Citibank property-insights-q1-2014

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Citibank property-insights-q1-2014

  1. 1. 1 India recorded a growth of 4.7% in Q3 FY14 (October-December 2013) over Q3 FY13. This was a marginal decline compared to Q2 FY14’s growth rate of 4.8%. Majority of the growth during the quarter was driven by services sector. The ‘financing, insurance, real estate and business services’ sector registered maximum growth of 12.5% during the quarter, followed by ‘community, social and personal services’ sector, which grew at 7% and ‘trade, hotels, transport and communication’ at 4.3%. Apart from this, all other sectors witnessed a slowdown in the growth rate as compared to the previous quarter. The pick-up in manufacturing activity during Q2 FY14 failed to sustain its momentum and registered a negative growth rate compared to the same period last year. The ‘Construction’ sector’s performance also remained almost at par with levels observed last year, recording only a 0.6% growth. The overall GDP growth for April-December 2013 was estimated at 4.6%, registering a marginal improvement from 4.5% duringthesameperiodlastyear. The Reserve Bank of India (RBI) raised the repo rate by 0.25 basis points to 8% in January 2014. This decisionwasdrivenbytheneedtosettheeconomyon the disinflationary path; targeting CPI below 8% by January 2015 and below 6% by January 2016. ApprehensionofafurtherdeclineingrowthduringQ3 2013-14 due to subdued outlook evident in the industrial and services sector also aided this decision. The Asian Development Bank (ADB) revised India’s 2014-15 growth forecast to 5.5% from an earlier estimate of 5.7% in October 2013. The RBI also suggested that though a revival from around 5.0% growth in 2013-14 is certain in the coming year, downside risks to central estimate of 5.5% for 2014-15 remain. This prediction came on the back of apprehensions that India might face a weak monsoon season this year. Additionally, there have been no clear indicators on sustained revival of industrial and services sector amidst a moderation in global economic activity. The easing of supply bottlenecks, revival of exports with pick-up in the world economy andtheimplementation of stalled projects all have to play a role in sustaining this positive outlook. The INDIA MARKET OVERVIEW GROSS DOMESTIC PRODUCT GROWTH RATE PROPERTY INSIGHTS India Quarter 1, 2014 Subdued Demand, Stable Outlook GrowthRate(%) Source: Central Statistical Organisation, Govt. of India 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Oct-Dec 07 Jan-M ar 08 Apr-Jun 08 Jul-Sep 08 Oct-Dec 08 Jan-M ar 09 Apr-Jun 09 Jul-Sep 09 Oct-Dec 09 Jan-M ar 10 Apr-Jun 10 Jul-Sep 10 Oct-Dec 10 Jan-M ar 11 Apr-Jun 11 Jul-Sep 11 Oct-Dec 11 Jan-M ar 12 Apr-Jun 12 Jul-Sep 12 Oct-Dec 12 Jan-M ar 13 Apr-Jun 13 Jul-Sept 13 Oct-Dec 13
  2. 2. Economic Trends Trends & Updates 2 EXCHANGE RATE MOVEMENT (INR/USD) BSE REALTY INDEX Source: RBI INR/USD Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Mar-13 Mar-14 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-13 Jan-14 Feb-13 Feb-14 70 65 60 55 50 45 40 INDEX Source: BSE Jun-10 Jun-11 Jun-12 Jun-13 Sep-10 Sep-11 Sep-12 Sep-13 Dec-10 Dec-11 Dec-12 Dec-13 M ar-11 M ar-12 M ar-13 M ar-14 4000 3500 3000 2500 2000 1500 1000 500 500 1 Top eight cities include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune. Current Account Deficit (CAD) shrunk to 0.9% of GDP during Q3 2013-14 due to a narrowing trade deficit resulting from higher exports and moderation in imports. However, it is expected to be around 2% of the GDP for 2013-14, much lower than the 4.8% of GDP in 2012-13. External financing conditions improved in February, as investors started responding to the economic developments in emerging markets by the way of reallocations considering the probable impact of the U.S. Fed tapering. However, exports growth dipped during the quarter, amidst decline in global demand due to overall slowdown. The commercial office space across top eight 1 cities of India recorded total net absorption of 5.9 million square feet (msf) during the first quarter of 2014. Nearly 92% of this net absorption was in Grade A developments. Hyderabad contributed 30% of the total net absorption during the quarter followed by NCR with 25% share. Majority of the absorption in Hyderabad (which recorded more than 100% quarterly rise) was driven by pre-commitments. The total leasing during this period across the top eight cities was 8.5 msf, indicating the continuing trend of relocation. These cities recorded a total supply of nearly 7.3 msf during the quarter and an overall vacancy of 18.9%. In the retail sector, only 0.35 msf of mall space supply was added across the eight cities compared to 1.18 msf in Q4 2013. Due to this supply decline and stable transaction activity, mall vacancies dropped or remained stable in most of the cities exceptAhmedabadandPune. In1Q2014,residentialunitlaunchesacrossthetop eight cities recorded a quarter-on-quarter (q-o-q) increase of 42%. Nearly 55,500 units were launched in this quarter, with Bengaluru contributing around 30% to the total launches. The capital values continued to remain sticky across segments in these top cities. However, GST submarket in Chennai recorded the highest quarterly capital value appreciation of 10% in the mid-end segment due to persistent demand for residential properties located in proximity to the workplaces. Quarterly mid-end segment capital value appreciation of upto 8% was recorded in certain submarkets of Bengaluru, Hyderabad and Pune. NCR witnessed a correction across segments in certain submarkets of the city due to sluggish demand and unsold inventory pile-up. Thus, although the launch activity picked up during the quarter, residential markets across cities continued to exhibit a subdued demand trend with buyers adopting a wait-and-watch approach due to prevailing economic scenario and uncertainty on resultsofupcominggeneralelections. After the repo rate hike in January 2014, headline inflation receded from 11.2% in November 2013 to 8.1% in February 2014. This decline in inflation could be attributed to the sharp seasonal correction in food prices.Theex-foodandfuelCPIinflationhasremained sticky at around 8% for nearly 20 months in a row, posing significant threat to growth and making a strong case for retightening of monetary policy to align with country’s fiscal targets. The WPI inflation also eased to 4.7% in February 2014 from 7.5% in November 2013. This was led by the disinflationary impulses in food prices; however, the inflation in non- food manufactured products rose marginally from 2.2-2.6% in May-September 2013 to 3.1% in February 2014. The RBI has stated that though the inflation
  3. 3. FDI INFLOW IN HOUSING AND REAL ESTATE SECTOR has started to moderate, further easing of inflationary pressures will depend on the impulses from policy actions, the play of food inflation and the extent of negative output gap. Thus, although the inflation is expected to moderate, it is likely to remain above the comfort zone. The Indian economy recorded a GDP growth of 4.7% in Q3 2013-14. Although this was marginally higher than the growth recorded during the corresponding quarter of previous year, concerns of growth revival escalated because the economy now needs to record a 5.5% growth in Q4 2013-14 in order to meet estimates of 4.9% GDP targeted for the fiscal year. This seems difficult considering Q3 2013-14 was the seventh consecutive quarter with a sub 5% growth. Although moderation in inflation provided someroomforrecovery,thedownsideriskscontinued to remain due to weak performance of the manufacturing sector and increased risks to the agricultural sectors’ performance due to uncertainty of south-west monsoons. Thus, recovery remains largely dependent on improvement in the investment climate, external demand facilitated by improvement in global financial and monetary conditions and improvement in business and consumer confidence aided by the formation of a stable central Government. The Rupee closed at INR 60.1 against the U. S. Dollar in March 2014 almost reaching levels prior to the devaluation/volatility slide in June 2013. This improvement in the Rupee value could majorly be attributed to the decline in inflationary pressures during the past two-three months. In addition, reallocations and improvement Residential capital values remained stable across the high-end segment in Ahmedabad, Chennai, Hyderabad and Mumbai. Mid-end segment capital values in Ahmedabad and Mumbai also remained stable; however GST Road in Chennai registered a 10% appreciation on a q-o-q basis, mainly driven by high demand from working professionals and new projects being launched at higher price points. Though high-end capital values for Bengaluru mostly remained stable, certain areas such as Koramangala, JP Nagar, Bannerghatta, Kanakpura, etc. in the southern region registered a marginal q-o-q in the external financing conditions also played a pivotal role in strengthening of the Rupee. The tightening of financial conditions during beginning of the year, the downslide of inflation and the improvement in the Rupee contributed to the recovery in BSE Realty Index. The index touched 1468 st points on 31 March 2014 at the close of the financial year, rising nearly 35 points above its December closingof1433points. India witnessed total FDI inflows of INR 24,632 crore in Q3 2013-14 (October-December 2013). The Construction Development sector contributed 6% (INR 1,432 crore) to the total FDI, registering a 55% q- o-qdecline.Thisdeclinecouldmajorlybeattributedto the fact that the previous quarter registered highest FDI in Construction Development in sixteen quarters. In addition, FDI numbers for July-September 2013 were revised to 45,153 crore, leading to overall q-o-q decline of 45%. Thus, the improvement in market sentiment evident from the pick-up in FDI inflows duringthelastquarterfailedtosustaininQ32013-14. Residential Trends RESIDENTIAL CAPITAL VALUES GROWTH INDEX 3 INRCrore Source: Dept. of Industrial Policy & Promotion, Govt. of India 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 171 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 12013-14 22013-14 32013-14 2,121 8,749 12,621 13,586 5,149 3,443 7,248 946 3,210 1,432 Source: Cushman & Wakefield Research 200120022003 2004200520062007 200820091Q20102Q 2010 3Q 2010 4Q 20101Q20112Q 2011 3Q 2011 4Q 20111Q20122Q 2012 3Q 2012 4Q 20121Q20132Q 2013 3Q 2013 4Q 20131Q 2014 1,000 900 800 700 600 500 400 300 200 100 - Bengaluru (Brunton Road Lavalle Road) Chennai (Boat Club) Kolkata (Ballygunge) NCR (Satya Niketan and Anand Kiketan) Hyderabad (Banjara Hills) Mumbai (South) Pune (Koregaon Park)
  4. 4. appreciation. The quarterly mid-end segment appreciation ranged from 1-7% across Bengaluru. In Hyderabad, areas such as Madhapur, Gachibowli, Miyapur, Nizampet and Kukatpally registered a 3% q- o-qcapitalvalueappreciationinthemid-endsegment. Prices in Kolkata also remained sticky except in high- end properties of South-east (comprising of locations such as EM Bypass, Christopher Road and Pancha Sayar) where new units were launched at higher price, leading to 3% q-o-q capital value increase. A few micro-markets in Pune witnessed 2-3% q-o-q increase in capital values in the high-end segment and 2-8% increase in the mid-end segment. This was primarily due to project launches at higher prices and higher demand for properties in close proximity to the commercial hubs. NCR was the only location that witnessed q-o-q capital value correction of 3- 9% in certain locations in both the high-and-mid-end segments, primarily due to subdued demand and decline in transaction activities. Nearly 55,500 units were launched in the first quarter of 2014. The launch activity picked up by 42% compared to the last quarter of 2013. Ahmedabad and NCR were the only two cities that registered a quarterly decline of new launches; 8% and 18% respectively. Conversely, number of launches almost tripled in Kolkata and Chennai. The increase in the number of launches in Kolkata was mainly due to the launch of a large township project. Maximum number of project launches was witnessed in Bengaluru among the top eight cities; it contributed nearly 30% of the total number of launches in the 8 cities during the quarter. Mumbai contributed almost 19% of the units launched. Although NCR witnessed a decline in the number of new launches, it still featured among the top three cities with maximum project launches for the quarter. Pune registered new launches in the range of 3,500-4,000 units for the third consecutive quarter. Hyderabad, which registered the lowest number of launches this quarter (930 units), recorded a 25% increase from Q4 2013. Going forward, new launch activity in Hyderabad is likely to remain stable or increase marginally as several delayed projects are expectedtobelaunchedinH12014. 4 NEW RESIDENTIAL UNIT LAUNCHES ACROSS LOCATIONS IN 1Q 2014 Source: Cushman & Wakefield Research 35% 30% 25% 20% 15% 10% 5% 0% Ahm edabad Bengaluru Chennai Hyderabad Kolkata M um bai NCR Pune 4% 30% 13% 2% 12% 19% 12% 7%
