2011_jll_ charting a global course

Indian Real Estate - Charting a Global Course

The Essential Ecosystem for a Sustainable Future

� Advance - Indian Real Estate - Charting a Global Course

AFFORDABILITY

INVESTMENT

REGULATIONINFRASTRUCTURE

LAND

TRANSPARENCY

SUSTAINABILITY

TECHNOLOGY AND

INNOVATION

IMAGEABILITYPROFESSIONALISM

The past decade has witnessed a period of economic transformation of the Indian Real Estate Industry. After the Global Financial Crisis, the pace with which India bounced back as compared to the most other economies across the globe is nothing short of magnificent. The moot point to be debated now is what next? Given the state of the Real Estate Industry in India, are we well poised to leverage this quick recovery and ensure that in coming 5-7 years, this industry is at par with some of the best in matured markets like Asia Pacific and US? A comfortable ground that we are on today, does it allow us to strengthen our foundation and leapfrog ahead to be recognized as one of the best? India has started to receive similar accolades from around the world for various other industries. Are similar accolades for the India Real Estate industry just around the corner?

In this paper, we discuss the answer all the above questions by analysing the market forces that impact the dynamics of the Indian Real Estate Ecosystem. A typical real estate ecosystem comprises of different stakeholders that include architects, developers, government/regulatory authorities, banks, private equity players, other funding agencies, buyers, brokers, and property consultants.

For any such ecosystem to remain successful over a long term, it is imperative that all its key industry participants are on a level playing ground despite the changing real estate dynamics. The dynamics in India’s real estate ecosystem is driven by ‘Extrinsic’ and ‘Intrinsic’ factors (Figure 1). While the extrinsic factors are those which impact the dynamics from outside the real estate ecosystem, the intrinsic factors are those which impact the dynamics of the ecosystem from within.

With a vision to drive the transformation of the country’s real estate best practices to the next level, Confederation of Indian Industry (CII) and Jones Lang LaSalle (JLL), through this paper, aims at gaining perspective on factors that could turn India into a global Real Estate Powerhouse in the next decade.

Advance - Indian Real Estate - Charting a Global Course �

AFFORDABILITYBuild per the needs of the affordability pyramidConsider H + T affordability through Transit Oriented Development (TOD)Maintain office rents at less than a-dollar-psf to reap IT/ITeS dividends

TRANSPARENCY Improve transparency to ensure better quality products and servicesSynergise efforts towards a transparent system and harvest collective benefits

TECHNOLOGY AND INNOVATION

Innovate to benchmark real estate developments to global standardsUse information technology extensively for planning in real estate

SUSTAINABILITY Be responsible to the environment – through resource optimisation to achieve sustainable goalsIntroduce sustainable concepts in each sector – from green leases to green homes

IMAGEABILITY Establish unique imageability to compete as global destinations Revitalise city centres to improve efficiency and imageability of prime locations

PROFESSIONALISM Manage real estate assets professionally – to gain from global best practicesImpart training to industry personnel for achieving higher quality of products and services

REGULATION Regulate to introduce accountability – within a national framework but having a local thrustCreate a business friendly ecosystem to facilitate fair play and encourage industry stakeholders

INVESTMENTDrive investment – a key externality that cuts across all the other extrinsic factorsEnact practical REIT and REMF regulations to make real estate an investable asset classEnhance sources of funding to real estate developers

LAND Streamline the procurement of land assets to reduce barriers of entry for new playersFormulate policies and framework with emphasis on transparent transaction processes

INFRASTRUCTURE Develop infrastructure to ensure an inclusive growthAdopt global best practices customized to the local needs

Professionalism

Land

Technology and

InnovationInfrastructure

Regulation

Investment

Affordability

Transparency

Sustainability

Imageability

INTRINSIC

E X T R I N S I C

INDIAN REAL

ESTATE

Figure 1: Indian Real Estate Ecosystem

Source: Real Estate Intelligence Service (Jones Lang LaSalle)

AFFORDABILITY

INVESTMENT

SUSTAINABILITY

� Advance - Indian Real Estate - Charting a Global Course

Figure �: Income Groups and Housing Affordability (Based on �008-09 Income Levels)

Income Groups Households (Thousand)

(% Share) Per Household Income in �008-09 (INR)

Affordable Ticket Size for Housing (INR)

Rich �,�� 1.0% 1,0�1,8�5 �,500,000Higher-Middle Income �5,�8� 15.0% �09,950 1,�50,000Middle Income �8,�� 0.6% 1��,7�9 550,000Lower-Middle Income - I �8,85� �0.8% 79,��5 �50,000Lower-Middle Income - II 55,9�� .8% 50,085 1�5,000Bottom of Pyramid - I �7,�6� 11.7% ��,69� 50,000Bottom of Pyramid - II 16,665 7.1% 18,851 �5,000

Consider H + T affordability through Transit Oriented Development (TOD)

Access to transit and proximity to daily destinations prevent the creation of low-density spread-out urban sprawls dependent on cars. Transit poor neighbourhoods lead to cities with traffic congestion, long commutes, air pollution, green house emissions and reduction in open spaces. Dense, transit-rich communities are “location efficient” because they connect residents to shopping, work, and recreation while limiting the strain on public infrastructure and natural resources.

Intrinsic FactorsAffordability Build per the needs of the affordability pyramidThe income pyramid in India is heavy at the bottom, with over 60% of the households earning averagely less than INR 80,000 per year. Nearly 19% of the households (at the Bottom of the Pyramid) can’t afford any type of housing through their income. Another ��.6% of the households in the Lower Middle Income Group can’t afford a house in Tier I or II cities (Figure �). Builders, architects and government have to plan real estate development, which conforms to the needs of the income pyramid of India.

Source: Consumer Pyramids, Centre for Monitoring of Indian Economy (CMIE); Real Estate Intelligence Service (Jones Lang LaSalle)

Rich

Higher-Middle Income

Middle Income

Lower-Middle Income - I

Bottom of Pyramid - II

Bottom of Pyramid - I

Lower-Middle Income - II

�09,950

1��,7�9

79,��5

50,085

��,69�

18,851

35.38 million

48.43 million

48.85 million

16.67 million

1,0�1,8�5(Per household income in INR) (Number of Households)

2.42 million

55.94 million

27.46 million

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Figure �: Residential Affordability Radar for Indian Cities

Source: Real Estate Intelligence Service (Jones Lang LaSalle), 1Q11Note: 1. The radar shows the average distance from the city centre at which a residential property would be priced at the given capital value ranges (See legend).�. The city centres considered for the respective cities are as follows: Mumbai - Nariman Point; NCR - Connaught Place; Bangalore - MG Road; Chennai - Nungambakkam; Pune - Deccan Gymkhana; Hyderabad - Begumpet and Kolkata - Park Road.

