KF Investment Advisory Report Nov-2012

This report the
top residential
destinations in the
country from the
investment point of view
over the next
years (2013-2017)
Balancing return with the associated risk is the
focal point of any investment decision. Equity and
debt are considered to be the mainstream asset
and risk in both these asset classes is strikingly
associated with high returns albeit with a greater
risk score as measured by volatility, a relatively
stable debt investment comes with a larger
compromise on returns.
Real estate, the third mainstream asset class,
From the perspective of return, real estate
investment in India has garnered superior returns
in comparison to other asset classes over a long
term. Further, an investment in residential
INVESTMENT
advisory REPORT
India’s Residential Destinations
INTRODUCTION
property is generally done with leverage in the
form of a housing mortgage. This leverage further
increases the potential for earning higher returns
since the initial equity contribution is a fraction of
the property value.
From the perspective of risk, property investment
fares better because asset price generally
remains stable. It has been established that an
investment in real estate based on sound
research can seldom go wrong. In the sense that
in comparison to an asset class like equity which
is dependent on several factors related to the
and corporate governance, a real estate
investment is based on the underlying asset. A
sound research is inherently founded on deep
IMPORTANT TERMS USED IN THE REPORT
TERM MEANING
Metropolitan region
Zone A Zone is a geographical division of the metropolitan region comprising of several
localities that possess similar characteristics in terms of access to employment hubs,
connectivity and demography. In most cases, the metropolitan region is divided into 4-5
Destination Destination is the most promising residential locality from the perspective of investment
Benchmark location
residential locality that has saturated in terms of real estate growth and infrastructure
development and is considered as the most sought after residential market within the
in the same zone, becomes the reference point
Property price This map splits the geography of a city in accordance with the prevailing residential
contour map
by such line
Investor Return It is the IRR (Internal Rate of Return) for a typical investor in residential property
Assumptions for Size of property: 1000 sq. ft. Investment horizon: 5 years
calculating Investor Loan to Value ratio: 60% Mortgage rate: 10.5% pa
Return Loan tenure: 20 years
Residential Property The price indicates the average capital value in the residential market of the destination
Price (` per sq.ft.) and benchmark locations
Hidden Gem Locations where we expect the real estate drivers to gather momentum beyond year 2017
We have developed a
framework built on ‘top-
down approach’ in the
selection of
promising cities and zones
within them and ‘bottom-
up approach’ in the
selection of top
investment destinations

From the perspective of
risk, property investment
fares better because asset
price generally remains
stable
understanding of the property market along with
the study of factors that drive it.
Real estate is an asset class where an educated
investor can mitigate the risk and enjoy the
associated superior returns at the same time.
Coupled with the other mainstream asset classes,
this investment vehicle can make for an optimally
real estate is fraught with decisions based on gut
feeling and tips which result in poor
investments. Hence, an investor has to clearly
delineate a real estate investment from
speculation.
about a striking change in the attitude of
investors. This change towards expectation on
investment returns, growth and risk does not
single out any one asset class but applies to most
of the assets whether it is equity, debt,
commodity or real estate. Amidst this changed
scenario it is evident that an advice on
investment in any asset class cannot be generic.
Real estate as an asset class is the foremost
example that will witness the challenge thrown by
this tenet particularly in this tough economic
scenario. Even within real estate as an asset
class, the judgment on investment outlook on
commercial real estate and residential real estate
that drive investment returns for both these are
diverse to a great extent. Hence, the investment
opinion should take into account each of these
factors.
INVESTMENT
advisory REPORT
Although the prominence of real estate as an
asset class is increasing, the investment research
in the subject lags much behind in comparison to
other asset classes. With this report, we will make
an incipient foray into the subject by identifying
the top residential destinations in the country
residential markets that we expect will
outperform in terms of the investor returns on
account of the appreciation in property prices. We
promising cities and zones within them and
investment destinations. Since real estate
activities are not restricted to city limits, we have
considered the entire metropolitan region in our
analysis. Our understanding of the local property
market and experience in dealing with
growth equips us to develop the framework for
this pioneering report.
While selection of the top residential investment
destinations remains the core of this report, we
real estate drivers to gather momentum albeit
In most cases, investment
in real estate is fraught
with decisions based on
gut feeling and tips which
result in pOor
investments. Hence, an
investor has to clearly
delineate a real estate
investment from
speculation

The top residential destinations have been picked
from the universe of all urban centres in the
country. In this multi stage selection, each
parameter was chosen in a manner that captures
parameters with the growth of residential
development in the city.
The population base of a city is a crucial indicator
based on their population. The extent of business
activity and thrust on infrastructure development
and accordingly these selected 100 cities were
studied. Banking penetration, hotel room
considered as surrogates for business activities
and current and proposed infrastructure
INVESTMENT
advisory REPORT
From the growth and
investment perspective,
zones that have high
concentration of business
activity at present and
projections of meaningful
increment in future will
have a comparative
advantage over others
that have saturated on
this
METHODOLOGY &
APPROACH
Selection of top cities in the country
expenditures were taken as proxies for
infrastructure development. The cities were
ranked on these individual parameters and based
on the average ranking Mumbai, Delhi,
Bengaluru, Chennai and Pune emerged as the top
With the fundamental prerequisite already in
participate in the growth trajectory for the
foreseeable future. While a framework was
striven to provide a crystal clear view on
investment destinations for a typical investor in a
residential property. This objective meant
would outperform others on the investment return
scale.
Selection of zone within a city
Regional growth within a city is anything but even
and the direction of such growth is a critical
factor in determining the fate of a particular
residential property. We therefore, split each city
into 4-5 zones to capture the quantum and
zones is based on the homogeneity of
characteristics with respect to access to
employment centres, social and physical
infrastructure and demography.
The selection of a preferred zone depends on the
depending on the purpose of purchasing property
which is either end-use or investment. From the
growth and investment perspective, zones that
have high concentration of business activity at
present and projections of meaningful increment
in future will have a comparative advantage over
others that have saturated on this. Growth of
business activity will create abundant
employment opportunities which in turn will lead
to a rise in inward migration and high demand for
residential property in these zones. Hence, we
assessed the impact of their business activity on
the kind of employment generated by such
industry. We have captured the extent of
employment generation by measuring the
A regression model capturing the impact of
change in revenue of driver industry on change in
revenue guidance by the respective industry
associations. Projections for the remaining three
years were based on the moving average trend of
zones was analysed to understand the balance
between the incremental employment and
on employment potential in a particular zone has
been provided. The service sector has emerged as
a driving force in most of the cases with the
Information Technology and Information
Technology enabled Services (IT/ITeS) industry
emerging as a dominant employment driver.
Besides the quantum of employment generation
in the driver industry, the nature of jobs in

INVESTMENT
advisory REPORT
accordance with its position in the value chain in
element. For instance, employment in software
development within the IT/ITeS industry has a
employees in comparison to that in the Business
diverse manner.
Besides employment, the other important factor
equipped us to assess the scope of infrastructure
development that will have an impact on
infrastructure like road, rail and airport projects
healthcare and recreation was also reviewed.
movement of employment and infrastructure.
IT Sector
Industrial Physical
Connectivity
Entertainment
The service sector has
emerged as a driving force
in most of the cases with
the Information
Technology and
Information Technology
enabled Services (IT/ITeS)
industry emerging as a
dominant employment
driver
Non IT Sector
Selection of Destination
All the residential markets within the preferred
employment opportunities and infrastructure
and proposed connectivity and social and
physical infrastructure facilities. The approach
discussions with various stakeholders. This
primary survey coupled with our real estate
destinations from the perspective of investment.
residential locality that has attained a relatively
As mentioned earlier, our analytical focus was
market’s connectivity with important locations
and social and physical infrastructure facilities
future price movements like:
.
. Limited land
Besides the quantum of
employment generation in
the driver industry, the
nature of jobs in
accordance with its
position in the value chain
in the industry was taken
as a ting
element
Business activity Infrastructure

INVESTMENT
advisory REPORT
construction and put an upward pressure on
property prices in destinations like Chembur
in Mumbai.
. Lifestyle shift: Destinations like KR Puram in
Bengaluru possess the potential to provide a
lifestyle shift, which is possible generally in
projects developed on large land parcels that
facilitate high rise premium developments
with plush amenities.
. Planned development: Lack of social
infrastructure remains a concern in some
destinations as of now. However, on account
of being in the planned development region,
education, healthcare and recreation facilities
will eventually come up in destinations like
Ulwe in Mumbai.
While dynamics of a residential market with
respect to the demand-supply scenario were
considered to understand its depth, the impact of
factors like quality of projects, premium or
assessed. It is of paramount importance to
assess all these factors in comparison to the
benchmark locality and also other localities
within the zone. Further, these factors have to be
viewed in the context of the prevailing property
that would outperform other locations on the
investment return scale. However, continuing
with our intention of undertaking a thread bare
analysis and providing an unequivocal
appreciation and the resultant investor returns for
investment in these destinations.
As mentioned earlier, to forecast the price
movement of a destination, we have considered
the price of a benchmark location as the
reference point. The assumption is that the
destination price will grow at a faster pace (as
compared to the benchmark location price)
because of its relatively higher level of increasing
developmental activities. As a result of this, the
current price discount of the destination will
reduce, making price convergence imminent in
the future.
a benchmark location. Empirical evidence
indicates that price variation of established
the changes in economic activities. In line with
this, we have conducted iterations to identify the
property price movement in the benchmark
locations. India’s economic growth has been
explaining the price movements. Regression
equations have been estimated for each of the
been forecasted till 2017.
In the second stage, the price discount of a
years. In order to achieve this, we studied the
benchmark location over the last decade. These
factors include:
. Incremental employment generation in the
zone.
. New infrastructure projects.
. Reduction in time to commute between the
benchmark location and important places in
the zone.
Our analysis shows that the occurrence of one of
the above mentioned factors or a combination of
them accelerated the growth of residential
property prices in a benchmark location before it
stabilized and emerged as a relatively developed
market. Assuming that the destination will have a
Over the foreseeable
future, the preferred
zones will be the biggest
they
fall in the dire of
movement of employment
and infrastr
ontinuing with our
intention of undertaking a
thread bare analysis and
providing an unequiv
investment view, we have
qu the al
appre tion and the
resultant investor
returns for investment in
these destinations
TOP INVESTMENT
DESTINATIONS RANKED IN
ORDER OF INVESTOR RETURN
DURING THE NEXT 5 YEARS
#1 Ulwe
29.0%
#2 Wadala
#3 Chembur#4 Noida
Extension
27.0%25.5%22.9%
#8 Ravet
#7 Hinjewadi
#6Medavakkam
#5 Dwarka
Expressway
22.3%
21.2% 20.6% 20.1%
20.0%
#9 Tathawade
#10 Hebbal
#11 Pallikarnai
19.3%19.1%18.7%
#12 Wakad
18.6%
#13 KR Puram
Investor returns per annum