  5. 5. 5 Index Ahmedabad................................................................................... 6 Bengaluru...................................................................................... 9 Chandigarh.................................................................................... 14 Chennai.......................................................................................... 17 Hyderabad..................................................................................... 23 Kolkata........................................................................................... 30 Jaipur........................................................................................... 27 Mumbai.......................................................................................... 35 National Capital Region.............................................................. 40 Pune............................................................................................... 44
  6. 6. Ahmedabad Market Overview In 1Q 2014, nearly 2,300 units were launched in Ahmedabad, a q-o-q decline of 8%. However, the number of projects launched more than doubled, indicating absence of any significantly large project launch in 1Q 2014. Around 30% of the new launches were concentrated in West Ahmedabad at locations such as Makarba, Thaltej and Vasna, followed by Vastral in East (21%) and Ranip in the North (19%). Approximately 55% of the new unit launches catered to the mid-end segment and 45% cater to the affordable segment. Due to stable demand, capital values remained unchanged during the quarter. Developers in the city primarily focussed on clearing existing unsold inventory rather than launching new projects. In 1Q 2014, overall net absorption in Ahmedabad office market was 608,000 sf, more than double the previous quarter. The substantial increase in net absorption was due to earlier pre-commitments that were absorbed during this quarter. The city also witnessedhealthysupplyadditionof1msfofficespace during the quarter, an increase of 9% from the previousquarter. Given the limited availability of quality spaces and no new malls becoming operational in the last two years, overall transaction activity in Ahmedabad’s mall segment has been insignificant. However, main- streets in the suburban business districts such as Prahladnagar and S.G. Highway witnessed increased enquiries from the BFSI (bank branches, financial advisors, etc.) and Food & Beverages (F&B) sectors. A few lifestyle and home improvement brands have also relocated and expanded operations in these areas. In 1Q2014,rentalvaluesremainedstableacrossallmajor mallsandmain-streetlocationsofthecity. Due to stable demand, ready residential properties’ capital values remained stable compared to the previous quarter, across all micro-markets in the mid-and-high-end segments. End-users’ Trends & Updates Ready Residential Property Update preference for emerging locations on the S.G. HighwayandBopalwashighduetoavailabilityofunits betweenINR20-40lakhsmainlyattheselocations. 6 READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 Source: Cushman & Wakefield Research Represents Mid and High End segments Alitus Orchid Woods Maple County Godrej Garden City Smarana Apartments Agora Residency 6,000 5,000 4,000 3,000 2,000 1,000 0 5,400 4,400 4,500 3,300 3,600 2,900
  7. 7. In 1Q 2014, number of new launches in Ahmedabad declined by 8% on a quarterly basis. Launches during the quarter were scattered across West, East and North Ahmedabad. Affordable project launches were primarily in the peripheral locations of South and East New Residential Launches Ahmedabad while launches in the mid-segment were in the West and North Ahmedabad. Approximately 49% of the units launched were 2 BHKs whilst 40% were3BHKandtheremainingwere1BHKand4BHK. * Estimated and as per market information Project Name Developer Location Number of Units* Type Area of Units (sf) Malabar County II 442 Apartment 3 BHK: 1,620 to 1,701Ganesh Housing Near Nirma University (S.G. Highway) Suryam Elegance – Phase 1 322 Apartment 2 BHK: 1,161 to 1,269Suryam Developers Vastral Aakruti Aangan 320 Apartment 1 BHK: 405 2 BHK: 873 Aroma Reality Narol Satyadeep Heights 320 Apartment 2 BHK: 1,050 3 BHK: 1,450 Deep Group Makarba Rajyash Reevanta 272 Apartment 2 BHK: 535Rajyash Group Vasna Aarohi Pratistha 208 Apartment 2 BHK: 1,092 to 1,285Siddhi Developers South Bopal Silver Casa 176 Apartment 2 BHK: 1,180Avirat Group Thaltej Suryam Pride 132 Apartment 2 BHK: 1,098 3 BHK: 1,359 Suryam Developers Vastral Aaryan Opulence 78 Apartment 3 BHK: 2,675 4 BHK: 3,450 to 3,520 Aaryan Developers Bopal Ambli Road Suryam Placid 41 Villas 3 BHK: 1,485Suryam Developers Vastral Average Capital Values – High End (INR '000/sf) Satellite Vastrapur S.G.Highway Prahlad Nagar Location 4.0 - 4.8 3.7 - 4.0 3.7 - 4.3 4.2 - 5.3 2010 4.3 - 6.0 3.7 - 5.0 3.7 - 4.5 4.2 - 6.0 2011 4.3 - 6.0 3.7 - 5.0 3.7 - 4.5 4.2 - 6.0 2012 4.3 - 6.0 3.7 - 5.0 3.7 - 4.5 4.2 - 6.2 2013 4.3 - 6.0 3.7 - 5.0 3.7 - 4.5 4.2 - 6.2 1Q 2014 Source: Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,000-4,000 sf Average Capital Values – Mid-Segment (INR ‘000/sf) Satellite Vastrapur S.G.Highway Prahlad Nagar Location 2.8 - 3.8 2.6 - 3.5 3.0 - 3.8 2.8 - 3.6 2010 2.8 - 4.3 2.6 - 3.8 3.3 - 4.3 3.2 - 4.2 2011 2.8 - 4.3 2.6 - 3.8 3.3 - 4.3 3.2 - 4.2 2012 2.8 - 4.3 2.6 - 3.9 3.0 - 4.3 3.2 - 4.3 2013 2.8 - 4.3 2.6 - 3.9 3.0 - 4.3 3.2 - 4.3 1Q 2014 Source: Cushman and Wakefield Research Note: The above values for mid-end segment typically include units of 1,200-1,800 sf 7
  8. 8. Under Construction Residential Property Update During 1Q 2014, locations in West Ahmedabad such as Bopal and South Bopal and Vaishnodevi in the North witnessed healthy construction activity in the affordable and mid-end segments. In this quarter, stable demand levels resulted in stagnating capital values for under construction projects across all sub-markets. Commercial Office Sector In 1Q 2014, office space net absorption was concentrated in submarkets of Gandhinagar (66%), Prahladnagar (25%) and Sarkhej-Gandhinagar Highway (10%). BFSI (49%), IT-ITeS (33%) and Pharmaceutical (6%) were the highest contributors to transaction activity during the quarter. Despite significant supply, healthy transaction activity helped to keep vacancy levels under control. In 1Q 2014, Grade A developments’ vacancy levels increased marginally to 36.3%. Rental values continued to remain stable from the previous quarter across all major sub-markets. Retail Sector Increasing vacancy levels were noted in a few malls along the S.G. Highway, resulting in overall mall vacancy increase of 1.3 percentage points, which was noted at 31.6% in 1Q 2014. Despite increase in mall vacancy, landlords continued to quote similar rentals across all sub-markets. In 1Q 2014, only a few retailers exited mature main-streets such as C.G. Road, Law Garden and Satellite Road. In addition, limited availability of quality spaces led to marginal opportunities for new retailers to expand at these locations. Due to the limited transaction activity, rental values remained stable from the previous quarter across all main-streets of Ahmedabad. Outlook Stable residential real estate demand is likely to result in stagnant capital values during the next quarter. However, with economic conditions likely to improve in H2 2014 (post elections); demand in the residential segment might improve gradually. The new Development Control Regulations, which are now under effect, are likely to result in increased redevelopment activity in the old city areas (which have been given higher Floor Space Index - FSI, as a part of R1 zone). Approximately 500,000 sf of Grade A space is expected to become operational at Prahladnagar in the second quarter of 2014. With low pre- commitments in these developments, vacancy is likely to increase in the upcoming quarter. This could result in a downward pressure on rentals at select locations in the city. Healthy demand for main-street locations such as Prahladnagar and S.G. Highway could result in rental increase at these locations. In the short-term, mall rentals at S.G. Highway might witness a correction due to existing high vacancy levels. Considering higher preference for main-streets and prevailing high vacancylevelsinmalls,developersarenotpresently undertakinganynewmallconstructioninthecity. 8
  9. 9. Bengaluru Market Overview Ready Residential Property Update Trends And Updates In 1Q 2014, quarterly uptrend of 3-7% was noted in capital values of select mid-end submarkets. Submarkets like North appreciated as the Hebbal- Airport expressway became operational, North-west due to commencement of metro rail line between Peenya-Sampige Road and Off-Central** because of supply paucity. Increased interest from employees of IT-ITeS companies led to a similar trend in Far South submarket; while demand spill-over from prominent residential localities like Jayanagar, Banashankari, etc.ledtocapitalvalueappreciationintheWest. In 1Q 2014, the Bengaluru residential market witnessed significant activity with more than 16,800 unit launches, a q-o-q increase of about 22%. Mid- end segment offerings continued to dominate (75% of total number of launches) due to continued demand generated from mid-level employees of IT- ITeS companies. Similar to the previous quarter, the Southern submarket contributed heavily (47%) to the new launches, followed by the Eastern submarket contributing 36%. Only select submarkets like North, Off-Central**, North-west, Far South and West witnessed 3-7% q-o-q capital value appreciation for the mid-end properties. In 1Q 2014, nearly 750,000 sf supply was added to the Bengaluru office sector. Owing to deferment of select under construction projects, q-o-q supply declined nearly by 23%. Reiterating last year’s trend, Outer Ring Road (ORR) accounted for 79% of the supply in 1Q 2014 approximately. Better connectivity, close proximity to residential developments and competitive rentals led to a high occupier interest at this location, leading to a significant traction in activity in this region. Similar to the last year’s trend, in Q1 2014, no new mall supply was added in the retail market. Consequently, overall mall vacancy was recorded at approximately 7.5%, a marginal q-o-q decline of 1%. Healthy demand from apparel, footwear and F&B retailers contributed to this decline. Although there was a drop in overall vacancy, the average quoted rentals still remained the same as spaces were leased to premium brands at relatively lower rentals with an aim to optimize tenant mix in the malls. Excellent demand existed for upcoming malls in Northern areas owing to scarcity of operational malls in this submarket. READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 9 Source: Cushman & Wakefield Research Represents Mid and High End segments 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 12,000 10,000 7,250 6,750 7,250 5,250 Brigade Gateway Prestige Acropolis Sobha Petunia Elita Promenade Brigade Metropolis Purva Venezia
  10. 10. Key to locations: High-end Segment Central: Lavelle Road, Off Palace Road, Off Cunnigham Road, Ulsoor Road, Richmond Road South: Koramangala, Outer Ring Road, Bannerghatta Road, JP Nagar Off-Central: Frazer Town, Benson Town, Richards Town, Dollars Colony East: Whitefield (villas) North: Hebbal, Yelahanka, Jakkur, Devanahalli Mid-end Segment Central: Brunton Road, Artillery Road, Ali Askar Road, Cunningham Road East: Marathalli, Whitefield, Old Airport Road South-East: Sarjapur Road, Outer Ring Road, HSR Layout South: Kormangala, Jakkasandra South-West: Jayanagar, J P Nagar, Kanakpura Road, Bannerghatta Road, BTM Layout North: Hebbal, Bellary Road, Yelahanka, Dodballapur Road, Jalahalli Off-Central*: Vasanth Nagar, Richmond Town, Indiranagar Off-Central**: Cox Town, Frazer Town, HRBR, Benson Town, etc North-West: Malleshwaram, Rajajinagar 10 Source: Cushman and Wakefield Research Note: The above values for mid-end segment typically include units of 1,600-2,000 sf. Average Capital Values – Mid-Segment (INR’000/sf) Location Central East South-East North South-West Off-Central* Off-Central** North-West South 2008 5.8 - 7.0 2.7 - 3.1 2.9 - 4.0 3.0 - 4.0 2.8 - 4.2 3.5 - 6.0 4.0 - 6.0 4.2 - 5.8 5.0 - 6.5 2009 5.0 - 6.0 2.4 - 2.7 2.5 - 3.2 2.8 - 4.0 2.7 - 3.9 3.3 - 5.7 3.7 - 5.7 3.5 - 5.2 4.6 - 5.7 2010 5.5 - 7.0 2.7 - 3.1 2.8 - 4.0 2.8 - 4.4 3.2 - 4.5 4.0 - 6.2 3.8 - 6.2 3.8 - 5.6 4.8 - 6.0 2011 6.0 - 7.5 3.2 - 3.8 3.4 - 5.0 3.0 - 4.8 3.6 - 5.0 4.5 - 6.7 4.3 - 6.7 4.3 - 6.2 5.0 - 6.5 2012 6.0 - 8.0 3.8 - 4.8 4.0 - 5.5 3.5 - 5.5 4.0 - 5.5 5.0 - 7.5 5.0 - 7.0 4.5 - 6.5 6.0 - 9.0 6.0 - 9.0 6.0 - 9.0 1Q 2014 9.0 - 12.0 4.0 - 5.5 4.5 - 6.0 4.5 - 6.5 7.0 - 10.0 6.5 - 8.5 6.0 - 6.5 2013 9.0 - 12.0 4.0 - 5.5 4.5 - 5.9 4.5 - 6.5 7.0 - 10.0 6.0 - 8.0 5.5 - 6.5 3.8 - 5.53.5 - 5.5 Source: Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,000-4,000 sf. Location Central South Off-Central East North 2009 12.0 - 14.5 6.0 - 8.5 5.0 - 6.8 5.6 - 7.0 5.5 - 7.0 2010 13.5 - 17.5 6.0 - 9.5 5.0 - 7.0 6.5 - 7.5 5.5 - 7.0 2011 14.0 - 18.0 6.5 - 10.0 6.0 - 8.5 6.8 - 8.0 6.5 - 8.0 2012 18.0 - 28.0 6.5 - 10.0 7.0 - 9.0 6.5 - 9.0 6.5 - 8.2 1Q 2014 18.0 - 30.0 7.0 - 10.3 8.0 - 11.0 6.5 - 10.0 7.0 - 9.5 2013 18.0 - 30.0 6.8 - 10.3 8.0 - 11.0 6.5 - 10.0 7.0 - 9.5 Average Capital Values – High-end (INR’000/sf) 2008 14.0 - 18.0 7.0 - 9.0 6.5 - 7.5 6.5 - 9.0 6.0 - 8.0