Due to lack of available land parcels within the cities, suburbanization has accelerated in several metropolitan areas during the past decade. Several office, retail and residential developments have dotted the suburban landscape. Unaffordable land prices have resulted in ‘leapfrogging’ of residential development to even suburbs of suburbs or exurbs. By �01�, 60% of the operational office space in the metropolitan cities will be at suburban locations. The retail market has been suburbanized earlier than office, with more than 50% of the operational retail space at suburban locations since �00�. The residential construction activity is even more skewed in the metropolitan cities, with over 95% of the housing projects being constructed at suburban locations. With rapidly expanding city limits due to increased suburbanisation of Indian cities, the focus of affordability should not only consider the market value of the products, but also the travel costs to the workplaces, retail and recreational centres.

Housing and transportation affordability (H+T Affordability) involves a more holistic approach of assessing the utility of a product to the buyer through not only the intrinsic value in terms of size of apartment, property rate and amenities provided but also the linkage value such as accessibility to workplaces. Transit oriented developments involve a mix of land uses, including commercial offices, residential and community amenities such as schools, hospitals and parks. They are integrated with a well developed rail transit network to discourage proliferation of cars.

Maintain office rents at less than a-dollar-psf to reap IT/ITeS dividends

The emergence of information technology industry in India during the past two decades has contributed significantly to the growth of real estate in several top metropolitan cities in India. Several concessions from the government under the ambit of Software Technology Parks of India (STPI)

Mumbai

Bangalore

NCR

ChennaiPune

Hyderabad

Kolkata

80706050�0�0�010

INR �,000-�,000 psf INR �,000-6,000 psf INR 6,000-8,000 psf > INR 8,000 psf

Dista

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Centr

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6 Advance - Indian Real Estate - Charting a Global Course

and Special Economic Zone (SEZ) facilitated this growth in the past. Nearly 50% of the transactions of investment grade office space are done by IT/ITeS companies. While IT/ITeS industry has necessitated higher grades of construction, it has benefited due to the affordable rents offered at several Tier I cities of India. Over 60% of the operational investment grade offices in top seven cities currently provide space at a lease rental of less than a-dollar-per sq ft per month (or less than INR �5 psf pm), primarily in secondary and suburban locations. These locations offer large land parcels that are ideal for the development of IT/ITeS campuses (Figure �).

With tax benefits to IT/ITeS industry ending in the coming years, the firms shall deviate to cost effective locations. If Indian real estate has to reap the dividend of the IT/ITeS industry in the future, it should maintain the dollar-psf rents for arbitrage against other competing locations in Indonesia, China and Philippines.

Figure 4: Micro-Markets in India Offering Office Space at INR 25-55 psf pm (As of 1Q11)

Source: Real Estate Intelligence Service (Jones Lang LaSalle), 1Q11 Note: Each dot represents a micro-market among the top seven cities of India.

TransparencyImprove transparency to ensure better quality products and services

Is Real Estate in India a market of “lemons”1? In information-inefficient markets, sellers tend to sell lemons to buyers, who have lesser knowledge of the goods than the sellers. This has an adverse impact on the industry, as the incentive to produce a higher quality of product is reduced. On the other hand, high levels of transparency make it conducive for buyers to understand the pros and cons of a specific project and accordingly make investment decisions. This in turn facilitates an increase in foreign direct investment – a powerful incentive for encouraging the free flow of information along with the fair and consistent application of local property laws.

Transparency of India’s real estate markets has been gradually improving and is largely

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50 100 150 �00 �00�50

Gross Rental Values (INR psf pm)

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SBD Bangalore

Suburbs Chennai

Whitefield NH-8 GurgaonSBD Chennai

SBD PuneHitec City

Thane & Navi MumbaiNoida

Suburbs Pune

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1“The Market for Lemons: Quality Uncertainty and the Market Mechanism” is a 1970 paper by the economist George Akerlof. It discusses information asymmetry, which occurs when the seller knows more about a product than the buyer. “Lemons” in popular parlance are those sub-standard products which are passed by sellers as good ones.


driven by improvements in data availability on market fundamentals, the regulatory and legal environment, as well as governance of listed entities (Figure 5). The increasing presence of international real estate developers, investors and occupiers especially in the Tier II and Tier III cities has acted as a catalyst for the increase in transparency outside the Tier I cities.

Data on office market fundamentals is now more comprehensive in the Tier II cities such as Hyderabad, Pune and Kolkata, as they develop into IT/ITES and manufacturing hubs. Data availability for the retail and residential sectors has improved across all tiers due to the rapid development of the residential sector and modern retail formats. However, when compared to the other countries in the Asia-Pacific, Indian cities fall in the category of being semi-transparent. They rank differentially on various parameters of real estate transparency.

Synergise efforts towards a transparent system and harvest collective benefits

Transparency is the key to improve efficiencies in the system, which benefits all stakeholders, particularly buyers. While developers should avoid misrepresentation and unfair practices, government needs to be unbiased and participative (Figure 6).

Appropriate indices to measure market fundamentals and performance is a key indicator of market transparency. There is an absence of national indices on real estate sectors, due to lack of market data. Some international property consultants, online real estate portals and government authorities such as National Housing Bank have begun providing real estate market data, which is improving this facet of real estate transparency. However, available data has a grade bias which results in the performance

Figure 5: Transparency of Indian Cities by Tier

Source: Global Real Estate Transparency Index �010, Jones Lang LaSalle Note: Tier I cities – Mumbai, Delhi, Bangalore and Chennai. Tier II cities – Hyderabad, Kolkata and Pune. Tier III cities – �0 other prominent Indian cities

Performance Management

Market Fundamentals

Listed Vehicles Legal & Regulatory

Transaction Process

Composite

1II III I II III I II III I II III I II III I II III

�

�

�

5

INCR

EASI

NG T

RANS

PARE

NCY

I


Approvals and Taxation Streamlined and transparent approval process to reduce project costs. Formulate effective simple taxation rules to avoid double taxation.

Redressal Mechanisms Setup an effective grievance redressal mechanism for

all interested stakeholders.Transaction Records

Make transaction records available for a transparent information flow to buyers and

investors.Development Plans

Ensure civil participation in development plans to address

concerns and requirements of citizens.

Services Provide an objective and unbiased service to buyers and developers.

Cost of Funding Maintain the right cost of funding to buyers and developers to ensure smooth completion of real estate projects.

Credibility Reporting Report credibility ratings of developers and buyers to reduce transaction risks

and fundamentals of investment grade assets being reported. Also, there is a tier bias since there is relatively more transparency in the tier I and II markets and lesser in tier III cities. The transparency also differs by sectors as residential market has relatively more transparency, when compared to office and retail transactions.