INVESTMENT
advisory REPORT
Empirical evidence
indicates that price
variation of established
residential markets is
y explained by
the changes in economic
activities
similar impact of incremental employment
generation and new infrastructure projects, the
property price in the destination has been
forecasted by applying an estimated discount
factor on the future price movements of the
benchmark location.
a resistance on price movement in many
destinations. Hence, we have created an income
pyramid of the employees in the driver industry.
This pyramid is a distribution of all the employees
according to their income. Thus, a ceiling was
applied to our destination price forecast as per
the change in this pyramid for the forecast
horizon.
REGION-WISE TOP INVESTMENT DESTINATIONS FOR NEXT 5 YEARS
Forecasted Price Appreciation in Percentage
Additionally, in cases where land availability is
not a concern, price growth will not breach the
group. As a result of this factor some destinations
did not qualify for the projected price growth and
were dropped from the top destinations list.
For a typical investor in residential property what
leverage provided through the housing loan. The
same has been calculated and labelled as
‘Investor Return’ arising out of investment in
under construction residential property, in these
available at a destination along with select
residential projects have also been provided in
the report.
NORTH
Mumbai Pune
NCRChennaiBangalore
SOUTH
WEST
#1 Noida Extension
#2 Dwarka Expressway
111%
108%
#2Hebbal
#1 Medavakkam
#3 Pallikarnai
#4 KR Puram
94%
103%
93%
91%
#4Hinjewadi
#5Tathawade
#6Ravet
#7Wakad
100%
98%
97%
91%
#1Ulwe
#3Chembur
#2Wadala
145%
133%
125%
EAST

INVESTMENT
advisory REPORT
in cases where land
availability is not a
concern, price growth
will not breach the
ordability threshold
of the target consumer
group
. With property options ranging from
`3,200/sq.ft. to `15,000/sq.ft. and investor
returns in the range of 18.6% - 29% pa
residential real estate will emerge as a
. With seven destinations, the western region
has the highest number of promising
residential investment options.
. The top three investment destinations, with
investor returns in excess of 25% pa, are from
Mumbai.
. Only Mumbai ranks ahead of the top
investment destinations of the NCR, the
biggest residential market in the country.
. Enhanced connectivity and the proposition of
the Dwarka Expressway, placing it in high
KEY takeaways
Risk factors for our outlook
largely on the service sector led by the IT/ITeS
industry. The sector’s revenue growth during the
employment, which is one of the biggest drivers
of real estate. For the IT/ITeS industry, the
revenue growth estimates for the initial two years
have been taken from the industry association
and for the remaining three years they have been
growth rate between 10-12%.
While the Indian IT/ITeS industry is
interconnected with the global economy, reputed
research studies have highlighted the
interlinkage between the domestic manufacturing
sector and this industry. As a result, the weak
global economy and a slowdown in the domestic
manufacturing sector will have a direct impact on
this industry. Our analysis puts a great emphasis
on the fate of the IT/ITeS industry because of its
The BFSI industry has a meaningful role in the
employment trend in cities like Mumbai and
Delhi. We have considered a revenue growth rate
moving average growth rate for this industry.
The employment generated by these industries
deviation in their revenue growth will have an
space and therefore the fate of the respective
destination.
Additionally, in several cases, the fate of the
destinations is linked to the delivery of
ranks on the investment return scale.
. The IT/ITeS industry is the driving force behind
the growth in most of the destinations.
. With four investment destinations, Pune has
the maximum number of promising residential
property options.
. IT/ITeS, Automobile and Engineering sectors
are the primary employment drivers in Pune
. The destinations in Chennai will immensely
Automobile industries in Tamil Nadu during the
. IT/ITeS and Bio-technology sectors will be the
driving forces behind the growth of
destinations in Bengaluru.

INVESTMENT
advisory REPORT
BENGALURU METROPOLITAN
REGION POPULATION
Population in Millions
Source: Census 2011, Knight Frank Research
Population Average Annual Growth
1991 2001 2011
Bengaluru (also known as Bangalore), the capital of Karnataka is located
in the south-eastern part of the state. The city is located at an
altitude of 950m. above the sea level, thereby making its climate very
serene. Bengaluru is the third most populous city of India with a very diverse
demography. It is also known as the Garden City of India. It houses the
largest number of Information Technology (IT) and Information Technology
Enabled Services (ITeS) companies in India for which it earned the
sobriquet of the ‘Silicon Valley’. It also houses numerous public sector
companies including defence, aerospace and bio-technology.
Bengaluru urban agglomeration is known as Bengaluru Metropolitan
Region (BMR) comprising Bengaluru urban district, Bengaluru rural district
and Ramanagara district. The Bruhat Bengaluru Mahanagara Palike
(BBMP) is in charge of the civic administration of the city. The corporation
is spread over an area of 741 sq. km. Bangalore Metropolitan Region
Development Authority (BMRDA), an autonomous body created by the
Government of Karnataka is the nodal agency looking after the overall
development of the BMR. During the last two decades the population
growth was phenomenal in the BMR. It rose at an annual rate of 3.9%
oyees.
BENGALURU
4.84 6.54 9.595.2% 3.1% 3.9%

CHIKKA
BOMMASANDRA
VARTURVARTUR
CHIKKA
MMASANDRANDRAABOM ABOM AA
15000
6000
3500
Major Roads
Railway Line
Existing Metro
Under Construction
South Zone
West Zone
Central Zone
East Zone
North Zone
Price Contours (`/ sq.ft)
Proposed Metro
Nagawara
Gottigere
BENGALURU MAP
INVESTMENT
advisory REPORT

Bengaluru Metropolitan
Region (BMR) is spread over
741 sq. km.
Market Overview
ZONE MAJOR RESIDENTIAL
DESTINATIONS
Central MG Road, Vitthal Mallya Road,
Frazer Town, Lavelle Road,
Richmond Road, Langford Town
West Malleswaram, Rajajinagar, Tumkur
Road, Vijayanagar, Yeshwanthpur
North Banaswadi, Hebbal, Bellary Road,
Hennur, Yelahanka, Jakkur, HBR
Layout
East
Madras Road, KR Puram
South Koramangala, Sarjapur Road, HSR
layout, Jayanagar, JP Nagar,
Bannerghatta Road, Kanakapura
Road
zones: Central, West, North, East and South.
South Bengaluru, a locale which until the mid-
1990s housed a strong Kannada (native language of
Karnataka) speaking population now boasts of
being a cosmopolitan region. This was mainly on
India. Electronic City located on Hosur Road in the
1990. Many IT giants like Infosys, HCL
Technologies, HP, Wipro, Genpact and Siemens
have setup their campuses in this region. With the
setting up of these companies, the South
Bengaluru region became a preferred commercial
as well as residential destination. The availability of
land, strong infrastructure and presence of the
middle-income segment have contributed to the
development of this zone. The residential clusters
Koramangala, Jayanagar, BTM Layout,
Bannerghatta Road and Hosur Road have attracted
a large number of immigrants especially the IT
employees. Social infrastructure like the availability
of quality hospitals, prestigious educational
institutions and retail malls are some of the major
reasons behind residential demand in this part of
Bengaluru.
This region started losing its charm since 1998
when the Government of Karnataka announced the
new international airport at Devanahalli - a town
located in the north of Bengaluru. Major IT/ITeS
companies started acquiring land closer to the
refrained from buying any new land in this region,
hampering the overall growth of the South
Bengaluru region. In this bargain North Bengaluru
emerged a better investment destination compared
to the south.
The new international airport at Devanahalli
commenced in 2008. By virtue of this, North
Bengaluru became one of the most sought after
destinations of Bengaluru. Numerous real estate
and infrastructure projects were announced to
enhance the connectivity between Bengaluru city
centre and the airport; this included High Speed
Rail Link (HSRL), monorail and Metro rail. Moreover,
to generate employment in this region, the
government in association with private companies
Technology Investment Region (ITIR), Devanahalli
Business Park (DBP) and Global Finance District
(GFD). These also attracted a lot of institutional
buyers like real estate developers and
hoteliers.This region is on the cusp of becoming the
new commercial business district (CBD) of
region with respect to the real estate investment.
Major micro-markets covered under this zone are
Hebbal, Devanahalli, Yelahanka and Hennur.
Before 1990, the eastern zone was home only to
some of the reputed heavy manufacturing
growth of this region. With the dawn of the IT sector
some of these industries have gradually turned into
attracted major IT/ITeS companies in the eastern
residential development in this region.
destinations among the IT employees. Moreover,
INVESTMENT
advisory REPORT
2007 2008 2012*2009 2010 2011
* Till September 2012
RESIDENTIAL PROJECT LAUNCH
TREND IN BENGALURU
Launches Source: Knight Frank Research
31,236
20,608
14,439
31,733
54,075
24,741
9.59 mn.
population in the BMR,an
increase of 98% in the
last two decades

2007 2008 2009 2010
5%
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
No.ofUnits
Stock Cumulative Absorption % of Unsold Units
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF BENGALURU
2011
Source: Knight Frank Research
2012*
Road emerged as a business district having many
tech-parks, SEZs, captive campuses and business
centres.
Central Bengaluru is the commercial and retail
Mallya Road, Commissariat Street, Ulsoor and
parts of the city, good physical and social
infrastructure along with the presence of organized
retail has ensured the highest property prices in
micro-markets of this region include MG Road,
the central locations are bungalows and
independent residential units, however some
witnessing growth in multi-storey high-rise
constructions as well.
renowned engineering, transformers, motors and
generator companies here. Being an industrial hub,
the mid-1990s, that transformed South and East
Bengaluru as one of the most sought after
residential markets. However, this region gained a
lot of traction with the announcement of the
layout, Mysore Road, Nagarbhavi,
received the necessary impetus for growth.
up of bio-technology units and other large national
and multinational manufacturing units have
East North South
ZONE-WISE SPLIT OF UNDER
CONSTRUCTION UNITS
42%
27%
30%
176,832 residential
units launched since 2007
in the BMR
INVESTMENT
advisory REPORT
changed the dynamics of Bengaluru real estate
market. Apart from generating thousands of new
able to attract a large pool of migrants into these
the real estate market to grow at a tremendous rate
segment that witnessed the launch of over 176,832
units since 2007.
Bengaluru residential market witnessed the launch
of 85,808 units in the last two years (i.e. 2010 and
2011) accounting for almost 49% of the total units
54,687 units were absorbed in the Bengaluru
residential market. South and East Bengaluru
absorption during this period mainly on account of
emerged as a self-sustaining micro-market
9%
11%
14%
25%
32%
Pennya industrial estate
spread over 266 acres -
one of the largest
industrial areas in Asia
85,808 units
launched and 54,687 units
absorbed during 2010 and
2011 in BMR
57% of under-
construction units are in
North and East Bengaluru

Real Estate Drivers
Infrastructure Development
Employment Indicators
Service Sector
IT Sector
Manufacturing Sector
Biotech Sector
Rail Network
Bangalore Metro Corridor I & II
Monorail Corridor
Infrastructure Development
Pheripheral Ring Road
Elevated Road / Expressway
Road Network
62 km. Outer Ring Road
connects all the major IT
hubs from North to South
EXISTING ARTERIAL ROAD NETWORK
DISTANCE OBSERVATIONS
Outer Ring Road (ORR) 62 km. ORR provides connectivity with all the major highways around the
city. Passing across the major suburbs viz. Hebbal - KR Puram -
Marathahalli - Sarjapur Rd. - Silk Board Junction
Nandi Infrastructure Corridor 42 km. Long peripheral road, connecting Jalahalli in the north with the
Enterprises (NICE) Electronic City on Hosur Road in the South. The corridor connects
Ring Road Mumbai and Chennai through NH-4 in the western region and NH-
7 in the southern region respectively. Initially a four-lane structure
with provision for expansion upto six-lane. NICE Ring Road has
crossing downtown Bengaluru
Hosur Road (NH7) 40 km. A four to eight-lane national highway (Part of NH7) connecting
Bengaluru city with Hosur, a town in Tamil Nadu. The Hosur Road
passes via the Electronic City one of the largest IT industrial parks
of Bengaluru
Bengaluru Elevated Toll-way 10 km. A 10 km. long elevated and tolled expressway connecting
Bomanahalli to Electronic City
INVESTMENT
advisory REPORT
High Speed Rail Link
EXISTING SUBURBAN RAIL NETWORK
DISTANCE OBSERVATIONS
Metro Train Network 6.7 km. Reach I, a 6.7 km. part of the East-West corridor, connecting
Phase I, Reach I Byappanahalli with MG Road is operational since October 2011
Metro rail operational
between Byappanahalli
and MG Road since Oct 2011
ROAD NETWORK
METRO TRAIN NETWORK

