India Residential Property Market Overview August 2013

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The report gives an overall macroeconomic overview followed by latest real estate updates and trends in each city through supply and demand, rental and capital values as well as market prognosis for 2013 onwards.

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India Residential Property Market Overview August 2013

  1. 1. Accelerating success. INDIA QUARTERLY UPDATE | AUGUST | 2013 Residential Property Market Overview
  2. 2. www.colliers.com research & forecast Report SYDNEY CENTRAL BUSINESS DISTRICT India RESIDENTIAL market Research & forecast report INDIA | AUGUST 2013 | residential www.colliers.com 1 As of June, 2013 (Provisional) 2 SBI Home Loan Rate for Loan upto INR 30 Lakhs 3 SBI Fixed Deposit rate for a period of more than one year and amount below INR 1 Crore 4 Realty Index is a free float weighted index, comprised of real estate development companies in the BSE-500 Index. ECONOMIC BAROMETER Return on Alternative Investments Jul-12 Jul-13 REPO RATE 8.00% 7.25% REVERSE REPO RATE 7.00% 6.25% CRR 4.75% 4.00% INFLATION 7.52% 4.86% Home Loan Rate 11.00% 9.95% Jul-12 Jul-13 YoY % Change Gold 29,216 26,717 -8.55% SILVER 51,572 41,026 -20.45% Fixed Deposit 9.00% 8.75% -2.78% EQUITY 17,103 20,034 17.14% REALTY INDEX 1,725 1,548 -10.29% 3 4 2 1 Repo Rate Cash Reserve Ratio Wholesale Price Index ECONOMIC INDICATORS InPercentage MACRO ECONOMIC OVERVIEW India’s GDP growth was registered at 4.7% in the Jan - Mar quarter of the current fiscal,• marginally up from the last quarter figure of 4.5%. Headline inflation, based on the wholesale price index, stood at 4.7% for the month of May 2013• as compared to 7.55% for the corresponding month of previous year. The reserve bank of India kept the policy rates unchanged despite lower inflation due to various economic factors such as currency depreciation and fiscal deficit. The rupee plunge 8.6% in the April-June quarter due to massive capital outflows and month end• dollar demand from importers. The rupee closed at an all-time low of 60.72 against the US dollar in the last week of June. The overall slowdown in the economy has impacted the residential market sentiments as buyers• were cautious to make long term Investments decision. The slowdown in sales has resulted in increased unsold inventories and downward pressure on capital values. Increasingly projects are offering incentives, and easy payment options. COLLIERS VIEW: There have been limited number of new launches in previous 2-3 quarters. We• anticipate increase in the new launches in coming quarters, as many developers are looking to the festive season to launch their projects. Most market’s are extremely price conscious and project pricing will be a key criteria for the success of a project. 4.0 3.0 6.0 5.0 8.0 9.0 7.0 11.0 10.0 12.0 Apr‘09 Feb‘09 Dec‘09 Apr‘11 Apr‘12 Jun‘13 Apr‘13 Feb‘11 Jun‘09 Jun‘10 Apr‘10 Feb‘10 Jun‘11 Jun‘12 Aug’08 jun’08 Apr‘08 Aug‘09 Aug‘10 Aug‘11 Aug‘12 Dec’08 Oct‘08 Oct‘09 Dec‘10 Oct‘10 Oct‘11 Oct‘12 Feb‘12 Feb‘13 Dec‘11 Dec‘12 2.0 1.0 0.0 -1.0 -2.0 Source: Goverment of India, Colliers International India Research
  3. 3. Colliers International | p. 3 MumBAI SELECT NEW PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** Aurum Grande Kanjurmarg Lodha Group 4Q 2016 10,500 Kalpataru Elan Parel Kalpataru Group 4Q 2017 26,500 Oriente Parel Lodha Group 4Q 2017 22,000 Radiance Goregoan Kalpataru Group 4Q 2017 13,500 Sapphire Powai Sai Group of Industries 4Q 2015 10,500 CITY RESIDENTIAL BAROMETER 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace Note: Ongoing Price (P.S.F): Indicative asking price for premium residential properties per sq.ft. MUMBAI In 2Q 2013, Mumbai’s residential market• witnessed an increase in launches of premium residential projects in micro-markets like the Powai, Goregaon, Kanjurmarg and Parel. These projects were priced in the range of INR 10,500 - 26,500 per sq ft. Construction activities remained slow,• resulting in no major new supply during the quarter. Demand for smaller residential properties• from investors, as well as end-users, has picked up. To cater to lower ticket sizes; many developers are focusing on developing smaller unit sizes. Capital values for prime residential properties• remained stable, barring select locations which witnessed marginal increase in the range of 1 - 2% QoQ. The rental values of premium residential• properties increased marginally in the range of 1 - 2% QoQ in almost all of the micro-markets, with the exception of micro-markets in south- central locations like Malabar Hill, Altamount Road, Carmichael Road, Breach Candy, Napeansea Road, Peddar Road, Colaba and Cuffe Parade, which experienced a marginal decrease in rents of 1% QoQ. This quarter the rail link between Churchgate• and Dahanu Road became operational, which will improve the connectivity of the western suburbs to the south Mumbai area. COLLIERS VIEW:• Demand for smaller residential units in the primary market is estimated to remain healthy due to smaller ticket size. Capital values in suburban areas will witness a moderate increase in view of the substantial new supply that is anticipated in medium term. 0 10,000 20,000 30,000 