Real Estate Facilities Management | Project Services | Vestian

Q42018
VESTIAN
QUARTERLY
NEWSLETTER
THE CONNECT
INVESTMENT & CONSULTANCY SERVICES

• India’s GDP growth slowed down to 7.1% during July-September 2018, as compared
8.2% in the previous quarter. This is the slowest pace of growth in the past three
quarters, despite a strong industrial output that pegged manufacturing growth at 7.4%.
• The slowdown in the September quarter notwithstanding, the International Monetary
Fund, in its latest World Economic Outlook, has projected India’s economy to pick up in
2019 and has forecasted it to expand to 7.5% in FY20 and 7.7% in FY21.
• The total FDI investments in India, as per the Department of Industrial Policy and
Promotion, during July–September 2018 stood at USD 14.14 billion. However, FDI inflow
registered a decline of 11% during the first nine months of the current fiscal, the
quantum of investment standing at USD 22.66 billion.
• The four major cities of Bengaluru, Mumbai, Chennai and Hyderabad saw absorption of
approximately 8.64 million sqft office space during Q4 2018, surpassing the
absorption in the previous quarter by 8%. Bengaluru accounted for the highest
absorption with 31% share of the total absorption.
• Office space supply observed a significant improvement in Q4 2018, leading to the
infusion of approximately 8.36 million sqft new office space across the four cities.
Mumbai registered the highest supply of 3.3 million sqft, followed by Bengaluru with 2.1
million sqft.
• Residential properties in Bengaluru, Hyderabad and Chennai continued to remain stable
in Q4 2018. Approximately 14,463 new residential units were launched overall in
Bengaluru, Chennai and Hyderabad in Q4 2018, Bengaluru leading the way with its share
recorded at 47% of the total new launches.
• The fourth quarter of the year saw mall completions in Hyderabad and Bengaluru, while
mall development in Chennai and Mumbai continued to remain sluggish. Leasing
continued to remain healthy and a number of large sized retail transactions were
observed across the cities.
• Going forward, while IT/ITeS and banking sector will remain the major contributors to
office demand, the co-working/flexible/agile workspace sector will continue to witness
a strong growth momentum, given the current expansion plans on board by global and
Indian majors across the office markets in Bengaluru, Mumbai, Hyderabad and Chennai.
2Vestian Quarterly Newsletter Q4 2018
EXECUTIVE SUMMARY
Content
India:
EconomicIndicators
IndiaRealEstateMarket
Overview
Bengaluru
Chennai
Hyderabad
Mumbai
Outlook
Office:LocationMaster
Residential:LocationMaster

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Year-on-Yeargrowth(%)
3Vestian Quarterly Newsletter Q4 2018Investment&ConsultancyServices
INDIA: ECONOMIC INDICATORS
Figure 1: GDP Growth Contributors
Figure 2: Inflation based on WPI & CPI
Table 1: Key Policy Rates
WPI CPI
Source: Monthly Economic Report, Department of Economic Affairs, Government of India
GDP growth slows down to 7.1% during July-
September 2018; retail inflation recorded at
2.19% in December 2018
The Indian economy, that had gained substantial momentum in
recent quarters, caught a slight impediment with the GDP growth
slowing down to 7.1% in the July-September 2018 quarter as
compared with 8.2% in the previous quarter. This is the slowest
pace of growth recorded in the past three quarters. However,
India continued to remain the world's fastest growing major
economy, China having grown at the rate of 6.5% during the
same period.
The slowdown was largely due to the underperformance in
manufacturing and agriculture sectors along with a contraction
in mining. While manufacturing grew by 7.4% as compared with
7.1% in the corresponding period a year back, it fell short of the
growth in the preceding April-June quarter, which was recorded
at 13.5%. Additionally, high employment generating sectors
such as mining saw contraction in growth by 2.4%, whereas
construction activity also observed a slowdown in the September
quarter vis-a-vis the previous few quarters.
The Index of Consumer Price Inflation (CPI) in India declined to
2.19% in December 2018 from 2.33% in November, matching
market expectation of 2.2%. It is the lowest inflation rate since
June 2017 as food prices continued to decline and inflation
eased for clothing, housing and fuel. Meanwhile, the Index of GDP is based on value-added concept, GVA at Basic Price (at constant prices)
Industrial Production (IIP) unexpectedly plummeted to a
17-month low in November 2018. The IIP rose by just 0.5% in
November 2018, compared with 8.5% in November 2017.
Although factors such as post-festive season decline in
manufacturing, fewer working days in the month and tighter
financial conditions were expected to pull down output in any
case, the magnitude of correction has been sharper.
Key Rates
PLR*
Repo Rate
Reverse Repo Rate
CRR
Oct-18
13.70%
6.50%
6.25%
4.00%
Nov-18
13.70%
6.50%
6.25%
4.00%
Dec-18
13.80%
6.50%
6.25%
4.00%
In December 2018, the State Bank of India increased its
benchmark prime lending rate by 5 basis points from 13.75% to
13.80%. However, The Reserve Bank of India kept the repo rate
unchanged at 6.50% and decided to continue with its stance of
“calibrated tightening” with an objective of achieving the
medium-term target for consumer price index (CPI) inflation of
4% within a band of +/- 2 per cent, while supporting growth.
Consequently, the reverse repo rate under the liquidity
adjustment facility continued to be at 6.25%.
Prime lending rate raised by 5 basis points to
13.80%; repo rate remains constant at 6.50%
Source: www.rbi.org.in, *Source: www.sbi.co.in
Source: Central Statistical Organisation, Government of India
-10 -5 0 2 4 6 8 10
Agriculture, forestry&ﬁshing
Mining&quarrying
Manufacturing
Electricity,gas &watersupply
Construction
Trade,hotels,transport,communication&services
relatedtobroadcasting
Financial,real estate&professional services
Publicadministration, defence&otherservices
Jul - Sep 2017 Jul - Sep 2018

