Capital ValuesAVERAGE RENTAL AND CAPITAL VALUE TRENDNote:Available Supply: Total Grade A office space being marketed for sale or lease insurveyed quarter.Grade A Rental/Capital Values: Indicative asking price for Grade A office space.Prime Office Average RentalTrends: Average market rental values for Grade Aproperties.puneNote:All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.4Q 2012 1Q 2013VacancyAbsorptionConstructionRental ValueCapital Value1Q20081Q20093Q20083Q20093Q20101Q20103Q2013F1Q20133Q2014F1Q2014F3Q20121Q20123Q20111Q2011
  11. 11. MumbaiThe 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 Cama Place,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, 62 and125-142, 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 comprises Guindy,Manapakkam, Velachery and other areas. The PBD primarily includes Ambattur and GST Road, while the IT Corridor is the Old Mahaballipuram Road(OMR) in south Chennai.Bengaluru (Bangalore)Prime office properties in Bengaluru can be divided into three principal sub-market— CBD, the SBD consisting of Banerghatta Road & Outer Ring Road(ORR) and PBD including Hosur Road, EPIP Zone, Electronic City and Whilefield.PuneThe prime office sub-markets of Pune include Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp (CBD), while the Off CBD includesAundh, 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.OFFICE SUBMARKETSColliers International | p. 11INDIA | 1Q 2013 | OFFICECity BarometerIncreasing as compared to previous quarterDecreasing as compared to previous quarterRemained stable from previous quarter
  12. 12. Accelerating success.Colliers International (India) provides property services to property Investors and Occupiers. Wedeliver customised service solutions utilising local and global knowledge in partnership with ourclients via our property Investment and Occupier service lines. These service lines include - OfficeServices, Facility Management, Project Management, Residential Services, Investment Servicesand Valuation & Advisory Services.www.colliers.com/indiaFor national offices services related queries please contact:George Mckay, South Asia Director Vikas Kalia, National DirectorOffice & Integrated Services Office ServicesGeorge.mckay@colliers.com Vikas.kalia@colliers.comTel: +91 22 4050 4553 Tel: +91 124 456 7531India office India reSIDENTIAL apac office APAC iNDUSTRIAL GLOBAL RETAIL iNDIA bUDGETMumbai : Vaibhav Kumar, Office Director Vaibhav.kumar@colliers.com 31/A, 3rd floor, Film Center, 68, Tardeo Road, Mumbai, India - 400 034. Tel : +91 22 4050 4527, fax : +91 22 2351 4272Delhi NCR : Ajay Rakheja, Office Director Ajay.rakheja@colliers.comNew Delhi : Statesman House, 4th Floor, Barakhamba Road, Connaught Place, New Delhi, India - 110001 Tel : +91 11 3044 6423, fax : +91 11 3044 6500Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 456 7500, fax : +91 124 456 7502Bengaluru : Goutam Chakraborthy, Office Director Goutam.chakraborthy@colliers.com Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru, India - 560 042 Tel : +91 80 4079 5500, fax : +91 80 4112 3131Pune : Suresh Castellino, Office Director 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 6434Chennai : Kaushik Reddy, Office Director Kaushik.reddy@colliers.com Heavitree Complex, Unit 1C, 1st floor, 23, Spurtank Road, Chetpet, Chennai, India - 600 031 Tel : +91 44 2836 1064, fax : +91 44 2836 1377Kolkata : Soumya Mukherjee , Office Director Soumya.mukherjee@colliers.com Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1, Block EP & GP, Salt Lake Sector V, Kolkata - 700 091 West Bengal, India Tel : +91 33 2357 6501, fax : +91 33 2357 6502Recent Reports :This book is printed on 100% Recyclable paperINDIA | 1Q 2013 | OFFICEAccelerating success.AUTHORSAmit Oberoi MRICSNational Director, Valuation & Advisory; ResearchEmail: Amit.oberoi@colliers.comSurabhi Arora MRICSAssociate Director, ResearchEmail: Surabhi.arora@colliers.comSachin SharmaAssistant Manager, ResearchEmail: Sachin.sharma@colliers.comHeliana ManoAssistant Manager,Valuation & AdvisoryEmail: Heliana.mano@colliers.comFor general queries and feedback :India.Research@colliers.comTel: +91 124 456 7580This report and other research materials may be found onour website at www.colliers.com/India. Questions relatedto information herein should be directed to the ResearchDepartment at the number indicated above. This documenthas been prepared by Colliers International for advertisingand general information only. Colliers International makesno guarantees, representations or warranties of any kind,expressed or implied, regarding the information including,but not limited to, warranties of content, accuracy andreliability. Any interested party should undertake theirown inquiries as to the accuracy of the information.Colliers International excludes unequivocally all inferredor implied terms, conditions and warranties arising outof this document and excludes all liability for loss anddamages arising there from.