40,000 60,000 70,000 50,000 80,000 INRpersq.ft.INRpersq.ft.permonth 1Q2008 3Q2008 3Q2009 1Q2009 1Q2010 3Q2010 1Q2012 3Q2012 1Q2013 3Q2013F 1Q2014F 1Q2011 3Q2011 80,000 40,000 50,000 70,000 60,000 10,000 20,000 30,000 0 Micro Market Ongoing Price (P.S.F) Thane-Kalyan 4,000 - 8,000 Navi Mumbai 3,500 - 7,500 Virar- Boisar 3,000 - 6,000 INDIA | AUGUST 2013 | residential Prabhadevi Colaba, Cuffe Parade SouthMumbai Malabar Hill, Altamount Road, Carmichael Road Worli Worli Breach Candy, Napeansea Road, Peddar Road Prabhadevi Bandra Bandra Santacruz Santacruz Andheri Andheri Powai Powai Khar Khar Juhu Juhu 200 150 100 50 0 Powai Khar Prabhadevi Breach Candy, Napeansea Road, Peddar Road Malabar Hill, Altamount Road, Carmichael Road Colaba, Cuffe Parade Bandra Juhu Andheri Worli Santacruz INRPersq.ft. Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: * As mentioned by developer ** Base selling price as quoted by developer AVERAGE CAPITAL VALUE RANGE AVERAGE RENTAL VALUE AVERAGE CAPITAL VALUE TRENDS INVESTMENT OPPORTUNITIES
  4. 4. p. 4 | Colliers International 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace INDIA | AUGUST 2013 | residential delhi SELECT ONGOING PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** Capital Greens Shivaji Marg DLF Ltd. 2Q 2015 14,000 Castlewood Okhla Indiabulls Ltd. 4Q 2013 12,800 Kings Court Greater Kailash- II DLF Ltd. 1Q 2015 36,000 Queens Court Greater Kailash- II DLF Ltd. 1Q 2015 36,000 Winter Hills Dwaraka Morh Umang Realtech 4Q 2013 8,750 CITY RESIDENTIAL BAROMETER delhI During 2Q 2013, limited supply was added to• Delhi’s premium residential inventory. Only a few small-scale residential redevelopment projects were readyforpossession in locations like Vasant Vihar, Anand Niketan, Panchsheel Park, Anand Lok and Defence Colony. In the same quarter, capital and rental values• for premium residential properties remained stable in all of the micro-markets; not much activity was noticed during the quarter. Absorption remains upbeat however, and various farm-house deals were concluded in micro-markets like Westend Green and Chhattarpur. This quarter the Delhi Urban Art Commission• has cleared the redevelopment plan of Kidwai Nagar (East). The project is a vision project of Ministry of Urban Development and will be developed by The National Buildings Construction Corporation (NBCC) with an investment of more than INR 4,000 crore. The project will comprise 4,747 residential units and about 1.3 million sq.ft. of commercial space adjoining prime areas such as AIIMS, Dili Haat and INA Market. The residential apartments are priced at the rate of INR 10,004 per sq ft. The Union Cabinet clears the Urban• Development Ministry proposal to repeal the Delhi Rent Control Act, 1958. According to the Urban Development Ministry the new act will be more balanced as compared to 1958 Act. This would benefit the landlords who are bound by rent controls and getting very low rentals even the property prices increase many folds. COLLIERS VIEW:• Major infrastructure activities like overhead bridges and extensions to metro lines will help to boost the residential real estate market in the city. Capital values are expected to remain upbeat due to limited upcoming residential supply and consistent demand. 15,000 0 30,000 45,000 75,000 90,000 105,000 60,000 120,000 INRpersq.ft.INRpersq.ft.permonthINRPersq.ft. 1Q2008 3Q2008 3Q2009 1Q2009 1Q2010 3Q2010 1Q2012 3Q2012 1Q2013F 3Q2013F 1Q2014F 1Q2011 3Q201140,000 50,000 60,000 70,000 80,000 100,000 90,000 30,000 20,000 10,000 0 AnandNiketan, VasantVihar Anand Niketan, Vasant Vihar Panchashila,Anandlok, NitiBagh,SDA Panchashila, Anandlok, Niti Bagh, SDA FriendsColony, MaharaniBagh Friends Colony, Maharani Bagh ShantiNiketan, Westend Shanti Niketan, Westend GreaterKailash I&II,South Extension Greater Kailash I & II, South Extension GolfLinks,JorBagh, SunderNagar Golf Links, Jor Bagh, Sunder Nagar ChanakyaPuri Chanakya Puri PrithvirajRoad, AurangzebRoad Prithviraj Road, Aurangzeb Road 200 160 120 80 40 0 Golf Links, Jor Bagh, Sunder Nagar Panchashila, Anandlok, Niti Bagh, SDA Greater Kailash I & II, South Extension Chanakya Puri Shanti Niketan, Westend Friends Colony, Maharani Bagh Prithviraj Road, Aurangzeb Road Anand Niketan, Vasant Vihar Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: * As mentioned by developer ** Base selling price as quoted by developer AVERAGE CAPITAL VALUE RANGE AVERAGE RENTAL VALUE AVERAGE CAPITAL VALUE TRENDS
  5. 5. Colliers International | p. 5 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace GURGAON During this quarter the city witnessed fewer• project launches, compared to previous quarter. Projects launched were mainly located in the vicinity of Dwarka Expressway, in the price range of INR 6,500 - 14,500 per sq ft. Construction activities remain slow due to the• monsoon season, resulting in the completion of few residential projects/ parts of projects like “Palm Drive” by Emaar MGF on Golf Course Extension Road and “Tulip Orange” by Tulip Developer on Southern Peripheral Road. During the surveyed quarter, demand• remained muted in both the primary and secondary markets. Few developers started offering various easy payment plans such as subvention plan and EMI waiver plan to boost the demand. The