Source: www.bseindia.com
Source: www.bseindia.com
Figure 3: Performance of BSE Sensex
Figure 4: Performance of BSE Realty Index
BSE Sensex touches a high of 36,526 points in
Q4 2018 and a low of 33,349 points
BSE Sensex touched a high of 36,526 points mark on October 1,
2018, as the RBI announced measures to shore up liquidity
amidst the government pressing for a change of management at
the crisis-hit IL&FS. The surge was primarily led by gains in IT
and banking counters. On the other hand, October 26 saw the
lowest during the quarter, closing at 33,349 points and
dropping to a 7-month low in the middle of lacklustre global
shares.
Meanwhile, the realty index touched 1,894 points - its highest
peak during Q4 2018, on December 19, while it suffered a
decline on October 9, dropping to 1,547 points – the lowest
during the quarter.
Business optimism in India slipped for Q1 2019 with Dun &
Bradstreet Composite Business Optimism Index standing at 73.8
during the period, depicting a decrease of 7.2% as compared to
Q4 2018. This could be attributed to several unfavourable
domestic events such as the ruling party in Centre losing three
states in the state elections, an unevenly distributed monsoon,
continued protests from farmers, loan waivers, subdued new
investments, and fears of fiscal slippage, amongst others.
Besides, continued apprehensions over the potential economic
slowdown in USA and weakening world economic growth have
also added to domestic growth concerns, thereby bringing down
the business sentiment.
Business optimism in India for Q1 2019 shows
decline of 7.2% q-o-q
According to Department of Industrial Policy and Promotion
(DIPP), the total FDI India received during July-September 2018
stood at USD 14.14 billion. However, FDI inflow registered a
decline of 11% during the period April-September of the current
fiscal, the quantum of investment standing at USD 22.66 billion.
As per DIPP data, key sectors that received maximum foreign
investment during the first six months of the fiscal include
services (USD 4.91 billion), computer software and hardware
(USD 2.54 billion), telecommunications (USD 2.17 billion),
trading (USD 2.14 billion), chemicals (USD 1.6 billion), and
automobile industry (USD 1.59 billion).
Total FDI inflow of USD 14.14 billion in July-
September 2018; FDI declines by 11% to USD 22.66
billion during April-September in the current fiscal
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
01-Jan-16
01-Mar-16
01-May-16
01-Jul-16
01-Sep-16
01-Nov-16
01-Jan-17
01-Mar-17
01-May-17
01-Jul-17
01-Sep-17
01-Nov-17
01-Jan-18
01-Mar-18
01-May-18
01-Jul-18
01-Sep-18
01-Nov-18
Points
0
500
1000
1500
2000
2500
3000
01-Jan-16
01-Mar-16
01-May-16
01-Jul-16
01-Sep-16
01-Nov-16
01-Jan-17
01-Mar-17
01-May-17
01-Jul-17
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Points

0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Q3
2017
Q4
2017
Q1
2018
Q2
2018
Q3
2018
USDMillion
TotalFDIInflows
Source: www.dipp.nic.in
Table 2: Key PE Investments in Real Estate Sector, Q4 2018
Figure 7: Foreign Direct Investment Inflows
According to data from Venture Intelligence, PE investments in
Indian companies rose to their highest ever figure of USD 33.1
billion in 2018. The year witnessed 81 PE investments worth
USD 100 million or more (accounting for 77% of the total
investment value during the period), compared to 47 such
transactions in 2017.
Regarding real estate, data from Venture Intelligence indicated
that the sector attracted announced investments worth USD
PE investments in India recorded at USD 33.1 billion
in 2018; real estate sector accounts for investments
worth USD 5.99 billion during 2018
Altico Capital
Blackstone
Xander
Clearwater Capital, Altico Capital
Temasek
Assetz Property Group
Indiabulls Real Estate
Phoenix Group
Renaissance Group
Shapoorji Pallonji Group
Residential
Commercial
Commercial
Commercial
Commercial
Bengaluru
Gurgaon
Hyderabad
Mumbai
Chennai
62
32.7
350
88.5
352
Amount
(in USD million)
LocationSectorDevelper/PartnerPE Firm
Source: Venture Intelligence
5.99 billion in 2018 across 51 transactions. The period
October-December (Q4 2018) saw announced value of USD 931
million across 8 deals. Investors such as Altico Capital,
Blackstone, Xander, Temasek and Clearwater Capital emerged as
some of the active players for Q4 2018, accounting for several
large sized deals.