Real estate sector in India is subject to multiple taxes such as corporate tax, service tax, minimum alternate tax, value added tax, stamp duty, property tax etc. Although there is transparency in terms of the enactment of legislations, certain key areas such as evaluation of property tax is a significant concern as reliable and easy methods of its calculation is not available. Also, there have


been certain disputes in the taxes being levied onto real estate developers and buyers. Moreover, such regulations also differ between states. With the possible introduction of a single uniform GST (Goods and Services Tax) in FY �011-�01�, several of these issues pertaining to multiplicity of taxes and even double taxation will be resolved. The payment of unaccounted and protection money is also a key lacunae in the transaction process. There are legislations to regulate foreign investment in the sector, which are progressively being relaxed to cater to the increased demands for funding in the sector.

Figure 6: Role of Stakeholders in a Transparent Ecosystem

Products Proper representation of product quality, area, amenities, location, efficiency and other project characteristics that influence buying decision.

Services Provide information regarding project progress, approvals, registration and transfer processes and maintenance.

Performance Reporting Report correct performance of the project in terms of sales and construction.

Accounted Purchases Should purchase real estate

through accounted means

Information Seeking and Distribution

Seek information through multiple sources and relay right information to other interested

parties

Reporting Report income and taxes on properties accurately, following laws and regulations

DEVELOPERS

BUYERS

GOVERNMENT

FINANCING AGENCIES

REAL ESTATE TRANSPARENCY


Sustainability

Be responsible to the environment – through resource optimisation to achieve sustainable goals

According to an analysis done by Ernest Orlando Lawrence Berkeley National Laboratory, electricity consumption in India is expected to increase fast, driven by the demand of the residential and commercial sectors that add to the already increasing demand from the industrial sectors. The residential sector will contribute nearly �8% of the projected electricity consumption in India in �0�0, increasing from ��% recorded during �005 (Figure 7). Per household electricity consumption is likely to quadruple in the �0 years between �000 and 2020. Services, which includes office, retail and hospitality industry is projected to contribute nearly 1�% of the total electricity consumption in �0�0. Rising energy needs in India have made sustainability in real estate an imperative necessity rather than an option.

India’s green real estate footprint has been growing exponentially from 0.0� million sq ft in �00� to over �� million sq ft of green space operational in various cities of India in �009. However, this growth is not homogeneous across the country. The top seven cities – Chennai, Mumbai, Hyderabad, NCR, Bangalore, Pune and Kolkata are ahead in the race towards a greener footprint (Figure 8).

India currently has two major rating systems for energy efficiency in building design – LEED India, managed by the Indian Green Building Council (IGBC); and Green Rating for Integrated Habitat Assessment (GRIHA), a system developed by The Energy and Research Institute (TERI) and the Ministry of New and Renewable Energy (MNRE). The GRIHA rating system is gradually strengthening its presence along with the more popular LEED India. By April 2011, five projects have been rated by GRIHA and 108 projects across industrial, commercial and residential sectors are registered and being evaluated. Apart from the rating systems being put in place,

Government of India has initiated certain steps towards a sustainability led industry. The Bureau of Indian Standards (BIS) has developed the Energy Conservation Building Code (ECBC), which specifies the energy performance requirements for all commercial buildings that are to be constructed in India.

Government of India has proposed to lead by example and develop all public buildings

Source: India Energy Outlook: End Use Demand in India to 2020, Ernest Orlando Lawrence Berkeley National Laboratory, January �009

Figure 7: Projected Electricity Consumption in India in �0�0: Real Estate Industry will be a Major Contributor

Agricultural Pumping, 1%

Residential Fans, 7%

Residential Television, �%

Residential Refrigeration, 5%

Residential Other Appliances, 17%

Residential Lighting, 16%

Services, 1�%

Other Industries, 15%

Ammonia, 1%

Aluminium, �%Cement, 1%

Steel, 7%

Public Transport, 1%Freight Transport, 1%

Source: Indian Green Building Council (IGBC), December �010 Note: The number of projects includes New Construction, Core and Shell, Existing Buildings & Green Homes but excludes Commercial Interior Projects

Figure 8: Number of LEED Certified and Pre-Certified Projects (As of 2010)

Others, 18

Chennai, �6

Mumbai Metropolitan Region, 19

Hyderabad, 15

Bhubaneshwar, �Kochi, �

Sriperumbudur, �Kolkata, 7

Pune, 10

Bangalore, 11

National Capital Region (Delhi), 1�


constructed in future as energy efficient spaces. Government of Maharashtra is considering the proposal to provide both financial and non-financial incentives including higher Floor Space Index, reduction in consent fee, rationalization of property tax and reduction in state taxes including VAT and Octroi and other incentives, for the development of green projects in the state. Apart from Maharashtra, several state governments are planning to develop their own green building byelaws.

Builders’ commitment to respond to the initiatives taken by the government would lead to inclusion of more green buildings to their portfolio. Also, they are becoming active participants in guiding the government towards the enactment of these byelaws, since they have a better understanding of the ground realities.

Introduce sustainable concepts in each sector – from green leases to green homes

A sustainable lease, often referred to as a ‘green lease’ is any lease that has a sustainability outcome built into it. This can include criteria around energy, waste and water. The introduction of these sustainability criteria does not replace the need to consider the implications of the base lease clauses. Essentially, the green lease schedule reflects the parties’ desire to improve and be accountable for sustainability in the building.

A sustainable lease meets the unique objectives and challenges faced for every individual situation reflecting the profile of the building, current building performance, willingness of parties to share savings in outgoings and the intended use of the space.

Inclusion of mandatory sustainable norms and directives in the development control regulations will ensure the development of low energy city envelopes. Since the largest contributor to the demand for electricity in India is the residential sector, it is imperative that both government and builders focus on building a sustainable housing sector, banking on low energy needs. Indian Green Building Council (IGBC) recently rolled out

Green Homes, which is its first rating programme, exclusively for the residential sector. Also, the IGBC Green Townships Rating System, a pilot version of which has been launched, should be beneficial at a larger scale for certifying residential townships.

ImageabilityEstablish unique imageability to compete as global destinations

In his most important work, The Image of the City published in 1960, Kevin Lynch has studied how users perceive and organize spatial information as they navigate through cities. According to Lynch, city dwellers and visitors form mental maps with five elements:

Paths, the streets, sidewalks, trails, and other channels in which people travel;

Edges, perceived boundaries such as walls, buildings, and shorelines;

Districts, relatively large sections of the city distinguished by some identity or character;

Nodes, focal points, intersections or loci;

Landmarks, readily identifiable objects which serve as external reference points.