limited activity in both the primary and• secondary markets resulted in stable capital and rental values across the city QoQ. The lower sales volumes is attributed to the high price points and the prevailing negative economic sentiment. This quarter, private equity firm ASK Property• Investment Advisors has invested around INR 147 crore into ATS Group’s housing project in Gurgaon located at Dwaraka - Gurgaon Expressway. Colliers View:• Golf Course Extension, Sohna Road, Southern Peripheral Road and Dwarka Expressway will remain the most sought after micro markets. New sectors in Sohna region have started witnessing investor activities with the launch of few new projects in this micro-market. Looking ahead, we anticipate increased traction in the upcoming festive season, with developers offering easy payment plans. INDIA | AUGUST 2013 | residential Gurgaon CITY RESIDENTIAL BAROMETER Note: Ongoing Price (P.S.F): Indicative asking price for premium residential properties per sq.ft. 0 5,000 15,000 10,000 20,000 25,000 30,000 35,000 45,000 40,000 INRpersq.ft.INRpersq.ft.permonthINRPersq.ft. 3Q2008 3Q2009 1Q2009 1Q2010 3Q2010 1Q2012 3Q2012 1Q2013F 1Q2014F 3Q2013F 1Q2011 3Q2011 6,000 8,000 10,000 12,000 14,000 16,000 18,000 4,000 2,000 0 Micro Market Ongoing Price (P.S.F) Golf Course Extension Road 7,500 - 8,500 Sohna Region 3,500 - 4,800 Pataudi Road 4,500 - 5,500 New Gurgaon 3,500 - 4,500 80 60 40 20 0 GolfCourseRoad Golf Course Road SohnaRoad&Ext Sohna Road & Ext DLFPhaseI DLF Phase I SushantLok Sushant Lok NH-8 NH - 8 DLF Phase INH-8 Golf Course Road Sushant Lok Sohna Road & Ext SELECT NEW PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** DLF Crest Sector 42 DLF Ltd. 4Q 2017 14,500 Gurgaon Gateway Sector 112 TATA Housing 4Q 2017 10,500 Primera Sector 37D Ramprastha Group 4Q 2016 6,500 Vatika Expressway Plot Sector 88A Vatika Group 4Q 2015 6,600 Vatika Soverign Sector 87 Vatika Group 4Q 2017 8,000 Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: * As mentioned by developer ** Base selling price as quoted by developer AVERAGE CAPITAL VALUE RANGE AVERAGE RENTAL VALUE AVERAGE CAPITAL VALUE TRENDS INVESTMENT OPPORTUNITIES
  6. 6. p. 6 | Colliers International 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace CITY RESIDENTIAL BAROMETER noida Note: Ongoing Price (P.S.F): Indicative asking price for premium residential properties per sq.ft. noida During 2Q 2013, there was a decrease in• new project launches, compared to previous quarters. Most of the newly launched projects were located in Sectors 75, 77 and 79, and were priced in the range of INR 4,400 - 5,100 per sq ft. During the same quarter, construction• activities remained slow due to the rainy season and not much supply added to the market except for a few units in projects such as Lotus Boulevard and Supertech 34 Pavilion. Capital values in the secondary sales market• witnessed marginal appreciation in sectors located along the NOIDA Expressway while all other micro markets recorded stable capital values due to limited traction in both primary and secondary market. New projects with modern amenities were• favored by tenants due to affordable rental. Continuous addition of new supply kept the rental values stable in almost all the micro market. During this quarter the NOIDA and Greater• NOIDA authorities raised land rates, which may indirectly impact investors and end- users who are seeking residential investment opportunities in these locations due to increased cost. In NOIDA, allotment rates for group housing, residential and institutional properties have been raised by 15%, while commercial and industrial land rates have increased by 30% and 11.25% respectively. Colliers View:• We anticipate increased end-user activity in the festive season, with developers offering attractive promotional payment schemes like subvention and EMI wavier plans. The capital values are expected to remain stable in the coming few quarters due to large inventory in pipeline. 1,500 3,000 0 4,500 6,000 10,500 9,000 7,500 12,000 INRpersq.ft.INRpersq.ft.permonth 3Q2009 1Q2010 3Q2012 1Q2013 3Q2013F 1Q2014F 1Q2011 3Q2010 1Q2012 3Q2011 12,000 10,500 9,000 7,500 6,000 4,500 3,000 1.500 0 Micro Market Ongoing Price (P.S.F) NOIDA Expressway 3,800 - 5,500 Sector 71 to 83 4,500 - 5,800 INDIA | AUGUST 2013 | residential 40 30 20 10 0 Sector28,29,30 Sector 28, 29, 30 Sector92/93 Sector 92/93 Sector61,62.,63 Sector 61, 62., 63 Sector50 Sector 50 Sector44 Sector 44 Sector 61,62,63 Sector 92 / 93 Sector 28,29,30 Sector 50 Sector 44 INRPersq.ft. Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: * As mentioned by developer ** Base selling price as quoted by developer AVERAGE CAPITAL VALUE RANGE AVERAGE RENTAL VALUE AVERAGE CAPITAL VALUE TRENDS INVESTMENT OPPORTUNITIES SELECT NEW PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** Civitech Stadia Sector 79 Civitech Developers Pvt. Ltd. 2Q 2016 4,800 Elite Golf Green Sector 79 HR Oracle Developers 4Q 2015 4,600 Griha Pravesh Sector 77 Griha Pravesh Buildteck & Phadnis Infrastructure 2Q 2014 5,100 White House- II Sector 75 Maxblis Constructions Pvt. Ltd. 4Q 2015 4,500