INDIA REAL ESTATE MARKET OVERVIEW
Source: Vestian Research
Figure 8: Supply and Absorption of Office space in Q4 2018
8.64 million sqft office space absorption across the
four major cities in Q4 2018; supply increases to
8.36 million sqft
OFFICE
The four major cities of Bengaluru, Mumbai, Chennai and
Hyderabad saw absorption of approximately 8.64 million sqft of
office space during Q4 2018, surpassing the absorption in the
previous quarter by 8%. Bengaluru accounted for the highest
absorption of 31% share of the total absorption during the
quarter followed closely Hyderabad and Mumbai at 30% and
28% respectively, while Chennai accounted for 11% share. The
year 2018 closed with a total absorption of 30.63 million sqft
in the four cities, Bengaluru occupying the top spot with 45% of
the total office space absorption during the year.
Office space supply observed a significant improvement in the
fourth quarter of the year, leading to the infusion of
approximately 8.36 million sqft of new office space across the
four cities. Mumbai registered the highest supply of 3.3 million
Accenture
Google
Fractal Analytics
MUMBAI
Cerner
Zynga
Reliance Jio
Aurbis
Samsung
North Gate
Prestige Falcon
AT One
SJR Pavilion
Bagmane WTC-Gold Stone
Bellary Road
Brunton Road
Outer Ring Road
Outer Ring Road
Outer Ring Road
Modern Asset
Prestige Group
AT-One Projects
SJR Group
Bagmane Developers
150,000
60,000
320,000
228,000
450,000
Indiqube
Smart Works
Infosys
Brigade Vantage
Olympia National Towers
RMZ One Paramount
OMR
Guindy
Mount Poonamallee High Road
Brigade Group
Olympia Group
RMZ Corp
60,600
70,500
46,150
Godrej IT Park
First International Financial Centre
Oberoi Commerz II
Vikhroli
BKC
Goregaon East
Godrej Properties
Earnest Towers Pvt Ltd
Oberoi Realty
250,000
100,000
110,000
Facebook
Salesforce
CoWrks
The Skyview Tower 10
Divyasree Orion Block 4
The Skyview Tower 10
Madhapur
Gachibowli
Madhapur
My Home Constructions
Divyasree Developers
My Home Constructions
640,000
58,200
250,000
BENGALURU
CHENNAI
HYDERABAD
Company Building Location Developer Area (in sqft)
Table 3: Key Office Lease Transactions, Q4 2018
sqft, followed by Bengaluru with 2.1 million sqft and
Hyderabad with 2 million sqft. Chennai brought up the rest with
0.96 million sqft of new supply. Altogether, the year 2018 saw
around 19.94 million sqft of new supply enter the office
markets of the four major cities. Steady office space demand led
rental values to increase in the range of 3-5% on a quarterly
basis in key office markets across the four cities.
2.10
0.96
2.00
3.30
2.70
0.92
2.60
2.42
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Bengaluru Chennai Hyderabad Mumbai
Area(inmillionsq.ft.) Supply Q42018 Absorption Q4 2018

INDIA REAL ESTATE MARKET OVERVIEW
RETAIL
Hyderabad and Bengaluru saw the completion of a few new mall
projects in Q4 2018, while mall development in Chennai and
Mumbai continued to remain sluggish despite the quantum of
retail supply in the pipeline. Overall, the year 2018 remained an
average period for mall development in the four cities,
accounting for a total of 5.15 million sqft mall space becoming
operational during the year.
Meanwhile, high street markets continued to observe consistent
traction and a number of large sized retail transactions were
inked across the four cities. Rentals mostly remained stagnant in
malls during the period, with high streets continuing to be seen
as a viable alternate option.
Residential markets remain stable in Q4 2018 without
drastic changes; 14,463 units launched altogether
in Bengaluru, Chennai and Hyderabad
RESIDENTIAL
Residential properties in Bengaluru, Hyderabad and Chennai
continued to remain stable in Q4 2018, without any drastic
changes, after witnessing a dip in new launches in the previous
quarter. Approximately 14,463 new residential units were
launched overall in Bengaluru, Chennai and Hyderabad in Q4
2018 – depicting a nominal increase of 2% over the number of
units launched in the previous quarter.
Despite the relatively restrained number of new launches,
Bengaluru led the way with maximum number of units, its share
recorded at 47% of the total new launches in Q4 2018. Chennai
accounted for 27% share while Hyderabad accounted for 26% of
the total new residential launches in the three cities. The year
2018 inclusively witnessed the launch of around 58,402
residential units across these three cities. New launches were
largely in the affordable and mid-segment budget category of
INR 40-75 lakh, particularly in Bengaluru, while premium
housing observed comparatively lesser share of launches.
Mall supply remains limited in Q4 2018 barring
Hyderabad and Bengaluru; consistent high street
leasing activity across cities
Akshobhya
Bhuvi
Ramky Greenview Apartments
Gothic Pride
R V Nirmaan
PVR Developers
Ramky Group
Gothic
Bandlaguda
Kokapet
Maheshwaram
Nizampet
Apartments
Apartments
Apartments
Apartments
143
63
120
90
Nebula Chennai Aavas
Urbanrise Jubliee Residences
Isha Anandham
Nebula Companies
Urbanrise Projects
Isha Homes
Singaperumal Kovil
Guduvancheri
Perungalathur
Apartments
Apartments
Apartments
1194
1020
244
CHENNAI
HYDERABAD
Project
Rajvilas
Misty Waters Vista Tower
Serene at Brigade Conerstone Utopia
Concorde Luxepolis
Ajmera Nucleus
Developer
Sobha Developers
Prestige Group
Brigade Group
Concorde Group
Ajmera Group
Location
Binnypet
Hebbal
Varthur
Basavanagudi
Electronic City phase 2
Type
Apartments
Apartments
Apartments
Apartments
Apartments
160
119
1132
48
380
No. of Units
BENGALURU
Table 4: Key Residential Launches, Q4 2018