  11. 11. New Residential Launches In 1Q 2014, 16,800 units were launched in Bengaluru, a q-o-q increase of around 22%. Reiterating past trends, mid-end segment continued to dominate launches with around 75% contribution while affordable segment accounted for an additional 18%. Majority of the demand was propelled by junior to mid-level employees working in IT-ITeS companies; developers focussed on mid- end segment offerings. Locations such as Sarjapur Road and Electronic City located in the Southern submarket accounted for 47% of the new launches while the Eastern submarket including Varthur Road contributed additional 36%. Availability of adequate social infrastructure and proximity to workplaces has been instrumental in sustaining buoyant demand for Eastern and Southern submarkets. Location Number of Units* Type Area of Units (in sf)Project Name Developer Prestige Lakeside Habitat Prestige Group Varthur Road 3,426 Apartment 2 BHK: 905 to 1,346 3 BHK: 1,655 to 2,338 4 BHK: 2,830 Purvankara Palm Beach Purvankara Developers Hennur Road 1,323 Apartment 2 BHK: 1,232 3 BHK: 1,481 to 1,846 Republic of Whitefield Divyasree Developers Whitefield 1,306 Apartment 2 BHK: 712 to 1,372 3 BHK: 1,724 Indya Greens - Phase II Indya Estates Attebelle-Anekal Road 1,278 Apartment 2 BHK: 695 to 890 3 BHK: 1,118 to 1,202 Shriram Summit Shriram Properties Electronic City 947 Apartment 1 BHK: 670 to 780 2 BHK: 1,190 to 1,310 3 BHK: 1,370 to 1,640 Sobha Silicon Oasis Sobha Developers Kudlu Junction, Hosur Road 918 Apartment 2 BHK: 1,350 3 BHK: 1,500 to 1,850 Purvankara West End Purvankara Developers Hosur Road 740 Apartment 2 BHK: 1,184 3 BHK: 1,415 to 18,91 MJR Clique MJR Group Electronic City 585 Apartment 1 BHK: 665 2 BHK: 1,140 to 1,315 3 BHK: 1,425 to 1,720 SJR Hamilton Homes SJR Developers Off Sarjapur Road 408 Apartment 1 BHK: 623 2 BHK: 937 3 BHK: 1,229 to 1,400 Hiranandani Queensgate House of Hiranandani Bannerghatta Road 400 Apartment 1 BHK: 565 2 BHK: 985 to 1,205 3 BHK: 1,685 VRR Fortuna VRR Builders & Developers Sarjapur Road 388 Apartment 2 BHK: 1,300 to 1,370 3 BHK: 1,680 to 1,745 Kolte Patil Mirabilis Kolte Patil Horamavu 386 Apartment 2 BHK: 1,100 to 1,389 3 BHK: 1,488 to 1,593 4 BHK: 2,266 Alpine Fiesta Alpine Developers Whitefield 320 Apartment 2 BHK: 936 to 1,221 3 BHK: 1,399 Unishire Spacio Unishire Developers Bannerghatta Road 300 Apartment 2 BHK: 1,266 to 1,294 3 BHK: 1,539 to 2,156 Hiranandani Glen Gate House of Hiranandani Hebbal 288 Apartment 2 BHK: 1,245 to 1,420 3 BHK: 1,630 to 1,665 Prestige Lakeside Habitat Prestige Group Varthur Road 271 Villas 3 BHK: 3,117 to 3,130 4 BHK: 4,003 to 4,934 Bren Woods Bren Corporation Electronic City 254 Apartment 2 BHK: 1,046 to 1,062 3 BHK: 1,281 to 1,377 11
  12. 12. 12 HRC Ibbani HRC Developers Jakkur 243 Apartment 2 BHK: 1,279 to 1,450 3 BHK: 1,645 to 1,687 Supertech Micasa Supertech Developers Thanisandara Main Road 224 Apartment 2 BHK: 1,100 to 1,136 3 BHK: 1,386 to 1,735 ND Orchids ND Developers Sarjapur Main Road 220 Apartment 2 BHK: 810 to 995 3 BHK: 1,235 to 1,360 Manar Pure Earth Manar Developers Sarjapur Road 208 Villas 3 BHK: 1,675 to 2,316 4 BHK: 3,972 GR Sankalpa GR Constructions Sarjapur Road 185 Apartment 2 BHK: 1,175 to 1,350 3 BHK: 1,440 to 1,450 Lilium Gardenia Dhammangani Developers Off Thanisandara Road 185 Apartment 2 BHK: 977 to 1,045 3 BHK: 1,431 to 1,593 LGCL New Life LGCL Developers Harlur Road 170 Apartment 3 BHK: 1,300 to 2,500 4 BHK: 2,500 to 3,000 Trifecta Starlight Trifecta Developers Mahadevpura 166 Apartment 2 BHK: 1,045 to 1,212 3 BHK: 1,313 to 1,337 Aparna Elina Aparna Group Yeshwantpur 152 Apartment 3 BHK: 1,940 to 2,100 4 BHK: 2,610 to 3,835 5 BHK: 5,310 Sai Vadana Brindavanam Sai Vadana Developers Sarjapur Road 150 Apartment 2 BHK: 1,118 to 1,401 3 BHK: 1,465 to 1,666 Concorde Amber Concorde Group Sarjapur Road 150 Apartment 2 BHK: 1,100 to 1,200 3 BHK: 1,300 to 1,400 Max Meridian Maxworth Realty Yelahanka 147 Apartment 2 BHK: 975 to 1,570 3 BHK: 1,880 Pride Wilasa Pride Housing JP Nagar 138 Apartment 3 BHK: 2,791 to 2,929 4 BHK: 3,498 to 3,621 TG Lakeside Vista TG Developers Begur 128 Apartment 2 BHK: 1,097 to 1,208 3 BHK: 1,341 to 1,625 Nester Harmony Nester Group Whitefield 127 Apartment 2 BHK: 948 3 BHK: 1,183 to 1,644 Cauvery Serenity Cauvery Developers Yeshwantpur 124 Apartment 2 BHK: 1,223 to 1,358 3 BHK: 1,783 to 1,999 4 BHK: 1,936 to 2,387 President Leone President Properties Yelahanka 109 Apartment 3 BHK: 1,150 to 1,845 Mahaghar's Vajra Mahaghar Developers Kanakpura Road 96 Apartment 2 BHK: 850 to 1,195 3 BHK: 1,300 to 1,535 Mantri Courtyard Mantri Developers JP Nagar 95 Villas 3 BHK: 1,690 to 2,100 4 BHK: 2,795 to 3,495 VRR Vista Sarovar VRR & Co. Whitefield 72 Apartment 2 BHK: 1,100 to 1,240 3 BHK: 1,360 to 1,420 Eternity Astral Eternity Structures Bellandur 72 Apartment 2 BHK: 980 to 1,125 3 BHK: 1,360 to 1,430 Chartered Grasshopper Chartered Housing Off Hosur Road 56 Villas 3 BHK: 3,500 4 BHK: 3,990 Unishire Signature Unishire Developers Jakkur 53 Apartment 3 BHK: 2,300 to 2,500 4 BHK: 2,700 to 2,900 Samruddhi Bliss Samruddhi Developers Hosa Road 40 Apartment 2 BHK: 1,200 3 BHK: 1,400 Purva Coronation Square Purvankara Developers JP Nagar 20 Villas 4 BHK: 6,095 to 6,400 * Estimated and as per market information
  13. 13. Retail Sector Most main streets witnessed q-o-q stability in rental values. However, there was a q-o-q rental decline of around 7% for properties located on the Vittal Mallaya Road, due to a drop in trading densities. In addition, main streets like Commercial Street, Brigade Road, Jayanagar 4th Block and Kormangala 80 Feet Road continued to witness demand from apparel,electronics,footwearandF&Bretailers. Commercial Office Sector In 1Q 2014, 1.5 msf of office space was leased in Bengaluru whilst net absorption accounted for only 33% of the leasing activity. Nearly 68% q-o-q decline in net absorption was noted primarily due to downsizingandrelocationsofafewselectcompanies. 94% of the leasing activity was in Grade A developments, indicating tenants’ preference for quality commercial spaces. In line with the past trend, IT-ITeS sector accounted for more than 81% of the transaction activity in 1Q 2014. Pre-commitments (700,000 sf) recorded a q-o-q drop of nearly 19%, all of which was concentrated in the peripheral submarket of ORR (Sarjapur-Marathahalli) and were committedbyIT-ITeSoccupiers. Capital values for mid-end projects in North, East and North-west submarkets are expected to improve in the future periods due to a variety of factors, including commencement of Hebbal-airport expressway and metro rail along with existing inherent demand from IT-ITeS population. Due to continued high level of enquiries for small and mid-sized spaces, office leasing activity is expected to increase in the next quarter. Going forward, rental values are anticipated to remain stable due to significant pipeline of under construction projects. Outlook Rentals for most of the malls are expected to remain in a similar range during the future periods. Also, most main streets are anticipated to witness stability in rentals. Although prominent main streets have been witnessing healthy enquiry levels, there is a delay in deal closures. However, there might be a downward pressure on rentals of main streets such as Indiranagar, 100 Feet Road and MG Road owing to non-availability of optimum sized spaces. Under Construction Residential Property Update Under construction residential projects in the Southern submarkets (Sarjapur Road, ORR, Sarjapur-Marathahalli, etc.) witnessed q-o-q capital value appreciation of upto 9% while projects in Eastern (Whitefield, Old Madras Road, etc.) and the Northern (Doddaballapur Road, Malleshwaram, etc.) submarkets recorded q-o-q rise of upto 5%. Sustained demand from IT-ITeS employees working in nearby places led to price hike in Southern and Eastern locations. Commencement of infrastructure projects such as Hebbal-Airport expressway and metro rail led to rise in prices at Northern locations. Bren Celestia on Sarjapur Road and Rohan Jharoka- Phase II on Old airport road are select residential projects nearing completion as of 1Q 2014. 13
  14. 14. Market Overview Chandigarh The residential sector of the Tri-City depicted a sluggish launch trend with no new units added in the first quarter of 2014. Slow pace of construction also resulted in no project being handed-over to the buyers during this quarter. However, GMADA’s (Greater Mohali Area Development Authority) issuance of Letter of Intent (LoI) for allotment of approximately 50 acres of land to Infosys improved buyer interest in the adjoining submarkets of Zirakpur and Mohali. Capital values remained stagnant in the high-end segment with a marginal decline in the mid-end segment from the previous quarter. Due to completion delay in many projects, the Tri- City did not witness any new office space supply addition in 1Q 2014. The demand for office space in the Tri-CitywasprimarilydrivenbytheMediaandtheBFSI sectors. The rentals of Grade A office space increased byapproximately10%fromthepreviousquarter. Approximately 1.1 msf of new mall space was added to the Tri-City in the first quarter of 2014. As the transaction activity was primarily concentrated in main-street locations, mall vacancies increased. The increase in mall vacancy was further fuelled by new supply added to the market. During the quarter, prominent main street locations of Sector 17, 20 and 35 witnessed healthy demand from apparel and F&B retailers. Ready Residential Property Update Trends And Updates In 1Q 2014, demand for residential property remained subdued across the Tri-City as expectations of probable decline in capital values kept end-users at bay. Due to the subdued transaction activity, the high- end segment capital values in central Chandigarh remained stable from the previous quarter. However, the mid-end segment's capital values declined by 5- 10%inreadyproperties. READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 14 Source: Cushman & Wakefield Research Represents Mid and High End segments 14,000 16,000 3,650 Marble Arch Gilco Towers Motia Heights Orchard County Pearls Group ATS Gold Meadows 3,500 2,950 3,350 3,100 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
  15. 15. Location Chandigarh Sector: 2-11 Chandigarh Sector: 28 Panchkula Manimajra 4Q 2012 160,000 - 180,000/sqyd 140,000 - 170,000/sqyd 110,000 - 145,000/sqyd 13,000/sf 1Q 2013 160,000 - 180,000/sqyd 140,000 - 170,000/sqyd 110,000 - 145,000/sqyd 13,000/sf 2Q 2013 160,000 - 180,000/sqyd 140,000 - 170,000/sqyd 110,000 - 145,000/sqyd 13,000/sf 1Q 2014 155,000 - 170,000/sqyd 140,000 - 160,000/sqyd 110,000 - 145,000/sqyd 14,000/sf 4Q 2013 155,000 - 170,000/sqyd 140,000 - 160,000/sqyd 110,000 - 145,000/sqyd 14,000/sf 3Q 2013 160,000 - 180,000/sqyd 140,000 - 170,000/sqyd 110,000 - 145,000/sqyd 13,000/sf Average Capital Values - High-end segment (INR) Source: Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,000-4,000 sf, both apartments and villa *sqyd: Square Yard Location Zirakpur Mohali Dera Bassi Panchkula 4Q 2012 2,500 - 3,600 3,000 - 4,000 3,000 - 3,200 2,700 - 3,300 3Q 2013 2,500 - 3,600 3,000 - 4,000 3,000 - 3,200 2,700 - 3,300 1Q 2014 2,800 - 3,400 3,000 - 3,800 2,800 - 3,200 2,800 - 3,400 4Q 2013 2,800 - 3,600 3,200 - 4,000 3,000 - 3,200 2,800 - 3,500 2Q 2013 2,500 - 3,600 3,000 - 4,000 3,000 - 3,200 2,700 - 3,300 1Q 2013 2,500 - 3,600 3,000 - 4,000 3,000 - 3,200 2,700 - 3,300 Average Capital Values – Mid Range (INR/sf ) Source: Cushman and Wakefield Research Note: The above values for mid-segment apartments typically include units of 1,600-2,000 sf 15 Mid-end Segment: Mohali: Sectors - 114, 115, 127 Panchkula: Sector - 20 High-end Segment: Panchkula: Sectors - 2, 4, 6, 7, 8, 9, 15 Key to Locations: Due to significant unsold inventory and cautious buyer sentiment, the Tri-City did not witness any new launches in the first quarter of 2014. Also, no new projects were “soft-launched” in this quarter as developers focussed primarily on clearing existing unsold inventory. New Residential Launches The Tri-City did not witness any project completions duringthefirstquarterof2014.Moreover,capitalvalues ofunder-constructionprojectsdeclinedby5-7%dueto unsoldinventorypile-up. Under Construction Residential Property Update Commercial Office Sector Rental values of commercial office spaces in the Tri-City improved q-o-q by nearly 10% during the first quarter of 2014. This was primarily due to demand generated from media, BFSI and manufacturing companies. Quoted rentals for IT Parks and SEZs was around INR 50-60 per square feet per month (psf per month) and commercial spaces was INR 70-90 psf per month.
