ncr real estate outlook report h1 2015

NCRRESIDENTIAL

JANUARY TO JUNE 2015

RESIDENTIAL MARKET STARES AT A FREE FALL

Is NCR still one of the largest residential markets in the country?Have government and developers failed the buyers?

NEW LAUNCHES DROP BY 68% Y-O-Y

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -

10,000

20,000

30,000

40,000

50,000

60,000

70,000 6

2,25

2

33,

516

35,

500

37,

643

11

,36

0

45,

302

26,

119

28,

500

12,

075

14,

250

Launches Absorption

STAGNANT PRICES OVER THE LAST 2 YEARS HINT AT A TIME CORRECTION

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 3,000

3,200

3,400

3,600

3,800

4,000

4,200

4,400

4,600

4,800

5,000

Wt. Avg. Price (RHS)

4,1954,330

4,400 4,444 4,511

GURGAON TREADS THE AFFORDABLE PATH

GURGAON’S SHARE OF NEW LAUNCHES UNDER INR 2.5 MN IS 91% IN JAN – JUN 2015

INR <2.5 mn 2.5-5 mn 5-7.5 mn 7.5-10 mn 10-12.5 mn 15-20 mn 20-40 mn0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Delhi Faridabad Ghaziabad Greater Noida Gurgaon Noida

INVENTORY PILES UP EVERY QUARTER;5 YEARS TO OFFLOAD CURRENT INVENTORY IN NCR

12 14 16 18 20 22 24 26 28 30 326

7

8

9

10

11

12

13

14

QTS

Ag

e o

f u

ns

old

in

ve

nto

ry i

n q

ua

rte

rs

GURGAONGHAZIABAD

GREATER NOIDA

NOIDA

FARIDABAD

OFFLOADING OF OLD INVENTORY, A CONCERN FOR GREATER NOIDA

DELHI

GURGAON CRUMBLES UNDER PRESSURE OF UNSOLD INVENTORY

PREMIUM MARKET WITH APARTMENTS OVER INR 3 CRORE HIT HARDER BY SLOWDOWN

NO NEW LAUNCHES DURING JAN – JUN 2015 IN PREMIUM MARKETS

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -

200

400

600

800

1,000

1,200

1,0

64

19

2

14

7

54

4

-

91

8

26

1

11

7

20

0

21

5

Launches Absorption

No

. o

f u

nit

s

x

OUTLOOK FOR THE NEXT 6 MONTHS

  LAUNCHES (UNITS)

SALES(UNITS)

WEIGHTED AVERAGE PRICE

(INR/SQ FT)

H2 2014 37,643 12,075 4,444

H1 2015 11,360 14,250 4,511

H2 2015 E 18,000 15,000 4,578

HOW DOES NCR STAND WHEN COMPARED TO OTHER CITIES

LAUNCHES- NCR 2ND LARGEST MARKET DROPS BELOW PUNE TO 4TH

H1 2015

BENGALURU 21,400

MUMBAI 18,887

PUNE 12,762

NCR 11,360

CHENNAI 9,102

KOLKATA 8,372

AHMEDABAD 8,062

HYDERABAD 5,457

  H1 2014 H2 2014

MUMBAI 35,512 26,833

NCR 35,500 37,643

BENGALURU 35,545 32,589

PUNE 16,883 16,700

CHENNAI 11,377 7,318

HYDERABAD 7,899 5,151

KOLKATA 8,444 11,891

AHMEDABAD 9,021 4,991

ABSORPTION - EVEN IN SALES, NCR

H1 2015

MUMBAI 28,446

BENGALURU 22,234

PUNE 15,524

NCR 14,250

CHENNAI 9,091

AHMEDABAD 7,751

HYDERABAD 7,123

KOLKATA 5,883

DIPS TO THE 4TH POSITION  H1 2014 H2 2014

MUMBAI 31,210 36,505

NCR 28,500 12,075

BENGALURU 27,256 28,445

PUNE 14,719 20,150

CHENNAI 10,315 10,643

AHMEDABAD 10,472 8,019

HYDERABAD 7,282 7,829

KOLKATA 6,390 6,245

NCR REMAINS MORE AFFORDABLE THAN PUNE AND CHENNAI

H1 2012

H2 2012

H1 2013

H2 2013

H1 2014

H2 2014

H1 2015

H2 2015E

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Rs

/sq

ft

MUMBAI (7,994)

PUNE (4,819)

AHMEDABADHYDERABAD

KOLKATA

NCR (4,511)

BENGALURU

CHENNAI (4,526)

NCR THE WORST MARKET WITH 5 YEARS OF UNSOLD INVENTORY

5 7 9 11 13 15 17 195

7

9

11

13

15

QTS

Age

of

unso

ld in

vent

ory

in q

uart

ers

MUMBAI

PUNE

AHMEDABAD

HYDERABAD

KOLKATA

NCR

BENGALURU

CHENNAI

189,678 UNSOLD units

NCROFFICE

JANUARY TO JUNE 2015

OFFICE MARKET STEADY

Will NCR maintain the 2014 turnaround story?Which are the next preferred office locations?