A 33 km. High Speed Rail
Link proposed - will
operate between Cubbon
Road and Bengaluru
International Airport
UPCOMING ARTERIAL ROAD NETWORK
CONNECTIVITY & LENGTH OBSERVATIONS CURRENT EXPECTED
STATUS COMPLETION
Road widening from Hebbal A six-lane elevated road over the Under 2013-14
to Bengaluru International Airport existing road connecting with the Construction
20 km. international airport is under
construction. The elevated stretch that
starts from Kodigehalli gate will be a
six-lane highway extending over 4 km.
The project will have a series of seven
Junction near the airport
High Speed Rail Link (HSRL) Five Post 2016
33 km. that will connect the city centre with consortiums
shortlisted
International Airport with two halts in
at Yelahanka.
Monorail Project Proposed Post 2015
41 km. proposed 31 km. monorail from JP
will function as a feeder service to metro
rail as well as the international airport
Peripheral Ring Road (PRR) Pre-feasibility Post 2016
116 km. will connect the entire peripheral stage
arterial road linking all the major
Bengaluru Metro Rail Phase I Under 2014-15
42 km. construction
Bengaluru Metro Rail Phase 2 In-principle
approval
the north it will be extended upto received from
Karnataka.
Awaiting
approval from
the Urban
Development
and Kengeri to the west. Department
INVESTMENT
advisory REPORT
A 116 km. Peripheral Ring
Road proposed -
connecting Hosur Road to
Tumkur Road via KR Puram,
Bellary Road, Old Madras
Road and Sarjapur Road

Over 2,000 IT & ITeS
companies present in
Bengaluru including more
than 100 Fortune-500
companies
CONNECTIVITY & LENGTH OBSERVATIONS CURRENT EXPECTED
STATUS COMPLETION
Rashtreeya Vidyalaya (RV) Road with
Bommasandra in the South,
Electronics City on the Hosur road with
the city centre
d) Another line will be parallel to the
NS Corridor of Phase I, running
between Nagawara in the north and
Gottigere in the South. It will have two
interchange stations, one at MG Road
and another at Jayadeva hospital
Elevated corridor from Central Silk A 15 km. elevated corridor connecting Pre-Feasibility Beyond 2015
Board Junction to Jayamahal Road Central Silk Board Junction to stage
15 km. Jayamahal Road is envisaged to ease
South Bengaluru. This will also
facilitate in reaching the new
international airport in the North.
Construction of elevated corridor A 28 km. West-East elevated corridor Pre-Feasibility Beyond 2014
between Jnanabharathi and along the Ring Road connecting stage
Old Airport Road Tumkur (Jnanabharathi) with Old
28 km. Airport Road. The corridor will pass
through Sirsi Circle, Town Hall, Hudson
Circle, Vellara junction and Old Airport
Road. The proposed corridor is
expected to ease the East-West city
Bengaluru - Mysore Expressway A six-lane expressway connecting Land Beyond 2017
140 km. Bengaluru with Mysore is under acquisitions
construction. Only peripheral part of
56 km. has been completed till date.
INVESTMENT
advisory REPORT
Bengaluru is the IT and Bio-technology capital of
India. It also houses numerous Government
promoted heavy industries including defence
aerospace and telecommunication companies. It
also has renowned Indian educational institutions
However, Bengaluru’s economy is primarily
driven by the IT/ITeS sector and bio-technology
sector.
IT/ITeS SECTOR
Over 2,000 IT/ITeS companies, including more
than 100 Fortune-500 companies have
established their operations in Bengaluru. These
companies in all, generate software exports worth
`700bn. and directly employ over 650,000
professionals. Prominent Fortune-500 companies
operational in Bengaluru are IBM, Dell, HP,
CISCO, Sun Microsystems, Microsoft, Toyota, ING,
Tesco, Citigroup, JP Morgan Chase, Goldman
Sachs, Bosch and Tyco. Prominent Indian IT &
ITeS companies like TCS, Infosys, Wipro and
Mahindra Satyam have major operations in the
city.
Bengaluru’s IT/ITeS sector accounts for almost
one-third of India’s IT/ITeS revenue and almost
half of the Indian Bio-Technology companies are
located in Bengaluru. These sectors play a very
vital role in the growth of commercial and
residential real estate in Bengaluru.
IT/ITeS companies have been predominantly
concentrated in South, South East Bengaluru and
the Outer Ring Road (ORR) stretch from Hebbal to
Employment Indicators in Bengaluru
Bengaluru generates
software exports worth
`700 bn.
650,000 IT
professionals directly
employed in Bengaluru
IT/ITeS and Bio-technology
sector are the driving
factors for Bengaluru's
growth

Silk Board junction. This region houses many
renowned tech-parks, IT/ITeS SEZs and captive
campuses of Fortune-500 IT companies. Micro-
into self-sustaining hubs. East Bengaluru has
large campuses of IT/ITeS companies such as
southern region is spread over 330 acres having
which one is completely dedicated to the bio-
technology sector, while the other two pre-
dominantly house IT/ITeS sector companies.
commencement of the Bengaluru International
as a main junction between the airport and the
established IT hub of Bengaluru i.e. Electronic
tenanted IT parks. Major IT parks include Manyata
The country’s IT/ITeS sector grew at an annual
`
is estimated to reach
tremendous job opportunities, generating over 11
mn. direct and indirect jobs. It is
estimated that the sector would create
continue its growth trajectory in-line with the
of Karnataka proposes to increase employment
With the strengthening of the global economy,
robust domestic fundamentals and easy
availability of skilled human capital the IT/ITeS
the coming years.
`
IT/ITeS sector constitutes
70% of the total
space in Bengaluru
OFFICE SPACE BREAK-UP
Source:
BENGALURU OFFICE
SPACE DYNAMICS
before
2008
2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
INVESTMENT
advisory REPORT
140
100
40
ZONE WISE DISTRIBUTION OF
OFFICE SPACE STOCK
Source:
West South East North
Currently the total
space stock in Bengaluru
is 92 mn. sq.ft. of which
79.80 mn. sq.ft. is occupied
2 mn. direct and indirect
JoBS TO BE GENERATED BY
2020 IN BENGALURU

NORM DETAILS
Time line for property registration Any time until possession
Re-sale before possession Allowed
Transfer charges payable to builder `200-300 psf
Loading (as % of carpet) 33%
Remarks Investor friendly market. Gains from lower Stamp Duty are taken back by
and Pune
MARKET NORMS
BIO-TECHNOLOGY SECTOR
India is ranked among the top 12 biotechnology
destinations in the world and third largest in the
is committed to establishing a Biotech corridor
for the development of the biotech industry in
from the Indian Institute of Science to the
grow to USD 10 bn. by 2015 from USD 4 bn.
40% or USD 1.6 bn. of the country’s total
capital and cost advantage over peers overseas.
USD 10 bn. the size of
Indian Bio-technology
sector by 2015. Current size
USD 4 bn.
INVESTMENT
advisory REPORT
Bengaluru retained the top slot for the highest
despite global uncertainties looming large on the
translating into an increase of 10% over the
industry still remains the key demand driver for
by the end of 2017.
in the delivery of new projects will lower the
have forecasted an incremental demand of 44-45
end of 2017.
COST DETAILS
Stamp duty 5% (On ready reckoner rate)
Registration `
VAT 7% (on agreement value)
Service Tax (on under- 3% (on agreement value)
construction property)
STATUTORY COSTS
AND MARKET NORMS
STATUTORY COSTS
380 biotech companies
in India - 50% alone in
Bengaluru
40% of the country's
bio-technology sector
contributed by Bengaluru

Proposed Monorail
Major Roads
Railway Line
Benchmark location
Top destination
Employment Hubs
Major Roads
Existing Metro
Proposed Metro
Airport
Railway Line
Benchmark location
Top destination
Employment Hubs
KR PURAM
WHITEFIELD
B Halli Terminal
MG Road
KR Puram
B Narayanapura
Mahadevapura
CV Raman Nagar
Hudi
KIADB Export
Promotion Area
EPIP Zone
INVESTMENT
advisory REPORT
EAST BENGALURU MAP
HEBBAL
NORTH BENGALURU MAP
Major Roads
Proposed Metro
Airport
Railway Line
Benchmark location
Top destination
Employment Hubs

bengaluru dominance in the
BPO/KPO sectors have won
it a place in the dictionary
as ‘Bangalored’ meaning
‘Outsourced’
Bengaluru was a laid-back city till the mid-1990s
when the IT boom reshaped it into a major city of
India. Many large domestic IT companies as well
here giving a boost to the Bengaluru real estate
market. Today, Bengaluru has become the
software hub of India, commonly known as the
‘Silicon Valley of India’. Its dominance in the KPO
(Knowledge Process Outsourcing) and BPO
(Business Process Outsourcing) sectors have won
it a place in the dictionary as ‘Bangalored’
meaning ‘Outsourced’. We believe Bengaluru’s
dominance in the IT/ITeS sector will continue in
the foreseeable future.
As per the fundamental economics of the real
estate sector, the price appreciation depends on
two factors - employment and infrastructure
development (connectivity). This phenomenon
has been witnessed in the South and South-East
regions of Bengaluru. In the mid-1990s, since the
growth of the IT/ITeS sector many large IT parks
and campuses have been set-up in the Electronic
This attracted many software engineers to
Bengaluru consequently leading to demand for
residential real estate. Micro-markets such as
Bannerghatta Road, Kanakpura, Sarjapur Road, JP
Mahadevapura, CV Raman Nagar, Uttarahalli, KR
Puram and Electronic City have emerged as
residential markets. However, South Bengaluru
destinations lost their charm post the
Airport (BIA) near Devanahalli in North Bengaluru.
As a natural phenomenon for the real estate
sector, all focus including government,
corporates and general public at large, has now
shifted northwards – a new growth corridor for
real estate.
We expect North and East Bengaluru to be the
to emerge as the new Central Business Districts
(CBD) of Bengaluru within the next decade. This
can be further substantiated by the numerous
infrastructure projects undertaken by the
government such as High Speed Rail Link (HSRL),
Metro Lines, monorail and the Peripheral Ring
Road that are at various stages of construction.
On completion, these projects will enhance the
connectivity of the city centre with the BIA.
PREFERRED
ZONES IN
BENGALURU
Availability of huge land parcels along the road
between the city centre and the BIA has attracted
many large corporates.
Residential end-users at large prefer residing in
Northern Bengaluru as against the south; this
was not the case 4-5 years back. The change in
preference was mainly on account of shifting of
the airport to the north near Devanahalli. We
expect the stretch from Hebbal to Yelahanka in
the north to gain large price appreciation in the
to the airport, connectivity with the city centre
and upcoming social infrastructure.
East Bengaluru in itself is a well-developed and
micro-market has evolved over the years. It has
become one of the most preferred destinations
for the IT/ITeS employees, as it is close to the IT
developed social infrastructure (school, hospitals
etc.) and a well-organized retail market.
Moreover, this region will have smooth
accessibility to the airport with the proposed 116
km. Peripheral Ring Road (PRR). The PRR will link
Hosur Road with Tumkur Road via KR Puram,
Bellary Road, Old Madras Road and Sarjapur
Budigere Cross and Old Madras Road will see
some good traction in the next 4-5 years.
Therefore, based on the above developments we
believe North and East Bengaluru regions will
INVESTMENT
advisory REPORT
NORTH
BENGALURU
The focus of the GOK over the last decade has
clearly been North Bengaluru. By shifting the
Bengaluru International Airport (BIA) near
Devanahalli in the north thereby replacing old
HAL Bengaluru International Airport, GOK has
substantiated its intention in developing North
Bengaluru. Since the new airport is 40 km.
outside the city, GOK has also planned Mass
Transit Systems (MTS) like monorail, Metro-Line
and High Speed Rail Link (HSRL) to enable
travellers to reach the airport faster. Also,
commuter rail system has been planned to
connect Devanahalli with Yeshvantpur via
Yelahanka. Additionally, widening of the NH-7
upto BIA from the existing six-lane to eight-lane is
to airport expansion and expected real estate
developments on either side of the NH-7. Further,
South Bengaluru micro-
markets lost its charm
post the commencement
of the Bengaluru
International Airport in
North Bengaluru
We anticipate North and
East Bengaluru to be the
biggest of
the BIA and expect them to
emerge as the new Central
Business Districts (CBD) of
Bengaluru within the next
decade