  7. 7. Colliers International | p. 7 SELECT NEW PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** Mandarin OMR Radiance Realty 4Q 2016 6,400 Sheltrex City GST Road Sheltrex 4Q 2016 2,060 Padmalaya Siruseri (OMR) Real Value Promoters 4Q 2016 3,200 Sai Enclave Arasankazhani (OMR) MMRF Realty 4Q 2015 4,000 The Point Guindy KSV Developers 4Q 2015 14,000 Vista Oceana Padur (OMR) MMRF Realty 4Q 2015 6,000 CITY RESIDENTIAL BAROMETER chennai Note: Ongoing Price (P.S.F): Indicative asking price for premium residential properties per sq.ft. CHENNAI In 2Q 2013, several new projects were• launched in the city. Locations like Old Mahabalipuram Road (OMR), Guindy and GST Road saw maximum new launches. Projects were priced in the range of INR 3,000 - 6,500 per sq ft. This quarter the city witnessed completion• of many mid-scale projects in micro-markets like Besant Nagar, Shastri Nagar, Palavakkam, Uthandi and Thiruvanmiyur. Following last quarter’s capital value trend,• the secondary sales market for premium residential properties appreciated in the range of 4 - 7% QoQ, in micro-markets such as Nungambakkam, Adyar, Besant Nagar, T Nagar Alwarpet / R A Puram and Velachery. This was primarily because, new projects were being launched at a higher price, and there was an increase in the guideline rates for these areas. However micro-markets like Sholinganallur and Siruseri / Kazipattur remained stable. The residential rental market gained• momentum during the quarter; however rents remained stable across the city for premium residential properties, except Adyar, where rents increased by 9% QoQ. The State Government has planned to build• a 45 kilometre elevated road along the IT corridor from Taramani to Mamallapuram. This will further boost real estate activity in the area between these two micro-markets. COLLIERS VIEW:• In the last few quarters Chennai’s residential market has witnessed growth. The developing corridors, along with OMR, will see an increase in capital values due to high demand from the mid-end segment. Looking ahead, capital values are expected to increase moderately considering the demand coming from both end-users and investors. Adyar AnnaNagar Nungambakkam Alwarpet/ RAPuram Velachery Sholinganallur Siruseri/ Kazipattur TNagar Beasant Nagar BoatClub 6,000 2,000 10,000 18,000 14,000 22,000 26,000 30,000 INRpersq.ft.INRpersq.ft.permonth Sholinganallur Velachery Alwarpet / R A Puram T Nagar Beasant Nagar Adyar Anna Nagar Nungambakkam Boat Club Siruseri/ Kazipattur Boat Club Siruseri/ Kazipattur Velachery Sholinganallur Anna Nagar T Nagar AdyarBeasant Nagar Nugambakkam Alwarpet / R A Puram 1Q2008 3Q2008 3Q2009 1Q2009 1Q2010 3Q2010 1Q2012 3Q2012 1Q2013F 3Q2013F 1Q2014F 1Q2011 3Q2011 25,000 21,000 17,000 13,000 9,000 5,000 1,000 Micro Market Ongoing Price (P.S.F) Velachery 5,000 - 7,000 Sholinganallur 3,500 - 4,200 Siruseri/ Kazipattur 2,500 - 3,900 INRPersq.ft. 75 60 45 30 15 0 Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: * As mentioned by developer ** Base selling price as quoted by developer AVERAGE CAPITAL VALUE RANGE AVERAGE RENTAL VALUE AVERAGE CAPITAL VALUE TRENDS INVESTMENT OPPORTUNITIES INDIA | AUGUST 2013 | residential 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace
  8. 8. p. 8 | Colliers International 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace INDIA | august 2013 | RESIDENTIAL bengaluru SELECT NEW PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** Klassik Landmark Sarjapur Road Klassik Developers 4Q 2015 3,700 Prestige Sunrise Electronic City Prestige Developers 4Q 2017 3,900 Samruddhi Rthythm Hennur Samruddhi Developers 4Q 2016 3,450 SJR Palms Kudlugate SJR Developers 4Q 2016 4,200 Sobha Indraprstha Rajajinagar Sobha Developers 4Q 2016 4,200 Valmark Apas Hulimavu Valmark Developers 4Q 2015 6,500 CITY RESIDENTIAL BAROMETER AVERAGE CAPITAL VALUE RANGE Note: Ongoing Price (P.S.F): Indicative asking price for premium residential properties per sq.ft. BENGALURU (BANGALORE) During 2Q 2013, micro-markets like Hulimavu,• Hennur, Sarjapur Road, Rajajinagar, Kudlugate and Electronic City saw the highest number of new launches. Residential demand was driven by both investors and end-users. Premium residential projects were priced in the range of INR 3,500 - 6,500 per sq ft. In the surveyed quarter, Bengaluru witnessed• the completion of various premium projects/ parts of projects including “RegencyFloradale” by Ashed Properties at Lavelle Road, “Brigade Sonata” by Brigade Group at Palace Road and “Chaitanya Samarpan” by Chaitanya Developers at Whitefield. Few other mid-range projects were also completed on Sarjapur Road and HMT Layout micro markets. Capital values in the secondary sales markets• remained stable, except for Cooke Town where capital values increased by 2% QoQ, due to limited supply. Rents in micro-markets such as Airport Road,• Bannerghatta Road and Whitefield increased in the range of 2 - 8% QoQ. Most of the demand in this segment came from employees of the IT/ITeS sector. All other micro-markets remained stable. Duringthisquarter,theBangaloreMetropolitan• Region Development Authority (BMRDA) framed the draft master plan for Bengaluru. The revised plan envisages a compact, balanced and equitable urban growth pattern for the city. COLLIERS VIEW: The city’s residential market• will continue to remain active, as construction of various residential projects is in full swing and premium and mid-range projects were launched across various micro-markets. We anticipate that residential prices will remain stable in the near future due to the huge supply in the pipeline. 