cb property insights q2 2012
TRANSCRIPT
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PROPERTYINSIGHTS
Cautious Demand Despite The Economic Uncertainties
India Quarter 2, 2012
INDIA MARKET OVERVIEW
The slow economic growth of India leading to a
GDP growth rate of only 5.3% during the last quarter
of the fiscal year 2011-12 was mainly due to the
poor performance by manufacturing, trade, hotels
transport and communication sectors. This was the
lowest quarterly growth recorded in the last nine
years. The wholesale price index reached its peak at
7.5% in May 2012 and depreciating rupee also touched
INR 57.15 in May 2012 around 12.3% lower than the
previous quarter. In a move to address these concerns,
the Reserve Bank of India had cut the key short term
lending rates by 50 bps at the start of the second
quarter of the year. However, without support from
the government itself inflation rose again in May &
June. These factors combined led many agencies like
Standard & Poor and Fitch to downgrade Indias rating
from stable to negative. Foreign Direct Investment
during the last quarter of fiscal year 2011-2012 was
recorded in excess of US$ 12.3 billion (Department
for Industrial Policy & Promotion, India), significantly
higher than US$ 3.4 billion during the same period
last year.
Contrary to the prevailing weak economic
sentiments, real estate sector witnessed some
positive trends during the second quarter of 2012
(April June). Office sector recorded absorption of
approximately 7.2 msqft (million square feet) across
all Grades registering an increase of nearly 16% over
the previous quarter. Almost all cities recorded an
increasing trend except Bengaluru and Pune where
there was a decline. Additionally 1.2 msqft of office
space was pre-committed during the same period.
New stock additions were recorded at 8.9 msqft
across the major cities. Residential markets remained
stable with only a few micro markets showing price
escalations. Launches of new projects remained
subdued compared to the previous quarter and were
mainly in the mid segment. An anticipated economic
revival towards the end of the year is likely to favour
the growth of the overall real estate sector in second
half of the year.
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INDIA TRENDS AND UPDATES
Economic Overview
Rising inflation, a long time concern, was again
aggravated in the second quarter. After some
moderation in March 2012, the whole sale price index
moved up to 7.55% in May 2012. Consumer Price
Index was recorded at 10.66% in May 2012, which is
reflective of the rising prices of food and commodities.
The Reserve Bank of India revised key rates in April
and reduced it by 50 basis points. Repo and the reverse
repo rate are at 8% and 7% respectively. However,
cash reserve ratio was left unchanged at 4.75%. This
time, the change in the central banks stance was
mainly to arrest the falling growth momentum of the
economy.
Rupee had started to depreciate since the end of
last year. However, in the second quarter the fall in
the value of the currency has been accentuated to
reach an all time low of INR 57.15 in May 2012 and it
continues to hover above INR 55 per US Dollar mark.
Inflow of Foreign Direct Investment in India
according to Department for Industrial Policy &
Promotion was estimated at US$ 36.5 Billion in 2011-
12 registering an increase of approximately 88%
over the previous year. The last quarter of the fiscal
year gained momentum and attracted investments in
excess of US$ 12.3 billion. It is also notable that FDI
outflows from India rose by nearly 12% to US$ 15.0
billion. Foreign Direct Investment in the housing and
real estate sector was estimated at US$ 731 million
during the year 2011-12 registering a decline of nearly
40% annually.
The BSE Realty Index had started to witness an
upward trend since December 2011 and had breached
the 1,800 mark in April to reach the highest for the
year. Thereafter from May 2012 onwards it started it
descent to close at 1,627.72 in June 2012 registering a
decline of 8% over the quarter.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%12.0%
Jan-Mar07
Apr-Jun07
Jul-Sep07
Oct-Dec07
Jan-Mar08
Apr-Jun08
Jul-Sep08
Oct-Dec08
Jan-Mar09
Apr-Jun09
Jul-Sep09
Oct-Dec09
Jan-Mar10
Apr-Jun10
Jul-Sep10
Oct-Dec10
Jan-Mar11
Apr-Jun11
Jul-Sep11
Oct-Dec11
Jan-Mar12
GROSS DOMESTIC PRODUCT GROWTH RATE
Growth Rate (%)
Source: Central Statstcal Organisaton, Govt. of India
40
44
48
52
56
60
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
EXCHANGE RATE MOVEMENT (INR/USD)
INR/ USD
Source: MInistry of Finance, Govt.of India
171
2,121
8,749
12,62113,586
5,149
3,443
-
4,000
8,000
12,000
16,000
20 05 -0 6 2 006 -07 200 7-08 20 08 -0 9 2 00 9-10 2 010 - 11 2 011 -1 2
FDI INFLOW IN HOUSING AND REAL ESTATE SECTOR
FDI INFLOW IN INR Crore
Source: Dept. of Industrial Policy & Promoton, Govt.of India
0
1000
2000
3000
4000
Index
Source: BSE
BSE REALTY INDEX
2
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Residential markets across the country recorded
subdued demand during the second quarter with
reduced launches and transactions. Capital values
mainly remained stable across the major locationsbarring Hyderabad and select locations in Pune &
Gurgaon. Construction activities gained momentum
with several project completions being recorded
in Pune, Chennai and Gurgaon. Other projects in
the advanced stages of construction witnessed
appreciation across all cities.