From Vastu to Vistas, Indian architecture has come a long way in amalgamating styles and grammar into its urban fabric. However, there is a serious imageability crisis in the Indian cities, due to near absence of implementation of guidelines, if any. While Indian cities are progressing in terms of nodes and landmarks due to iconic construction happening at places, paths, edges and districts require the attention of planners and designers. Instead of following global architectural styles, some of which are probably not appropriate for Indian cities due to different climatic conditions, materials of construction and cultural or aesthetic considerations of the local city, designers should architect an Indian image, which will create a unique branding of the urban fabric.

Early examples of urban branding in India are the cities of Jaipur, Jodhpur and Udaipur (all in Rajasthan) in India, which follow distinct urban

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Inclusion of mandatory sustainable norms and directives in the development control regulations will ensure the development of low energy city envelopes. Since the largest contributor to the demand for electricity in India is the residential sector, it is imperative that both government and builders focus on building a sustainable housing sector, banking on low energy needs.


Cities Urban Branding Cities Urban BrandingMumbai Financial and Entertainment Capital Bhubaneswar Emerging IT HubNew Delhi Political Capital Guwahati Education HubBangalore Silicon Valley of India Jamshedpur Industrial HubChennai Established IT Hub & Detroit of India Ludhiana Industrial HubHyderabad Established IT Hub Nashik Emerging Industrial HubGurgaon Established IT & Industrial Hub Patna Emerging Education & Agricultural HubNoida Established IT Hub Kochi Emerging IT HubKolkata Gateway to the East Nagpur Education HubPune Established IT & Automotive Hub Indore Commercial and Industrial HubAhmedabad Commercial Hub in the West Jaipur Tourism HotspotChandigarh Emerging IT Hub Surat Diamond Capital of IndiaCoimbatore Emerging Industrial & IT Hub Vishakhapatnam Emerging IT & Logistics Hub

Figure 9: Major Indian Cities and their Urban Branding Due to Functions


citizens, tourists and business. Outward branding on the other hand is concerned with external communication and is directly related to attracting investments, knowledge workers, visitors and tourists to a place. Outward branding aims to help support the sales and marketing potential of goods and services produced in the local area.

Adapted from Image of the City (�006) by Johan Johnson and Dominic Power

Despite the lack of urban imageability, Indian cities have attained a brand status due to the nature of their functions and policies (Figure 9). Further focus is required to strengthen and diversify branding.

Revitalise city centres to improve efficiency and imageability of prime locations

Most of the Indian metropolitans are facing an urban design crisis with buildings and architecture at prime locations in these cities (closer to the city centre) in a decrepit state. Since these buildings and associated infrastructure were planned and built decades ago and had minimal upgradation over the years, they fail to meet the global Grade A standards of real estate. Lacking features of sustainability, there are higher costs of operations and maintenance of these premises as well. Despite this, they are much sought after by tenants due to their prime location and excellent

design considerations, in their old cities. While Jaipur is known as the Pink city due to the color of its avenues, Jodhpur is known as the Blue city due to the walls of the houses around the fort. Udaipur, which is among the favourite tourist destinations of India, is known as the city of lakes and palaces. While traditional in nature, the architecture of these cities conjures the image of erstwhile kingdoms as well as the arid conditions of west India. Chandigarh, arguably the most planned city in India, reflects the grandeur of governance in its public architecture, while infusing a humane branding to its roads, residences and campuses.

Urban branding strategies are vital for

Attracting inward investments and international venture capital

Attracting and retaining companies

Attracting and retaining skilled knowledge workers

Attracting new citizens

Promoting tourism

Sales and marketing of local goods and services

Inward branding is concerned with identity building and strengthening the pride of the residents living in a place, thus creating an attractive environment with the ability to maintain its residents and business and in the long run also attract new

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1� Advance - Indian Real Estate - Charting a Global Course

tenancy. Common problems in old office building stock at the city centres include

Deteriorated facadesPoorly maintained common areas such as lobbies and corridorsLack of ��/7 power back up and centralised air conditioningOutdated staircases and lifts/elevators, and a lack of efficient mechanisms for modification of the sameLack of new technology for building safety and securityPoor mechanisms for energy efficiency

However, the tide is turning as buildings in newer locations are providing better grade premises, amenities and infrastructure to the tenants�. There is a need for an urban renaissance in the coming decade – in which massive investment is required to upgrade the internal infrastructure of the cities, as well as revitalize the existing buildings. The role of architects and designers assumes significance due to the heritage importance of these districts. Several buildings were built during the colonial period, which add to the imageability of the city. Since most of these redevelopment or retrofitting projects will be infill developments�, a localisation of concepts including form, function and sustainability is required to preserve the character of the area, and harmonise with and complement the existing streetscape rather than compete with it. This ‘sympathetic infill’ is vital in providing an imageability to Indian cities, which is lacking and prevents them from attaining a global standard.

ProfessionalismManage real estate assets professionally - to gain from global best practices

Professional management of real estate encompasses a gamut of services including positioning, zoning, promotions and marketing, facility management and finance management. While this will result in better services being provided to occupiers, a direct benefit would

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be in reducing operational costs. Several shopping centres and offices have begun availing professional management services for their operations; in view of maintaining the long term viability and success of the asset.

International property consultants bring global best practices for the optimization of maintenance costs, which can typically be achieved by

Adoption of efficient planning strategies for achieving the optimal level of future costs and expenses

Optimizing the actual costs incurred for the maintenance of the property

Ensuring the long-term viability of the asset and income stream associated with it.

Impart training to industry personnel for achieving higher quality of products and services

With a large unorganised network of real estate brokers, construction workers and other intermediaries in the industry, there is a need for focused training and certification programs for their skill upgradation.

Government of India recognises this need and has formed the National Skill Development Corporation (NSDC), whose objective is “to contribute significantly to the overall target of skilling / upskilling 500 million people in India by �0��, mainly by fostering private sector initiatives in skill development programmes and providing viability gap funding.” Real estate is one of the 22 focus sectors identified under NSDC. According to the NSDC report prepared by ICRA Management Consulting Services, nearly �5 million people shall be employed in the real estate sector in �0��, with the incremental human resource requirement between �008 and �0�� to be 1� million. The report further observed that substantial skill building is required at the skilled workforce level to build capacity. This would stem from modular courses of anywhere between � months to 8 months duration in areas such as carpentry, plumbing, operations, and other occupations. It

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�Retrofitting India’s Central Business Districts, Jones Lang LaSalle, March 2011.�Infill development is the development of a building among other old buildings with heritage value and character in an established streetscape.