4,000 0 8,000 16,000 12,000 20,000 24,000 28,000 32,000 INRpersq.ft.INRpersq.ft.permonth AVERAGE RENTAL VALUE 25,000 20,000 15,000 10,000 5,000 0 AVERAGE CAPITAL VALUE TRENDS Micro Market Ongoing Price (P.S.F) Airport Road 5,000 - 6,000 Bannerghatta Road 4,200 - 6,000 Whitefield 4,400 - 6,700 Yelahanka 3,800 - 6,000 Yelahanka Yelahanka BannerghattaRoad Whitefield (Appts) AirportRoad AirportRoad Koramangala Whitefield Bannerghatta Road Jayanagar Indiranagar CookeTown Airport Road Koramangala Palace Orchard Indiranagar Jayanagar PalaceOrchard Cooke Town Central Central 80 60 40 20 0 1Q2008 3Q2008 1Q2010 1Q2009 3Q2009 3Q2010 1Q2011 3Q2012 1Q2013 3Q2013F 1Q2014F 1Q2012 3Q2011 Central Yelahanka Koramangala Indiranagar Jayanagar Bannerghatta Road Palace Orchard Cooke Town Airport Road Whitefield INRPersq.ft. Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: * As mentioned by developer ** Base selling price as quoted by developer INVESTMENT OPPORTUNITIES
  9. 9. Colliers International | p. 9 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace Kolkata SELECT NEW PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** Godrej Platinum Alipore Godrej Group 4Q 2016 19,000 Greenfield Oasis Bakhrahat Road Bengal Greenfield 4Q 2016 2,350 Kings Residency Rajarhat Vibgyor Group 4Q 2016 3,000 Modello Highs E M Bypass Tirupati Awas 4Q 2017 4,800 Mounthill Fusion Rajarhat Mounthill Realty 4Q 2016 3,750 Symphony Tower Ho Chi Minh Sarani Mainaak Group 4Q 2016 3,600 CITY RESIDENTIAL BAROMETER AVERAGE CAPITAL VALUE RANGE Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: Ongoing Price (P.S.F): Indicative asking price for premium residential properties per sq.ft. kolkata During 2Q 2013, Kolkata’s residential market• saw new launches in micro-markets like EM Bypass, Bakhrahat Road, Rajarhat and Alipore. Most of these projects were launched in the mid-range, and were priced from INR 2,300 - 4,800 per sq ft, except “Godrej Platinum” by Godrej, which was priced at INR 19,000 per sq ft. During the same quarter, developers• accelerated their construction activities, resulting in the completion of various projects or project phases, including “Purti Bloom” and “Purti Flowers” by Purti Group at Taratala, “Meera Gardens” by Vibgyor Housing at Madhyamgram and “Manjuri Enclave” by Sunirman Infrastructure at Narendrapur. Capital values in the premium residential• market increased this quarter across all micro-markets in the range of 3 - 13%. However, micro-markets in the peripheral locations remained stable. Rental values continued to remain stable due to• weaker economic sentiments however, central locations witnessed marginal appreciation due to consistent demand and limited availability. Colliers View:• Residential sales in peripheral locations are showing signs of growth due to the lower ticket size. In view of ceiling on acquisition of large tracts of land we anticipate a slowdown in the new launches of the projects in coming quarters. Capital and rental values are expected to remain stable across the city, while South Kolkata may experience a marginal increase due to the limited availability of properties. 3,000 1,000 7,000 5,000 11,000 9,000 13,000 15,000 17,000 19,000 21,000 INRpersq.ft. AVERAGE RENTAL VALUE 2,000 4,000 0 6,000 8,000 10,000 12,000 14,000 16,000 18,000 AVERAGE CAPITAL VALUE TRENDS Micro Market Ongoing Price (P.S.F) Tollygunge 3,600 - 4,800 Behela 2,900 - 3,700 Salt Lake 4,000 - 5,500 EM Bypass 4,000 - 7,000 New Town -Rajarhat 3,200 - 4,600 Alipore Bhawanipur Ballygunge PA Shah Road Bhawanipur Tollygunge EMBypass Loudon Street PAShahRoad Behela LoudonStreet Alipore NewTown-Rajarhat EM Bypass SaltLake Ballygunge Tollygunge Salt Lake VIPRoad VIP Road Behela New Town Rajarhat Bhawanipur EM Bypass Ballygunge Behela Tollygunge P A Shah Road New Town - Rajarhat Loudon street Alipore VIP Road Salt Lake 1Q2008 3Q2008 1Q2010 1Q2009 3Q2009 3Q2010 1Q2011 3Q2012 1Q2013 3Q2013F 1Q2014F 1Q2012 3Q2011 INRPersq.ft. 50 40 30 20 10 0 Note: * As mentioned by developer ** Base selling price as quoted by developer INRpersq.ft.permonth INVESTMENT OPPORTUNITIES INDIA | august 2013 | residential
  10. 10. p. 10 | Colliers International 2Q 2013 3Q 2013F Capital Value Rental Value New Project Construction Pace pune SELECT NEW PROJECTS Project Name Location Developer Name Tentative Possession* Rate (Per Sq.ft.)