Approximately 18,000 units were launched
across the major cities during the quarter registeringa decline of nearly 46% over the previous quarter.
Pune recorded the largest number of units launched
and accounted for nearly 37% of the total. Western
India, comprising of Mumbai, Pune and Ahmedabad
outweighed the other regions and was closely
followed by the south. In Hyderabad and Mumbai, the
reduction in the number of launches was mainly due
the apprehensions by the developers about the new
legislations, whilst in other cities, the developers are
awaiting a revival of positive market sentiments.
A further reduction in the interest rates and
improvement in the economic conditions may aid
revival of the demand in residential markets. Capital
values are likely to remain stable in the short termwhile the launches in the coming months are likely
to increase. Developers are likely to offer further
incentives to attract buyers in the upcoming festive
season to capitalize on the demand.
-
100
200
300
400
500
600
700
800
RESIDENTIAL CAPITAL VALUES GROWTH INDEX
Bangalore (Burnton Road Lavalle Road) Chennai (Boat Club)Hyd erabad (Banjara Hills) Ko lkata (Ballygunge)Mumbai (South) NCR (Satya Niketan Anand Niketan)Pune (Koregaon Park)
Source: Cushman & Wakefield Research
12%
25%
7% 5% 7% 5%
37%
2%
0%
10%
20%
30%
40%
NEW RESIDENTIAL UNIT LAUNCHES ACROSS LOCATIONS
IN Q2 2012
New unit launches (%)
Source: Cushman & Wakefield Research
Residential Overview
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4
Ahmedabad 5
Bengaluru 8
Chennai 11
Hyderabad 14
Kolkata 17
Mumbai 20
National Capital Region 23
Pune 26
Index
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Transaction activity in the residential market in
Ahmedabad continued to remain stable in the second
quarter of the year. Majority of the construction
activity was witnessed in upcoming locations along the
Ring Road and Sarkhej-Gandinagar Highway where
most of these projects cater to the mid segment.
Some of the prominent projects under construction
are Shantigram by the Adani Group and Apple Woods.
After healthy absorption in the previous quarterabsorption declined, and was estimated at 241,000
sqft with no supply of Grade A office space.
Demand has remained stable for both main street
locations and malls in the city. Ahmedabad is not
expected to receive any new supply of malls in the
near future.
Ahmedabad
Market Overview
Trends & Updates
Ready Residential Property Update
Capital values have remained stable during the
second quarter of the year for both the mid and high-
end segments due to the lack of demand. This is now
the case for the fourth subsequent quarter.
5,400
4,200 4,200
2,800 2,8002,333
-
1,000
2,000
3,000
4,000
5,000
6,000
Ready Residental Property Values in June'12
Price (INR/sqf) Represents mid and hi gh-end segmentsSource: Cushman & Wakefield Research
Source: Cushman and Wakeeld Research
Note: The above values for high segment typically include units of 2,000-4,000 sq..
Average Capital values High end (INR 000/Sq.ft.)
Location 2010 2011 1Q 2012 2Q 2012
Satellite 4.0-4.8 4.3-6.0 4.3-6.0 4.3-6.0
Vastrapur 3.7-4.0 3.7-5.0 3.7-5.0 3.7-5.0
S.G.Highway 3.7-4.3 3.7-4.5 3.7-4.5 3.7-4.5
Prahlad Nagar 4.2-5.3 4.2-6.0 4.2-6.0 4.2-6.0
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New Residential Launches
Ahmedabad witnessed a solitary launch in the
mid segment, offering over 350 units in the second
quarter of 2012. This project is located at S.G.
Highway and is priced competitively and offers the
usual amenities.