BENGALURU
Office rentals mentioned are for Warm Shell spaces
Table 5: Bengaluru Office Rental Values, Q4 2018
2.70 million sqft of office space absorption and 6,811
new residential unit launches in Q4 2018
OFFICE
With several technology occupiers continuing to expand in the
city, Bengaluru remained the foremost office destination in the
South, recording approximately 2.70 million sqft office space
absorption during Q4 2018. The city’s office market observed
total absorption of 13.83 million sqft of office space during the
year 2018, marking it the period with the highest volume of
leasing in the past decade. While IT/ITeS sector continued to be
the key demand driver for office space in the city, the demand for
office space was progressively accounted for by other sectors,
too. This primarily included transactions by co-working
operators that continued to scale up their space requirements in
order to capture market share and cater to the growing demand
from corporates. Of late, there has been a perceptible trend of
co-working operators offering space in older office projects in
space constraint CBD markets, offering start-ups and other new
entrants with the option of being centrally located.
Despite dearth of ready office space supply, office markets along
the Outer Ring Road (ORR) accounted for the highest share of
absorption, to the tune of nearly 55% of the total office space
absorption in 2018, significant of the fact that the region
remains the most preferred office market. The shrinking vacancy
levels in the region have led IT/ITeS occupiers to explore
pre-commitment options and this is expected to remain the
norm in the forthcoming period as well, till more supply is added
to the market. Besides the ORR, the peripheral office markets,
primarily towards the North, and the central markets saw
substantial leasing transactions, too.
New supply in Q4 2018 amounted to approximately 2.1 million
sqft, that included project completions deferred from previous
periods. New completions were largely observed in the ORR
micro-market with several blocks of a large IT Park witnessing
completion, that momentarily eased the supply pressure in the
RETAIL
The city witnessed the commencement of the long-awaited retail
part of the integrated township project Shantiniketan at
Whitefield during Q4 2018. With retail space of approximately
0.6 million sq.ft. and housing major brands such as H&M,
Lifestyle, Westside and Spar department store, the Forum
Shantiniketan mall is touted to become a popular retail
destination in the East Bengaluru region. This brought the
quantum of mall space to become operational in the city to a
total of 1.1 million sqft during the year 2018.
In the meantime, leasing continued at a healthy pace both in
malls and high streets during the quarter, primarily led by the
Food & Beverage (F&B) segment, with rentals remaining stable
across key retail markets of the city. The year also witnessed the
entry of several leading textile showroom chains from other
parts of South India.
CBD
SBD
ORR
PBD
Bengaluru North
Grade A
90 - 145
90 - 115
75 - 100
40 - 55
68 - 85
Grade B
75 - 95
70 - 95
60 - 70
28 - 35
50 - 65
Micro-location
Rental Value (INR/sq ft/month)
*(INR/sqft/month)
Retail rental values mentioned are for Ground floor store of 1,000 sqft on
carpet with an efficiency of 80% for high streets and 65% for malls.
Table 6: Bengaluru Retail Rental Values, Q4 2018
350
250
150
150
250
300
100
150
200
125
100
Magrath Road
Cunningham Road
Vittal Mallya Road
Koramangala
Whitefield
Bannerghatta Road
Mysore Road
Rajarajeshwari Nagar
Rajaji Nagar
Malleswaram
350
160
450
500
170
200
115
110
350
250
High Street
Rental
Value*
Rental
Value*
Mall Spaces
Brigade Road
Commercial Street
Church Street
MG Road
Indiranagar 100 ft Road
Jayanagar 11th Main Road
Sampige Road,
Malleswaram
New BEL Road
Kamanahalli Main Road
ORR (Marathahalli -
Sarjapur junction)
Bannerghatta Road
micro-market. Vacancy levels continued to remain stressed in
the city, given the strong quarter-on-quarter office demand,
and was recorded at 5.7% in Q4 2018. This led rentals in select
micro-markets to increase by around 4-5% on a quarterly
basis. Major large sized deals recorded during the quarter
include Cerner (150,000 sqft) and ABB (220,000 sqft), both on
Bellary Road, and Aurbis (228,000 sqft) on ORR, amongst
others.

BENGALURU
RESIDENTIAL
Bengaluru saw its number of new residential launches increase
nominally by 6% in Q4 2018, as compared with the figure in Q3
2018. The number of new launches were recorded at 6,811
units during Q4 2018 and a total of 28,676 units for the year
2018. The launches were spread across the city’s various
micro-markets, particularly towards the northern region, like
Jakkur, Hennur, Yelahanka and Thanisandra Road, owing
primarily to the region’s rising demand as an office destination
-
-
4,500 - 5,500
4,500 - 5,400
4,600 - 5,800
4,800 - 5,800
4,200 - 5,800
3,500 - 4,750
3,800 - 4,900
4,350 - 5,500
4,500 - 5,750
Micro-location Mid Segment
10,500 - 14,000
6,800 - 12,000
6,000 - 8,500
5,800 - 7,000
6,000 - 7,500
6,000 - 7,500
6,350 - 8,200
-
6,000
6,100 - 8,500
5,890 - 6,500
Premium Segment
Central
Off-Central
Bannerghatta Road
Hosur Road
Sarjapur Road
Whitefield
Bengaluru North
Tumkur Road
Mysore Road
Kanakapura Road
Old Madras Road
18,000 - 36,000
16,000 - 22,000
-
-
8,000 - 11,000
8,500 - 12,000
8,500 - 13,500
-
-
-
-
Luxury Segment
Table 7: Bengaluru Residential Capital Values for Apartments, Q4 2018
(Prices in INR/sqft)
and its proximity to International Airport. An interesting trend
observed regarding the new launches has been the
concentration of projects in the mid-end and affordable housing
category. A large share of the new launches was in the range of
INR 40-70 lakh. Meanwhile, capital values of completed as well
as under- construction projects continued to remain steady
without observing any significant change.
Source: https://www.thebrigadeutopia.com/gallery/
Serene at Brigade Conerstone Utopia