** Artemis Sinhagad Road Calyx Group 1Q 2016 6,000 Kumar Pinakin Baner Kumar Properties 2Q 2015 5,500 Kunal Aspiree Balewadi Kunal Group 2Q 2016 5,600 Kunal Iconia Mamurdi Kunal Group 4Q 2016 3,700 Le Reve Kharadi Ami Estates LLP 2Q 2014 5,900 Marvel Aquanas Kharadi Marvel Realtors 2Q 2015 5,750 CITY RESIDENTIAL BAROMETER AVERAGE CAPITAL VALUE RANGE Note: Average Capital/Rental Value Range: Indicative asking price for premium residential properties on per sq.ft. basis. Note: Ongoing Price (P.S.F): Indicative asking price for premium residential properties per sq.ft. PUNE In 2Q 2013, fewer residential projects were• launched compared with the previous quarter; most of the launched projects were located in areas such as Baner-Balewadi, Bavdhan, Kondhwa, Kharadi, and Wakad. New launches were in the an average price band of INR 4,000 - 7,000 per sq ft This quarter continued to register a slowdown• in construction activities, further delaying completion of under-construction projects and ready possessions. Similar to the previous quarter, capital values• in Pune remained stable in most micro- markets. However, the NIBM-Undri-Kothrud, Pimpri Chinchwad-Chakan and Magarpatta- Hadapsar micro-markets registered an average increase of 2 - 6% and Baner- Pashan-Hinjewadi-Wakad and Bavdhan- Kothrud-Warje micro-markets, prices were increased by around 10% QoQ. During 2Q, rental values remained stable in• almost all the micro-markets in Pune, with marginal increase in prime areas in the north- west and north-east micro-markets. During this quarter, the Union Ministry of• Urban Development has revised Pune’s metro rail project which will commence construction between the first corridor of Pimpri Chinchwad and Swargate and the second corridor between Vanaz and Ramwadi, with a total length of 31.5 kilometres. COLLIERS VIEW: Pune’s residential market• continues to witnessed end-user as well as investor demand in affordable residential projects. NH4 Bypass will remain the location of interest as it is emerging as preferred location from mid-range buyers. We anticipate marginal appreciation in capital values in the coming quarter. 1,000 3,000 7,000 5,000 9,000 13,000 11,000 15,000 INRpersq.ft. AVERAGE RENTAL VALUE 11,000 10,000 8,000 9,000 7,000 6,000 5,000 4,000 3,000 2,000 AVERAGE CAPITAL VALUE TRENDS Micro Market Ongoing Price (P.S.F) Kalyani Nagar/Viman Nagar/Kharadi 5,000 - 12,000 Baner/Hinjewadi/Wakad/ Pashan 3,800 - 6,000 Kothrud/Bavdhan/Wajre 3,800 - 6,000 NIBM/Undri/Kondhwa 3,800 - 5,000 Pimpri/Chinchwad/Chakan 2,500 - 4,500 KalyaniNagar/Vi- manNagar/Kharadi Bhawanipur Kalyani Nagar/Viman Nagar/ Kharadi Bhawanipur Deccan/Camp/ BoatClub Deccan/Camp /Boat Club Baner/Hinjewadi/ Wakad/Pashan Baner/Hinjewadi/Wakad/Pashan Magarpatta/Hadapsar Magarpatta/ Hadapsar NIBM/Undri/Kondhwa NIBM/Undri/ Kondhwa Kothrud/Bavdhan/ Wajre Kothrud/ Bavdhan/ Wajre Pimpri/Chinchwad/ Chakan Pimpri/Chinchwad/ Chakan 30 25 20 15 10 5 0 1Q2009 3Q2009 1Q2010 3Q2010 1Q2011 3Q2011 3Q2012F 1Q2014F 1Q2013 3Q2012 1Q2012 Kalyani Nagar/Viman Nagar/Kharadi Kothrud/Bavdhan/Wajre NIBM/Undri/Kondhwa Pimpri/Chinchwad/Chakan Deccan/Camp/Boat Club/Central Pune Magarpatta/Hadapsar Baner/Hinjewadi/Wakad/Pashan INRPersq.ft.INRpersq.ft.permonth Note: * As mentioned by developer ** Base selling price as quoted by developer INVESTMENT OPPORTUNITIES INDIA | august 2013 | RESIDENTIAL
  11. 11. Colliers International | p. 11 INDIA | august 2013 | residential Mumbai The high-end residential real estate markets in Mumbai include Malabar Hill, Altamount Road, Carmichael Road, Napean Sea Road, Breach Candy, Colaba, Cuffe Parade, Prabhadevi, Worli, Bandra, Khar, Santacruz, Juhu and Powai. Delhi The prime residential areas in Delhi are in the South region and comprise Vasant Vihar, Westend, Shanti Niketan, Anand Niketan and Central Delhi locations. These areas enjoy proximity to embassies, the airport and central commercial areas - Connaught Place. Gurgaon The prime residential locations of Gurgaon include Golf Course Road, DLF Phase I, Sushant Lok and Sohna Road. The Delhi- Jaipur Highway (NH-8) is also emerging as a preferred residential location owing to its proximity to the national capital. NOIDA NOIDA premium residential market is comprised of sectors 44, 50, 92, 61, 62, 63 , 28, 29, 30 and Taj Express Highway. Chennai The prime residential areas in Chennai include Thiruvanmiyur, Valmiki Nagar and Besant Nagar, R.A Puram, Mylapore and Adyar in South Chennai, Nungambakkam, Chetpet, Poes Garden, Egmore, Alwarpet, T. Nagar in Central Chennai; and Anna Nagar, Kilpauk in North West Chennai. Bengaluru (Bangalore) The residential market of Bengaluru comprises both apartments and independent residences. Currently, high-end residential developments are mainly concentrated along the CBD, and Eastern and South precincts of the city. Recently, Northern Bengaluru has also witnessed a spree of realty activity facilitated by the new International Airport at Devanhalli. Kolkata The prime residential areas in Kolkata include PA Shah Road, Tollygunge and Bhawanipur in South Kolkata, Alipore and Behala in South-west Kolkata, Loudon Street and Ballygunge in Central Kolkata; and Salt Lake, EM Bypass and VIP Road in North Kolkata. Pune The prime residential areas in Pune include Kalyani Nagar, Viman Nagar, Boat Club Road, NIBM Road, Magarpatta, Hadapsar, Koregaon Park. Recently, increased activities has been witnessed in Pimpri-Chinchwad, Baner-Pashan and Kondhwa. Residential SUBMARKETS CITY BAROMETERS Increasing as compared to previous quarter Decreasing as compared to previous quarter Remained stable from previous quarter