Under construction Residential Property Update
Retail Sector
Commercial Office Sector
The city witnessed healthy construction activity
during the quarter. Several large projects which were
running behind schedule have renewed their pace
to minimise any delays. Majority of the residential
projects under construction are concentrated alongthe Ring Road and S.G. Highway. Select projects
in areas like Bopal, Thaltej and Satellite road has
registered appreciation in values during the quarter
in the range of 2-8%. Some developers are offering
favourable payment schedules and incentives to
increase demand.
Both main-street and mall rentals remained stable
during the quarter and can be attributed to the lack
of major transaction activity and churn at main street
locations. Lack of quality options at prime main-street
locations have left retailers with a few options to
choose from. The food and beverage sector remained
the strongest demand driver in the city. Existing
high mall vacancies have restrained developers from
launching any new malls in the city.
Prahladnagar and S.G. Highway remained at the
centre of leasing activity contributing close to 61%
of total absorption for the quarter. Readily available
Grade A space has kept rentals stable during the
quarter. The vacancy level in the city stood at 9.7%.
The city witnessed a supply of 500,000 sqft of Grade
B space during the quarter.
Source: Cushman and Wakeeld Research
Note: The above values for mid segment typically include units of 1,200-1,800 sq..
* Esmated and as per market informaon
Average Capital values Mid Segment (INR 000/Sq.ft)
Location Q4 2010 Q4 2011 1Q 2012 2Q 2012
Satellite 2.8-3.8 2.8-4.3 2.8-4.3 2.8-4.3
Vastrapur 2.6-3.5 2.6-3.8 2.6-3.8 2.6-3.8
S.G.Highway 3.0-3.8 3.3-4.3 3.3-4.3 3.3-4.3
Prahlad Nagar 2.8-3.6 3.2-4.2 3.2-4.2 3.2-4.2
Project Name Developer Location Number of Units* Type Area of Units - in sqft
Aakruti Greenz Tirupati Sarjan S.G. Highway 352 Apartment 2BHK - 1,3053BHK - 2,205
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Capital values are expected to remain stable in
the upcoming quarter as the demand may continue to
be dampened. The festive season may see some new
launches but will mainly cater to the mid segment
and are expected to be competitively priced.
With significant Grade A commercial office
space developments nearing completion, the city
is expected to witness a fresh supply of 1.8 million
square feet (msqft). This is likely to create a downward
pressure on rentals due to prevailing high vacancies.
Ahmedabad is not expected to witness any new
mall supply during 2012. Rentals in both malls and
main street locations are expected to remain stable
to encourage leasing activity. Main street locations
at C.G. Road, Satellite Road and S.G. Highway are
expected to receive a chunk of enquiries from
retailers.
Outlook
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Bengaluru
Market Overview
Given the uncertain global economic conditions
and high interest rates, the overall demand in the
Bengalurus residential market has slowed down.
However, mid segment properties continued to
witness some interest, which encouraged developers
to launch new projects.
The office market in the second quarter was
marked by subdued absorption and a steep fall in pre-
commitments. Outer Ring Road (Sarjapur-Hebbal)micro-market witnessed maximum absorption,
around 60% of the total, followed by CBD/off CBD
micro-market. While 75% of the absorption was by
IT/ITeS sector, CBD/off CBD micro-market witnessed
maximum absorption by the non IT/ITeS sectors.
The retail segment witnessed the supply of two
new malls during the quarter admeasuring 1.05
msqft totally, at Yashwantpur and M.G. Road. These
developments became operational with more than
90% occupancy due to previous pre-commitments.
Prominent high streets continue to witness new
retailers entering and vying for quality spaces.
Trends & UpdatesReady Residential Property Update
Select markets in the mid and high-end segments
witnessed notable appreciation in capital values
of up to 13% compared to the previous quarter.
High-end micro markets such as Central and East
Bengaluru saw increased demand, primarily from
Non Resident Indians due to depreciating value
of rupee. North and South-West locations in the
mid segment category witnessed capital value
appreciation in the range of 10-13% over the last
quarter owing to increased interest.
The rentals remained stable across most micro
markets except in the North-West where there
was an increase in commercial and retail activities
marking it as an emerging residential destination.
8,750 8,500
6,350
4,925 4,7504,400
0
2,000
4,000
6,000
8,000
10,000
Ready Residental Property Values in June '12
Price (INR/sqf)Source: Cushman & Wakefield Research Represents mid an d high-end segments
Average Capital values High end (INR000/Sq.ft.)