The tide is turning as buildings in newer locations are providing better grade premises, amenities and infrastructure to the tenants.There is a need for an urban renaissance in the coming decade – in which massive investment is required to upgrade the internal infrastructure of the cities, as well as revitalize the existing buildings.

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is also required to examine models in which such skills can be delivered to the skilled and minimally educated workforce near the construction sites.

Estate agents and real estate brokers are a vital component of the real estate industry. However,

India lacks a national association which can provide certified licenses for real estate broking and regulate their conduct through education and ethics. This has resulted in an unregulated and unorganised sector, which leads to high search time and costs for the buyer.

Project Life Cycle Property & Asset Management Value Add

PLANNING

Project feasibility, land procurement, finalizing project brief, consultants, budgeting, financial modeling

Operations stage expenditure can be predicted to accurately define feasibility

DESIGN

Finalizing spatial layout, construction materials, development phases

Layout can be improved to prevent additional expenditure at later stages

PRE CONSTRUCTION

Tendering, site preparation, sales, promotion, advertising, brand building

Efficient property management can be a significant marketing USP

CONSTRUCTION

Onsite erection of the building structure, from excavation to internal finishes, tendering of maintenance contracts, selection of equipment

Benchmarking of equipment and operations costs along with generating tendering documentation for vendors

PHASED OCCUPANCY

Provisioning for ancillary services, security, etc

Supporting transitioning of the project including commissioning of equipment

Property will be maintained efficiently to the satisfaction of the client/tenants

MAINTENANCE

Asset optimization through maintenance of equipment, facility & infrastructure and rent collection

Reports are generated periodically and analysed to attain operational cost optimisation, inventory control and efficient vendor management

RENOVATIONS

Additions & alteration in the building & infrastructure along with improvement in management techniques

Re-assessment of existing infrastructure

Renovation & capital expenditure planning

Figure 10: Typical Real Estate Project Lifespan and Corresponding Property and Asset Management Value Adds

PLAN

NING

PRE

CONS

TRUC

TION

DESI

GN

PHAS

ED O

CCUP

ANCYCO

NSTR

UCTI

ON

MAIN

TENA

NCE

RENO

VATI

ON

PRE

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UPAN

CY

MANA

GEME

NTPO

ST -

OCCU

PANC

Y

MANA

GEME

NTRE

NOVA

TION

MA

NAGE

MENT

Source: Property and Asset Management, Jones Lang LaSalle, �009

1� Advance - Indian Real Estate - Charting a Global Course

Extrinsic Factors InvestmentDrive investment – a key externality that cuts across all the other extrinsic factors

The market value� of investment grade real estate assets under construction across the three sectors of office, retail and residential in India is more than USD 100 billion. This fact reiterates the importance of investment in to real estate sector in order to ensure timely completions of the projects which are currently under construction. A sustained capital flow through multiple channels including foreign players, local funding agencies/banks, and internal accruals of the developers is of prime importance to ensure growth of real estate sector in India. Investment, both at a project level as well as at a market level is imperative for a sustained growth of real estate sector.

Investment leading to capital infusion can be done either directly or indirectly into the real estate ecosystem (Figure 11). While direct investments include those initiatives leading to money flow directly towards development of a particular real estate asset, the indirect investments are those that involve capital infusion towards developments that are external to the real estate asset but yet have a significant impact on marketability of the same.

Investment in India’s real estate market is further driven by multiple factors which are listed below:

Growing disposable incomes of along with favourable demographics leading to diverse real estate demand calls for niche / unique investment strategy from a developer’s point of view.Increased focus on both traditional manufacturing sectors as well sunshine services sectors positions India as one of the fast emerging economies with multiple economic drivers resulting in need of improved thrust on investment in to real estate.Rapid urbanization rate in India, lack of availability of land within the city limits and rise in number of nuclear families leading to fall in density per household would result in investment in the form of geographical

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expansion of cities and product innovation especially in terms of residential offerings in the market.Need for global infrastructure standards which would act as a key enabler for development of new satellite towns and transformation of the same in to business epicentres.

Enact practical REIT and REMF regulations to make real estate an investable asset class

Real Estate Mutual Funds In �008, SEBI (the apex regulatory body in India for the securities markets) approved the guidelines for real estate mutual funds (REMFs). As per the guidelines, all the schemes having an objective to invest directly or indirectly in real estate assets or other permissible assets are governed by the provisions and guidelines under Securities and Exchange Board of India (Mutual Funds) Regulations 1996.

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Direct Investment (Project/Company Level)

Indirect Investment (Market Level)

Foreign Direct Investments Urban Infrastructure (JNNURM Scheme)Private Equity Investments Public Private Partnership ModelsBank Credits Investment in Technology and InnovationREITs / REMFs Investment in Training and Skill Development

Figure 11: Direct and Indirect Investment into Real Estate

The key features of the guidelines are as follows:REMFs shall be closed end funds and its units shall be listed on a recognised stock exchange. The net asset value (NAV) shall be declared at the close of each business day.Title deeds pertaining to the real estate assets shall be kept in safe custody with the custodian of the REMF.No lending or housing finance activities should be taken up by REMFs.The investments by an REMF are to be made in the prescribed ratios among real estate assets, mortgage backed securities (but not in mortgages), equity shares or debentures of companies (whether listed or not) engaged in dealing in real estate assets or in undertaking real estate development projects and other securities. They must invest at least �5 percent of net assets in completed properties and at least 75 percent of net assets directly in real estate assets, equity shares, or debentures of real estate companies engaged in real estate development, whether listed or unlisted.Real estate assets may be let out or leased out if the term of such lease or letting does not extend beyond the period of maturity of the REMF.

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Real Estate Investment Trusts Under the draft Real Estate Investment Trust (REIT) regulations, a REIT is defined as a trust registered under the

�Retrofitting India’s Central Business Districts, Jones Lang LaSalle, March �011.


Relax Foreign Direct Investment (FDI) norms By lowering the minimum area requirements, especially for Tier I cities, where land is not available in plenty, more real estate projects can garner funding through Foreign Direct Investment (FDI). Also, early exits should be allowed in cases where either the project has been completed or is uninitiated due to lack of statutory clearances.RegulationRegulate to introduce accountability – within a national framework but having a local thrust

The Indian real estate market has taken a paradigm shift towards a much organized future as compared to a couple of decades ago. India has witnessed multi-fold growth of real estate sectors across varied asset classes such as office, retail and residential in the past decade underpinned by a healthy economic growth in the country. Further, the rising inflow of global capital in to the Indian real estate ecosystem calls for a much transparent and liquid ways to invest. As a result, the property firms in India are strategizing towards strengthening their operational infrastructure, personnel, and financial practices to be at part with global standards. While the industry participants are the key to ensure fair business practices of their respective firms, it is important for the government to roll out the regulatory policies through a national structured framework which enforced at a state or city level.