  12. 12. Colliers International (India) provides property services to property Investors and Occupiers. We deliver customised service solutions utilising local and global knowledge in partnership with our clients via our property Investment and Occupier service lines. These service lines include - Office Services, Facility Management, Project Management, Residential Services, Investment Services and Valuation & Advisory Services. www.colliers.com/india For national Residential Services related queries please contact: Poonam Mahtani, National Director Residential Services & Knowledge Systems Poonam.mahtani@colliers.com Tel: +91 22 4050 4551 This book is printed on 100% Recyclable paper INDIA | August 2013 Accelerating success. AUTHORS Amit Oberoi MRICS National Director, Valuation & Advisory; Research Email: Amit.oberoi@colliers.com Surabhi Arora MRICS Associate Director, Research Email: Surabhi.arora@colliers.com Sachin Sharma Assistant Manager, Research Email: Sachin.sharma@colliers.com Heliana Mano Assistant Manager, Research Email: Heliana.mano@colliers.com For general queries and feedback : India.Research@colliers.com Tel: +91 124 456 7580 This report and other research materials may be found on our website at www.colliers.com/India. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. © Copyright 2012 - 2013 All Rights Reserved. 482 offices in 62 countries on 6 continents United States: 140 Canada: 42 Latin America: 20 Asia Pacific: 195 EMEA: 85 $2.0 billion in annual revenue 1.1 billion square feet under management Over 13,500 + professionals Recent Reports : GLOBAL OFFICE INDIA OFFICE INDIA RESIDENTIAL APAC OFFICE GLOBAL INDUSTRIAL INDIAN REAL ESTATE UNPLUGGED OFFICE PROPERTY MARKET OVERVIEW INDIA QUARTERLY UPDATE | JUlY | 2013 Accelerating success. Accelerating success. INDIA QUARTERLY UPDATE | MAY | 2013 Residential Property Market Overview ASIA PACIFIC OFFICE MARKET OVERVIEW 1Q 2013 Accelerating success. Trade Flows Bolster Industrial Demand in Asia and the Americas > Despite anemic U.S. job growth, demand for North American industrial warehouse space and modern distribution centers remains strong. In Q1 2013, the North American vacancy rate declined for the eighth straight quarter, down 20 basis points to 8.20%. Canada’s vacancy rate stands at 4.13%. > Thanks in part to a recent drop in exports to the United States, Mexico has seen slowing economic growth. In Q1 2013, several Mexico City industrial warehouses were vacated, slightly increasing the vacancy rate to 3.49%. > While occupier demand for industrial property in Brazil remains strong, the market now appears to have stabilized into a more rational mode of sustained growth. São Paulo has seen positive net absorption, in spite of the final tally in 2012 showing a 23% decrease over the previous year. > Demand for Beijing’s logistics properties remained as strong as it has been since 2011. Rents grew by 11.41% year-over-year as of the end of Q1 2013. Shanghai’s industrial sector remained stable, with average asking rents for ground floor premises of high quality facilities in both the logistics and workshop sectors unchanged. > In Hong Kong, high quality warehouse buildings are nearly fully occupied. Those users seeking to expand or rationalize their real estate costs have had to consider the option of split operations in lower quality buildings. > Indian economic growth remained sluggish through the end of 2012, however we expect industrial activity to improve, thanks to recent government actions. These include the government-proposed National Investment and Manufacturing Zones and the newly approved 51% foreign direct investment in multi-brand retail trading. Global | Industrial | Midyear 2013 HIGHLIGHTS * December 2013 Rent (USD/PSF/YR) ** Local currency Global Top 10 Industrial Warehouse Rents* 6-Month Change in Rent** LONDON (HEATHROW) HONG KONG SINGAPORE TOKYO OSLO GENEVA PARIS HELSINKI MINSK SYDNEY 21.95 21.83 21.02 20.61 20.04 16.20 14.70 14.70 13.23 13.23 MIN SK OSL O SIN GAP ORE SYD NEY 11.1% 3.9% 2.2% 12.5% PARIS HELSINKI GENEVA TOKYO HONG KONG LONDON - (HEATHROW) LEGEND EMEA APAC THE INTERNATIONAL INDIAN May - June 201344 CONTENTS 45 Indian Real Estate Unplugged 46 Gurgaon 48 NOIDA 52 Mumbai 53 Pune 54 Bengaluru 55 Chennai 56 Hyderabad 56 Kochi 57 Maisuru 57 Thiruvananthapuram 58 Current Market Prices 61 Do’s and Don’ts of Real Estate Investments 62 Dubai Residential Market Hots up TheSpring-Summer REALESTATEFOCUS 2013 OUTLOOK GLOBAL OFFICE WWW.COLLIERS.COM 2012 | OFFICE The global economy has seen recent headwinds from the smoldering eurozone debt crisis, slowing growth in China’s economy and the forecasted American fiscal cliff. Yet our overall global view of office real estate is moderately positive. While many large occupiers have taken a wait-and-see attitude toward the global economy, others are leasing up much-needed space to accommodate expanding operations. Quality office buildings in major global cities are seeing consistent demand from both occupiers and investors. U.S. is showing gradually lowering vacancy rates. Canada’s office market continues to perform well and is seeing notable development activity in major markets. Office absorption has been largely driven by Intellectual Capital, Energy and Education (ICEE) sectors. Mexico and Brazil report slightly higher vacancies, due to a combination of speculative construction and slackening economic growth. Yet São Paulo still boasts the ultra-low vacancy rate of 3.3%. Average Central Business District (CBD) office rents remained broadly unchanged across key EMEA markets, but this has been a result of limited supply more than increased demand. Business confidence across Europe is firmly negative, which does not bode well for the next year of activity. China’s slowing growth has dampened office demand in some Asian markets. Beijing’s office market remains healthy, but appeared lackluster when compared to an extremely active 2011. GLOBAL OFFICE MARKETS SHOW STABILITY IN THE FACE OF HEADWINDS GLOBAL CAPITALIZATION RATES / PRIME YIELDS: 10 LOWEST CITIES MARKET (Ranked by June 2012) JUNE 2012 DEC 2011 JUNE 2011 Taipei �.