Location 2008 2009 2010 2011 Q1 2012 Q2 2012
Central 14.0-18.0 12.0-14.5 13.5-17.5 14.0-18.0 16.0-21.0 18.0-23.0
South 7.0-9.0 6.0-8.5 6.0-9.5 6.5-10.0 6.5-10.0 6.5-10.0
Off Central 6.5-7.5 5.0-6.6 5.0-7.0 6.0-8.5 6.0-8.5 6.0-8.5
East 6.5-9.0 5.6-7.0 6.5-7.5 6.8-8.0 6.0-8.5 6.8-9.0
North 6.0-8.0 5.5-7.0 5.5-7.0 6.5-8.0 6.0-8.0 6.5-8.0
Source: Cushman and Wakeeld Research
Note: The above values for high segment typically include units of 3,000-5,000 sq..
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High-end Segment
Central: Lavelle Road, Off Palace Road, Off Cunnigham
Road, Ulsoor Road, Richmond Road
South: Koramangala, Outer Ring Road, Bannerghatta
Road, JP Nagar
Off Central: Frazer Town, Benson Town, Richards
Town, Dollars Colony
East: Whitefield (villas)
North: Hebbal, Yelahanka, Jakkur, Devanahalli
Mid-end Segment
Central: Brunton Road, Artillery Road, Ali Askar Road,
Cunningham Road
East: Marathalli, Whitefield, Airport Road
South-East: Sarjapur Road, Outer Ring Road, HSR
Layout
South: Koramangala, Jakkasandra
South-West: Jayanagar, J P Nagar, Kanakpura Road,
Bannerghatta Road, BTM Layout
North: Hebbal, Bellary Road, Yelahanka, Dodballapur
Road, Jalahalli
Off Central*: Vasanth Nagar, Richmond Town,
Indiranagar
Off Central**: Cox Town, Frazer Town, HRBR, Benson
Town, etc
North-West: Malleshwaram, Rajajinagar
Key to Locations:
Average Capital values Mid Segment (INR000/Sq.ft.)
Location 2008 2009 2010 Q3 2011 Q1 2012 Q2 2012
Central 5.8-7.0 5.0-6.0 5.5-7.0 6.0-7.5 6.0-8.0 6.0-8.0
East 2.7-3.1 2.4-2.7 2.7-3.1 3.2-3.8 3.8-4.8 3.8-4.8
South East 2.9-4.0 2.5-3.2 2.8-4.0 3.4-5.0 4.0-5.5 4.0-5.5
South 5.0-6.5 4.6-5.7 4.8-6.0 5.0-6.5 5.0-7.0 5.0-7.0North 3.0-4.0 2.8-4.0 2.8-4.4 3.0-4.8 3.0-5.0 3.5-5.5
South West 2.8-4.2 2.7-3.9 3.2-4.5 3.6-5.0 3.6-5.0 4.0-5.5
Off Central* 4.0-6.0 3.7-5.7 4.0-6.2 4.5-6.7 4.5-7.0 4.5-7.0
Off Central** 3.5-6.0 3.3-5.7 3.8-6.2 4.3-6.7 4.0-6.5 4.5-6.5
North West 4.2-5.8 3.5-5.2 3.8-5.6 4.3-6.2 4.3-6.2 4.3-6.2
Source: Cushman and Wakeeld Research
Note: The above values for mid segment typically include units of 1,700-2,500 sq..
Despite the subdued demand witnessed by the
residential realty market, there were some significant
launches by the prominent developers like Sobha and
Salarpuria in the mid segment and Nitesh Estates and
Equinox Reality in the high-end segment.
New Residential Launches
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Given the subdued demand and present inventory
in the market, the under construction projects are
getting delayed. Also, the customers are being
attracted by various value added and customized
offerings by the new developers.
Under Construction Residential Property Update
Project Name Developer Location Number of Units* Type Area of Units - in sqft
Equinox Water Edge Equinox Reality Hebbal 400 Apartment 3BHK: 2,5264BHK: 3,067 to 3,870
Sobha Marvella Sobha Developers Sarjapur Road 86 Apartment 3BHK: 1,846 to 2,0684BHK: 3,700 to 3,744
Nitesh Napa Valley Nitesh Estates Jakkur 133 Villas 3BHK: 2,8594BHK: 4,243 to 5,631
Salarpuria Senorita Salarpuria Sarjapur Road 349 Apartment 3BHK: 1,540 to 1,917
* Esmated and as per market informaon
Bengaluru witnessed a supply of 3.02 msqft of
office space and net absorption of 1 .06 msqft across
grades in the second quarter. Pre-commitments of
about 0.7 msqft were recorded. Maximum absorption
was witnessed in the Peripheral micro market of Outer
Ring Road where the rental values also appreciated
around 4%. The overall vacancy level decreased to
12.3%. The buoyancy in demand in the peripheral
micro markets of Outer Ring Road and Whitefield &
Electronic City, resulted in an appreciation in rental
values in the range of 4-6%.