  16. 16. Demand for retail spaces was noted primarily in the main street locations with apparel and F&B brands such as Louise Phillipe and Subway strengthening their market presence in the Tri-City. Retail space in malls was primarily taken up by the Retail Sector automobile sector with brands such as Volvo and Land Rover opening stores in the city. New supply addition led to increase in vacancy levels. Rental values in malls maintained status quo at around INR 300 psf per month during the first quarter of 2014. Due to subdued buyer interest, capital values are likely to remain under pressure in the region during the next quarter. With the new international terminal at Mohali airport nearing completion, the adjoining areas may witness increased interest from buyers. Furthermore, with elections around the corner, developers are pinning hopes on better sales during the next quarter. Demand for office space is expected to be stable in the second quarter of 2014. More than 450,000 sf of new office space is scheduled for completion in the next quarter. Rentals are likely to remain stable over the next quarter. Outlook Approximately 150,000 sf of new supply is likely to be added in the Tri-City retail sector during the second quarter of 2014. Although there is a steady demand for quality retail spaces, significant supply addition during this quarter led to higher vacancy. As a result, the rentals are likely to remain stable during the next quarter. 16
  17. 17. Trends And Updates Ready Residential Property Update Prominent real estate developers such as Jain Housing and Constructions, Land Marvel, Navin Housing, KGEYES Residency and Vijay Shanthi Builders handed over projects in locations such as Kilpauk, Mylapore, Manapakkam, Besant Nagar and GST Road. In 1Q 2014, 1,400 residential units were completed, of which 77% belonged to the mid-end segment, followed by 12% in the high-end segment. Capital values largely remained stable for almost all locations in Chennai. However, Poes Garden (high- end segment) which is a prime residential location, witnessed 6% q-o-q capital value appreciation due to continued strong demand. Also, T.Nagar (mid-end segment) witnessed 4% q-o-q capital value appreciation due to high demand amongst end- users for this central location, which is in proximity to primary and secondary business centres. Chennai Market Overview In 1Q 2014, 7,400 units were launched in the Chennai residential real estate market, recording a substantial increase from the previous quarter. Locations such as Rajiv Gandhi Salai and Grand Southern Trunk (GST) Road witnessed maximum number of launches (51%) in 1Q 2014. Of the total units launched, 90% were in the mid-end segment. The high-end segment witnessed 37% q-o-q increase in the number of launches; locations such as Nungambakkam, Kotturpuram and Anna Nagar accounted for majority of new units in this segment. In 1Q 2014, overall leasing (all grades) in Chennai’s office property market declined 26% on a q-o-q basis and was recorded at 865,000 sf. Corporate occupiers continued preference for Grade A spaces. This was evident as 85% of leasing transactions were concluded in such assets. However, significant downsizing along with relocations reduced the net absorption level, which was noted at 90,000 sf for Grade A assets. 176,000 sf of supply across all grades was infused into the market, of which only 18% was Grade A (in Suburban-South West submarket). The overall vacancy rate in Chennai dipped marginally by 0.1 percentage point and was noted at 15.3%. In 1Q 2014, Chennai’s retail market did not witness any new mall supply addition. However, growing demand for select shopping malls in Chennai-CBD and Chennai-South led to a marginal q-o-q decline of 0.2 percentage points in mall vacancy and was noted at 6.2%. However, enquiries from domestic retailers of apparel, footwear and F&B remained high in these sub-markets. Rentals for most high streets largely remained stable during the quarter. READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 17 Source: Cushman & Wakefield Research Represents Mid and High End segments 20,000 16,000 12,000 8,000 4,000 0 17,000 18,500 15,000 10,000 12,000 9,150 Appaswamy Midtown Lancor Coral Golden Altius Newry Shreenidhi True Value Homes Eden Ceebros Boulevard
  18. 18. New Residential Launches In 1Q 2014, 7,400 new residential units were launched in Chennai, which is a substantial rise of 190% from the previous quarter. 44% of these units were in large projects, in peripheral locations of Kelambakkam, Perumbakkam and Padur in Rajiv Gandhi Salai. Developers such as True Value Homes, Adroit Urban Developers, Vijay Shanthi Builders, Casa Grande and Voora Group were the key developers of these projects. This quarter also witnessed more than 120 unit launches in the luxury segment in locations such as Kotturpuram and Nungambakkam. Source: Cushman & Wakefield Research Note: The above values for mid segment typically include units of 1,000-2,000 sf The time series have been adjusted to reflect the updated values Location Adyar Average Capital Values – Mid Segment (INR ’000/sf) Rajiv Gandhi Salai (Perungudi) Velachery T. Nagar Mylapore Mogappair Kilpauk 2009 4.5 - 6.5 2.5 - 2.8 3.5 - 4.0 4.0 - 6.5 NA NA 4.5 - 6.0 2008 4.5 - 6.5 2.5 - 3.6 3.8 - 4.2 4.0 - 6.5 NA NA 4.5 - 6.0 2010 6.0 - 8.5 3.5 - 4.5 3.5 - 5.0 7.5 - 10.5 NA NA 6.0 - 8.0 2011 8.0 - 11.0 4.0 - 5.5 3.5 - 5.5 8.5 - 11.5 8.0 - 12.5 5.0 - 5.5 7.5 - 9.5 2012 9.0 - 13.0 5.0 - 6.3 4.5 - 6.5 8.5 - 14.0 10.0 - 15.0 5.0 - 6.5 9.0 - 12.0 10.0 - 14.0 5.0 - 6.3 6.0 - 8.0 10.0 - 16.0 12.0 - 17.0 5.0 - 7.5 9.0 - 12.0 1Q 2014 10.0 - 14.0 5.0 - 6.3 6.0 - 8.0 10.0 - 16.0 12.0 - 17.0 5.0 - 7.5 9.0 - 12.0 2013 Source: Cushman & Wakefield Research Note: The above values for high-end segment typically include units of 1,800-4,000 sf The time series have been adjusted to reflect the updated values *RA Puram also includes Alwarpet and Abhiramapuram **Poes Garden also includes Venus Colony and Kasturi Rangan Road Location 2008 18.0 - 24.0 13.0 - 15.0 NA NA 5.5 - 10.0 14.5 - 20.0 13.0 - 16.0 6.0 - 9.0 4.0 - 8.0 Boat Club R.A Puram* Besant Nagar Kotturpuram Adyar Poes Garden** Nungambakkam Anna Nagar Kilpauk 2010 18.0 - 23.0 13.0 - 16.5 NA NA 8.0 - 12.0 14.5 - 20.0 13.0 - 16.5 7.5 - 10.5 8.0 - 12.0 2009 18.0 - 20.0 13.0 - 15.0 NA NA 5.5 - 9.5 14.5 - 18.0 13.0 - 16.0 6.0 - 9.0 4.0 - 8.0 2011 20.0 - 25.0 14.0 - 17.0 12.5 - 13.5 12.0 - 14.0 11.5 - 13.5 17.5 - 24.5 13.0 - 17.0 8.0 - 11.5 9.0 - 15.0 2013 23.0 - 33.0 17.0 - 23.0 13.5 - 15.0 14.0 - 20.0 14.0 - 17.5 20.5 - 28.0 14.0 - 25.0 12.0 - 17.0 12.0 - 16.0 2012 23.0 - 27.0 15.0 - 19.0 13.0 - 14.5 14.0 - 16.0 13.0 - 14.5 18.5 - 25.0 17.0 - 20.0 12.0 - 14.0 12.0 - 15.0 1Q 2014 23.0 - 33.0 17.0 - 23.0 13.5 - 15.0 14.0 - 20.0 14.0 - 17.5 20.5 - 33.0 14.0 - 25.0 12.0 - 17.0 12.0 - 16.0 Average Capital Values - High-End Segment (INR ‘000/sf) 18
  19. 19. Project Name Developer Location Number of Units* Type Area of Units (in sf) VGN Hazel VGN Developers Avadi 781 Apartments 1 BHK: 570 to 578 2 BHK: 1,057 to 1,167 Eden Park - Phase II L&T Realty Siruseri, OMR 720 Apartments 1 BHK: 580 2 BHK: 1,100 to 1,135 3 BHK: 1,655 to 2,155 Santorini - Phase I Tata Value Homes Sriperumbudur 512 Apartments 1 BHK: 576 2 BHK: 855 to 1,008 3 BHK: 1,385 to 1,539 Vidyasagar Oswal Garden - Phase II ISP Infrastructure Pvt. Ltd. (Voora Group) Korukkpet 388 Apartments 2 BHK: 1,029 3 BHK: 1,281 to 1,634 4 BHK: 2019 Vasanthaa - II Arun Excello Padappai 388 Apartments 1 BHK: 375 Alexandriea ASV Constructions Before Shollinganallur, OMR 374 Apartments 3 BHK: 1,850 4 BHK: 2,750 The Terraces Unitech Vandalur 300 Apartments 3 BHK: 1,374 Ruby Landmark Ruby Builders Varadhararjpuram 298 Apartments 2 BHK: 1,101 to 1,141 3 BHK: 1,360 to 1,518 District S - Phase I Adroit Urban Developers Thalambur Main Road 264 Apartments 1 BHK: 606 to 626 2 BHK: 922 to 978 3 BHK:1,254 to 1,278 Tiana Hiranandani Developers Egattur 262 Apartments 2 BHK: 975 to 1,205 3 BHK: 1,095 to 1,435 Purva Swanlake Sky Condos Series Puravankara Projects Ltd Kelambakkam 234 Apartments 2 BHK: 1,075 to 1,330 2.5 BHK: 1,539 to 1,579 3 BHK: 1,699 to 1,805 Pristine Acres - Phase II Plaza Group Perumbakkam 232 Apartments 1 BHK: 567 to 570 2 BHK: 910 to 973 3 BHK: 1,206 to 1,499 TVH Aura True Value Homes Padur, OMR 190 Apartments 2 BHK: 1,235 to 1,245 3 BHK: 1,447 to 1,525 Aldea Casa Grande Private Limited Thoraipakam 184 Apartments 1 BHK: 574 to 583 3 BHK: 1,423 to 1,695 4 BHK:1,919 to 1,986 Oceanique Altis Properties East Coast Road 180 Apartments 2 BHK: 1,252 to 1,255 3 BHK: 1,632 to 2,584 Ashraya BBCL Thoraipakkam 160 Apartments 2 BHK: 1,070 to 1,120 3 BHK: 1,110 to 1,480 Malles Aatmika Malles Constructions Mannivakkam 154 Apartments 2 BHK: 923 2.5 BHK: 1,120 3 BHK: 1,217 to 1,453 Daffodils Deva Constructions Potheri 152 Apartments 2 BHK: 982 to 1,112 3 BHK: 1,119 to 1,400 Suncity - Phase II Amarprakash Developers Tiruvallur 136 Apartments 1 BHK: 450 to 580 2 BHK: 650 to 725 BBCL Vajra BBCL Mogappair 134 Apartments 2 BHK: 1,306 3 BHK: 1,846 to 1,850 Shreyas Villas Sare Homes Singaperumalkoil 130 Villas 3 BHK: 2,316 to 2,616 Pavillion - Phase II Casa Grande Pvt. Ltd Thalambur 127 Apartments 3 BHK: 1,193 to 1,771 4 BHK: 2,325 Artistica Adroit Urban Shollinganallur 124 Apartments 3 BHK: 1,444 to 2,250 4 BHK: 2,500 to 4,700 Shriram OneCity Shriram Properties Valarpuram 118 Apartments 2 BHK: 1,032 to 1,048 3 BHK: 1,200 4 BHK: 1,555 19
  20. 20. Project Name Developer Location Number of Units* Type Area of Units (in sf) Advaya Royal Splendour Developers Porur 81 Apartments 2 BHK: 715 to 1,130 3 BHK: 1,346 to 1,435 Royal Creek Raba Promoters (P) Ltd Mangadu Village 72 Apartments 2 BHK: 750 to 1,050 2.5 BHK: 1,120 3 BHK: 995 to 1,330 Euphoria Doshi Housing Perungudi 67 Apartments I BHK: 414 to 825 Pace Aagam Pace Builders Medavakkam 66 Apartments 2 BHK: 1,177 to 1,181 3 BHK: 1,632 to 1,847 VGN Imperia - Phase IV VGN Developers ML Nagar, Velappanchavadi 64 Apartments 2 BHK: 986 to 1,077 3 BHK: 1,300 to 1,320 Vogue Casa Grande Pvt. Ltd Perumbakkam 56 Apartments 2 BHK: 1,218 to 1,271 3 BHK: 1,453 to 1,701 RKC Subrabath Raj Kishore Developers Pvt. Ltd. Kumaran Colony, Vadapalani 48 Apartments 2 BHK: 1,100 to 1,394 3 BHK: 1,496 to 1,600 Park Residence Olympia Group Kotturpuram 32 Apartments 3 BHK: 2,766 to 3,047 4 BHK: 3,155 to 3,581 5 BHK: 5,137 Lantern's Court Casa Grande Private Limited Thoraipakkam 32 Apartments 3 BHK: 1,392 to 1,633 Firm's Tranquility Firm Foundations & Housing Velachery 32 Apartments 2 BHK: 1,055 3 BHK: 1,375 Matrix Mini P dot G Constructions Potheri 32 Apartments 2 BHK: 630 to 892 Athena Sreerosh Properties Nolambur, Mogappair (W) 32 Apartments 2 BHK: 1,275 to 1,355 3 BHK: 1,405 to 1,630 The Art Vijay Shanthi Builders Nungambakkam 21 Apartments 4 BHK: 5,498 to 5,969 Galileo KGEYES Anna Nagar (East) 20 Apartments 3 BHK: 1,735 to 1,770 Urbano - Phase II Casa Grande Pvt. Ltd. Ponmar, Near Medavakkam 20 Apartments 3.5 BHK: 1,486 to 1,960 Celestyn - Phase II Jeyyes Housing Developers Perumbakkam 16 Apartments 1 BHK: 557 2 BHK: 786 3 BHK: 1,015 to 1,180 Ananya BBCL Five Furlong Road, Velachery 16 Apartments 3 BHK: 1,562 to 1,808 Serenity Newry Properties Gandhi Nagar, Adyar 16 Apartments 3 BHK: 1,671 to 1,881 I Sky Villas Vijay Shanthi Builders Corporation Rd, Perungudi 13 Apartments 3 BHK: 3,300 Livia@Luz Church Livia Spaces Mylapore 12 Apartments 3 BHK: 3,200 4 BHK: 5,800 Rampon Flats Rampon Infratech Ram Nagar (S), Madipakkam 12 Apartments 2 BHK: 784 to 900 3 BHK: 998 to 1,314 Amara Avana AR Group Nungambakkam 11 Apartments 4 BHK: 4,200 Ananta KG 5 Poes Garden 8 Apartments 3 BHK: 3,800 to 6,000 Navin's Sumathi Navin Housing Alandur 8 Apartments 3 BHK: 1,264 LCS Natraj LCS City Makers Pvt. Ltd. Shastri Nagar, Adyar 8 Apartments 3 BHK: 1,920 to 2,019 Y Block Vishwakarma Properties Anna Nagar (W) 8 Apartments 2 BHK: 900 to 1,100 3 BHK: 1,250 Pleasant Agni Estates & Foundations Perungudi 8 Apartments 2 BHK: 1,132 Elite Newry Properties CathedralGarden Road,Nungambakkam 8 Apartments 3 BHK: 2,452 to 2,506 Mayfair Newry Properties CBI Colony, Perungudi 8 Apartments 2 BHK: 954 to 1,026 3 BHK: 1,518 to 1,556 20