Government’s move to introduce market regulator for the real estate market could lead to the following advantages to the country’s real estate ecosystem:

Effective single window clearances of approvals leading to cost and time advantages to all the key stakeholders of the industry.Technologically advanced, e-Governance mechanisms to reduce barriers of entry for new developersRationalised stamp duty rates across states through uniform stamp duty policy.Clear classification of real estate property as either a product or a service to avoid double taxation regime which in turn would result in realistic price points to the buyers.Structured bank provisioning for lending to developers to ensure timely execution of real estate projects.

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Indian Trusts Act, 188�, and registered with SEBI, whose objective is to organize, operate, and manage real estate collective investments.

It is similar to REMFs in structure, except for a few significant differences:

REITs can invest in income generating real estate but can acquire real estate under construction as long as the value does not exceed �0 percent of the total NAV.REITs must distribute at least 90 percent of their annual net income after tax to unitholders and leverage cannot exceed �0 percent of gross assets.

REITs and REMFs would demand a greater transparency from the real estate developers, for appropriate and periodic valuation of assets and investment decisions, in turn assuring a higher transparency to the investor.

The major challenges to enactment of REIT and REMF legislations in India is the issue over clarity of taxation and high real estate transaction costs in India. Government should expedite these legislations to bring more investment into real estate, as well as increase transparency in the sector.

Enhance sources of funding to real estate developers

Several developers are currently grappling with funding issues for their ongoing projects, resulting in execution delays. A concerted effort is required to enhance sources of funding to real estate developers.

Reduce bank provisioning for lending to real estate Reserve Bank of India (RBI) has increased provisioning for lending to real estate, which has adversely affected the availability of bank funds for massive amounts of real estate construction happening in the country. Authorities should look into reducing the provisioning for a smoother and timely execution of realty projects.

Provide infrastructure status to housing The Insurance Regulatory and Development Authority (IRDA) regulations mandate insurance companies to invest up to 15% in the social and infrastructure sector. If the housing sector is granted infrastructure status, it could benefit from greater access to long-term finance5.

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5Realty Decoded – Investing Across Borders, Ernst & Young & FICCI, �010

While the industry participants are the key to ensure fair business practices of their respective firms, it is important for the government to roll out the regulatory policies through a national structured framework which enforced at a state or city level.


Deeming the real estate sector with infrastructure status to ensure greater access to long term finance.Relaxation of the foreign direct investment (FDI) norms to ensure qualification of more projects for foreign investments primarily in the larger cities of India where the availability of land is scarce.Streamlined procedures to relax the provisions of real estate investment trusts (REITs) and Real Estate Mutual Funds (REMFs) would result in adequate funding opportunities for real estate developments in India.

LandStreamline the procurement of land assets to reduce barriers of entry for new players

Land is one of the vital and indispensable components of any real estate development. Throughout the world, as economies and populations grow, the consumption of land for real estate, infrastructure and public services is rapidly

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increasing. India, a country where the availability of land is scarce, is no exception to the above trend. Lack of availability of land parcels in major India’s cities has led to the prices within the city limits to touch record levels in the past five years. This in turn has driven geographical expansion of cities in to the suburbs and suburbs of suburbs or exurbs.

Land acquisition being the first step towards any real estate development, it is of prime importance to have a streamlined and transparent land procurement process. While still there are risks involved in buying land in India, the investment landscape in the country has significantly improved in the recent past.

The additional issues that owners and investors in land have to concern themselves with are those pertaining to ownership titles, clarity of permitted use and fairness of governmental bodies when land is repossessed for the greater public good. These risk elements, while particular to the stakeholders of land, are by no means particular to India. Although developing nations are often considered to offer an environment of greater risk in regard to these elements relative to more developed nations, it is interesting to note the improvement that India has made in this area.

InfrastructureDevelop infrastructure to ensure an inclusive growth

Infrastructure development, a key enabler of real estate growth, is one of the most critical drivers of demand for real estate as it allows for geographic expansion of cities. Major infrastructure initiatives that are particularly effective in this regard include improved connectivity through road, rail and air networks, as well as the sustained availability of power and water.

According to Goldman Sachs, India will need to spend more than $1 trillion on infrastructure from �010 to �019, with roads requiring $��7 billion, power $�88 billion and railways $�81 billion. India’s investment in infrastructure is expected to be around 10% of GDP at the end of �008–�01� Five Year Plan, as compared to the 7.5% of GDP invested in the previous plan.

While there are numerous infrastructure initiatives proposed by the Indian government, we have highlighted few of the major ones both at a country and city level (Figure 1�).

Source: Draft of Model Real Estate (Regulation of Development) Bill; Real Estate Intelligence Service (Jones Lang LaSalle)

Figure 1�: Model Real Estate (Regulation of Development) Bill

Need for Enforcement: The regulation of activities of property developers and builders in India is a state subject and comes under the purview of the respective state governments, urban local bodies (ULBs) and development authorities, under the provisions of State Town and Country Planning or City Development Authority Acts. This has led to inconsistency, vis-a-vis rules and regulations being followed in governing, constructing, purchasing, transferring and leasing of properties across the country.Proposal: The Model Real Estate Regulation Bill proposes to establish a regulatory authority and appellate tribunal to regulate, control and promote real estate construction, keeping in view the interest of the buyer and enable smooth and speedy construction. All properties being developed on land greater than 1,000 sq m or have proposed number of residential units greater than four shall come under the purview of the act and shall be registered with the regulatory authority. All details regarding the property shall be maintained on a website and the promoter of the project shall be responsible for recording and entering the project details within a stipulated timeframe.

Figure 1�: Risk Elements for Land Owners & Investors


Comprehending the land title documentsComplications and lack if clarity in title deeds when it comes to strata title propertiesLack of information on loans, liens and easementsEncroachment hassles and lack of title insurance

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City Initiative Comments

Indi

a

Jawaharlal Nehru National Urban Renewal Mission (JNNURM)

This initiative is primarily to encourage reforms and fast track planned developments in select cities. The mission is to speed the infrastructure initiatives and to ensure that the gaps in funding for the same are filled. Other initiatives that this mission is expected to drive would include, provision of basic services to the urban poor including security of tenure at affordable prices, improved housing, water supply and sanitation, and ensuring delivery of other existing universal services of the government for education, health and social security.

National Highways Development Project (NHDP)

National Highways Authority of India commissioned the Golden Quadrilateral project to connect the four metros (Delhi, Mumbai, Kolkata and Chennai). The project is under progress and is aimed at minimizing the travel time and casualties on the road. With over 98% of the 5,8�6 km expressway project completed, the entire project is expected to be fully operational in the near term. The recent announcement of road transport and housing ministry to increase the per day construction of roads from 9 km to �0 km is expected to speed up the Indian road infrastructure in the long run.