Commercial Office Sector
The low availabilities in the existing malls and
lack of new supply have resulted in demand spilling
over to the main streets. As a result, rentals in the
prime main streets have appreciated by 8-9% in the
quarter.
Retail Sector
In the residential market, the capital values forthe next quarter are expected to be stable in most
of the micro markets. Factors like sustained demand
and high concentration of mid segment housing,
proximity to airport and IT hub are expected to cause
appreciation in capital values in locations like South-
East, North and East. The demand and appreciation
levels will rely on the interest rate movement in the
short term. The rental values are expected to be
stable over the next few months.
Around 7.73 msqft of new supply in the office
space is expected to come in the second half of 2012.
Subdued absorption levels are expected to prevail inthe next quarter also. However, micro markets like
Outer Ring Road might witness a marginal escalation
in the rentals by the end of 2012 because of the
healthy absorption level in this micro market.
Due to the lack of any planned malls supply during
the second half of the year, retailers may focus on
churn to secure leasing opportunities. Hence, the
rentals are expected to show slight appreciation in
select micro markets.
Outlook
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The residential market during the second quarter
of 2012, registered a slowdown in demand. On account
of sluggish sales activity, residential markets in
Chennai registered stable capital values as developers
refrained from increasing the rates in order to attract
consumers.
Leasing activity was also subdued during the
quarter, resulting in stable rental values across all
micro markets.
The commercial office market in Chennai registered
robust absorption during the second quarter of 2012.
Absorption of around 917,000 square feet (sqft)
registered during the quarter leading to marginally
lower vacancy in Grade A space. Despite the healthy
absorption, infusion of additional supply resulted in
stable rental values during the quarter.
Malls and main street rentals during the quarter
remained stable on account of limited leasing activity.
There was no new mall supply registered during
the second quarter of 2012. With no supply and
little leasing activity, the vacancy levels in the malls
persisted at 8.2% during the quarter.
Chennai
Market Overview
16,500
14,50013,500
9,0007,500
6,000
-
4,000
8,000
12,000
16,000
20,000
Ready Residental Property Values in June'12
Price (INR/sqf)Source: Cushman & wakefield Research Represents mid and high-end segments
Trends & Updates
Ready Residential Property Update
The overall demand scenario in the housing market
was subdued during the quarter. The capital values
across various markets remained stable. Despite
the sales enquiry being sluggish, ready property in
the market continued to fare better than the under
construction projects as several transaction in the
high-end segment were recorded during the quarter.
Average Capital values High end (INR 000/sq.ft.)
Location 2008 2009 2010 2011 1Q 2012 2Q 2012
Boat Club 18.0-24.0 18-20 18.0-23.0 20-25.0 20-25.0 20-25.0
R.A Puram* 13.0-15.0 13-15 13.0-16.5 14.0-17.0 14.0-18.0 14.0-18.0
Besant Nagar NA NA NA 12.5-13.5 12.5-13.5 12.5-13.5
Kotturpuram NA NA NA 12.0-14.0 12.0-14.0 12.0-14.0
Adyar 5.5-10.0 5.5-9.5 8.0-12.0 11.5-13.5 12.5-14.0 12.5-14.0
Poes Garden** 14.5-20 14.5-18 14.5-20 17.5-24.5 18.5-25 18.5-25
Nungambakkam 13.0-16.0 13.0-16.0 13.0-16.5 13.0-17.0 14.0-18.0 14.0-18.0
Anna Nagar 6.0-9.0 6.0-9.0 7.5-10.5 8.0-11.5 9.0-12.0 9.0-12.0
Kilpauk 4.0-8.0 4.0-8.0 8.0-12.0 9.0-15.0 9.0-15.0 9.0-15.0
Source: Cushman & Wakeeld Research
Note: The above values for high segment typically include units of 1,800-4,000 sq..
*RA Puram also includes Alwarpet and Abhiramapuram
**Poes Garden also includes Venus Colony and Kasturi Rangan Road
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Source: Cushman & Wakeeld Research
Note: The above values for mid segment typically include units of 1,000-2,000 sq..
Average Capital values Mid Segment (INR 000/sq.ft.)