  21. 21. Project Name Developer Location Number of Units* Type Area of Units (in sf) Sirius Adroit Urban Developers T. Nagar 7 Apartments 3 BHK: 1,979 to 2,700 Carnation Newry Properties New Avadi Road, Kilpauk 7 Apartments 3 BHK: 1,950 to 2,060 Aurum Atikramya Tambaram - West 6 Apartments 2 BHK: 1,005 to 1,056 Padmalaya India Builders Anna Nagar 6 Apartments 3 BHK: 1,461 to 1,492 Newry Daffodils Newry Properties Thiruvika 3rd Street, Mylapore 6 Apartments 2 BHK:1,336 3 BHK: 1,784 Mithila Pushkar Properties Pvt. Ltd. Shenoy Nagar East, Kilpauk 6 Apartments 3 BHK: 2,050 JBM Manas JBM Shelters Pvt. Ltd. Chrompet 6 Apartments 2 BHK: 812 to 1,008 Imperia Adroit Urban Developers Nungambakkam 5 Apartments 3 BHK: 2,375 to 2,670 4 BHK: 5,012 to 5,143 By The C Ceebros East Coast Road 4 Apartments 4 BHK: 3,650 Dhanalakshmi Sreenivas Housing Pvt. Ltd. Madipakkam 4 Apartments 2 BHK: 1,015 to 1,022 The Nest Pushkar Properties Pvt. Ltd. Anna Nagar 4 Apartments 3 BHK: 1,550 Bonsai Spero Spero Holdings Kotturpuram 3 Apartments 4 BHK: 2,850 Shiv Krish India Builders Anna Nagar (E) 3 Apartments 4 BHK: 2,775 * Estimated and as per market information Current market conditions remain subdued and this continued to impact the end-user sentiment, leading to a slower pace of construction activity in several micro markets. More than 6,600 residential units scheduled to complete in 1Q 2014 were not delivered and are Under Construction Residential Property Update expected to be ready by 2Q 2014. However, due to end- users’ interest in projects at final stages of completion, prices of a few under-construction projects in Rajiv Gandhi Salai, Besant Nagar and Velachery marginally improvedfromthepreviousquarter. Commercial Office Sector Grade A spaces in Suburban-Rajiv Gandhi Salai and Suburban-South West accounted for the maximum share in net absorption. IT and IT-SEZ buildings accounted for a major chunk of the leasing activity for Grade A properties with an average ticket size of 37,000 sf. IT-ITeS and Automobiles sector accounted for 39% and 23%, respectively, of the total gross absorption for Grade A assets. The weighted average rentals depicted a marginal q-o-q improvement of 2.5% primarily due to an increase in net rentals for Peripheral-GST; only buildings with higher rentals were currently vacant in this area. In1Q2014,prevalentcautioussentimentsamongst retailers prevented any upward bias in rentals for most high streets of Chennai. However, q-o-q rentals increased by 5% on Khadar Nawaz Khan Road due to high retailer interest at this prime location. Some Retail Sector retailers in Velachery and Usman Road-North preferred to relocate to nearby shopping malls due to which, rentals at both these high streets witnessed a q-o-qdeclineofaround3.6%. 21
  22. 22. More than 4,200 units are currently in the pre- launch stage and are expected to be launched during the next six months. Of these, 76% belonged to the mid-end segment in locations such as Rajiv Gandhi Salai and Suburban-South. The high-end segment is likely to account for 17% of these proposed launches with new units at Nungambakkam and Kotturpuram. In addition, more than 6,100 units are likely to complete during 2Q 2014, which will infuse significant new supply in the market and might lead to short-term stability in capital values. In 2Q 2014, 566,000 sf new office space supply is likely to be infused in Chennai, of which 490,000 is in Grade A. This sizeable upcoming supply will mainly be concentrated in Suburban-South West, CBD and Peripheral-GST, which might increase the vacancy levels in these micro markets and bear a negative impact on 2Q 2014 weighted average rentals. Outlook No new mall supply is likely to be infused in 2Q 2014. Amongst high streets, only Khadar Nawaz Khan Road might witness rental appreciation in 2Q 2014 owing to availability of quality retail premises at this prime location. Limited availability of quality mall spaces and high-level of enquiries from apparel, electronics and footwear retailers might lead to an improvement in Chennai-CBD and Chennai-South rentals. 22
  23. 23. Market Overview Hyderabad In 1Q 2014, approximately 900 new residential units were launched in Hyderabad, a q-o-q increase of 25%; mid-end and high-end segment accounted for 77% and 21%, respectively. The launches were primarily concentrated in North-west quadrant of the city in locations such as Gachibowli and Kompally. Continued cautious buyer approach led to stability in capital values from the previous quarter across most micro-markets. The North-west quadrant of the city continues to be the most active in terms of new launches and construction activity. Approval delays led to retention of many projects in the pre-launch stages and are likely to be launched in the subsequent quarters. In 1Q 2014, Hyderabad office market witnessed overall (all grades) office supply addition of more than 2.2 msf, of which Grade A spaces accounted for around 98%. The quarter also witnessed pre- commitments (primarily by IT-ITeS companies) of around 588,000 sf in Grade A developments. First quarter of 2014 witnessed office space leasing of 2.1 msf and net absorption of 1.8 msf, majorly contributed by pre-commitments of 2012 and 2013. Supply almost equivalent to net absorption for this quarter kept the vacancy stable. The first quarter of 2014 witnessed continued interest amongst retailers for quality main street and mall spaces. Due to deferment of a 200,000 sf mall planned at Attapur, no new mall space was added in 1Q 2014. Moderate demand and supply kept the main streetandmallrentalsstable. READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 Trends And Updates Ready Residential Property Update Demand for ready residential property remained moderate across the city. Continued cautious buyer approach led to stability in capital values. However, slight upward capital value movement of 2-4% was recordedinMadhapurandGachibowliduetocontinued demand from employees working in nearby IT-ITeS offices.Completionofcertainphasesofafewprojectsin Kukatpally and Gachibowli led to residential supply additionsofnearly600unitsin1Q2014. 23 Source: Cushman & Wakefield Research Represents Mid and High End segments 12,100 9,050 8,700 5,350 5,650 5,500 Aparna Orchid Trendset Ville Aditya Hill Paradise Hill Ridge Springs Aditya Swapnalok Reliance Manor 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0
  24. 24. Source: Cushman and Wakefield Research Note: The above values for mid segment typically include units of 1,200-1,600 sf Banjara Hills Jubilee Hills Himayatnagar West & East Marredpally Begumpet, Somajiguda Madhapur, Gachibowli Kukatpally Miyapur, Nizampet Average Capital Values - Mid Segment (INR ‘000/sf) Location 2009 2.4 - 2.9 1.8 - 2.5 3.6 - 4.2 3.5 - 4.0 2.7 - 3.0 2.5 - 2.8 2.6 - 3.1 2.5 - 3.1 2010 2.7 - 3.2 1.8 - 2.5 3.6 - 4.5 3.7 - 4.0 2.7 - 3.5 2.7 - 3.0 2.8 - 3.5 2.6 - 3.4 2011 2.9 - 3.5 2.4 - 3.0 3.8 - 4.6 4.0 - 4.2 2.7 - 3.7 2.8 - 3.2 2.9 - 3.6 2.8 - 3.5 2012 2.9 - 3.6 2.2 - 3.4 3.8 - 4.8 4.0 - 4.2 2.8 - 3.6 2.7 - 3.2 2.8 - 3.6 3.0 - 3.8 2013 1Q 2014 3.3 - 4.0 2.7 - 3.6 4.0 - 5.0 3.8 - 4.4 3.0 - 3.8 3.0 - 3.5 3.0 - 4.0 3.6 - 4.3 3.1 - 4.0 2.7 - 3.4 4.0 - 5.0 3.8 - 4.4 3.0 - 3.8 3.0 - 3.5 3.0 - 4.0 3.5 - 4.2 Source: Cushman and Wakefield Research Note: The above values for high-end typically include units of 1,600-4,000 sf Average Capital Values - High-end Segment (INR ‘000/sf) Banjara Hills* Jubilee Hills * Himayatnagar West & East Marredpally Begumpet, Somajiguda Madhapur, Gachibowli Kukatpally Miyapur, Nizampet Location 2009 3.3 - 4.0 2.6 - 3.3 5.8 - 6.5 5.5 - 6.3 3.3 - 4.0 3.3 - 3.8 3.9 - 4.5 3.5 - 4.3 2010 3.5 - 4.5 2.7 - 3.4 6.0 - 7.2 6.0 - 7.0 3.7 - 4.0 3.5 - 4.0 4.1 - 4.5 3.8 - 4.9 2011 3.8 - 5.1 2.8 - 3.5 6.4 - 7.5 6.2 - 7.2 3.7 - 4.2 3.6 - 4.3 4.3 - 4.8 3.9 - 5.3 2012 3.8 - 5.1 2.9 - 3.5 6.5 - 7.5 6.1 - 7.2 3.6 - 4.2 3.6 - 4.3 4.3 - 4.7 4.1 - 5.3 2013 1Q 2014 4.0 - 6.0 2.9 - 3.5 7.0 - 9.5 6.5 - 9.5 4.0 - 5.5 4.0 - 5.5 4.5 - 5.5 4.5 - 6.0 4.0 - 6.0 2.9 - 3.5 7.0 - 9.5 6.5 - 9.5 4.0 - 5.5 4.0 - 5.5 4.5 - 5.5 4.5 - 6.0 New Residential Launches First quarter of 2014 witnessed more than 900 residential unit launches, a 25% q-o-q increase. Gachibowli, HITEC City, Chandanagar, Kondapur, Velimella and Kompally accounted for majority of the new launches during this quarter. Approximately 47% of the units launched were 3 BHKs whilst 32% were 4 BHKs and the remaining were 2 BHKs. Mid- end segment recorded the highest number of new launches (77%), followed by 21% and 2% in the high- end and affordable segments, respectively. Around 65% of the total launches were concentrated in Madhapur, Gachibowli micro-market due to persistent demand from employees working in the nearby IT-ITeS offices and developing physical infrastructure in the region. 24
  25. 25. Project Name Developer Location Number of Units* Type Area of Units (in sf) Vertex Panache - Phase I Vertex Homes Gachibowli 338 Apartment 2 BHK: 1,265 3 BHK: 1,435 to 1,890 Ashoka A-La Mansion - Phase II Ashoka Developers and Builders Ltd. Kompally 200 Villas 3 BHK: 2,700 to 4,500 Vasantha City Vasantha Group HITEC City 197 Villas 4 BHK: 2,700 to 4,500 Tree Walk SVC Ventures Kondapur 128 Apartment 3 BHK: 1,622 to 2,052 Orchid Avenue Vitus Infrastructure Velimella 52 Villas 3 BHK: 1,855 Maruti Fortune Lucid Constructions Chandanagar 15 Apartment 2 BHK: 1,000 to 1,150 * Estimated and as per market information 25 Under Construction Residential Property Update Capital values of under construction properties in Madhapur, Gachibowli, Miyapur, Kukatpally and Tellapur appreciated around 1-4% from the previous quarter. This increase was primarily due to proximity of workspaces from these locations and burgeoning physical infrastructure. However, prices of under construction projects in other parts of the city remained stable from the previous quarter due to subdued market sentiments. Construction delays also led to completion deferment of many projects in Gachibowli,MadhapurandKukatpally In 1Q 2014, Hyderabad’s office market witnessed an influx of 2.2 msf, 98% of which were Grade A spaces. IT-SEZ space addition continued to remain high in 1Q 2014 and was in-line to the previous quarter. The leasing activity in this quarter was 2.1 msf, of which largely 54% was pre-committed in 2012 and 2013. Approximately 77% of the leasing activity in 1Q 2014 was concentrated in Madhapur Commercial Office Sector micro market, on the back of significant pre- commitments of 2012 and 2013. Grade A vacancy marginally increased due to supply slightly exceeding absorption. However, absorption exceeded supply for All Grade properties leading to a slight dip in vacancy level. Rentals largely remained stable in this quarter. The main street and mall rentals across the city remained stable in 1Q 2014 as compared to the previous quarter. Apparel, sportswear, telecom and F&B retailers took up space in prominent main streets such as A.S. Rao Nagar and Jubilee Hills. Retail Sector Although enquiries remained high in areas such as Banjara Hills Road No. 2, lack of apt-sized space affected the transactions. Deferment of 200,000 sf mall supply at Attapur, due to delay in approval, led to a marginal decline in vacancy.