CORPORATE DEMAND FOR PREMIUM OFFICES KEEPS LEASING STEADY DURING JAN – JUN 2015

H1 2013 H2 2013 H1 2014 H2 2014 H1 20150

1

2

3

4

5

6

3.40 3.20 3.504.10 3.70

New completions Absorption

mn

sq

ft

3.5 3.5 4.0 4.1 5.5

ALL NUMBERS IN MN SQ FT

RENTALS FIRM UP DUE TO ROBUST CORPORATE DEMAND & LACK OF QUALITY SUPPLY

DOUBLE DIGIT RENTAL GROWTH IN JAN - JUN 2015

H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 201550

52

54

56

58

60

62

64

53 5352

53

56

58

62

Weighted average rent

INR

/sq

ft/

mo

nth

IT/ITES NO LONGER THE LARGEST DEMAND DRIVER FOR JAN – JUN 2015

BFSI * IT/ITeS Manufacturing Other services sector

4%

54%

19%23%

11%

37%

9%

44%

8%

30%

14%

48%

2014 H1 2014 H2 2015 H1

OTHER SERVICES SECTOR INCREASE SHARE ON THE BACK OF E-COMMERCE AND CONSULTING

* INCLUDES SUPPORT SERVICES

0.1

4 0.4

5

0.3

0

ALL NUMBERS IN MN SQ FT

1.8

9

1.5

2

1.1

1

0.8

1

1.8

0

1.7

7

0.6

7

0.34 0.5

2

WITHIN NCR, GURGAON WITNESSES MAXIMUM OFFICE DEALS IN JAN – JUN 2015

CBD - Delhi PBD - Faridabad PBD - Gurgaon PBD - Noida SBD - Delhi

1% 0%

66%

24%

8%3%

0%

61%

23%

13%

3% 2%

76%

12%

5%

2014 H1 2014 H2 2015 H1

RENTALS FIRM UP IN KEY LOCATIONS OF GURGAON DUE TO CONTINUED OCCUPIER PREFERENCE

NE

GL

IGIB

LE

0.0

7

2.3

3

2.4

8

2.7

9

0.8

5

0.9

3

0.4

5

0.2

9 0.5

4

0.1

9

0.0

2

0.1

3

0.1

2

NE

GL

IGIB

LE

NEW SUPPLY TO JUMP BY NEARLY 40% IN H2 2015, BUT IN LOCATIONS LEAST PREFERRED BY OCCUPIERS

OUTLOOK FOR THE NEXT 6 MONTHS

 NEW

COMPLETIONS (MN SQ FT)

ABSORPTION (MN SQ FT)

VACANCYWEIGHTED AVERAGE

RENT (INR/SQ FT/MONTH)

H2 2014 4.1 4.1 20.2% 58

H2 2015E 5.6 3.7 21.3% 63

HOW DOES NCR STAND COMPARED TO OTHER CITIES

VACANCY LEVELS IN NCR ONE OF THE HIGHEST NEXT TO MUMBAI

Mumbai NCR Bengaluru Pune Chennai Hyderabad -

1

2

3

4

5

6

7

0%

5%

10%

15%

20%

25%22% 21%

8%

15%

18%16%

New completions Absorption Vacancy (RHS)

mn

sq

ft

H1 2015

AT 10%, RENTS IN NCR APPRECIATED FASTER THAN MUMBAI & BENGALURU BETWEEN JAN – JUN 2015

H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -15%

-10%

-5%

0%

5%

10%

15%

20% Mumbai NCR Bengaluru Pune Chennai Hyderabad

Gro

wth

in R

enta

ls

MUMBAI 5% INR 117/sq ft

BENGALURU 6% INR 50/sq ft

16% INR 50/sq ft

NCR 10% INR 62/sq ft

RESIDENTIALNCRWORST PERFORMING MARKET IN INDIA; NO SIGNS OF REVIVAL IN NEXT 6 MONTHS; UNSOLD INVENTORY STANDS TODAY AT 5 YEARS

OFFICENCRMAINTAINS THE 2014 TURNAROUND STORY – OFFICE ABSORPTION TOUCHES 3.7 MN SQ FT IN H1 2015

KEY TAKEAWAYS

NCRREAL ESTATE

JANUARY TO JUNE 2015