Location 2008 2009 2010 2011 1Q 2012 2Q 2012
Adyar 4.5-6.5 4.5-6.5 6-8.5 8.0-11.0 8.5-12.0 8.5-12.0
Rajiv Gandhi Salai(Perungudi)
2.5-3.6 2.5-2.8 3.5-4.5 4.0-5.5 4.5-6.0 4.5-6.0
Velachery 3.8-4.2 3.5-4.0 3.5-5.0 3.5-5.5 4.0-6.0 4.0-6.0
T Nagar 4.0-6.5 4-6.5 7.5-10.5 8.5-11.5 8.5-13.0 8.5-13.0
Mylapore NA NA NA 8.0-12.5 9.0-14.0 9.0-14.0
Mogappair NA NA NA 5.0-5.5 5.0-6.5 5.0-6.5
Kilpauk 4.5-6.0 4.5-6.0 6.0-8.0 7.5-9.5 8.0-10.0 8.0-10.0
Chennais housing market registered a drop in
the supply front with close to 4,400 units launched
during the quarter, registering a 47% drop over
the previous quarter. Rajiv Gandhi Salai registered
the highest number of project launches during the
quarter. However, GST recorded the largest number
of units (28%) being launched during the quarter. Mid
segment accounted for approximately 60% of the
total number of units launched during the quarter.
New Residential Launches
* Esmated and as per market informaon
Project Name Developer Location Number of Units* Type Area of Units - in sqft
Futura Casa Grande Off SH 57, 6 Lane High-way, Sriperumbudur
224 Row Houses and Villas Row Houses: 1007Twin Villas: 1381 Inde-pendent villas: 2750
Greenn Athens Green Tree Homesand Ventures
Kovalam KelambakkamRoad, (ECR KelambakkamLink Road)
40 Apartments 4BHK: 4600 to 5000
Greens Lotus GVSPL T.Nagar 11 Apartments 3BHK: 2370 to 3030Lumina Lancor Guduvanchery-Thiruporur
(Nellikuppam) Road,Guduvanchery
504 Apartments 3BHK: 1143 to 1287
Pushkara Marg Properties Kazhipattur, OMR 204 Apartments 1BHK: 5882BHK: 1075 to 11653BHK: 1265
The Gardenia Ozone Group 4th Avenue, Anna Nagar 32 Apartments 4BHK: 3640
Akash Ganga Rajkham Builders Saibaba Nagar, Pallikarnai 87 Apartments 2BHK: 919 to 10023BHK: 1182 to 1212
Groovy Woodz VIP Housing and Prop-erties, Shri JananiHomes Ltd
Kazhipattur, OMR 93 Apartments 3BHK: 21005BHK: 4000
Under construction projects during the quarter
also witnessed limited movement in capital values.
Nearly 15% of the projects registered moderate
appreciation in the range of 2-5%. However, several
projects in the suburbs were noticed to register price
increase over 8%.
During the quarter, Vijay Shanthi Builders handed
over several units of their Lotus Pond Project in
Kelambakkam.
Under construction Residential Property Update
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The demand scenario in the housing market is
expected to remain sluggish over the forthcoming
months. As a result the rental and capital values
across majority of the residential markets are
likely to remain stable.
As a result of the subdued demand scenario
and persisting vacancy levels, limited project
completions during the next two quarters are
expected in the commercial office sector. A
realistic supply estimate of 1.2 million square
feet (msqft) is expected to be infused during the
second half of 2012.
Despite the anticipated demand in main streets,
limited supply in these retail precincts is likely to
result in stable rentals during the third quarter
of 2012. With no new mall supply lined up for the
third quarter, the mall rentals are also expected to
remain stable.
Outlook
Low availabilities continue to prevail in the retail
main streets of Chennai. Retailers involved in the
jewellery business prefered to take up premium
properties in Anna Nagar, whereas some other luxury
retailers located in Khader Nawaz Khan Road exited
the city due to poor business prospects.
Retail Sector
Office space of over 341,000 sqft was infused during
the second quarter of 2012. The supply was restricted
to CBD and off-CBD markets. In the suburban and
peripheral office districts, developers were hesitantto complete their projects due to lack of commitments
for their under-construction inventory. Rental values
remained stable across all the micro markets during
the quarter mainly because of the addition of space
in the CBD locations and high vacancy rates in thesuburban and peripheral markets.
Commercial Office Sector
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Hyderabad
Market Overview
Hyderabads Residential Market saw an increase
in demand in the form of growing NRI investments
and enquires from end-users in the second quarter
of 2012. Due to this increase in demand, the prices
appreciated by around 7-10% in prominent mid
segment locations such as Miyapur, Chandanagar,
Kukatpally, Nallagandla etc. However there was not
much supply in the residential market due to the
uncertainty remaining over delay in announcementof revision for land reservation regulation (G.O.