NCR

Delhi MetroInitiated with the objective of improving connectivity and combat increasing traffic situation in Delhi city, the Delhi Metro has spread its wings to the suburbs of Gurgaon and Noida as well. It has now interconnected various parts of Delhi as well as its suburbs and has eased traffic situation and contributed to local public transport to a great extent.

T� International Airport Terminal

The newly made terminal of the International Airport claims to be one of the largest airports in Asia with highly increased passenger capacity and state of the art facilities. Equipped with a dedicated express metro line with check in facility at metro stations and soon to be integrated domestic and international flight operations, the new terminal will give an edge to Delhi’s air travel.

Mum

bai

Mumbai Urban Transport Project (MUTP)

This is a multi modal project initiated by Mumbai Metropolitan Region Development Authority (MMRDA) to bring about improvement in traffic and transportation situation in the MMR. MUTP envisages investment in suburban railway projects, local bus transport, new roads, bridges, pedestrian subways and traffic management activities.

Mumbai Metro Rail Project

Aimed at improving the traffic and transportation scenario in Mumbai, Government of Maharashtra (GoM) has commenced the Metro Rail Project in Mumbai. This is the first MRTS project in India being implemented on Public Private Partnership (PPP) format and is envisaged in three phases expected to be completed by 2021. Currently fist phase of the project connecting Versova to Ghatkopar is under construction and expected to become operational by end �011.

Bang

alore

Bangalore Metro Rail

Owing to a rise in traffic congestion in Bangalore roads, the Government of Karnataka has initiated the metro rail project which will connect the North-South and East-West parts of the city. Development of the Metro Rail Corridor is expected to drive the real estate market along the Metro Rail alignment on the East–West and North–South corridor of the city.

Peripheral Ring Road (PRR)

The Peripheral Ring Road is a 116-km stretch connecting the city with the periphery. About 11.5 km away from the outer ring road, the PRR will connect Tumkur Road, Magadi Road, Mysore Road, Bellary Road, Old Madras Road, Hosur Road and Kanakapura Road.

Chen

nai Second Master

Plan (SMP)

With a vision to decongest the Chennai city and decentralize central business district, the Chennai Metropolitan Development Authority (CMDA) has unveiled the Vision �0�6 in the second master plan. It is aimed at strengthening the potential for growth in the three satellite towns of Gummidipoondi, Thiruvallur and Maraimalai Nagar and creation of new ones near Thiruporur and near Sriperumbudur.

Chennai Metro Aimed at easing the connectivity and traffic flow between the city centre and the fast emerging suburbs of the city, Chennai Metro Rail work is under progress and is expected to become operational in phases in the next five to ten years.

Hyde

raba

d Hyderabad Growth Corridor Limited

This is a special purpose vehicle formed by the GoAP for the development of Outer Ring Road at an estimated cost of INR �,000 Crores. While the phase I of the project connecting the �� km stretch connecting Gachibowli to Shamshabad is operational, the 1�0 KM stretch in the phase II to connect Narsingi, Kollur, Patancheru, Medchal, Shamirpet, Peddamberpet, Turkayamanjil, Tukkuguda and Shamshabad is under construction.

Hyderabad Metro Rail

Phase I of the metro rail project includes � lines covering a distance of around 71 km. The ground work on the project is expected to commence by early January 2011 and the entire project is expected to be completed in five years

Kolka

ta

Kolkata East-West Metro

East–West corridor of Kolkata metro rail system is aimed at connecting howrah to salt lake sector V. The improvement in connectivity in this corridor is expected to drive the real estate developments along this corridor. The metro rail alignment is expected to go under ground (8 km) as well on an elevated corridor (1�.7 km).

Joka-BBD Bagh Metro Rail Expansion

The foundation for the project was laid during September �010. The 17-km stretch will be built at an estimated cost of more than Rs �,600 crore will connect Joka in South-�� Parganas district to BBD Bagh, the central business district of the metropolis, and help decongesting the arterial Diamond Harbour Road.

Pune

Pune Metro Rail Connectivity

Proposed Metro line for Pune is implemented in � phases. While the phase I is expected to connect PCMC to Swargate (Metro Line 1-16.5 Kms), PMC Depot (Kothrud) to Ramvadi (Metro Line �-1� Kms), the phase II is designed to link ASI to Hinjewadi (18 Kms.).

Outer Ring Road

To avoid traffic congestion in the city the local muncipal corporation has planned a ring road for Pune city that will divert the traffic of heavy duty vehicles. The length of the ring road is 169 Kms and is divided in to � parts, Part 1 is from Theurphata to Chimbli (�8 Kms), Part � is from Chimboli to Pirangut (�6 Kms), Part � is from Pirangut to Shriramnagar; Part � is from Gogalwadi to Theurphata. While the part 1, part � and part � is complete, the part � is under implementation.


Figure 1�: Notable Central and State Infrastructure Initiatives in India


Technology and InnovationInnovate to benchmark real estate developments to global standards

Developing suitably priced real estate assets depends a lot on effective planning and scheduling of various project timelines along with a prompt delivery. As the rates of raw materials such as steel, cement and other building materials like tiles and fit-outs continue to fluctuate depending on the demand–supply situation in the commodities market and the overall macroeconomic weather; these can impact the delivery schedule of projects. Therefore, it is highly imperative for developers to ensure adherence of schedule to control costs. This can be better achieved by utilising technology to innovate effective methods to construct and deliver on time.

Despite having large needs for rapid and efficient construction techniques, the Indian construction industry is yet to embrace pre-fabrication to the extent practiced in the developed countries. It has the benefit of planned mass production under factory conditions, safe from the weather fluctuations. Also, the economies of scale distribute several costs to a larger number of units. However, some of the issues that have been cited with pre-fabrication in the past include unavailability of skilled labour, expensive transfer of technology, perceived downsizing of human labour (from government’s point of view) and simply lack of aesthetics and uniqueness due to mass production.

However, pre-fabrication is the need of the hour for India, especially in the low-cost housing sector, where the targets and benefits are huge. One of the major inputs to pre-fabrication is freight cost, since modules have to be transported from the factory to the site. Since there is a large need for housing in almost every Indian city, a decentralised network of pre-fabrication factories can effectively reduce freight costs. Also, local materials such as fly-ash, lime and earth can be used extensively in pre-fabrication. While accelerating schedule of projects, pre-fabrication can help reduce construction costs as well and increase affordability to the home buyer.