`1,150 bn.
Investment earmarked for
North Bengaluru
the GOK is also developing the Peripheral Ring
Road (PRR) as an eight‐lane expressway along
the periphery of Bengaluru for a total road length
of 116 km. that will connect all the periphery
regions to the airport. Availability of vast vacant
land parcels close to the airport and along the
road leading to the airport has enabled GOK to
plan projects worth `1,150bn., including
Devanahalli Business Park (DBP), Aero SEZ,
Information Technology Investment Region (ITIR),
Bio-Technology, Aerotropolis and many other
recreational developments.
Further, the GOK has also invited many
Bengaluru. Many large companies such as HAL,
BEML, Infosys, Dynamatic Technologies Ltd, IFCI
and Tata Elxsi have signed an MoU with the GOK.
55 multinational IT companies including Infosys,
Wipro, TCS and Cognizant have evinced interest
people are expected to get direct employment
employment. Employment due to the ITIR in itself
speaks about the growth of this region. These
developments are expected to completely change
bustling self-sustaining city.
Growth of the residential market in this zone has
been primarily along the Outer Ring Road (ORR)
2007 2008 2009 2010
50,000
40,000
30,000
10,000
No.ofUnits
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF NORTH BENGALURU
2011
2012*
witnessing residential developments. Proximity to
the airport and to the commercial hub of
Manayata Tech Park has made this pocket of
Bengaluru the preferred residential location by
the IT population.
unsold. Over the years, unsold units have risen
mainly on account of low pace of absorption due
to uncertain global markets. Announcement of
excess supply from the previous years has had an
INVESTMENT
advisory REPORT
2007 2008 2012*2009 2010 2011
TREND IN NORTH BENGALURU
13,355
14% 14%
15%
42,329 units
launched and 28,785 units
absorbed since 2007 in
North Bengaluru
4 mn. direct and
indirect employment to be
genereated over next 3
decade in North
Bengaluru

Existing
Infrastructure
HEBBAL TO BIA ROAD
A 3.72 km. six-lane elevated road over the
existing road is under construction. The project
the Trumpet Junction near the airport. The
elevated road starts from the Kodigehalli gate
and connects to the international airport. This
project is expected to reduce the travel time
OUTER RING ROAD (ORR)
INVESTMENT
advisory REPORT
Upcoming
Infrastructure
areas that are connected with the international
have far-reaching implications on the growth
along its route.
underpasses will come up at other crucial
junctions.
ELEVATED CORRIDOR FROM
CENTRAL SILK BOARD JUNCTION
TO JAYAMAHAL ROAD
MONORAIL
as a feeder service to the metro rail as well as to
the international airport.
ORR accounts for almost
35% of the total
space of Bengaluru.
Hebbal to BIA road project
is expected to reduce the
travel time between Hebbal
to BIA from 45 minutes to
20-25 minutes

EMPLOYMENT HUBS IN NORTH BENGALURU
SECTOR PROJECT NAME MAJOR COMPANIES
IT/ITeS Manyata Embassy Business Park Philips, IBM, ANZ
INVESTMENT
advisory REPORT
Employment Indicators in
North Bengaluru
Further, there is the aerospace SEZ that is being
planned here besides three industrial parks on
3,000 acres of land. Many renowned hotels like
Oberoi, JW Marriot and Fortune are also planned
here. There is plenty of commercial development
in the pipeline, with several developers having
bought huge land parcels for development in the
stretch from Hebbal to Devanahalli. With so much
commercial development, we expect residential
development to follow suit in this region making
it the most sought after destination in the next 4-
5 years.
Few builders who have planned residential
projects in North Bengaluru are Brigade Group
with their Gateway, Ozone Developers with their
integrated project called Urbana, Prestige with
their Ozone and Golfshire Projects, Hiranandani
Upscale with their Chancery, Nitesh with their
Columbus Square and Sobha with their Althea.
METRO-LINE
A 24 km. North-South (NS) corridor connecting
Hesaraghatta circle near Nagasandra (north) with
Puttenahalli (south) has been proposed. Along
with this, there are also plans (under Metro Phase
II) to extend the Metro line from Hesarghatta up
value to the property along this route.
The region has a demand for residential,
commercial and retail spaces. With plans for the
development of an aerospace Special Economic
Manyata Embassy Business
Park has over 7.5 mn. sq. ft.
stock and 9.4 mn. sq. ft.
under construction
North Bengaluru region
is expected to
generate direct and
indirect employment of
over 4-4.5 mn. in
the next decade
Zone (SEZ), IT SEZ and creation of separate
workspaces in the vicinity of the airport, there is
also a huge supply of residential layouts.
HIGH SPEED RAIL LINK (HSRL)
A 33 km. HSRL has been proposed and will
connect the city centre with the airport. The HSRL
will operate between Cubbon Road and BIA with
two halts between them, one at Hebbal and the
other at Yelahanka. The HSRL will run parallel to
the expressway.
North zone of the city has a host of civic
infrastructure projects, large commercial
developments and new residential options that
have changed the characteristics of the localities
over the last few years. Bengaluru International
Airport has been the main catalyst for the change
in this region. The monorail, Metro Rail and
Bengaluru-Mysore Infrastructure Corridor (BMIC)
project as well as the social infrastructure
facilities are together set to drive Bengaluru
further ahead.
The existing major employment driver in this
region is the IT/ITeS sector. However, in future the
incremental employment in this region will be
generated from the planned commercial
developments such as ITIR, Aero SEZ, Devanahalli
Business Park, Aerotropolis and Global Financial
District. Cumulatively the GOK has envisaged an
investment of `1,150bn. in the North Bengaluru
region and is expected to generate direct and
indirect employment of over 4-4.5 mn. in the next
decade.

INVESTMENT
advisory REPORT
before
2008
2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
NORTH BENGALURU OFFICE
SPACE DYNAMICS
EAST BENGALURU
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF EAST BENGALURU
2007 2008 2009 2010
No.ofUnits
2011
Source:
2012*
Currently the total
spa th
Bengaluru is 7.7 mn. sq.ft.
of . ft. is
23,689
and 15,946 unitsabsorbed
7 in East
Bengaluru
Over 30 mn. sq. ft. of
IT/ITeS spa operational
as of June 2012 in East
Bengaluru
We expe another 9.5
mn. sq.ft. of new
spa to be ome
operational by 2017

Existing
Infrastructure
PERIPHERAL RING ROAD (PRR)
A 116 km. PRR connecting the entire
peripheral arterial road linking all the major
highways has been proposed. The major
connecting areas would be Hosur Road
(south) to Tumkur Road (west) via KR Puram
(east), Bellary Road (north), Old Madras
Road and Sarjapur Road (south). The PRR is
expected to ease the congestion on the
ORR.
METRO-LINE
A 15.5 km. metro rail line has been proposed
under Phase-II of the Bengaluru Metro. This
is the extension of the existing metro line
which runs between Byappanahalli and MG
Road. The new metro line stretch, a part of
East-West corridor, will start from the
on the East. This corridor has 14 metro
stations - Jyothipuram, KR Puram,
Narayanapura, Mahadevapura,
Garudacharpalya, Doddanakundi,
Visvesvaraya Industrial Estate,
Kundalahalli, Vaidehi Hospital, Satyasai
Medical Institute, ITPL, Kadugodi, Ujwala
CONNECTIVITY FROM OLD
MADRAS ROAD TO DEVANAHALLI
The distance between the Old Madras Road
(OMR) in the East and Devanahalli in the North is
over 40 km. There are two major routes that
connect the city centre in the east with the airport
Baiyappanahalli – Hebbal – BIA is a 40 km. drive
INVESTMENT
advisory REPORT
before
2008
2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
60
50
40
30
20
10
EAST BENGALURU OFFICE
SPACE DYNAMICS
along the ORR. The second route starts on the NH-
It then connects with the airport via NH-648 near
the Hoskote Industrial area. This stretch has also
witnessed a lot of residential traction post the
commencement of BIA. Manyata Tech Park,
and other IT space on the ORR are the major
developments fuelling demand for residential
houses in this pocket.
Upcoming
Infrastructure
2007 2008 2012*2009 2010 2011
TREND IN NORTH BENGALURU
4,691
2,961
429
3,795
6,399
5,415
A 15.5 km. metro rail
line has been proposed
under Phase-II of the
Bengaluru Metro
The new metro line
stretch, a part of East-
West corridor, will start
from the Byappanahalli
and terminate at
on the East

INVESTMENT
advisory REPORT
EMPLOYMENT HUBS IN EAST BENGALURU
SECTOR PROJECT NAME MAJOR COMPANIES
IT/ITeS Bagmane World Centre EMC2
IT/ITeS Ferns Icon Lenovo, ST Micro Electronics
IT/ITeS ITPB Zone ABB, Accenture, Amazon
Employment Indicators in
East Bengaluru
The IT/ITeS sector continues to be the major
employment driver of this region. Over 30 mn. sq.
Major IT/ITeS hubs in this region include
Salarpuria Hallmark, ITPB, RMZ Ecospace,
Prestige Shantiniketan and Bagmane World
employees’ preference to stay close to their
infrastructure including organized retail market.
the industrial hubs of Bengaluru. One node of
this PRR is Hoskote - an upcoming industrial and
evinced interest in setting up their plants here.
space has been constructed in Eastern
the existing inventory taking the total stock to 57
remains the single largest demand driver for
the region is vacant and this is expected to
INVESTMENT
DESTINATIONS IN
BENGALURU
Hebbal located in the northern region and KR
Puram in the eastern region are the most
promising residential destinations in Bengaluru.
Proximity to the Manyata Tech Park near Hebbal
destinations an ideal residential location.
Additionally, connectivity of the eastern region
commuting experience. Further, the upcoming
eastern region to the airport. Proposed
infrastructure projects such as the monorail,
Metro and High Speed Rail Link is expected to
further enhance the connectivity from the city
developments.
The GOK is carrying out numerous infrastructure
projects across the cities that are in various
stages of construction. These projects are
expected to bring about phenomenal changes in
highest appreciation compared to other zones.
Based on the announced infrastructure projects,
in this zone viz. Hebbal and KR Puram. These
destinations share some common characteristics
among themselves making them ideal residential
Since 2008 more than 37
mn. sq. ft. of ace
has been constructed in
East Bengaluru
ct another 24
mn. sq.ft. of new
ace to become
tional by 2017
We believe Hebbal and KR
Puram to ovide the
highest ciation in
Bengaluru market