45). The overall capital values witnessed marginal
appreciation in the range of 1-2% in areas such as
Himayatnagar, Madhapur, Gachibowli. The rentals
also remained stable across most locations.
There was a substantial increase in demand for
commercial office space market in Hyderabad in
the second quarter compared to the first quarter
with overall absoprtion was recorded at 870,000
sqft., nearly 23% higher than the previous quarter.
The supply was 1,510,000 sqft., which is nearly 2.7
times the previous quarter.
In the retail markets, main street rentals
reduced by 5-7 % due to reduced leasing enquiries
in the face of poor quality supply. The retail market
continued to expand into new locations such as
Chandanagar, Madinaguda, A.S. Rao Nagar.
Trends & Updates
Ready Residential Property Update
The ready residential property witnessed stable
capital values in the second quarter of 2012. Though
there have been healthy enquiries about these
projects, prices in most of the areas have remained
mostly stable with only marginal increases in select
projects in Kondapur.
11,250
8,300 8,600
4,9005,500 5,350
-
2,000
4,000
6,000
8,000
10,000
12,000
Ready Residental Property Values in June 12
Price (INR/sqf)Source: Cushman & Wakefield Research Represents mid and high-end segments
Average Capital values High end (INR 000/sq.ft.)
Location 2008 2009 2010 2011 Q1 2012 Q2 2012
Banjara Hills 6.5-7.1 5.8-6.5 6.0-7.2 6.4-7.5 6.4-7.5 6.5-7.5
Jubilee Hills 6.5-7.1 5.5-6.3 6.0-7.0 6.2-7.2 6.1-7.2 6.1-7.2
Himayatnagar 3.4-4.4 3.3-4.0 3.7-4.0 3.7-4.2 3.7-4.1 3.7-4.1
West & East Marredpally 3.3-4.3 3.3-3.8 3.5-4.0 3.6-4.3 3.6-4.3 3.6-4.3
Begumpet, Somajiguda 3.9-4.5 3.9-4.5 4.1-4.5 4.3-4.8 4.3-4.7 4.3-4.7
Madhapur, Gachibowli 3.8-4.4 3.5-4.3 3.8-4.9 3.9-5.3 4.0-5.3 4.0-5.3
Kukatpally 3.3-4.3 3.3-4.0 3.5-4.5 3.8-5.1 3.8-5.1 3.8-5.1
Miyapur, Nizampet Road NA 2.6-3.3 2.7-3.4 2.8-3.5 2.9-3.5 2.9-3.5
Source: Cushman and Wakeeld ResearchThe above values for high end typically include units of 1,600-3,200 sq..
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There were not many new residential launches
in this quarter due to the uncertainty over the landreservation regulation (G.O.45). Three new projects
with approximately 960 units were launched in areas
like Kukatpally, Shaikpet and Kompally, with one of them
being the launch of a new phase in an already existingproject. Approximately 4,000 units are in pre-launch
stage.
New Residential Launches
Average Capital values Mid Segment (INR 000/sq.ft.)
Location 2008 2009 2010 Q4 2011 Q1 2012 Q2 2012
Banjara Hills 3.4-4.2 3.6-4.2 3.6-4.5 3.8-4.6 3.8-4.6 3.8-4.6
Jubilee Hills 3.4-4.0 3.5-4.0 3.7-4.0 4.0-4.2 4.0-4.2 4.0-4.2
Himayatnagar 2.6-3.0 2.7-3.0 2.7-3.5 2.7-3.7 2.7-3.6 2.6-3.8
West & East Marredpally 2.5-3.0 2.5-2.8 2.7-3.0 2.8-3.2 2.7-3.2 2.7-3.2Begumpet, Somajiguda 2.5-3.0 2.6-3.1 2.8-3.5 2.9-3.6 2.8-3.5 2.8-3.5
Madhapur, Gachibowli 2.6-3.0 2.5-3.1 2.6-3.4 2.8-3.5 2.8-3.7 3.0-3.6
Kukatpally 2.4-2.8 2.4-2.9 2.7-3.2 2.9-3.5 2.9-3.5 2.9-3.5
Miyapur, Nizampet Road NA 1.8-2.5 1.8-2.5 2.4-3.0 2.3-3.2 2.3-3.3
Source: Cushman and Wakeeld Research
The above values for mid range typically include units of 1,200-1,600 sq..