Value Engineering – Developer’s Tool to Ensure Optimal Cost with Enhanced Quality

1 Effective usage of locally available materials including marginal and industrial waste for the reduction of cost, yet maintaining the functional requirements of buyers;

� Rainwater harvesting, low-cost sanitation, waste-water management, and landscaping with recycled water

� Solar-operated street lights;� Main electrical equipment to be located together, which helps in further cost

reduction; 5 Trenches for electrical, data etc and cabling to take the shortest route possible;6 Passive cooling, providing adequate natural ventilation systems to avoid forced

ventilation/pressurisation systems.

Use information technology extensively for planning in real estate

Geographical Information Systems Geographical Information Systems (GIS) based planning and analysis of urban areas will lead to a better understanding of urban morphology, merging the exogenous factors such as demographics, income, traffic and climate to endogenous factors such as built and open spaces, green cover and public amenities. Indian real estate needs to leverage its expertise in information technology to ensure a holistic urban development process, which results in equitable growth of cities.

Property Title Certification System (PTCS) and Transaction Records One of the optional reforms required to be undertaken by cities that are receiving funds under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is the creation of Property Title Certification System (PTCS). PTCS will be a comprehensive database of land transaction records, utilizing Information Technology. It shall have three registers – register of titles, register of disputes and register of charges and covenants, which shall together constitute the total record of title of all lands. It will have far reaching implications in making the land market transparent and enabling better policymaking and urban planning. While none of the states have achieved this, most of the cities have committed to a 5-7 year timeline


AuthorsHimadri Mayank, Manager, Research & REIS [email protected] +91 �� 07 1500

Himadri Mayank joined Jones Lang LaSalle India in July �008 and is responsible for managing the quarterly research offering – Real Estate Intelligence Service (REIS), which tracks, analyses and forecasts trends in office, retail and residential property sectors for Indian cities. Based out of Mumbai, he also contributes towards regional and local research publications covering economy, sector analyses, market forecasts and investment strategies. He holds a bachelor’s degree in Architecture from Indian Institute of Technology Kharagpur and has four years of experience in the field of real estate. He is pursuing the Chartered Financial Analyst (CFA) program offered by CFA Institute, Charlottesville and is a �011 Level III CFA candidate.

Hariharan Ganesan, Manager, Research & REIS [email protected] +91 �� 07 1500

Hariharan Ganesan joined the Jones Lang LaSalle India in April �008 and is responsible for managing the quarterly research offering – Real Estate Intelligence Service (REIS) publications. Based in Mumbai, he contributes to research publications on office, retail and residential real estate markets in the city. Prior to joining the Mumbai team, he managed research operations for Jones Lang LaSalle based out of Chennai region and has worked on multiple topical white papers, property market digests and bespoke research projects spanning diverse geographies within India. With over five years of research and marketing experience, Hariharan holds a dual degree from Bits Pilani and an MBA from IIPM, Delhi.

Abhishek Kiran Gupta, Head of Research & REIS [email protected] +91 �� 61�1 6500

Abhishek Kiran Gupta leads the Jones Lang LaSalle India Research team and is based in Mumbai. He manages research operations on a Pan-India level and is responsible for the team’s outputs, including research reports such as topical white papers, property market digests and bespoke research projects based on specific client requirements. Prior to joining Jones Lang LaSalle, he had seven years of experience in market research, business analysis and market strategy consulting, servicing diversified industries including pharmaceutical, software publishing and insurance.

estate market. The registration departments should integrate these records with Geographical Information Systems (GIS) and make it available for analysis, which will enable faster and effective urban planning. The computerised records should also be integrated with the Unique Identification (UID) project that is currently underway, which is providing a unique identification to all Indian citizens. This will enable reliable identification of ownership and transfer of assets.

to accomplish the reform, considering the vast amount of effort required in compiling this.

Another optional reform under JNNURM is the introduction of computerized process of registration of land and property. Over half of the cities had already achieved this by June �010. Government should make available the deeds and titles under the ambit of ‘Right to Information (RTI)’ in order to foster transparency in the real

COPYRIGHT © JONES LANG LASALLE All rights reserved. No part of this publication may be published without prior written permission from Jones Lang LaSalle. The information in this publication should be regarded solely as a general guide. Whilst care has been taken in its preparation no representation is made or responsibility accepted for the accuracy of the whole or any part. We stress that forecasting is a problematical exercise which at best should be regarded as an indicative assessment of possibilities rather than absolute certainties. The process of making forward projections involves assumptions regarding numerous variables which are acutely sensitive to changing conditions, variations in any one of which may significantly affect the outcome, and we draw your attention to this factor.

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Real Estate Intelligence Service (REIS) India is a subscription based research service designed to provide you with cutting edge insights into India’s diverse and challenging real estate markets through collation, analysis and forecasts of property market indicators and trends across all major Indian markets across various real estate asset classes - office, retail, residential.

REIS empowers you with consistent and complete market data and analyses for all real estate indicators by specific micro markets. It is supplemented by value added services including client briefings, presentations and rapid market updates.

For more details, contact, Abhishek Kiran Gupta +91 98�0�1�065 [email protected] or Himadri Mayank +91 997561��0� [email protected]

AHMEDABAD tel +91 79 �00� 7769

BANGALORE tel +91 80 �118�900 fax +91 80 �118�901

CHANDIGARH tel +91 17� �0�7650 fax +91 17� �0��1�

CHENNAI tel +91 �� 99�000 fax +91 �� 99�001

COIMBATORE tel +91 �� 5�� fax +91 �� 5��

DELHI tel +91 11 ��17070 fax +91 11 ��17071

GURGAON tel +91 1�� 605000 fax +91 1�� 605001

HYDERABAD tel +91 �0 �0�09100 fax +91 �0 �0�09101

KOCHI tel +91 �8� �01865� fax +91 �8� �0�9�9�

KOLKATA tel +91 �� 7��9� fax +91 �� 769��

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About Jones Lang LaSalle Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than USD 2.9 billion, Jones Lang LaSalle serves clients in 60 countries from more than 1,000 locations worldwide, including 185 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than USD 43 billion of assets under management. Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 19,700 employees operating in 78 offices in 13 countries across the region. The firm was named the Best Property Consultancy in Asia Pacific at ‘The Asia Pacific Property Awards 2011 in association with Bloomberg Television’. For further information, please visit our website, www.ap.joneslanglasalle.com

About Jones Lang LaSalle India Jones Lang LaSalle is India’s premiere and largest professional services firm specializing in real estate. With an extensive geographic footprint across eleven cities (Ahmedabad, Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and a staff strength of over 4000, the firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, analytics, consultancy, transactions, project and development services, integrated facility management, property and asset management, sustainability, warehousing and logistics, capital markets, residential, hotels, health care, senior living, education and retail advisory.For further information, please visit www.joneslanglasalle.co.in

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