CHENNAI
Table 8: Chennai Office Rental Values, Q4 2018
Table 9: Chennai Retail Rental Values, Q4 2018
0.92 million sqft of office space absorption and
3,842 new residential unit launches in Q4 2018
OFFICE
Chennai clocked office space absorption of 0.92 million sqft in
Q4 2018, striving to hold its place in the face of fierce
competition from the other southern states. The total absorption
witnessed by the city’s office market amounted to approximately
3.7 million sqft during 2018. Largely led by the IT/ITeS sector,
BFSI and other services sectors such as automobile and logistics,
Chennai continues to attract its fair share of office space
occupiers. Of late, co-working operators have made their
presence felt in the city, accounting for a substantial quantum of
leasing activity.
New office space supply, although limited, saw an improvement
in Q4 2018 as compared with the previous quarter and was
recorded at 0.96 million sqft. On a positive note, Chennai office
market is slated to witness a significant quantum of office space
completion in the forthcoming quarters, thereby easing the tight
vacancy situation in the preferred office markets of the city.
Majority of this new supply is being developed in the vicinity of
Guindy–Mount Poonamallee High Road stretch and the Old
Mahabalipuram Road (OMR). Presently, with constricted supply
entering the market, rentals have been on the rise in the OMR
corridor, to the tune of around 5-7% on a Year-On-Year basis.
Major large sized deals recorded during the quarter include
Smart Works (70,500 sqft) in Guindy and Infosys (46,150 sqft)
on Mount Poonamallee High Road, amongst others.
RETAIL
The city witnessed no major mall development in Q4 2018,
though the year has been quite productive regarding malls
projects. Till now two malls have commenced operations in the
city during the year - the 2 million sqft VR Chennai mall in Anna
Nagar, operational in Q2 2018, and the 0.25 million sqft
Palladium Mall in Velachery, operational in Q1 2018. In the
forthcoming quarters, two additional mall projects are expected
to commence operations, including the 0.5 million sqft Grand
Marina Mall, which is part of a mixed-use project and has
already garnered fair amount of pre-commitments.
Meanwhile, the city continued to witness good leasing activity
and retail transactions were largely observed in the high street
properties, driven primarily by F&B and apparel segments.
Rentals, in both high streets and malls, continued to remain
stable. Notable retail transactions during Q4 2018 include
brands such as Croma taking up 15,000 sqft space at Avadi,
while Pantaloons occupied 10,000 sqft of retail space along the
OMR.
CBD
Off CBD
SBD
Ambattur
OMR (Pre-toll)
OMR (Post-toll)
GST Road
PBD
Grade A
70 - 95
65 - 85
50 - 85
35 - 45
60 - 80
45 - 55
35 - 45
Grade B
60 - 70
55 - 65
35 - 45
28 - 35
45 - 55
30 - 40
30 - 35
Micro-location
Rental Value (INR/sqft/month)
*(INR/sqft/month)
200
145
140
125
150
220
150
180
120
150
Whites Road
R K Salai
Mount Road
Nelson Manickam
Road
Velachery
Vadapalani
230 - 250
130 - 150
120 - 150
140 - 160
270 - 290
220 - 240
High Street
Rental
Value*
Rental
Value*
Mall Spaces
Khadar Nawaz Khan Road
Nungambakkam High Road
R K Salai
Usman Road – South
Usman Road – North
Pondy Bazaar
Adyar Main Road
Annanagar Second Avenue
Velachery
Purasavakkam High Road
Retail rental values mentioned are for Ground floor store of 1,000 sqft on carpet with an efficiency of 80% for
high streets and 65% for malls.

CHENNAI
RESIDENTIAL
Chennai saw the launch of 3,842 new residential units during
Q4 2018, depicting a slight dip of 5% as compared to the figure
in the previous quarter. Chennai residential market had
remained subdued for most part since being bogged down by
several issues ranging from political uncertainty to new policy
measures and overall slowdown in the economy, before seeing
positive movement in housing interest resurface in Q2 2018.
The marginal dip in new launches notwithstanding, there is a
perceptible improvement in buyer confidence, post the
regulatory reforms, thereby encouraging developers to explore
the affordable and mid-income residential segments. In 2018,
a total of around 14,526 residential units were launched in the
city, out of which majority of the launches were in southern
peripheral locations such as Kelambakkam, Chengalpattu and
Perungalathur, largely preferred by the professionals engaged
the IT/ITeS setcor owing to their proximity to the employment
hubs and heightened commercial activity in these regions.
Table 10: Chennai Residential Capital Values for Apartments, Q4 2018
(Prices in INR/sqft)Source: Vestian Research
Central
Off - Central
OMR
GST
East Coast Road
Oragadam
-
-
3,900 - 5,300
3,000 - 4,700
-
3,200 - 4,600
10,000 - 15,000
6,000 - 10,500
6,400 - 7,000
5,000 - 6,000
7,000 - 9,000
-
20,000 - 28,000
12,000 - 18,000
-
-
9,500 - 11,000
-
Micro-location Mid Segment
Premium
Segment
Luxury
Segment
In the meantime, capital values remained stable across all
micro-markets in the city, although, going forward, there is
likelihood of a price increase owing to the inauguration of metro
lines towards the central and off-central locations of the city.
Source: https://chennai.mallsmarket.com/malls/grand-marina-mall