© Copyright 2012 - 2013 All Rights Reserved.482 offices in 62 countries on 6 continentsUnited States: 140 Canada: 42 Latin America: 20 Asia Pacific: 195EMEA: 85$2.0 billion in annual revenue1.1 billion square feet under managementOver 13,500 + professionalsASIA PACIFICOFFICE MARKET OVERVIEW3Q 2012Accelerating success.ASIA PACIFICINDUSTRIAL MARKET OVERVIEWAccelerating success.May 2012STREET/PRECINCTRENT(USD)**ANNUALCHANGE(%)New York – Fifth Avenue ��,��� ��.�Hong Kong – QueensRoad Central, Central (tie)��,��� ��.�Hong Kong –Canton Road (tie)��,��� ��.�London – Old Bond St.*** ��,��� ��.�Paris – Avenue des***Champs-Élysées��,��� flatHong Kong -Causeway Bay��,��� ��.�New York –Madison Avenue���� ��.�Zurich – Bahnhofstrasse ���� flatMilan –Via Monte Napoleone���� (�.�)Sydney – Pitt Street Mall ���� (��.�)HIGHLIGHTSGLOBALwww.colliers.comMID-YEAR 2012 | RETAILANN T. NATUNEWICZ Manager | Retail Research | USAColliers’ 2012 Global Retail Streets survey found that of 129 locations tracked, 51 posted higher yearover year average rental rates, 49 were flat, and 24 were down (5 lacked comparable data).Retailers entering new markets—both developed and developing—continue to hedge risk by targetingthe same one or two premier locations, generating heated competition and outsized rental rate growthin a handful of space-constrained corridors.Companies with the most ambitious long-term expansion plans remain focused on emerging marketswith rapidly growing middle-class populations, but recently institutional capital has pulled backsomewhat to favor core markets and investments.While economic and political turmoil did affect rental rates in headline-generating markets (suchas Cairo and Athens), high streets with strong fundamentals remained remarkably resilient, suggest-ing, at least for now, some separation between macroeconomic issues and underlying realestate fundamentals.Since we conducted our survey, however, weakening consumer sentiment among affluent shoppershas already begun to impact retailers’ revenues and could hinder landlords’ near-term ability toraise rents, suggesting flattening growth rates for the coming year.This spring proved to be a tricky time to conduct global benchmarking, as market sentiment hasdeteriorated markedly since April. During the past year, virtually every entity making a forecast—including Colliers in our 2012 U.S. Retail Outlook—included a caveat related to not-yet-quantifiable globalfallout from Europe’s fiscal issues. As the past few months have illustrated, the time to face Eurozoneissues has finally arrived, spawning a new wave of financial uncertainty.More than two years post-recession, though, results from our annual survey of High Street rentsillustrate that the world’s priciest retail corridors continue to attract the most sought-after tenants at loftyrental rates. Eight of Colliers’ top ten Global Retail Streets in 2011 made the list again this year. The bigstory, however, lies with the explosive year over year rental growth achieved in a handful of markets. Sixof our Top 10 grew at double-digit levels year over year in local currency units, five of them by more than20%.At a regional level, streets in areas that entered 2007-08 better-positioned economically—Australia,Canada, parts of Eastern Europe—had a higher percentage of this years flat-to-higher rents than thoseslower to emerge from the recession. We will be watching these areas closely. Even as they representsome of the most attractive destinations for expansion-minded companies and yield-seeking investors,they too are vulnerable to softening consumer demand and, for those with reliable data, encroachment ofe-commerce.This report contains two parts. The first summarizes the results of our annual Global Retail Streetssurvey, conducted in April 2012. The second incorporates content from Colliers’ brokerage and researchteams worldwide who contributed market operational metrics, nuanced commentary on retail conditions,and forward-looking opinions on what the next year will hold for consumers, landlords, and investors.Record Rents for Top Retail Corridors; GlobalSlowdown Impacts Momentum ElsewhereTOP 10 GLOBAL RETAIL STREETS*(USD PER SQUARE FOOT PER YEAR)REGIONAL RETAIL RESEARCH CONTACTSAMERICAS> Ann T. NatunewiczAnn.Natunewicz@colliers.comEUROPE/MIDDLE EAST/AFRICA> Zuzanna BaranowskaZuzanna.Baranowska@colliers.comASIA> Simon LoSimon.Lo@colliers.comAUSTRALIA/NEW ZEALAND> Nora FarrenNora.Farren@colliers.comSource: Colliers International* selected cities** exchange rate as of March 31, 2012*** Zone A rents

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