INVESTMENT
advisory REPORT
destinations. These destinations are in close
Road and the ORR (Hebbal-KR Puram-
Marathahalli stretch). Additionally, these
destinations are also well connected with the
Bengaluru International Airport and Bengaluru
city centre. The upcoming monorail, Metro, HSRL
and elevated road will enhance connectivity
between the city centre and the airport.
Following are the factors that will have a positive
impact on the chosen destination:
. Bengaluru will witness an incremental demand
sector. More than 60% of this will be within
North-East Bengaluru.
. Bio-technology industry of Karnataka is
forecasted to grow at an annual average rate
of 10% over the next six years from USD
170mn. in 2011 to USD 272mn. in 2017. A large
number of these units are expected to be set-
up in the north-east region mainly on account
of favourable regulations, availability of vast
land parcels, proximity to the city centre and
the talent pool of the city.
. The distinct feature of these destinations will
be a) proximity to the major employment hubs
of Bengaluru i.e. Manyata Tech Park in the
quick and easy accessibility to the city centre
distance to the airport.
. Additionally, the upcoming metro, monorail,
HSRL corridor between Hebbal and BIA will
further boost the connectivity of this location.
. Proposed PRR will further enhance the
connectivity from all the peripheral districts.
More than 60% of the
incremental ace
to be in North and East
Bengaluru
Bio-technology industry in
Karnataka is estimated to
grow at 10% CAGR from USD
170mn. in 2011 to USD 272mn.
in 2017

PRICE FORECAST
* Figures in `/sq.ft
2012
HebbalRMV/Sanjay Nagar
`6,350
2017E
`8,230
`9,145
`4,250
DESTINATION
HEBBAL
Hebbal was once the end of the northern city limit
of Bengaluru. However with Bengaluru’s
horizontal growth, Hebbal has witnessed a
complete make-over in the last decade. Hebbal,
previously, endowed with a calm and serene
environment has now become quite active and
lively. Hebbal gained importance as a destination
with the establishment of Bengaluru International
Airport near Devanahalli which is 30 km. away
from Hebbal. It has now emerged into one of the
IT/ITeS hub, housing many tech parks and
campuses of IT companies. The infrastructure of
Hebbal is outstanding; it has well linked roads
further enhanced once the monorail, HSRL and
Metro commence in the next 4-5 years that will
connect the city-centre with the airport. This is
expected to immensely increase the residential
prices in Hebbal.
There was a dearth of residential projects in
Hebbal before 2008. It witnessed the launch of a
mere 110 residential units in 2008.
Developers got attracted to this destination post
Airport near Devanahalli in 2008. On account of
this, 372 new residential units were launched in
2010, which on a year-on-year basis registered a
rise of 285%.
As on September 2012, 557 units out of the total
1,604 units launched were unsold, implying 34.7%
of the total inventory as unsold.
We have benchmarked Hebbal to RMV/Sanjay
Nagar which is an established micro-market and
has characteristics similar to Hebbal. Going
forward, we expect the absorption rate to
increase due to the reasons stated earlier and
this will positively impact prices in Hebbal.
Currently, Hebbal prices are 33% lower than our
benchmarked micro-market. We forecast this
discount to narrow down to 10% by the end of 2017
resulting in Hebbal prices moving up from
`4,250/sq.ft. to `8,230/sq.ft.
2007 2008 2009 2010
1,800
1,500
1,200
900
600
300
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF HEBBAL
2011 2012*
1%
33%
8%
35%
Launches
2007 2008 2012*2009 2010 2011
TREND IN HEBBAL
110
97
372
666
721 units launched
and 233 units absorbed in
last 21 months in Hebbal
No.ofUnits
INVESTMENT
advisory REPORT
5% 4%
We forecast prices in
Hebbal to appreciate by
94% from 2012 to 2017
305
55

PRICE MOVEMENT
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
* Figures in ` per sq.ft
2013E 2014E 2015E 2016E 2017E2007 2008 2009 2010 2011 2012
Hebbal RMV/Sanjay Nagar Discount Margin
`3.6 mn.and
`5.3 mn. are the
minimum ticket size for
investment in Hebbal for a
2 BHK and 3 BHK Apartment
respectively
Investment Options in Hebbal
INVESTMENT TICKET SIZE
Apartment Size in sq.ft. Ticket Size in ` mn.
SELECT PROJECTS
Source: Knight Frank ResearchSource: Knight Frank Research
Project Developer No. of Launch Completion
Units Date Date
Waters Equinox 380 Sep-11 Mar-16
Edge
Sobha Sobha 498 Jun-11 Mar-15
City Developers
1250 - 1850 5.3 - 7.9
850 - 1100 3.6 - 4.7
3BHK
2BHK
INVESTMENT
advisory REPORT
33%
10%

Launches
2007 2008 2012*2009 2010 2011
TREND IN KR PURAM
DESTINATION
KR PURAM
enhanced the connectivity; the commute time to
minutes. Hence, KR Puram-Budigere Cross stretch
has emerged as a good destination. Proximity to
Puram as there is still some supply overhang of
the previous year.
impact prices in KR Puram. Currently, KR Puram
prices moving up from `3,245/sq.ft. to
`
2007 2008 2009 2010
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF KR PURAM
2011 2012*
6,095 units launched
in KR Puram since 2007, of
which 42% launched in last
33 months
No.ofUnits
INVESTMENT
advisory REPORT
CONNECTIVITY TO
IMPORTANT LOCATIONS
13
km
52
mins
13
km mins
881
254
1,118
414
Over the next years,
we expect KR Puram to
follow in terms
of price
We forecast prices in KR
Puram to appreciate by
91% from 2012 to 2017

`3.1 mn. and
`4.7 mn. are the
minimum ticket size for
investment in KR Puram for
a 2 BHK and 3 BHK
Apartment respectively
SELECT PROJECTS
Units Date Date
Purva Puravankara 306 Mar-11 Sep-14
Midtown
Pashmina Pashmina 250 Jan-12 Dec-14
Waterfront Developers
Purple Purple 135 Jan-11 Dec-13
Woods Estates
1450 - 2100 4.7 - 6.8
950 - 1220 3.1 - 4.0
3BHK
2BHK
INVESTMENT
advisory REPORT
PRICE MOVEMENT
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
KR Puram Discount Margin
2013E 2014E 2015E 2016E 2017E2007 2008 2009 2010 2011 2012
PRICE FORECAST
2012
KR Puram
`5,175
2017E
`6,200
`7,370
`3,245
37%
15%
Investment Options
in KR Puram

INVESTMENT
advisory REPORT
HIDDEN GEM
Yelahanka
CONNECTIVITY TO
IMPORTANT LOCATIONS
FROM YELAHANKA
* By road
Distance
18
km
17
km 19
km
Yelahanka located further north of Hebbal is at a
distance of 19km. from the Bengaluru
International Airport (BIA). It was initially
envisaged as the satellite city of Bengaluru, but is
now a part of the BBMP – The Municipal
Corporation of Bengaluru. The NH-7 provides
excellent connectivity with the airport as well as
the city centre.
The destination gained prominence only after the
commencement of BIA at Devanahalli. However,
this was the sole reason for the swift rise in the
real estate prices of Yelahanka. The current prices
announced projects, which we believe will see
light only after 2017. As on date, Yelahanka is still
short of social infrastructure including basic
amenities like water and electricity. Moreover, the
organised retail market is still non-existent in this
destination.
The Government of Karnataka has proposed
numerous infrastructure projects including
widening of elevated road, High Speed Rail Link
and Metro Rail to improve the connectivity
between the airport and Bengaluru City Centre.
Also, commuter rail system has been planned to
connect Devanahalli with Yeshvantpur via
Yelahanka.
Further, the Government of Karnataka has formed
Bengaluru International Airport Area Planning
Authority (BIAAPA) to ensure organized
development of Bengaluru North, Devanahalli
and Dodaballapur Taluka. A total investment of
`1,150bn. has been earmarked in order to make
North Bengaluru a self-sustaining business hub.
Some of the major investments are Information
Technology Investment Region (ITIR) in
Devanahalli, Aero SEZ an aviation hub in
Devanahalli, Devanahalli Business Park and
Aerotropolis. The Government of Karnataka is in
talks with banking giants to set up a Global
Financial District near Devanahalli. These
developments are expected to completely change
North Bengaluru from an unexciting location to a
bustling self-sustaining city.
Cumulatively, the above developments have the
potential to generate 4 mn. direct and indirect
jobs in North Bengaluru over the next two
decades. Hence, we believe that Yelahanka’s
eventual evolution as a Peripheral Business District will
give birth to a thriving resiential real estate destination.
BBAE LH
Yelahanka located
further north of Hebbal is
at a distance of 19 km
Yelahanka is still short of
social infrastructure and
basic amenities
Bengaluru International
Airport Area Planning
Authority formed by
Government of Karnataka
Destination gained
prominence only after the
commencement of
Bengaluru INTERNATIONAL
AIRPORT

INVESTMENT
advisory REPORT
8.701.9%6.56 2.9%
CHENNAI METROPOLITAN REGION POPULATION
5.42 2.4%
1991 2001 2011
Chennai, the capital of Tamil Nadu, is the fourth most populous city in
India and serves as a gateway to Southern India through its strategically
located port. Chennai’s urban agglomeration, also known as the Chennai
Metropolitan Region (CMR), is spread over 1,189 sq.km. and consists of
parts of Thiruvallur and Kancheepuram districts apart from Chennai city.
As per Census 2011, the total population of CMR was 8.7 mn.
The development of the CMR is entrusted to the nodal planning agency
Chennai Metropolitan Development Authority (CMDA) which prepares the
master plan for the region. CMDA in September 2008 prepared the
Second Master Plan for Chennai Metropolitan Area, 2026 outlining the
detailed development plan along with land use, transportation, housing
and other important aspects of the CMR.
CHENNAI

Major Roads
Railway Line
South Zone
West Zone
Central Zone
North Zone
Price Contours (`/ sq.ft)
U/C Metro Corridor I
U/C Metro Corridor II
INVESTMENT
advisory REPORT
CHENNAI MAP