  26. 26. Cautious buyer approach is likely to result in moderate demand and stable rentals (for the next 3-6 months) in the residential real estate market. However, select micro-markets such as Madhapur, Gachibowli, Kukatpally and Miyapur are likely to witness marginal capital value appreciation in the mid-end segment, primarily due to interest generated from employees working in the nearby IT-ITeS and BFSI offices. The North-west quadrant of the city is likely to witness robust launches in the next quarter with approximately 1,500 units already in the pre- launch stages. During the next quarter, approximately 3 msf of office space is expected to become operational, of which nearly 50% is Grade A development. As majority of this Grade A spaces are already pre- committed, the vacancy levels for these developments are likely to remain stable in the future periods. Outlook Approximately 500,000 sf of mall space influx at Kukatpally is likely to increase the overall city-level vacancy in the short-term. Demand for both main street and mall spaces is anticipated to remain stable due to decent enquiries witnessed in this quarter. Stable supply and demand are likely to result in stagnation of main street rentals. However, mall rentals might remain under pressure due to substantialinfluxofnewspaceinthenextquarter. 26
  27. 27. Market Overview Jaipur With the change of regime in the state government, Jaipur residential real estate sector depicted mixed trends with prices increasing in January 2014 and then normalizing towards the end of 1Q 2014. In this quarter, more than 1,500 units were launched primarily in the mid-segment. Developers continued to launch projects in peripheral areas such as Mansarovar, Jagatpura, Ajmer road and Vidyadhar Nagar. These regions and a few areas in proximity to the Mahindra SEZ witnessed high buyer interest with capital values increasing by 8-10% from the last quarter. In 1Q 2014, around 100,000 sf supply was added to the Jaipur office sector. Compared to the previous quarter, there was a decline in office space demand with no significant deals recorded in this quarter. The rentals remained stable from the previous quarter across major locations in the city. As mall space scheduled for completion during 1Q 2014 was deferred, the city did not witness any new supply addition. Continuing with the trend witnessed in the previous quarters, transaction activity in the city was primarily in the main street locations of Mirza Ismail (MI) Road, Vaishali Nagar and Malviya Nagar. Rental values remained stable both in malls and main-street locations from the previous quarter. Trends And Updates Ready Residential Property Update In 1Q 2014, central submarkets of Jaipur such as C-scheme, Swage Farm and Bani Park witnessed continued interest from end-users. Stable demand in the central submarkets led to capital values appreciating by 5-6% from the previous quarter. In 1Q 2014, the mid-end segment witnessed quarterly capital appreciation of 8-12%. READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 27 Source: Cushman & Wakefield Research Represents Mid and High End segments 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 7,500 7,000 6,200 4,500 3,300 2,700 Grand Geejgarh Kalpvriksha Anukampa Grandeur The Royal Paradise Mahima Panorama Hanging Gardens
  28. 28. Source: Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,000-4,000 sf, both apartments and villas *sqyd: Square Yard Average Capital Values – High End (INR ‘000/sf) Location C- Scheme Bapu Nagar Civil Lines Malviya Nagar 3Q 2013 7,000 - 9,000 /sf 6,500 - 7,500 /sf 80,000 - 95,000 /sqyd* 70,000 - 80,000 /sqyd 1Q 2014 8,000 - 10,500 /sf 7,000 - 9,000 /sf 80,000 - 100,000 /sqyd* 75,000 - 95,000 /sqyd 4Q 2013 7,500 - 10,000 /sf 7,000 - 8,000 /sf 80,000 - 100,000 /sqyd 75,000 - 90,000 /sqyd Average Capital Values - High-end segment (INR) Source: Cushman and Wakefield Research Note: The above values for mid-segment apartments typically include units of 1,600-2,000 sf, both apartments and villas *sqyd: Square Yard Average Capital Values – High End (INR ‘000/sf) Location Malviya Nagar Vaishali Nagar Mansarovar Jagatpura 3Q 2013 55,000 - 65,000 /sqyd 2,700 - 3,000 /sf 2,700 - 3,000 /sf 2,650 - 2,900 /sf 1Q 2014 60,000 - 75,000 /sqyd 2,900 - 3,300 /sf 3,000 - 3,400 /sf 2,900 - 3,200 /sf 4Q 2013 60,000 - 70,000 /sqyd 2,700 - 3,100 /sf 2,800 - 3,200 /sf 2,800 - 3,000 /sf Average Capital Values – Mid Segment (INR ‘000/sf) New Residential Launches The largest supply in Jaipur during 1Q 2014 was from residential plots in Jaisinghpura close to Ajmer road, being developed by the Jaipur Development Authority. This scheme (Anand Vihar) is proposed to be developed on 250 bigha of land with more than 1,500 plots. Developers launched nearly 1,500 units in the first quarter of 2014 in peripheral submarkets of Jaipur such as Mansarovar, Jagatpura and Ajmer Road. The new launches were mainly in the mid- segment priced around INR 2,200-3,200/sf. Project Name Developer Location Number of Units* Type Area of Units (in sf) Vedanta Ashadeep Group Jagatpura 670 Apartment Apartment Apartment Apartment 2 BHK: 1,308 to 1,318 3 BHK: 1,803 to 2,136 4 BHK: 2,638 Unique Joy Unique Builders Jagatpura 270 Studio: 420 1 BHK: 616 to 730 2 BHK: 1,090 to 1,363 Pinnacle Anukampa Group Mansarovar 250 2 BHK: 1,020 to 1,260 3 BHK: 1,425 to 2,170 Siddha Aaangan Phase II Siddha Group Ajmer Road 240 Apartment 2 BHK: 1,040 to 1,094 3 BHK: 1,330 to 1,500 Midas Touch Mojika Real Estate and Developers Vidyadhar Nagar 148 2 BHK: 1,100 to 1,211 3 BHK: 1,496 to 1,760 4 BHK: 2,293 * Estimated and as per market information 28
  29. 29. Under Construction Residential Property Update The first quarter of 2014 witnessed steady construction activity in peripheral areas of Tonk Road, Ajmer Road and Sirsi Road. A number of affordable and mid-end segment projects in these areas started giving possession in this quarter. Approximately 1,200 units in nearly 10 projects were handed-over during this period. Commercial Office Sector Jaipur witnessed nearly 100,000 sf of office supply addition in the first quarter of 2014. The supply was added in proximity to JLN (Jawahar Lal Nehru) Marg. The rental values in the Central Business District (CBD) of MI Road and C-Scheme remained stagnant from the previous quarter at INR 65 psf per month and for Secondary Business District (SBD) at INR 35-50 psf per month. Demand for retail space in malls was primarily driven by BFSI, F&B and apparel segment in the first quarter of 2014. Brands such as Pizza Hut, John Player, Titan continued to strengthen their presence by opening new stores in the city. Demand in the Retail Sector main street locations was driven by Lifestyle brands such as Adidas besides apparel brands such as Lee and Wrangler. In 1Q 2014, rentals remained stable in malls as well as main street locations. Capital values in the Jaipur residential sector are likely to appreciate in the next quarter both in central as well as peripheral locations. With space in the Mahindra SEZ being taken up by IT-ITeS companies, residential demand around this location is likely to increase. Work on 9.2 km metro connecting Mansaorvar to Chandpole via Civil Lines is expected to complete soon and a part of this route is expected be operational towards the end of next quarter. This is likely to increase buyer interest for projects in Mansarovar, Shyam Nagar and Ajmer Road. No new office space is likely to be added in Jaipur during the next quarter. Rental values are expected to remain stable as vacancies are quite high in recently added stock in Malviya Nagar submarket. Outlook Overall city-level vacancy is expected to remain range-bound as demand is likely to pick up only after the elections. Demand for quality retail space is likely to remain stable especially in prominent main street locations of MI Road and select malls such as MGF Metropolitan, Elements and Gaurav Towers. With no new mall supply expected to be added in the next quarter, vacancy in both malls and main street locations are expected to decline over the next quarter. As a result, rentals are likely to improve in certain locations of the city. 29
  30. 30. Market Overview Kolkata Kolkata residential real estate sector witnessed substantial increase in new unit launches during 1Q 2014. Around 6,700 units were launched, which is almost 3.5 times the number of new launches in previous quarter. This quarter also witnessed a marginal demand uptick in a few submarkets compared to the previous quarter. However, capital values remained stable during the quarter across micro-markets in both mid and high-end segments. During 1Q 2014, Kolkata’s commercial office sector witnessed total supply addition of 72,500 sf, a significant q-o-q decline of 90% owing to deferments and slow pace of construction. Net absorption also declined by about 62% on q-o-q basis and was recorded at 156,700 sf. The average deal size also decreased from 5,300 sf to 4,400 sf due to lack of large-ticket deals. Overall vacancy levels dropped marginally by about 0.4 percentage points and were noted at 32.4% in 1Q 2014. Weighted average rentals remained stable across submarkets owing to low leasing activity. In 1Q 2014, Kolkata’s retail sector witnessed healthy leasing activity from apparel, accessories and F&B segments, wherein malls witnessed more demand than the main streets. No new mall supply was added to the Kolkata retail market in 1Q 2014, leading to the total mall stock remaining stagnant at 3.7 msf. Overall vacancy level in malls dropped to 3.6% due to healthy leasing activity and lack of new mall supply. Rentals remained stable during the quarter across main streets as well as malls. Trends And Updates Ready Residential Property Update During 1Q 2014, transaction activity in the mid-end segment of ready residential properties improved from the previous quarter. However, transaction activity in the high-end segment did not witness any momentum owing to subdued demand. The capital values remained stable during the quarter across submarkets in mid-and-high-end segments. However, select projects in the mid-end segment of North-east submarket that were completed during the quarter witnessed minor q-o-q capital value appreciation of about 3%. Around 3,000 units were completed in 1Q 2014, of which around 60% catered to the mid-end segment while 30% catered to the high-end segment. Similar to previous quarter, in 1Q 2014 nearly 52% of the completed projects were concentrated in the North-east submarket. Some of the prominent projects that were completed in 1Q 2014 include Sri Avani (a luxury project located in prime South Central submarket) and Cascades (part of Uniworld City locatedinNorth-eastsubmarket). READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 Source: Cushman & Wakefield Research Represents Mid and High End segments 11,800 10,750 12,600 7,650 6,400 5,800 Mani Karn Silver Springs South City Ujjwala Green wood Sonata Utsa 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 30