Retail rental values mentioned are for Ground floor store of 1,000 sqft on carpet
with an efficiency of 80% for high streets and 65% for malls.
HYDERABAD
Table 13: Hyderabad Office Rental Values, Q4 2018
Table 14: Hyderabad Retail Rental Values, Q4 2018
Table 15: Hyderabad Residential Capital Values for Apartments, Q4 2018
2.6 million sqft of office space absorption & 3,810 units
of new launches in the residential market in Q4 2018
OFFICE
Hyderabad office market recorded a robust leasing activity in Q4
2018, to the tune of approximately 2.6 million sqft, depicting
an increase of more than 40% over the absorption in the
previous quarter Q3 2018. Altogether, the year 2018 observed
total absorption of 6.40 million sqft office space. Besides the
IT/ITeS sector and the manufacturing companies, substantial
demand for office space also emanated from co-working space
operators and the segment continues to make its presence felt in
Hyderabad. Of the total transacted space in the city, co-working
space operators picked up a significant quantum of office space
during the year, thereby reducing the share of the IT/ITeS sector.
Key transactions in Q4 2018 include deals such as Facebook
(640,000 sqft), Accenture (373,000 sqft) and CoWrks
(250,000 sqft), among others.
New office space supply observed in the city during Q4 2018
was recorded at a robust 2 million sqft, an improvement of 43%
over the supply in Q3 2018. However, given the quantum of
demand envisaged in the city, the new supply has not been able
to match up to current levels. As a result, tight vacancies have
been witnessed in Madhapur and Gachibowli, thereby pushing up
rentals by nearly 5-7% on a Year-on-Year basis.
RESIDENTIAL
Hyderabad residential market witnessed the launch of 3,810
units in Q4 2018, a marginal improvement of 4% over the
number of new launches in Q3 2018. The year 2018 inclusively
recorded the number of new launches in the city at 15,200
units, out of which the western region of the city accounted for
the lion’s share, to the tune of over 70%. Majority of the new
launches were observed in locations such as Manikonda and
Kondapur, which have gained prominence as residential
neighbourhoods on account of their proximity to employments
hubs in the region. Expansion of the city’s office markets has also
connected with corridors radially outwards along the ORR,
thereby leading to a number of new launches in north-western
peripheral locations such as Kukatpally and Bachupally.
With reasonable infrastructure in place, along with good
connectivity in key markets, the city is expected to witness
improved buyer confidence, thereby attracting more investors
and developers to the city.
RETAIL
Hyderabad observed the commencement of two mall projects -
Sarath City Capital mall at Kondapur and the other in Erramanzil
during Q4 2018, totaling up to 1.8 million sqft of retail space.
These malls projects are expected to gain much traction given
the largely lackluster period of mall development during 2018.
On the other hand, the city witnessed robust leasing activity in
Q4 2018, primarily in the high street properties. Notable
transactions include FabIndia taking up 10,000 sqft of space in
Banjara Hills Road No. 12, Pai International Electronics
occupying 8,500 sqft in Begumpet and Reliance Digital with
8,000 sqft at Punjagutta. Rentals, in both the high streets and
malls, continued to remain stable.
*(INR/sqft/month)
CBD
SBD
PBD (West)
PBD
Grade A
45 - 57
55 - 65
58 - 68
30 - 35
Grade B
40 - 48
50 - 55
45 - 50
25 - 30
Micro-location
Rental Value (INR/sqft/month)
150
130
160
160
120
140
110
150
130
NTR Gardens
Banjara Hills
Madhapur
230
270
280
High Street
Rental
Value*
Rental
Value*
Mall Spaces
M.G. Road
Begumpet
Banjara Hills Road. 1
Banjara Hills Road. 2
Panjagutta
Jubilee Hills Road. 36
AS Rao Nagar
Madhapur
Kukatpally
-
-
4,500 - 6,000
3,800 - 5,500
3,500 - 5,000
3,700 - 4,750
3,300 - 4,000
7,500 -10,000
6,500 - 10,000
-
-
5,500 - 6,700
5,000 - 6,000
4,500 - 6,000
11,000 - 13,500
-
-
-
-
-
-
Micro-location Mid Segment Premium
Segment
Luxury
Segment
Banjara Hills
Jubilee Hills
Himayath Nagar
Maredpally
Begumpet, Somajiguda
Madhapur, Gachibowli
Kukatpally
Source: Vestian Research (Prices in INR/sqft)

Retail rental values mentioned are for Ground floor store of 1,000 sqft on carpet
with an efficiency of 80% for high streets and 65% for malls.
MUMBAI
Table 18: Mumbai Office Rental Values, Q4 2018
Table 19: Mumbai Retail Rental Values, Q4 2018
Office space demand at 2.42 million sqft; supply
picks up pace in Q4 2018
OFFICE
Mumbai continued to observe heightened office leasing activity
in Q4 2018 and office space absorption during the period was
recorded at approximately 2.42 million sqft, showing an
increase of 44% over the absorption in the previous quarter. This
robust leasing activity could partly be attributed to the new
completions entering the market periodically as well as healthy
pre-commitments. The office market of the city saw a total
absorption of 6.70 million sqft during the year 2018. It
witnessed substantial demand from the co-working space
operators and the segment continue to expand rapidly, buoyed
by the demand from smaller firms and start-ups, along with
demand from the BFSI and IT sectors. A large part of the
absorption during Q4 2018 was accounted for by the Thane
micro-market while Thane-Belapur Road and central suburbs
accounted for a substantial share as well.
In Q4 2018, new supply recorded in Mumbai was 3.3 million
sqft, bringing the total supply for the year to 5.2 million sqft.
Meanwhile, rental values have remained largely stable during the
quarter due to sufficient availability of office space in existing
Grade B developments. A number of mid to large sized office
space deals were inked in Q4 2018, a few prominent ones being
Accenture (250,000 sqft) at Vikhroli and Google (100,000
sqft) at BKC.
RETAIL
The period Q4 2018 witnessed no new malls becoming
operational in the city owing to the deferment of several malls to
the next year. The year 2018 thus did not witness the
completion of a single mall project in the city. This resulted in
tight vacancy levels in the operational malls along with
significant churn of brands. However, F&B and apparel sectors
continued to lead leasing activity in the city.
*(INR/sqft/month)
175 - 220
125 - 175
225 - 335
125 - 145
90 - 120
75 - 100
Micro-location
Rental Value
Grade A
(INR/sqft/month)
125 - 150
100 - 120
175 - 225
85 - 120
60 - 90
45 - 70
Rental Value
Grade B
(INR/sqft/month)
CBD
Off CBD
BKC
Western Suburbs
Eastern Suburbs
Navi Mumbai
600 - 700
750 - 850
450 - 550
300 - 400
250 - 275
200 - 250
350 - 450
-
-
200 - 300
150 - 200
150 - 200
Micro-location
High Street
Rental Value*
Mall Rental
Value*
South Mumbai
Linking Road, Juhu
BKC
Western Suburbs
Eastern Suburbs
Navi Mumbai
Amongst the notable leasing transactions, mention can be made
of Brand Factory taking up 27,000 sqft of retail space in
Borivali, while Pantaloons picked up 10,000 sqft of space at Hill
Road, Bandra. Meanwhile, F&B major Bastian occupied 7,000
sqft in Lower Parel. Rentals continued to remain stable, barring a
few select malls that witnessed rental increase due to dearth of
quality retail space.