�� �.�� �.�� Hong Kong �.�� �.�� �.�� Vienna �.�� �.�� �.�� Singapore �.�� �.�� �.�� London - West End �.�� �.�� �.�� Zurich �.�� �.�� �.�� Geneva �.�� �.�� �.�� Beijing �.�� �.�� �.�� Paris �.�� �.�� �.�� Munich �.�� �.�� �.�� Tokyo �.�� �.�� �.�� GLOBAL OFFICE OCCUPANCY COSTS: TOP 10 CITIES MARKET (Ranked by June 2012) JUNE 2012 DEC 2011 JUNE 2011 Hong Kong ���.�� ���.�� ���.�� London – West End ���.�� ���.�� ���.�� Tokyo* ���.�� ���.�� ���.�� Rio de Janeiro ��.�� ��.�� ��.�� Paris ��.�� ��.�� ��.�� Moscow ��.�� ��.�� ��.�� London – City ��.�� ��.�� ��.�� Perth ��.�� ��.�� ��.�� Geneva ��.�� ��.�� ��.�� São Paulo ��.�� ��.�� ��.�� CBD CAP RATE (%) CLASS A / NET RENT (USD/SF/YR) 10.25 9.00 9.00 4.90 4.75 4.70 4.00 4.00 3.90 3.50 2.67 2.50 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 Rio de Janeiro Mexico City Buenos Aires New York, NY - Midtown South Manhattan Vancouver, BC New York, NY - Midtown Manhattan London - West End Zurich Singapore Vienna Hong Kong Taipei Asia Pacific EMEA North America Latin America TOP THREE MARKETS BY REGION: JUNE 2012 CAP RATE (%) *Tokyo rents listed are gross rents. Mumbai : Vaibhav Kumar, Office Director Vaibhav.kumar@colliers.com IndiaBulls Finance Centre, 1701-A, 17th Floor, Tower 3, Elphinstone Mills, Senapati Bapat Marg, Mumbai, India - 400 013. Tel : +91 22 4050 4527, fax : +91 22 2351 4272 Delhi NCR : Ajay Rakheja, Office Director Ajay.rakheja@colliers.com New Delhi : Statesman House, 4th Floor, Barakhamba Road, Connaught Place, New Delhi, India - 110001 Tel : +91 11 3044 6423, fax : +91 11 3044 6500 Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 456 7500, fax : +91 124 456 7502 Bengaluru : 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 3131 Pune : 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 6434 Chennai : 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 1377 Kolkata : 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 6502 Colliers International1 www.colliers.com/india Impact on Real Estate I Neutral THE KEY HIGHLIGHTS OF THE BUDGET WHICH MAY IMPACT REAL ESTATE SECTOR ARE AS FOLLOWS: 1Q 2013 | RESEARCH Source: www.bseindia.com | Feb 28, 2013 Company Change (%) BSE SENSEX -1.52 -2.72 -2.05 -3.54 -0.27 -2.97 -5.62 0.23 -7.51 -2.12 -4.00 -0.69 -2.93 -0.77 -0.04 -0.99 -7.95 Realty Index Anant Raj Ltd. D B Realty Ltd. DLF Ltd. Godrej Properties Ltd. HDIL Hubtown Ltd. Indiabulls Real Estate Mahindra Lifespace Orbit Corporation Ltd. Parsvnath Developers Peninsula Land Ltd. The Phoenix Mills Ltd. Sobha Developers Ltd. Sunteck Realty Ltd. Unitech Ltd. UNION BUDGET 2013 - A SNEAK PREVIEW Honorable Finance Minister P. Chidambaram started his budget speech 2013-14 with the pretext of slowed global economic growth in 2012. He acknowledged that the Indian Economy is challenged and mentioned that the Indian economy is constrained because of a high fiscal deficit; its reliance on foreign inflows to finance the current account deficit; decreased savings and lower investment; a tight monetary policy to contain inflation and strong external headwinds. He assured that the budget spelled out measures for each of the above mentioned issues. The agenda for the Union Budget 2013-14 is set for ‘higher growth leading to inclusive and sustainable development’. The finance minister projected the economy to grow by 4.8% in the next fiscal down from 5.5% in 2012-13. The real estate sector had high hopes this year from the Budget. However, the budget remained silent on most of the major issues such as enactment of the Real Estate (Regulation and Development) Bill, revision of Land Bill, granting industry status to the sector or infrastructure status to the much ailing affordable housing sector etc. None the less, there are a few small measures that have been taken for the real estate industry in this budget. 1% TDS on value of the transfer of immovable properties where the consideration exceeds INR 50 lakh; No TDS for agricultural land transfer; Impact: This move would help to increase the much needed transparency in the real estate transactions. The provision of deducting 1% as TDS will improve the reporting of such transactions and improve the government revenue from capital gain taxes arising from such transactions. Increase in excise duty rate on marble from INR 30 per sq. meter to INR 60 per sq. meter; Impact: The increase in excise duty rate on marble will affect the sector by increasing in the overall construction cost. This impact will however be minor considering the percentage of cost allocated to this particular construction material and the alternates available. The impact will probably be felt more in the luxury residential and hospitality construction sectors. iNDIA bUDGET 2012-13

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