  31. 31. High End Segment: South: Southern Avenue, Hindustan Park, Triangular Park, Lake Terrace. South Central: Ballygunge, Queens Park, Rainy Park, Gurusaday Road, Ballyguange Circular Road, Dover Lane. South-East: EM Bypass - Science City, Christopher Road, Pancha Sayar. South-West: Alipore Park Road, Ashoka Road, Burdwan Road, Belvedere Road. Central: Park Street, Camac Street, Shakespeare Sarani, Minto Park, Elgin Road, Lee Road, Loudon Street, Rowdon Street. North: Kankurgachi, Lake Town, VIP Road, Ultadanga, Narkeldanga Main Road East: Salt Lake North-East: New Town, Rajarhat Mid-Segment: South: Golf Green, Tollygunge, Lake Gardens, Jodhpur Park. South Central: Deshpriya Park, Hazra Road, Bhawanipur South-East: Ajoy Nagar, Hiland Park, PA Shah Connector North-East: Rajarhat, Rajarhat Chowmatha South West: Tollyguange Circular Road, New Alipore, Behala North: Jessore Road, Ultadanga, Shyambazar, Bagbazar, Girish Park, Manicktala, Dum Dum. Key to Locations:Key to Locations: Source: Cushman and Wakefield Research Note: The above values for mid segment typically include units of 1,000-2,000 sf *The values for North-East micro market have been revised due to increased market coverage Average Capital Values – Mid Segment (INR ‘000/sf) Location South South - Central South - East North - East North 2009 2.7 - 3.9 4.2 - 5.3 2.4 - 2.8 1.9 - 2.2 1.8 - 3.4 2010 3.2 - 4.5 4.5 - 6.0 2.5 - 3.2 2.2 - 2.7 2.2 - 4.7 2011 3.8 - 5.5 5.5 - 8.0 2.8 - 4.5 2.4 - 3.0 2.8 - 5.2 2012 3.8 - 5.5 5.5 - 8.0 2.8 - 4.5 2.4 - 3.5 2.8 - 5.2 2013 3.8 - 6.5 5.8 - 8.8 2.9 - 5.0 2.7 - 4.0 3.0 - 5.8 1Q 2013 3.8 - 6.5 5.8 - 8.8 2.9 - 5.0 2.7 - 4.0 3.0 - 5.8 Average Capital Values -Mid-Segment (INR ‘000/sf) Source: Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,000-4,000 sf *The values for Central, East and North-East micro markets have been revised due to increased market coverage. Average Capital Values – High End (INR ‘000/sf) East North - East Location South South - Central South - East South - West Central 4.0 - 5.2 3.0 - 4.0 2009 4.8 - 5.9 8.5 - 9.6 4.5 - 5.7 8.6 - 9.8 7.2 - 10.0 4.5 - 6.0 3.5 - 5.0 2011 6.3 - 8.5 10.0 - 18.0 5.8 - 9.2 10.0 - 15.0 9.0 - 15.0 4.5 - 6.8 3.8 - 5.7 2012 7.0 - 12.0 10.0 - 18.0 5.8 - 9.5 10.0 - 15.0 10.0 - 17.0 5.0 - 7.7 4.2 - 6.5 2013 7.5 - 13.0 12.5 - 18.5 6.0 - 10.5 12.0 - 17.0 12.0 - 19.5 5.0 - 7.7 4.2 - 6.5 1Q 2014 7.5 - 13.0 12.5 - 18.5 6.0 - 11.0 12.0 - 17.0 12.0 - 19.5 Average Capital Values - High-end Segment (INR ‘000/sf) Location 4.0 - 5.5 3.2 - 4.5 2010 5.3 - 6.8 9.5 - 13.0 4.5 - 8.0 8.9 - 13.0 8.0 - 12.5 2010 31
  32. 32. In 1Q 2014, around 6,700 residential units were launched in Kolkata, 3.5 times the number of units launched in the previous quarter. This was primarily due to a few high-density affordable and mid-end projects launched in southern peripheral locations such as Joka and Maheshtala. These projects contributedalmost70%tothetotalnewunitlaunches New Residential Launches during the quarter. In 1Q 2014, affordable segment overall accounted for 57% of total new unit launches followed by the mid-end segment with 40% share. This quarter witnessed launch of a theme-based project in collaboration with Disney UTV, which is first ofitskindintheregion. Hiland Green Hiland Group Maheshtala 3,817 Apartments 2 BHK: 712 The County - Phase I Team Taurus Joka 850 Apartments 1 BHK: 869 2 BHK: 919 to 1,053 3 BHK: 1,253 Ivy Green Vedic Realty Vedic Village, Rajarhat 480 Apartments 2 BHK: 867 to 967 3 BHK: 1,174 to 1,274 North Grande Mounthill Realty Belghoria 474 Apartments 2 BHK: 1,022 3 BHK: 1,231 to 1,903 4 BHK: 2,311 Merlin Paradise Merlin Group Dum Dum 264 Apartments 2 BHK: 960 3 BHK: 1,365 to 1,663 4 BHK: 1,888 Ideal Aquaview (Tower A, B) Ideal Group Maheshbathan, New town 234 Apartments 2 BHK: 1,080 to 1,090 3 BHK: 1,475 to 1,510 4 BHK: 1,950 Eternia Unimark Group & Concast Group EM Bypass 104 Apartments 3 BHK: 2,398 to 2,573 4 BHK: 2,857 to 3,297 Rohit Apartments Parasrampuria Realty VIP Road 80 Apartments 2 BHK: 977 to 1,159 3 BHK: 1,431 to 1,530 GoldwinGanpatiSharnam Goldwin & Ganpati Group Kaikhali 72 Apartments 2 BHK: 964 to 1,083 3 BHK: 1,045 to 1,114 Ideal Heights: Ph II (Cirrus) Ideal Group Sealdah 60 Apartments 2 BHK: 1,330 to 1,355 3 BHK: 1,715 to 1,995 Yahvi A. Sarkar & Associates Joka 46 Apartments 2 BHK: 993 3 BHK: 1,165 to 1,195 Curiocity Realtech Nirman Rajarhat 44 Apartments 2 BHK: 996 to 1,018 3 BHK: 1,398 to 1,502 The Address PS Group EM Bypass 40 Independent Floors 3 BHK: 2,440 to 2,486 4 BHK: 2,688 to 2,734 Ivory Tower Shrishti Comotrade Kudghat Metro 39 Apartments 2 BHK: 1,387 3 BHK: 1,556 to 1,656 Inia JC Infratech Park Circus Connector 37 Apartments 3 BHK: 2,180 to 2,450 4 BHK: 4,300 5 BHK: 4,630 Fort Rejoice Fort Group Behala 24 Apartments 3 BHK: 1,555 Florenza Vinayak Group Diamond Harbour Road 22 Apartments 3 BHK: 1,765 4 BHK: 2,100 Sukhmani Imperia Sukhmani Developer Diamond Harbour Road 22 Apartments 3 BHK: 1,858 to 1,881 Euphoria Multicon Ballygunge 15 Apartments 4 BHK: 5,000 Project Name Developer Location Number of Units* Type Area of Units (in sf) * Estimated and as per market information 32
  33. 33. Under Construction Residential Property Update In1Q 2014,capital valueslargelyremained stable in both mid and high-end segments across most submarkets. Most of the developers kept prices stable to garner sales in the current subdued environment. However, select projects in north, north-east and south-east submarkets witnessed around 3-5% q-o-q capital value appreciation. The construction activity picked up pace during the quarter and nearly 2,100 units are likely to be completed in Q2 2014; majority of this upcoming supply will cater to the mid-end segment. North-east submarket would continue to see maximum number of project completions as lot of projects have been launched in last couple of years. Some of the prominent projects that are nearing completion include Promenade and Orbit Royale in primesouthcentralandsouthwestsubmarkets. Commercial Office Sector The commercial office sector witnessed total supply addition of 72,500 sf, a q-o-q decline of about 90%. 1Q 2014 did not witness any new Grade A supply addition due to slow pace of project construction in Salt Lake and Rajarhat micro- markets, which together constitutes majority of Grade A stock in Kolkata. Net absorption also declined by about 62% on q-o-q basis and was noted at 156,700 sf. Average deal size in Q1 2014 fell to 4,400 sf as against 5,300 sf in the preceding quarter. IT-ITeS sector continued to witness highest share (50%) in total net absorption, followed by BFSI and Consulting sectors together accounting for nearly 20%. The overall quarterly vacancy dropped marginally by about 0.4 percentage points, primarily due to lower supply infusion than net absorption in this quarter. Weighted average rentals remained stable across micro-markets owing to low leasing activity. During 1Q 2014, no new mall supply was added to the Kolkata retail sector, leading to total mall stock remaining unchanged at 3.7 msf. The malls in Central location (Elgin Road) and East Kolkata (EM Bypass) witnessed healthy leasing activity from F&B and apparel retailers. Lack of new mall supply and healthy leasing activity in a few malls led to a q-o-q decline of 0.3 percentage point in vacancy level, which was noted at 3.6% at the end of 1Q 2014. Main street locations witnessed negligible transactions despite demand from apparel, accessories and F&B retailers due to lack of quality retail space on the main streets. This in turn benefited the mall leasing activity during 1Q 2014. Retail Sector In 1Q 2014, rentals remained stable during the quarter in both main streets and malls. Also, a few locations having retail space availability did not witness significant leasing activity due to lack of apt catchment area to attract shoppers towards these locations. 33
  34. 34. Outlook North-east submarket along with peripheral locations such as Narendrapur, Sonarpur and Joka in South and Madhyamgram and BT Road in North are expected to witness majority of new launches in 2Q 2014. Demand in the mid-end segment may further improve in the upcoming quarter, post general elections and establishment of a stable government. However, capital values are expected to remain stable across most submarkets with minor appreciation in the north-east region owing to continued demand. Kolkata office space sector is expected to witness supply infusion of around 1.8 msf in 2Q 2014, majority of which was supposed to have been added during 1Q 2014 but got deferred due to slow pace of construction. Net absorption is expected to improve considering current pre-commitment levels. Overall vacancy is expected to remain high due to anticipated supply addition. Weighted average rentals are expected to remain stable with slight downward pressure in Salt Lake micromarket, owing to existing high vacancy levels and likely new supply addition. In 2Q 2014, new mall supply of about 120,000 sf is likely to be added to the south Kolkata retail market. Retailers are likely to depict a higher preference for malls over main streets primarily due to lack of quality retail spaces on the main streets. The upcoming quarter might witness leasing of a few premium and upscale apparel brands. In 2Q 2014, rentals are expected to remain stable across both main streets and malls. 34
  35. 35. MARKET OVERVIEW Mumbai In 1Q 2014, around 10,700 new residential units were launched in Mumbai, which is double the number of the previous quarter. This substantial increase was primarily due to the launch of new phase in a large township project located on the outskirts of city. This project received healthy response from the market due to its lower ticket size offerings. New launches in the quarter were concentrated in the sub-markets of Dombivli (56%), Western Suburbs (15%), Thane (15%) and Central Suburbs (19%). In 1Q 2014, capital values remained stable across sub-markets due to the subdued demand and new launches at competitive prices. Mumbai’s commercial office sector witnessed an overall net absorption of approximately 750,000 sf during the first quarter of 2014, a q-o-q decline of 35%. Majority of the net-absorption was in Grade A developments concentrated in the sub-markets of Thane-Belapur Road (29%), Lower Parel (29%), Central Suburbs (19%) and Vashi (10%). Office space demand was primarily driven by the IT-ITeS (48%), E n g i n e e r i n g ( 3 0 % ) , B F S I ( 1 6 % ) a n d Pharmaceuticals (4%) sectors. Lower demand in the CBD resulted in the weighted average rental decline of 3.7% from the previous quarter. Retailers’ demand for space in malls and main- streets remained stable during the first quarter of 2014. Demand from the apparel segment was high, especially in Lower Parel, resulting in mall rentals increasing by 4% during the quarter. Due to stable demand, mall rentals in other suburban locations such as Andheri, Malad, Goregaon, Ghatkopar, Thane and Vashi remained stable from the previous quarter. Overall mall vacancies also remained unchanged and were noted at 15.3% for 1Q 2014. Demand for spaces on main-street locations was driven by the F&B and apparel sectors. However, stable demand resulted in landlords quoting similar rentals from the previous quarter across all major sub-markets. Ready Residential Property Update TRENDS AND UPDATES With low demand levels, capital values of ready residential properties continued to remain stable during the quarter. Even in submarkets with healthy supply and continued end-user demand such as Thane and Navi Mumbai, capital values remained stable during the quarter. With a number of under- construction projects facing completion delays, end- users preferred ready projects over under construction properties. 35 READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 Source: Cushman & Wakefield Research Represents Mid and High End segments Planet Godrej Ashok Towers Summer Trinity Orchard Residency Rustomjee Athena Godrej Riverside 50,000 46,000 44,000 14,000 9,800 6,000 50,000 40,000 30,000 20,000 10,000 0
  36. 36. Source- Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,500-6,000 sf for South, South-Central, Central and North and units of 1,650-3,000 sf for North (Santacruz & Juhu), Far North and North-East South South Central Central North Far North North East Location 2008 43.0 - 55.0 47.0 - 67.0 27.0 - 31.0 9.0 - 13.0 33.0 - 53.0 14.0 - 18.0 34.0 - 55.0 10.0 - 16.0 42.5 - 58.0 42.0 - 66.0 22.0 - 30.0 10.0 - 16.5 2009 35.0 - 55.0 10.0 - 16.0 43.0 - 60.0 45.0 - 70.0 24.0 - 32.0 11.0 - 16.5 2010 48.0 - 70.0 46.0 - 78.0 34.0 - 58.0 28.0 - 40.0 12.5 - 18.0 14.0 - 22.0 2012 48.0 - 75.0 46.0 - 83.0 27.0 - 65.0 28.0 - 48.0 12.5 - 18.0 15.0 - 22.0 1Q 2014 48.0 - 75.0 46.0 - 83.0 27.0 - 65.0 28.0 - 48.0 12.5 - 18.0 15.0 - 22.0 2013 32.0 - 54.0 10.0 - 18.0 45.0 - 65.0 45.0 - 75.0 24.0 - 32.0 11.0 - 16.5 2011 Average Capital Values -High-end Segment (INR ‘000/sf) South South Central Central North Far North North East Location 2008 27.0 - 34.0 34.0 - 43.0 13.5 - 19.5 7.0 - 9.0 18.0 - 28.0 6.0 - 7.4 15.0 - 26.0 6.4 - 8.5 28.0 - 37.0 35.0 - 45.0 16.0 - 24.0 8.5 - 11.5 2009 17.0 - 30.0 6.5 - 8.5 30.0 - 40.0 40.0 - 48.0 16.0 - 25.0 9.0 - 12.0 2010 35.0 - 45.0 43.0 - 52.0 22.0 - 37.0 18.0 - 27.0 10.0 - 14.0 8.5 - 12.5 2012 40.0 - 50.0 45.0 - 58.0 23.0 - 40.0 20.0 - 30.0 10.0 - 14.0 8.5 - 12.5 1Q 2014 40.0 - 50.0 45.0 - 58.0 23.0 - 40.0 20.0 - 30.0 10.0 - 14.0 8.5 - 12.5 2013 17.0 - 35.0 6.5 - 10.0 30.0 - 40.0 43.0 - 52.0 16.0 - 25.0 9.0 - 13.0 2011 Average Capital Values – Mid Segment (INR'000/sf) Source: Cushman and Wakefield Research Note: The above values for mid-end segment typically include units of 1,400-2,500 sf for South, South-Central, Central and North and units of 900-1,400 sf for Far North and North-East South: Colaba, Cuffe Parade, Nariman Point, Churchgate, etc. South Central: Altamount Road, Carmichael Road, Malabar Hill, Napeansea Road, Breach Candy, Pedder Road, etc. Central: Worli, Prabhadevi, Lower Parel/ Parel North: Bandra (W), Khar (W), Santacruz (W), Juhu, etc. Far North: Andheri (W), Malad, Goregaon, etc. North-East: Powai Key to Locations: 36