OUTLOOK
 India’s GDP growth slowing in the September quarter
notwithstanding, the International Monetary Fund, in its
latest World Economic Outlook, has projected India’s
economy to pick up in 2019 and has forecasted it to expand
to 7.5% in FY20 and 7.7% in FY21. The projection for
current fiscal year is expected to be 7.3%, benefiting from
lower oil prices and a slower pace of monetary tightening
than previously expected. According to the report, India will
continue to be the world's fastest growing major economy,
an upward trajectory as the rest of the world slumps.
 On a similar note, the World Bank kept India’s growth
projection unchanged at 7.3% for FY19 and 7.5% in FY20,
reflecting robust private consumption and strengthening
investment. The bank based its projections on the economy
of country being competently resilient as well as its
potential to deliver sustained growth.
 On the office market front, absorption will continue to rise
steadily, backed by strong economic fundamentals and
favourable sentiment exhibited by occupiers and investors.
Despite the planned supply, healthy pre-commitments of
space in under-construction projects will continue to be the
norm, leading vacancy rates to remain under pressure in key
office markets.
 While IT/ITeS and BFSI companies will continue to be the
major demand drivers for office space, increased demand is
envisaged from co-working and fintech start-ups. The
co-working segment is expected to account for a larger
share of the market in 2019, portending a major shift in
workspace dynamics with technology, innovative space
design and flexibility impacting the preferences of new age
businesses.
 Mumbai is slated to witness significant office space
leasing activity in the forthcoming period owing to factors
such as substantial office completions on the horizon and
infrastructure development. The demand for office space is
likely to be driven by BFSI and pharmaceutical sectors as
well as co-working space operators. The trend of
consolidation of space by corporates is expected to continue
across the office markets in the city. Going forward, Navi
Mumbai, with its strong office supply pipeline and the
upcoming phase 1 of the international airport, is projected
to become an attractive destination for occupiers seeking
large contiguous space for their back-office IT operations at
relatively lower rentals.
 Bengaluru will continue to be the foremost IT/ITeS
stronghold in the country. In recent years, it has also
become a preferred hub for startups, which in turn has
encouraged the expansion plans of leading co-working
space operators like WeWork, Indiqube and Awfis in the city
to capture a larger share of the flexible office space market.
In the forthcoming period, infrastructure developments
currently underway shall determine the capacity of the city
to attract further investments and office occupier interest.
The upcoming completion of the Whitefield metro is
expected to encourage occupiers and developers to create a
stronger office market while the proposed red line of the
Metro connecting Gottigere in the south with Nagawara in
the north will firm up the office markets in these regions,
particularly towards the north, given the quantum of supply
in the pipeline. Office rentals will witness continued rise on
the basis of steady demand and staggered supply in the city.
 Chennai has been lagging behind the other key southern
counterparts regarding demand for office space, though the
scenario has improved in the recent months. The city has
several key infrastructure projects planned and underway,
which, when completed, might prove to be a game changer.
This includes the Phase II of the Chennai metro rail project,
which plans to cover the OMR corridor, as well as three
elevated corridors approved by the central government. The
enhanced connectivity brought about by these
infrastructure projects is expected to have a positive impact
on the city’s real estate market in the medium to long term.
Of late, the suburban office market of the city, particularly
Mount Poonamallee High Road, has gained traction owing to
factors such as good infrastructure and low housing rentals
in the vicinity. This micro-market will continue to cater to
the needs of occupiers looking for proximity to the city’s
core locations for the short term, as rising rentals and
limited supply might eventually hamper demand.
 Hyderabad has been witnessing robust office traction in the
recent months. Ably supported by infrastructure
development in the city as well as competitive rentals, the
office market will continue to thrive, considering the
large-scale expansion plans of IT/ITeS occupiers and the
employment growth envisaged for the city. However, given
the demand evinced by prospective occupiers, developers
would have to pick up pace to maintain traction in the
market as well as sustain occupier interest. Till then,
pre-commitments are going to be the order of the day along
with rise in co-working space. Going forward, the office

OUTLOOK
markets in PBD West will further expand, augmenting
occupier interest in locations such as Kokapet, Narsingi and
Puppalguda. Meanwhile, other regions would require to be
aligned with adequate infrastructure to promote a similar
growth story as observed in PBD West markets. Currently,
infrastructure initiatives such as metro rail extensions,
airport and road improvement and a proposed regional ring
road are a few key projects that are underway in the city.
 On the residential front, the affordable housing sector is
projected to continue to drive the market growth in 2019,
aided by the transparency brought about by recent policy
implementations and augmenting buyer sentiments
investors interest alike. The government is also in favour of
a substantial GST rate cut on housing and is currently
working to build consensus with the states to push this
through. These factors bode well for the residential market
in the forthcoming period.

OFFICE: LOCATION MASTER
Bengaluru
Chennai
Hyderabad
Mumbai
CBD
SBD
ORR
PBD
Bengaluru North
CBD
Off CBD
Ambattur
SBD
OMR (Pre-toll)
CBD
SBD
PBD (West)
PBD
CBD
Off-CBD
BKC
Western Suburbs
Eastern Suburbs
Navi Mumbai
M.G. Road, Kasturba Road, Lavelle Road, V.M. Road, Ulsoor Road, Infantry Road
Indiranagar, Koramangala, Inner Ring Road, Old Airport Road, Bannerghatta Road
Stretch from Hebbal to Silk Board junction
Whitefield, Electronics City, Mysore Road, Sarjapur Road
Bellary Road (Hebbal to BIAL)
Anna Salai, Cathedral Road, Dr.R.K. Salai, Nungambakkam
T.Nagar, Alwarpet, Egmore
Ambattur
Porur, Guindy, Mt. Poonamallee Road
OMR till Perungudi Toll Plaza
OMR beyond Perungudi Toll Plaza
Tambaram to Singaperumalkoil
Begumpet, Somajiguda, Raj Bhavan Road & SP Road
Banjara Hills, Jubilee Hills
Madhapur, Gachibowli, Raidurgam, Manikonda, Hi-Tech City
Pocharam, Uppal, Shamshabad
Fort, Church Gate, Cuffe Parade, Colaba
Worli, Lower Parel, Prabhadevi
Bandra Kurla Complex
Andheri, Goregaon, Malad
Vikhroli, Powai, Mulund, Thane
Vashi, Belapur
OMR (Post-toll)
GST Road
PBD
City Micro-location Key Locations