Chennai Metropolitan
Region is spread over
1,189 sq.km. with a
population of
8.7 mn.
Market
Overview
DESTINATIONS
Central Nungambakkam, Boat Club, Anna
Nagar, Kilpauk, T Nagar,Mylapore,
R.A Puram
West Sriperumbudur, Mogappair, Porur,
Ambattur, Poonamallee
North Ayanavaram, Tondiarpet,
Madhavaram, Perambur
South Old Mahabalipuram Road (OMR),
GST Road, Adyar, Velachery,
Medavakkam
Chennai is divided into four broad zones: North,
Central, South and West. It may be noted that
being a coastal city, Chennai does not have an
eastern market and faces the Bay of Bengal.
North Chennai is primarily an industrial area
dotted with various locomotive workshops and
port related activities. The two major ports
namely Chennai Port and Ennore Port are located
in this region. Non-availability of vacant land,
narrow arterial roads and lack of employment
opportunities have restricted the real estate
growth of this region as compared to other parts
of the city. Destinations such as Tondiarpet,
Madhavaram and Perambur are the primary
residential locations with large under-
construction projects in these areas. Residential
demand is driven by the business community,
traders and public sector employees here.
Central Chennai is the commercial heart of the
Central Business District (CBD) areas of Anna
Salai, Nungambakkam, Egmore, Nandanam and
others. Excellent connectivity with various parts
of the city, good physical and social infrastructure
and presence of organized retail have ensured
the highest property prices in this part of the city.
Locations such as Boat Club Road, Poes Garden,
Nungambakkam, T Nagar, Mylapore and RA
Puram are some of the prominent residential
areas. Majority of the residential development in
the central locations comprises bungalows and
independent residential units while some
pockets like Alwarpet, Kilpauk and Anna Nagar
are witnessing growth in high-rise construction as
well.
The western part of the city has some of the most
upcoming locations. The saturation of land banks
in Central Chennai has seen westward movement
of residential development. Electronic hardware
corridor in Sriperumbudur and Auto & Auto
Ancillary manufacturing units in Oragadam have
residential units in this region. Multinationals like
Nokia, Dell, Samsung, Saint-Gobain, Renault-
Nissan and Hyundai have set up their units here.
However, lack of social infrastructure, absence of
organized retail and distance from the city centre
have restricted growth of the residential market in
this zone.
South Chennai, along the Old Mahabalipuram
Road (OMR) and Grand Southern Trunk (GST) road
is rapidly developing as a self-sustaining hub
with the presence of a large number of IT SEZs, IT
Parks and manufacturing units. Nodes such as
Perungudi, Sholinganallur and Siruseri on the
OMR along with Tambaram and Mahindra World
City on GST road have created enormous
employment opportunities in this region. This has
inherently led to the development of the
residential market in South Chennai.
Additionally, the focus of the state government in
providing excellent road connectivity along these
nodes has further helped in the development of
this region.
2007 2008 2012*2009 2010 2011
TREND IN CHENNAI
14,441 15,505
12,702
23,803
26,152
12,633
INVESTMENT
advisory REPORT
Chennai market has
witnessed the launch of
more than 105,236
units since 2007

2007 2008 2009 2010
5% 4%
7%
12%
120,000
100,000
80,000
60,000
40,000
20,000
No.ofUnits
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF CHENNAI
2011
21%
2012*
25%
The advent of the IT sector along with the setting
up of large manufacturing units by multi-national
companies have changed the dynamics of
Chennai real estate market. Apart from
generating thousands of new jobs for the local
residents, Chennai has been attracting a large
pool of migrants into these sectors from across
the country. This has enabled the real estate
market to grow at a tremendous rate during the
which witnessed the launch of more than 105,236
units since 2007.
During 2010 and 2011, more than 49,955 units
were launched in Chennai. However, only 33,938
units were absorbed during this period resulting
percentage.
nine months of 2012 has further increased despite
the number of new launches falling drastically.
This is primarily because of the supply overhang of
the previous years.
Chennai is land locked on the eastern side by the
Bay of Bengal, thereby restricting its growth to
the remaining three sides. Backed by excellent
rail and road connectivity, the city has been
expanding three ways over the last few decades.
However, development on the northern side is
subdued as compared to West and South
Chennai mainly due to the presence of various
industrial pockets and port related activities here.
Over the last few years, the focus of developers
has been shifting from Central Chennai to the
peripheral areas of South and West Chennai due
to greater availability of jobs here.
Central NorthWest South
ZONE-WISE SPLIT OF UNDER
CONSTRUCTION UNITS
65%
23%
5%
7%
As of Q3 2012, 25% of
the total units remain
unsold
INVESTMENT
advisory REPORT
33,938
units were absorbed
during 2010 and 2011
65%
of the under
construction units are
located in South Chennai

Most of the upcoming
infrastructure
projects will be
operational before
2017
CONNECTIVITY DESCRIPTION CURRENT EXPECTED
STATUS COMPLETION
Outer Ring
Road I
Outer Ring
Road II
Vandalur - The six-lane highway is expected to Under 2012-13
Nazarathpet - decongest the city road by connecting construction
Nemilichery the GST Road (NH 45) with Chennai-
Bangalore Highway (NH 4) and NH 205
Nemilichery - Will connect NH 205 with the Chennai- Land 2016-17
Nallur - Minjur Kolkata Highway (NH 5) and TPP road Acquisition
at Minjur through a six-lane highway
UPCOMING SUBURBAN RAIL NETWORK
CONNECTIVITY DESCRIPTION CURRENT EXPECTED
STATUS COMPLETION
Chennai
Monorail
Corridor I
Chennai
Monorail
Corridor II
Chennai
Monorail
Corridor III
Chennai Metro
Corridor I
Washermenpet - Will enhance connectivity between Under 2015
Chennai Central Chennai Airport and central Chennai via construction
Station - Guindy
Chennai Airport
Chennai Metro Chennai Central Under 2015
Corridor II Station - between city centre and St. Thomas Construction
Annanagar - Mount
Vadapalani -
St. Thomas Mount
Vandalur - Better connectivity for Vandalur and Bidding 2016-17
Velachery Tambaram with city centre via Valechery stage
Poonamallee - Will connect West Chennai via Porur Bidding 2016-17
Kathipara stage
Poonamallee - Enhance connectivity of Poonamallee as Bidding 2016-17
Vadapalani Vadapalani is also a node on Metro stage
Corridor II
Employment Indicators in Chennai
Being a port city, Chennai has historically been at
an advantage compared to other metro cities of
South India like Bangalore and Hyderabad. Export
oriented manufacturing industries have always
been attracted to Chennai due to the presence of
two major ports with excellent road and rail
connectivity from all the three sides of India. Auto
& Auto Ancillary sector is one of the largest
employers among the various manufacturing
INVESTMENT
advisory REPORT
industries present in the periphery of Chennai.
Apart from the manufacturing plants of Hyundai,
Renault-Nissan, Daimler and Eicher Motors, there
are numerous Auto Ancillary units spread across
the industrial corridor of Sriperumbudur-
Oragadam. Additionally, manufacturing plants of
Ford, BMW and Sundram Fasteners on GST road
have also created large scale employment in the
Auto sector.
IT/ITeS and
Automobile
sectors to be the driving
factors for Chennai’s
growth

South
Chennai, which
will host three-fourth of
the total ock, is
expected to witness
maximum growth in the
residential market over
the next 5 years
Although the manufacturing sector is expected to
grow strongly, going forward, this zone will not be
employment in the IT/ITeS sector. Higher
purchasing power and preference to reside in
close proximity of their work area, makes IT/ITeS
employees a dominant force in driving the
residential market of any region.
South Chennai, which will host three-fourth of the
number of manufacturing units located on the
The focus of Tamil Nadu government over the last
decade in promoting OMR as an IT/ITeS
destination along with the setting up of Mahindra
World City on GST road has created immense
employment opportunities in South Chennai.
Additionally, the proximity to Chennai airport,
presence of arterial roads and availability of vast
vacant land parcels has enabled this zone to
rapidly grow into an emerging residential market.
Since 2000, a large number of IT/ITeS companies
have set up their operations in the numerous IT
Parks and IT SEZs on OMR and GST road. The
growth in IT/ITeS based employment, gradually
sowed the seeds of a bustling residential market
in this zone. Preference of employees in staying
compared to Central Chennai sustained the
development of a healthy market in this zone.
Growth of the residential market in South Chennai
has been primarily along the three arterial roads
of OMR, GST road and ECR. However, in the last
few years a lot of development has taken place
within the destinations located between OMR and
GST road. The advantage of being centrally
SOUTH CHENNAI
2007 2008 2009 2010
70,000
60,000
50,000
40,000
30,000
20,000
10,000
No.ofUnits
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF SOUTH CHENNAI
2011
2012*
9% 6%
11%
13%
22%
26%
located with easy access to both these roads has
led to many home buyers preferring these
destinations.
South Chennai has witnessed the launch of
68,914 residential units since 2007. Of these, a
total of 50,666 units of this have been absorbed
as of Q3 2012, with 26% remaining unsold. There
has been a steady rise in the percentage of
unsold units over the years, as the pace of
absorption has not been able to keep up with the
pace of new launches. A total of 29,245 units
were launched in South Chennai during 2010 and
2011, of which only 19,550 units were absorbed.
Taking a cue from the market, developers have
become cautious before launching any new
project and only 61 new projects have been
launched in 2012 as compared to 147 during
the previous year. Although the number of new
launches has reduced drastically, the excess
supply from the previous years is impacting the
unsold units’ percentage. Additionally,
has been abysmally low.
INVESTMENT
advisory REPORT
GST road, is expected to witness maximum
any mass rapid transport system on the IT
Corridor of OMR has resulted in many employees’
area. This phenomenon is expected to continue
for the next few years as no new mass rapid
transport system is planned on the OMR. Hence,
growth in the IT/ITeS sector of the city will directly
68,914 residential
units have been launched
in South Chennai since
2007. Of these, a total of
50,666
units have been absorbed
as of Q3 2012

St. Thomas
Mount
Chennai
Airport
Kunrathur
Paranur
Chengalpattu
Anna
International
Airport
B A Y
O F
B E N G A L
ChennaiByepass
ITCorridor
OldMamallapuram
SH 121
SH
121
GreatSouthernTrunkRoa
d
GreatSouthernTrunkRoa
d
ChennaiBypass
Ol
dMahabalipuramRoad
EastCoastRoadEastCoastRoad
OldMahabalipuramRoad
EastCoastRoad
VelacheryRoad
East Coast Link Road
Velachery Road
G
r
ea
t
Southern
Trun
k Road
Sardar Patel Road
NH
45
NH
45
NH
45
NH
4
NH
45
ToMamallapuram
ToMamallapuram
ToChengalpattu
TAMBARAM
GUDUVANCHERI
VELACHERY
PALLAVARAM
CHROMEPET
THIRUPORUR
SIRUSERI
SRIPERUMBUDUR
CHENGALPATTU
SITHALAPAKKAM
MEDAVAKKAM
ADYAR
VANDALUR
PALLIKARNAI
Proposed Monorail
Major Roads
U/C Metro Corridor I
U/C Metro Corridor II
Airport
Railway Line
Benchmark location
Top destination
Employment Hubs
INVESTMENT
advisory REPORT
SOUTH CHENNAI MAP