  37. 37. New Residential Launches Approximately 10,700 units were launched in 1Q 2014, which is close to double the previous quarter. Mid-end segment accounted for about 67% of the total units launched in the quarter whilst high-end segment contributed 33%. New residential launches during the quarter were concentrated in Dombivli (56%), Western Suburbs (15%), Thane (15%) and Central Suburbs (19%). Launches in the Western Suburbs were concentrated between Goregaon- Kandivali whilst in the Central Suburbs were located at Chembur and Mulund. Thane also witnessed a few launches at Kolshet and along the Ghodbunder road. Lakeshore Greens Lodha Developers Dombivli 6,000 Apartment 1 BHK: 729 to 774 2 BHK: 927 to 1,026 3 BHK: 1,197 Ariisto Siesta Ariisto Realty Mulund 576 Apartment 2 BHK: 1,310 to 1,335 3 BHK: 1,715 to 1,925 Eastern Heights Satara Properties Chembur 480 Apartment 1 BHK: 367 1.5 BHK: 442 2 BHK: 503 BBJ Worldwide Roma BBJ Worldwide Andheri 432 Apartment 2 BHK: 1,095 3 BHK: 1,580 Rajesh Whitecity Rajesh Lifespaces Kandivali 416 Apartment 1 BHK: 745 2 BHK: 980 3 BHK: 2,015 4 BHK: 2,685 Rajesh Tattva Rajesh Lifespaces Thane 368 Apartment 3 BHK: 1,935 4 BHK: 2,985 Runwal Eirene Runwal Developers Thane 304 Apartment 1 BHK: 620 2 BHK: 830 to 1,075 2.5 BHK: 1,335 3 BHK: 1,510 to 1,535 Raheja Ridgewood Raheja Universal Goregaon 262 Apartment 1.5 BHK: 690 2 BHK: 1,274 3 BHK: 1,663 to 1,742 4 BHK: 2,232 to 2,465 La Riveria Lakhani Builders Panvel 234 Apartment 1 BHK: 640 to 720 2 BHK: 1,000 to 1,135 Omkar Ananta Omkar Developers Goregaon 221 Apartment 2 BHK: 1,050 Rosa Neo Orbis Rosa Group Thane 192 Apartment 2 BHK: 960 Acme Ozone - Phase 2 (Alpinia) Acme Developers Thane 180 Apartment 2 BHK: 1,066 3 BHK: 1,318 Unique Vistas Unique Shanti Developers Thane 176 Apartment 2 BHK: 1,250 Acme Ozone - Phase 2 (Herbelia Acme Developers Thane 108 Apartment 3 BHK: 1,482 Puranik Hometown Smart Homes Puranik Developers Thane 100 Apartment 2 BHK: 715 3 BHK: 957 Neona K Hemani Developers Mulund 90 Apartment 1 BHK: 850 2 BHK: 1,190 Tridhaatu Harsh Aangan Tridhaatu Princecare Group Chembur 80 Apartment 2 BHK: 743 2.5 BHK: 881 White Orchid Kamala Landmarc Kandivali 80 Apartment 1 BHK: 725 2 BHK: 1,110 Marina Shree Tirupati Group Thane 80 Apartment 1 BHK: 695 2 BHK: 1,060 Iris Hubtown Developers Mira Road 77 Apartment 1 BHK: 795 2 BHK: 945 Project Name Developer Location Number of Units* Type Area of Units (in sf) 37
  38. 38. 38 Rosa Oasis - Phase 2 Rosa Group Thane 68 Apartment 2 BHK: 950 to 985 Pashmina Lotus Pashmina Developers Andheri 60 Apartment 4 BHK: 2,350 to 2,400 Celeste Hubtown Developers Worli 60 Apartment 1 BHK: 724 2 BHK: 1,048 Raheja Reflections Odessy K. Raheja Universal Pvt. Ltd Kandivali 54 Apartment 4 BHK: 3,454 Project Name Developer Location Number of Units* Type Area of Units (in sf) * Estimated and as per market information In 1Q 2014, Mumbai witnessed an overall office space supply addition of 1.1 msf, 70% of which was in Grade A developments. Overall supply increased by 21% from the previous quarter and was concentrated in the sub-markets of Vashi (34%), Lower Parel (24%) and Kanjurmarg (24%). With a few companies deferring plans to take-up new space, there was a decline in net-absorption during 1Q 2014. Commercial Office Sector With similar levels of supply and net-absorption in Grade A developments, q-o-q vacancy declined marginally to 19.7%. Rentals at all sub-markets remained stable during the quarter except CBD, which witnessed a decline due to lower demand. Attractive rentals at Thane-Belapur road resulted in pre-commitments of approximately 450,000 sf during the quarter. Westernandcentralsuburbanlocationswitnessed healthy construction activity during the quarter. With new launches at attractive prices, capital values in under construction projects remained stable during Under Construction Residential Property Update the quarter. A few developers also offered attractive discounts in the high-end segment under constructionprojects. Retail Sector Main street locations in Colaba, Andheri (West) and Borivali continued to witness high level of enquiry from F&B retailers. Limited availability of quality spaces remains a concern especially in mature main- streets such as Colaba, Breach Candy and Borivali. With limited transactions and churn, rentals remained stable across main-street locations. Mall rentals at Mulund declined 4.6% during the quarter due to existing high vacancy. A number of apparel and footwear brands are expanding operations in peripheral main-streets of Vasai and Virar due to increasingresidentsinthisregion.
  39. 39. Outlook Mumbai’s residential real estate demand is likely to remain stable in 2Q 2014, resulting in stagnant capital values from 1Q 2014. Developers are likely to delay new launches and focus on clearing existing unsold inventory. With economic fundamentals likely to improve in 2H 2014, post general elections, demand in the residential real estate sector might revive. In 2Q 2014, office space supply of 1.9 msf is expected to be added in sub-markets of Goregaon and Vikhroli. Net-absorption is likely to remain stable in the upcoming quarter with transaction activity concentrated in Andheri, Goregoan and Thane- Belapur Road. Also, with stability in demand, rental values are likely to remain unchanged in all major submarkets in the short-term. Demand for quality mall space is expected to remain high from retailers who are planning store expansions in the city. Limited availability and high demand from F&B and apparel sectors for mall spaces at Lower Parel, Malad and Goregaon could result in rental appreciation in the short-term. Demand for space at main-streets such as Chembur, Borivali and Vashi is also expected to increase in the upcoming quarter, resulting in rental values appreciation at these locations. 39
  40. 40. National Capital Region MARKET OVERVIEW Due to current state of the economy and political situation, NCR witnessed fewer launches in the first quarter of 2014. New launches declined by 18% over the previous quarter and were noted at around 6,500 units. More than 95% of the new units launched in the quarter were in the mid-segment and the remaining 5% were in the affordable segment. This is a notable shift from the previous quarter, which witnessed majority launches in the affordable segment. Low demand continued to impart pressure on rental and capital values across most submarkets of NCR, resulting in capital and rental value decline of 3-5% in many submarkets. In 1Q 2014, NCR office sector also witnessed a decline in supply due to completion delays in many buildings. At 1.7 msf, Grade A supply in NCR declined around 53% from the previous quarter. Approximately 1 msf of pre-commitments were noted during the quarter primarily from the IT-ITeS companies. IT-ITeS sector also led the leasing activity during this quarter, accounting for 46% of total leasing followed by the Consulting and Engineering sectors. Net absorption declined 18% from the previous quarter and was noted at 1.4 msf. The first quarter of 2014 did not witness any new addition to the existing mall supply of NCR. Some amount of transaction activity was witnessed in select malls of South and North Delhi only. Main street locations witnessed a number of transactions in Connaught Place, Khan Market, South Extension and DLF Galleria. In mall space, vacancy remained almost similar to the previous quarter and was noted at 13.4%. Rental values maintained status quo in malls and main street locations. TRENDS AND UPDATES Ready Residential Property Update In 1Q 2014, capital and rental values declined in the range of 3-5% across submarkets of South Delhi, primarily due to subdued transaction activity prevailing for the past few quarters. Capital values in Central Delhi maintained status quo owing to stable supply-demand dynamics. Gurgaon and Noida markets reported stagnant capital values in the high- end segment from the previous quarter. In the luxury and mid-end segment of Gurgaon, capital values declined q-o-q by 5% and 3% respectively due to sluggish demand and availability of ready-to-occupy projectsinthevicinity. 40 READY RESIDENTIAL PROPERTY VALUES IN MARCH '14 Source: Cushman & Wakefield Research Represents Mid and High End segments 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 16,500 11,500 11,500 13,250 9,750 8,250 ITC Laburnum Uniworld City ATS Greens Village Richmond Park Vatika City Eldeco Utopia
  41. 41. High-end Segment: South-West: Shanti Niketan, Westend, Anand Niketan, Vasant Vihar South-East: Friends Colony East, Friends Colony West, Maharani Bagh, Greater Kailash - I, Greater Kailash – II. South Central: Defence Colony, Anand Lok, Niti Bagh, Gulmohar Park, Hauz Khas Enclave, Safdarjung Development Area, Mayfair Gardens, Panchsheel Park, Soami Nagar, Sarvodaya Enclave. Central: Jorbagh, Golf Links, Amrita Shergil Marg, Aurangzeb Road, Prithviraj Road, Sikandara Road, Tilak Marg, Ferozshah Road, Mann Singh Road, Sunder Nagar, Nizamuddin, Tees January Marg, Chanakyapuri. Mid-Segment: South-East: New Friends Colony, Kalindi Colony, Ishwar Nagar, Sukhdev Vihar, Kailash Colony, Pamposh Enclave. South Central: Uday Park, Green Park, Saket, Asiad Village, Geetanjali Enclave, Safdarjung Enclave, Sarvapriya Vihar, Panchsheel Enclave, Navjeevan Vihar. Key to Locations: Average Capital Values – High End (INR '000/sf) Location South-West South-East South Central Central Gurgaon Noida Source: Cushman and Wakefield Research Note: The above values for high-end segment typically include units of 2,000-4,000 sf Source: Cushman and Wakefield Research Note: The above values for mid-segment typically include units of 1,600-2,000 sf Average Capital Values – Mid End (INR '000/sf) South-East South Central Gurgaon Noida Location NCR witnessed new launches of approximately 6,500 units in the first quarter of 2014. Majority of the newlaunchesbelongedtotwoprojectsinSector118of Noida. Shifting from the last year’s trend when launches were primarily in the affordable segment, 95% of the launches in 1Q 2014 were in mid-end segment.BesidesNoida,newunitswerealsolaunched New Residential Launches on Sohna Road with an aim to capitalise on the fact thatitliesinproximitytotheGolfCourseroadandGolf Course Extension road. Some projects were launched in Noida extension as well, a few of which were additions to already existing projects. Due to the uncertainty of upcoming elections, many developers continuedthesoft-launchstatusoftheirprojects. 41 29.0 34.0 21.0 24.0 21.0 25.0 40.0 45.0 5.3 12.5 5.2 6.5 2009 36.0 43.0 24.0 30.0 25.0 32.0 50.0 57.0 6.2 18.0 5.5 7.0 2010 42.0 50.0 25.0 35.0 27.0 40.0 50.0 65.0 8.5 21.0 5.5 7.5 2011 50.0 60.0 25.0 45.0 27.0 50.0 60.0 80.0 10.5 32.0 6.2 8.1 2012 25.0 42.5 25.0 27.0 60.0 11.0 7.0 57.5 40.0 48.0 90.0 8.5 1Q 2014 45.0 60.0 25.0 40.0 27.0 50.0 60.0 - 90.0 11.0 27.5 7.0 8.5 2013 14.5 16.5 18.5 20.5 4.0 6.5 3.2 5.5 2009 15.0 20.0 20.0 23.5 4.5 7.5 3.8 5.6 2010 15.0 - 28.0 25.0 - 30.0 5.0 - 9.0 4.2 - 5.8 2011 25.0 30.0 25.0 35.0 6.8 10.5 4.3 6.2 2012 22.5 27.5 25.0 35.0 7.5 11.0 5.0 6.0 1Q 2014 25.0 30.0 25.0 35.0 7.5 11.5 5.0 6.0 2013

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