RESIDENTIAL: LOCATION MASTER
Segments
Affordable
Mid
Premium
Luxury
Price Range
INR 25 - 50 lakhs
INR 50 lakhs - 1 crore
INR 1 crore - 3.0 crore
INR 3.0 crore and above
Residential: Segment Classiﬁcation
Bengaluru
Chennai
Central
Off-central
ORR (Marathahalli-Silk
Board Jn) & Sarjapur Road
Whitefield
Old Madras Road
Bengaluru North
Hosur Road
Bannerghatta Road
Mysore Road
Kanakapura Road
Tumkur Road
Central
Off-Central
East Coast Road
OMR
GST Road
Vandalur- Kelambakkam Road
Oragadam
MG Road, Kasturba Road, Brunton Road, Lavelle Road, Richmond Road, Residency Road,
Frazer Town, Cox Town and Hannes Road
Indiranagar, Koramangala, Jayanagar, JP Nagar, Malleswaram, RMV Extension,
Sanjay Nagar, RT Nagar, Yeshwathpur, Rajajinagar
HSR Layout, ORR (Marathahalli-Silk Board Junction), Sarjapur Road, Haralur Main Road,
Kasavanahalli Main Road
Whitefield, Brookefield, Mahadevpura, ORR (K.R.Puram to Marathahalli), Varthur Road
K.R. Puram, Ramamurthy Nagar, Battarahalli, Sonnenahalli, Hirandahalli, Budigere,
Devanahalli-Hoskote Road
Banaswadi, HRBR Layout, Hennur Road, Thanisandra Main Road, Bellary Road, Yelahanka,
Kogilu, Chokkanahalli, Bagalur Road, Doddaballapur Road, New Town Yelahanka, Jakkur
Hosur Main Road, Electronics City, Neeladri, Chandapura, Anekal
Bannerghatta Road, Begur, BTM Extention
Mysore Road, Kengeri Satellite Town, Vijayanagar, Magadi Road, RR Nagar
Kanakapura Main Road, Banashankari Extension and Uttarahalli
Tumkur Road, Hessarghatta, Jalahalli, HMT Township
Adyar, T Nagar, Nungambakkam, Kodambakkam,Teynampet, West Mambalam
Manapakkam, Anna Nagar, Koyambedu, KK Nagar
Thiruvanmiyur, Nellikaranai, Uthandi
Perungudi, Velacherry, Sholinganallur, Kelambakkam
Guindy, Thambaram, Vandalur, Singaperumal Koil
Vandalur-Kelambakkam Road
Oragadam
City Micro-location Key Locations

For further information, please write to us at info@vestianglobal.com
THE TEAM
Vestian, is a contemporary workplace solutions firm that specializes in providing
occupier-focused solutions for commercial, residential, industrial, retail and hospitality
sectors. Our service portfolio includes Integrated Service Delivery, Project Services,
Investment & Consultancy Services, Transaction Advisory Services, Retail Business
Solutions & Integrated Facilities Management Services.
We align and measure our key deliverables based on clients' strategic business goals. Our
commitment to achieve excellence and consistency in our service delivery models has
helped us attain high standards of quality and raise the bar for the industry. Our
experienced team has the required expertise and exposure in different sectors.
Combining global best practices and local knowledge, the team provides an integrated
solution for all real estate requirements. Moreover, the belief in our corporate philosophy
- Delivering Measurable Results - helps us to provide solutions, in keeping with global
delivery standards.
Vestian is certified in both quality management systems and environmental health &
safety standards - ISO 9001, ISO 14001 and OHSAS 18001. We are also a member of
the Indian Green Building Council.
Investment & Consultancy Services (ICS) is the Research, Consultancy and Investment
solutions arm of Vestian. We provide value-added end-to-end investment advisory and
consultancy services. Our clients include multinational and Indian corporations,
investors, private equity (PE) funds, global and national financial institutions,
government organizations, international, national and local real estate developers and
landlords in tier I, II and III cities across the country.
About Vestian
Avijit heads Investment & Consultancy Services at
Vestian. A member of the Royal Institution of
Chartered Surveyors, he is well versed with
Consultancy Services, Property Valuation,
Financial Appraisal, Market Research, Land and
Capital Market Transactions.
Avijit Mishra, MRICS
Assistant Vice President -
Investment & Consultancy Services
avijit@vestianglobal.com
Sangeeta is a management professional with over
12 years of experience in the real estate industry.
Her expertise lies in real estate research with
proficiency in curation of industry reports
(writing, design and development), data analysis
and market research.
Sangeeta Sharma
Associate Director -
sangeeta@vestianglobal.com
Suhas is a real estate professional with more than
three years of experience in the industry. He
specialises in Land Advisory, Due Diligence,
Consultancy Services, Property Valuations and
Market Research.
Suhas Kulkarni
Manager -
suhas@vestianglobal.com
Vestian Reports
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Office Market Report
Hong Kong
Office Market Report
The Shanghai
Report
Connect Q2, 2018
Bengaluru:
Real Estate Market Report
Provisional Revised
Master Plan Bengaluru
2031
AerotropolisEvolution in
Workplace Trends

Real Estate Facilities Management | Project Services | Vestian

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