Existing
Infrastructure
up their campuses along this route. ELCOT SEZ
space developments in these segments.
However, lack of social infrastructure and
absence of organized retail are the major
drawbacks of these segments and hence
preference among home buyers to reside here is
low. Some of the major residential destinations
located here are Thuraipakkam, Sholinganallur,
Navallur, Egattur and Padur.
GST road, also known as NH-45, is one of the
busiest National Highways in Southern India and
starts from Kathipara junction in Guindy till Theni.
It is a four-lane highway with various suburban
destinations and the Chennai airport located
along the road. The setting up of Ford India’s
manufacturing plant at Maraimalai Nagar was one
However, commencement of the 1,550 acres
Mahindra World City in 2005 at Chengelpet led to
a dramatic change in the development of this
corridor with huge employment opportunities
being created across the IT/ITeS, Auto & Auto
Ancillary and Apparel sectors. In addition to this,
setting up of Shriram’s The Gateway and Estancia
IT SEZ have further facilitated growth of the
IT/ITeS sector on this road.
Residential development on the GST road has
been centred along the hubs of Chromepet,
Tambaram, Vandalur, Maraimalai Nagar and
Singaperumalkoil. The seamless connectivity
throughout the road leaves little variation in
terms of price among the various residential
destinations located on GST road, as the time
taken to travel between them is very marginal.
ECR, also known as the Entertainment Corridor, is
a two lane highway built along the coast of the
Bay of Bengal connecting Chennai with
Pondicherry. The road starts at Thiruvanmiyur in
South Chennai and runs parallel to OMR and
the last ten years this road has witnessed
considerable real estate development with
numerous theme parks, boat houses, beaches,
5-star hotels and pubs dotted along the stretch.
residential development along this road has been
restricted to second homes and villas.
GRAND SOUTHERN TRUNK (GST)
ROAD
EAST COAST ROAD (ECR)
OLD MAHABALIPURAM ROAD
(OMR)
OMR, also known as the IT Highway or Rajiv
Gandhi Salai, starts from Madhya Kailash
Junction near Adyar till Mahabalipuram. It is a six-
lane highway being developed in two phases,
with Phase I of 20.1 km. from Madhya Kailash
Junction to Siruseri already under operation since
2008. The work on Phase II that will connect
Siruseri to Mahabalipuram is still underway.
Phase II is expected to be ready in another 3-4
years. Phase I of OMR is further divided into three
segments based on toll plazas. The road from
Kailash Junction to Perungudi toll plaza is known
Proximity to the city centre, presence of an
malls has enabled rapid development of various
segment. Some of the major IT/ITeS projects such
as TIDEL Park, Ramanujan IT Park, Ascendas
International Tech Park, RMZ Millenia Business
Park and SP Infocity are located in this segment.
The road from Perungudi toll plaza till Egattur toll
plaza is known as the second segment and the
road beyond Egattur as third segment. These two
segments of the OMR have also witnessed
tremendous residential development over the last
few years, as many IT/ITeS companies have set
INVESTMENT
advisory REPORT
Lack of social
infrastructure and
absence of organized
retail have restricted the
growth of residential
market on OMR
beyond toll
plaza
Commencement of the 1,550
acres Mahindra
World City
led to a dramatic change
in the development of the
GST Road with huge
employment opportunities
being created
TREND IN SOUTH CHENNAI
2007 2008 2012*2009 2010 2011
9,185
11,889
10,355
12,505
16,740
8,240

PRICE FORECAST
* Figures in `/sq.ft.
2012
PallikarnaiAdyar
`12,000
2017E
`8,100
`15,858
`4,200
Pallikarnai has witnessed
the launch of 1,684
units since 2007, of which
1,382 units have been
absorbed till Q3 2012
DESTINATION
PALLIKARNAI
Pallikarnai, which is located a few km. south of
Velachery, is well connected by road to all the
major employment hubs in south Chennai.
However, absence of rail network has restricted
the growth in prices of this destination. Going
forward, this is about to change as the upcoming
Vandalur-Velachery Monorail project will
Pallikarnai with the GST Road and the city centre.
From 2007 to 2010, Pallikarnai witnessed a
healthy absorption trend. However, the sudden
surge in new launches during 2011 along with a
unsold units’ percentage during the year.
Currently, the percentage of unsold units stands
at 18%.
The dynamics of Pallikarnai are expected to
change dramatically in the coming years due to
the upcoming Vandalur – Velachery Monorail
network. This will narrow down the current price
Currently, prices in Pallikarnai are 65% lower than
Adyar, which is the most established market in
this discount rate to narrow down to 49% due to
various reasons discussed before. This will result
in prices increasing from `4,200/sq.ft to
`8,100/sq.ft by 2017.
2007 2008 2009 2010
2,000
1,600
1,200
800
400
No.ofUnits
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF PALLIKARNAI
2011
2012*
2%
4%
16%
TREND IN PALLIKARNAI
2007 2008 2012*2009 2010 2011
228
94
900
181
52
230
INVESTMENT
advisory REPORT
Currently, the percentage
of unsold units stands at
18%
Pallikarnai to increase by
93% in the next 5 years
2% 2%
18%

PRICE MOVEMENT
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
65%
49%
Pallikarnai Adyar Discount Margin
` 3.3 mn. is the minimum
ticket size investment for
a 2 BHK apartment in
Pallikarnai
Investment Options in Pallikarnai
1325 - 2136 5.6 - 8.9
790 - 1766 3.3 - 7.4
3BHK
2BHK
2.4 - 2.61BHK571 - 623
INVESTMENT
advisory REPORT
Before
2008
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
Appartment Sizes start
from 571 sq.ft. for a 1
BHK in Pallikarnai
SELECT PROJECTS
Units Date Date
Mapleton Appaswamy 473 Jan-11 Apr-13
Akash Rajkham 87 Apr-12 Dec-13
Ganga

PRICE FORECAST
2012
MedavakkamAdyar
`12,000
2017E
`7,700
`15,858
`3,800
Medavakkam has witnessed
the launch of 5,707
units since 2007, of which
4,147 units have been
absorbed till Q3 2012
DESTINATION
MEDAVAKKAM
Medavakkam, which is around 6 km. south of
Velachery, is another emerging residential hub
with excellent road connectivity with
Sholinganallur on the OMR and Tambaram on GST
road. Sharing similar characteristics with
Pallikarnai, the prices in this destination have
moved in the same range as Pallikarnai over the
Medavakkam witnessed a large number of new
launches during 2010 and as it lacked the
capacity to absorb such a huge number, there
was a sudden jump in unsold inventory. During
2011 and 2012, the percentage of unsold
inventory increased further despite lesser number
of new launches due to the oversupply from the
previous year. As of Q3 2012, the unsold
inventory in Medavakkam stands at 27%.
to follow Pallikarnai in terms of price as the
will accrue equally to this destination too. The
down from 68% in 2012 to 51% by 2017, resulting
in a price rise from `3,800/sq.ft to `7,700/sq.ft.
2007 2008 2009 2010
6,000
4,500
3,000
1,500
No.ofUnits
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF MEDAVAKKAM
2011
2012*
3% 3%
26%
27%
TREND IN MEDAVAKKAM
2007 2008 2012*2009 2010 2011
3%
22%
870
621
315
2,411
1,256
233
INVESTMENT
advisory REPORT
Medavakkam to increase by
103% from 2012 to 2017

4BHK
3BHK
2BHK
1BHK
PRICE MOVEMENT
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
68%
51%
Medavakkam Adyar Discount Margin
` 3.4 mn. and
` 4.6 mn. are the
minimum ticket Sizes for
investment in Medavakkam
for a 2 BHK and 3 BHK
respectively
Investment Options in Medavakkam
SELECT PROJECTS
Units Date Date
Purva Purvankara 756 Mar-11 Mar-14
Windermere
Spring Navin 280 Oct-10 Dec-14
Field Housing
Majestica Vasavi 260 Jul-10 Dec-14
Housing
Indiabulls Indiabulls 900 Sep-10 May-14
Greens
Source: Knight Frank Research560 - 715
902 - 1254
1220 - 2161
2450 - 2710 9.3 - 10.3
4.6 - 8.2
3.4 - 4.8
2.1 - 2.7
INVESTMENT
advisory REPORT
Before
2008
2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E
Over the next years,
we expect
Medavakkam
to follow Pallikarnai in
terms of price

INVESTMENT
advisory REPORT
47.383.1%37.10 2.5%
NATIONAL CAPITAL REGION POPULATION
27.36 3.2%
1991 2001 2011
The National Capital Region (NCR) is spread over 33,578 sq. km. making it
one of the largest urban agglomerations in the world. It was initially
with the foremost objective of creating a metropolitan area around Delhi,
so as to ease out the pressure on the national capital. The NCR
encompasses of the entire National Capital Territory of Delhi as well as
select urban areas from its neighbouring states of Haryana, Rajasthan
and Uttar Pradesh (UP). By virtue of this development, Gurgaon, Noida
and Greater Noida emerged as the major sub-regions of the NCR.
DELHI-NCR

DELHI-NCR MAP
INVESTMENT
advisory REPORT
A National Capital Region Planning Board (NCRPB) was formed under the NCR Planning
Board Act 1985, by the Ministry of Urban Development. The central focus of the board
was to coordinate the development of the NCR with the State Governments of Haryana,
Uttar Pradesh and Rajasthan. Led by Gurgaon and Noida, the NCR has witnessed
substantial growth as a centre for e-commerce associated businesses including
Pharmaceuticals contribute the most towards the economy of this region.
Proximity to the national capital and enhanced connectivity due to the metro line
across the NCR, has positioned it as the most preferred destination for corporate and
service industry the region witnessed huge immigration. As per Census 2011, the
population of the NCR witnessed a 2.5% annual rise during the decade 2001-2011, the
total population now stands at 47.38 mn.
STATE/UT REGIONS AREA (SQ. KM.)
Jhajjhar, Panipat
10,853
Bulandshahr
and Baghpat
7,829
Delhi Delhi - National Capital Territory 1,483
Haryana
Sonepat, Rewari, 13,413
and Palwal
UP Meerut, Ghaziabad, Gautam
Budha Nagar,
Rajasthan Alwar
Total 33,578
Major Roads
Metro Corridor I
Metro Corridor II
South Zone
West Zone
Central Zone
North Zone
Price Contours (`
50001200035000
FARIDABAD
GHAZIABAD
Major Roads
Railway Line
Under Construction Metro
Delhi
Gurgaon
Faridabad
Noida
Greater Noida
Ghaziabad
Price Contours (`

National Capital Region
(NCR) is spread over
33,578 sq.km.
Market
Overview
DESTINATIONS
Noida
Delhi Rohini, Ashok Vihar, Civil Lines,
Greater Kailash, South Extension,
Hauz Khas, Anand Vihar, Pashchim
Vihar, Janakpuri, Raja Garden,
Tagore Garden, Rajouri Garden
Gurgaon Dharuhera, Golf Course Road,
Sohna Road, MG Road, NH-8,
Dwarka Expressway, Manesar
Noida/Greater Noida, Noida Extension, Noida-
Greater Noida Expressway
Faridabad Neharpar, Dayal Bagh Colony,
Sainik Colony
Ghaziabad Crossing Republik, Indraprastha
Yojna, Raj Nagar, Raj Nagar
Extension
Alwar Neemrana, Bhiwadi, Behror
Highway, Station Road
The NCR is divided into six broad zones: Delhi,
Gurgaon, Noida/ Greater Noida, Faridabad,
Ghaziabad and Alwar.
NATIONAL CAPITAL TERRITORY –
DELHI
populated city in the world. It is situated in
central north India and stands on the west bank
of Yamuna River. It is spread over an area of 1,483
sq. km., 216 m. above sea level and has a
population of around 16.75 mn. Delhi is the
political hub of India comprising headquarters of
all the political parties as well as important
city of royal power to the seat of bureaucratic
power.
It has also transpired as one of the central hubs
of North India's trading and service industry.
Delhi has emerged as the major commercial
centre for small, medium and large scale
industries. The information technology (IT),
electronic, textile and fashion industry are also
the major contributors to Delhi's economy.
Based on its geographical locations the city is
divided into North Delhi, East Delhi, West Delhi
and South Delhi.
North Delhi houses numerous small scale
industries and has emerged as one of the major
markets of small industries. Low-rise
condominiums and narrow streets full of chaos
are the major characteristic of North Delhi. This
refrains major white-collared executives from
more modern New Delhi and south Delhi areas.
Chawri Bazaar, Chandini Chowk, Mori Gate,
Kashmere Gate, Sadar Bazaar and Tis Hazaari are
some of the major micro-markets of Old Delhi.
East Delhi is largely inhabited by the middle-
income working class population. The residential
real estate market comprises the independent
houses and DDA apartments. The 2010 Common
Wealth Games held in East Delhi completely
changed its landscape and gave the necessary
growth impetus to this region. Delhi Metro has
enhanced the connectivity of East Delhi with
major destinations like Delhi City Centre and
Noida. Some of the major micro-markets of East
Delhi are Akshardham, Pushpanjali Enclave,
Vivek Vihar, Patparganj, Lakshmi Nagar, Mayur
Vihar, and Preet Vihar.
INVESTMENT
advisory REPORT
ZONE-WISE SPILT UP OF
UNDER CONSTRUCTION UNITS
Delhi
Gurgaon
Noida
Gt. Noida
Faridabad
Ghaziabad
23.6%
0.8%
2.0%
33.7%
18.8%
21.2%
Population of the NCR
increased by 20 mn. in
THE last 2 decades
55% of the residential
under-construction units
in Noida and Greater Noida

West Delhi is primarily a residential hub with a
cosmopolitan population. Sound infrastructure
and a well-developed organized retail market
Additionally, West Delhi region gained
prominence due to its proximity to the
commercial hubs of Janakpuri, Rajaouri Gardens
and Punjabi Bagh. Over the years, it has emerged
as the most sought after destination thereby
making it one of the major posh localities of
Delhi. Patel Nagar, Punjabi Bagh, Pitampura,
Rohini, Dwarka, Janakpuri and Rajouri Garden are
some of the major micro-markets of this region.
South Delhi
micro-market of Delhi. The residential real estate
comprises independent houses and bungalow
including embassies and consulates are located
here. By virtue of this, South Delhi has become
the most sought after destination among the
executives. High residential demand and dearth
of new supply has propelled the residential prices
in this part of Delhi.
Its proximity to the international airport,
educational institutions and to the city centre has
made this region the most preferred destination.
Moreover, proximity to the commercial hub of
Nehru Place and Lajpat Nagar coupled with the
presence of organized retail further augmented
the demand for this region. Some of the major
micro-markets are Greater Kailash, Chanakyapuri,
Lajpat Nagar, Nehru Place, Defence Colony,
Vasant Kunj, Hauz Khas and Friends Colony.
GURGAON
Gurgaon was developed to ease out the
burgeoning growth of New Delhi. It is one of the
four major satellite cities of the NCR, located 30
518,200 residential
units launched in DELHI NCR
since 2007
INVESTMENT
advisory REPORT
km. south of New Delhi. The evolution of Gurgaon
coincides with the 1990s liberalization of the
Indian economy. Contemporary Gurgaon is dotted
with high-rise buildings and spectacular malls.
Over the years Gurgaon earned the sobriquets of
the 'Millennium City' and the 'Mall City' of India.
centre of Haryana but also one of the most
hubs in the world. Further, it is also a major hub
for the automobile, telecom and garment
manufacturing industries. Major factors like
availability of huge land parcels, quality
commercial properties, proximity to the
international airport, favourable government
policies and access to the talent pool lured many
corporates to Gurgaon.
Some of the prime residential and commercial
micro-markets of Gurgaon include Mehrauli-
Gurgaon Road (MG Road), Golf Course Road, Golf
Course Extension Road, Sohna Road and NH-8.
These locations are well-connected with New
Delhi through the six-lane NH-8 and MG Road.
The NH-8 also provides quick and easy access to
the New Delhi International Airport. Further, a 14
km. Southern Peripheral Road (SPR) covers all the
major developments in this part of Gurgaon and
connects MG Road and Golf Course Extension
Road with NH-8. The connectivity between the
adjoining markets of Delhi and Noida is further
enhanced by the existing metro-rail. Further, a
new residential belt has emerged along the
upcoming 8 lane 18 km. Northern Peripheral Road
(NPR) or Dwarka Expressway. This expressway
would act as an alternative route for the existing
Delhi-Gurgaon Expressway. A 135 km. Kundli-
Manesar-Palwal (KMP) Expressway is under
construction, once completed this expressway
will provide connectivity with the major industrial
commercialization in Manesar.
2008 2009 2010
9%
600,000
500,000
400,000
300,000
200,000
100,000
No.ofUnits
Supply Demand % of Unsold Units (RHS)
RESIDENTIAL DEMAND-SUPPLY ANALYSIS OF NCR
2011
19.2%
2012*
23.8%
2007
9.4%
7.8%
14.1%

Golf Course Road is the most sought after
destination owing to its proximity to South Delhi
(a posh locality) and hence boasts of the highest
residential property prices in Gurgaon. MG Road
is a self-sustaining micro-market with the
presence of well-developed organised retail
market, superior residential development and
Infospace are some of the major commercial
buildings. Golf Course Extension Road is catching
up with the Golf Course Road with its quality
residential development.
NOIDA
situated to the south-east of Delhi and spread
over 20,316 hectares. New Okhla Industrial
Development Authority is the nodal agency for
the overall development of this region. Noida has
emerged as one of the major satellite cities of the
NCR after Gurgaon. Noida is well connected with
Yamuna Expressway provides connectivity with
Agra via Mathura; an eight-lane Delhi-Noida-Delhi
Ghaziabad. Noida has the Delhi Metro facility till
the City Centre from Delhi and also up to Vaishali.
The metro will further expand in Noida and also
cover Noida Extension and Greater Noida.
Over the years, Noida has developed into an
IT/ITeS hub. A number of IT/ITeS companies like
in the city. It is now swiftly emerging into a hub
for automobile ancillary units with multinational
emerged as the major commercial hubs in Noida.
GREATER NOIDA
Greater Noida is a new suburb located 20 km from
part of the NCR. Greater Noida Industrial
Development Authority (GNIDA) is the nodal
agency for the overall development of this region.
crafted very meticulously by the GNIDA. Wide
roads along with service roads for all the major
arterial roads have been built. The Noida-Greater
395,650residential
units absorbed in Delhi NCR
since 2007
INVESTMENT
advisory REPORT
Noida Expressway and the Yamuna Expressway
provides connectivity between Noida, Greater
Noida and Agra. Greater Noida also boasts of
on the International Motor Racing Circuit.
Moreover it is also emerging as a planned
industrial region and an educational hub.
FARIDABAD
gained prominence due to its proximity to the
National Capital Territory (NCT) of Delhi, Gurgaon
from the Ashram Crossing on Mathura Road. The
Delhi-Mathura-Agra Road (NH-2) passes through
Delhi through the metro rail service which
manufacturing companies. Motorcycles, tyres,
auto-ancillaries, refrigerators, tractors and
switch-gears are some of the major industries in
Escorts and Castrol are some of the major
2007 2008 2012*2009 2010 2011
TREND IN NCR
Source:
145,395 residential
units launched in Noida
during 2007-12

Reliance Energy has
proposed a 1000 hectares
multi-product SEZ in
Ghaziabad
INVESTMENT
advisory REPORT
GHAZIABAD
Ghaziabad forming one of the major constituents
of the NCR is strategically located 20 km. to the
east of New Delhi. It is a planned industrial city
spread over 1,933 sq. km. Moreover, it also acts
as a main entrance for the state of Uttar Pradesh.
Ghaziabad Development Authority (GDA) is the
nodal agency for the overall development of the
city. The region has gained prominence due to its
proximity to the National Capital Territory (NCT) of
Delhi, Gurgaon, Noida and Meerut. The city's real
estate market witnessed high traction with an
improvement in the physical and social
infrastructure.
Two major arterial roads NH-24 and NH-58
passing through Ghaziabad, provide connectivity
with Lucknow and Badrinath respectively. To
decongest the existing highways, the GDA has
proposed the widening of the NH-24 from the
existing four lanes to six lanes. Further, metro rail
has enhanced the connectivity with other regions
of the NCR. Further, the connectivity within
Ghaziabad will improve with the expansion of the
existing metro rail from Dilshad Garden to New
Bus Stand located near the Meerut Road
crossing. Major residential micro-markets like
Vaishali, Indirapuram, Vasundhara and Raj Nagar
Extension have emerged along these highways.
Being an industrial hub it has over 14,000 small-
scale industries, majorly manufacturing defence
products, railway wagons, heavy chains, bicycles
and glassware. Besides many large multi-national
companies, banks, IT and telecom services have
set up their base here. Reliance Energy's
proposed 1,000 hectares multi-product SEZ,
existing manufacturing units of Coca-cola and ITC
have further augmented demand for residential
as well as commercial real estate in Ghaziabad.
ALWAR
Alwar is a district in Rajasthan (a state in India)
located to the south-west of Gurgaon. It is spread
over 8,380 sq.km. of which 262 sq.km. forms a
part of the National Capital Region (NCR).
Rajasthan State Industrial Development and
Investment Corporation Ltd. (RIICO) is the major
nodal agency for the development of Rajasthan.
RIICO has been a catalyst for the overall industrial
transformation of the state. Over the years with
progressive industrial policies by the state
government, the district is now able to boast of
various industrial hubs. Some of the major
commercial areas are Bhiwadi, Tapookara,
Khushkhera and Neemrana. These commercial
areas house sectors like cement, automobile,
glass & ceramics, mines & minerals, textiles and
bio-tech industry. Moreover, this region is one of
the nodes for the Delhi-Mumbai Industrial
Corridor (DMIC) and Dedicated Freight Corridor
(DFC).
Rajasthan government has signed an MOU with
JETRO (Japanese External Trade Organization) for
setting up units in Neemrana. This region is
equidistant from Delhi and Jaipur and is also an
important part of the DMIC. These factors have
propped up the demand for commercial as well as
residential real estate in this region.
The Bhiwadi Industrial Hub is a mere 45 km. from
the Gurgaon city centre. Proximity to the city has
augmented demand for the residential as well as
commercial real estate in Bhiwadi. It alone
houses around 2,500 small, medium and large
industries including MNC industrial units. Some
of the major companies having their set up in
Alwar are ‐ Honda Siel Car, United Breweries,
Lafarge, Jaquar, Amtek India and Shree Cement.
The landscape of the NCR market has witnessed a
sea change in the last decade mainly on account
of new master development plans. Moreover,
expressways and Metro Rail has enhanced
connectivity with all the parts of the region. These
have also changed the way people commute,
especially due to the Metro Rail. New Delhi being
the National Capital is perennially the most
sought after destination for commercial as well as
residential real estate. Further, to support the
burgeoning growth of New Delhi, newer
destinations like Gurgaon, Noida and Greater
Noida emerged in the peripheral region. Many
companies were attracted to these newer
destinations which were meticulously planned
and had a proper blend of residential and
commercial real estate developments. The NCR
account of new jobs being created by the
companies. Besides the inclination of the people
to reside closer to their work-place gave a growth
impetus to the residential real estate demand.
Since 2007, the NCR residential real estate
segment witnessed the launch of over 500,000
units.
During 2007 and 2009, the NCR residential
market witnessed an average new launch of
60,000 units per year. The arithmetic of new
launches changed completely in the last 2-3 years
owing to numerous launches of mega townships
in new destinations like Noida and Greater Noida.
Since 2009, the average residential launch per
year has increased two-fold to 120,000 units.
Alwar is one of the nodes
for the Delhi-Mumbai
Industrial Corridor (DMIC)
and Dedicated Freight
Corridor (DFC)

KF Investment Advisory Report Nov-2012

KF Investment Advisory Report Nov-2012

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