* Esmated and as per market informaon
Project Name Developer Location Number of Units* Type Area of Units-in sqft
Lodha Meridian Lodha Builders Kukatpally 230 Apartment 2 BHK:1,278 to 1,4763 BHK: 1,854 to 2,259
Aparna Aura Aparna Constructions Shaikpet 130 Apartment 3 BHK: 1,820 to 2,406
Bhu:Sattva Saket Group Kompally 600 Apartment 3 BHK: 1,798 to 3,391
The under construction residential properties
in areas like Miyapur, Chandanagar, Kukatpally,
Nallagandla, Kondapur etc saw an increase in prices
by around 7-10%. This increase in prices was due to
growing enquiries from end-users and increasing
demand from NRI investors. However, the prices of
under construction properties were stable in areas
like Madhapur, Gachibowli, Tellapur, Pochampally.
There were a few projects like Bellezza in Kukatpally
and Vermont Projects in Begumpet where prices
increased by a huge margin of around 20-25% as
the last units of these projects were sold out in this
quarter.
Under construction Residential Property Update
In the office market, Grade A absorption (mostly
in the suburban micro market) was recorded at
over 520,000 square feet (sqft). However, there
was a downward trend in the absorption of non-IT/
ITeS space as companies are being cautious about
expansion due to the current global economic
uncertainties. The vacancy remained unchanged
from the first quarter at 16%. The office rentals
have also remained stable in most of the micro
markets.
Commercial Office Sector
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In the retail market, retailers expanded their
operations to new locations such as Chandanagar,
A.S.Rao Nagar, L.B. Nagar, Habsiguda due to adequate
supply, flexibility in leasing terms and favourable
rentals in these areas. The main street rentals
remained stable in most of the areas barring Banjara
Hills, Jubilee Hills and Ameerpet where they have
decreased by around 5-8% due to decrease in leasing
enquiries and lack of quality space.
Retail Sector
In the residential market, new launches are
expected in areas like Kukatpally, Miyapur, Nallagandla,
Shaikpet, Gopanpally in the next 3-6 months. The
overall demand is expected to increase mainly due to
NRI investors resulting in a price appreciation in primeresidential areas.
In the commercial office market, Grade A rentals
are expected to remain stable due to availability of
second generation space options. However Grade B
rentals might decrease a bit due to substantial supply
in the CBD and Off-CBD areas. Overall, the demand is
expected to remain moderate over next few quarters.
In the retail segment, there could be an overall
increase in the demand. Demand in new locations like
Chandanagar, A.S.Rao Nagar, L.B. Nagar, Habsiguda is
expected to increase as retailers continue expanding
into these new areas. Prime markets like Jubilee Hillsand Banjara Hills are also expected to attract more
foreign retailers. The lease of some malls is expected
to come up for renewals shortly, resulting in rentals
getting revised upwards in the next 3-6 months.
Outlook
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Kolkata
Market Overview
During the second quarter of 2012, Kolkatas
residential market reflected a comparatively less
vibrant market scenario than the last quarter due
to continuing slow economic growth of the country
and high inflationary conditions. Project launches
were slightly lower than previous quarter as the
sales remained slow across the micro markets.
However, due to the existing supply demand gap
in affordable and mid segment, developers wereseen to launch most of their projects to cater to
this demand. Majority of the new projects were
launched in the peripheral locations like Sonarpur,
Nagerbazar, Birati, primarily due to gradually
improving infrastructure and affordable land prices.
The commercial office space market in Kolkata
also witnessed steady demand recording absorption
of approximately 750,000 sqft. Commercial office
space supply increased almost 61% over theprevious quarter at just under a million square feet.
The retail market in Kolkata recorded sluggish
transaction trend due to the current economic
situation coupled with lack of fresh mall supply in
the city. Major retailers pre-committed in under
construction malls and main streets. As a result,
main streets in CBD location, continued to witness
appreciating rentals.
8,500 8,5008,200
6,0005,500
4,500
-
2,000
4,000
6,000
8,000
10,000
Ready Residental Property Values in Jun '12
Price (INR/sqf)Source: Cushman & Wakefield Research Represents mid and high-end segments
Trends & Updates
Ready Residential Property Update
Mid and high-end ready properties across the
city continued to witness stable price points in view
of already high property prices and high inflation.
Capital values remained stable across most micro
markets for the quarter except for Southern
Avenue and EM Bypass where the property prices
witnessed 6% and 2% respectively.
Average Capital values High end (INR 000/Sq.ft.)
Location 2008 2009 2010 2011 Q1 2012 Q2 2012
South 5.0 - 6.0 4.8-5.9 5.3-6.8 6.3-8.5 7.0-9.0 7.5-12.0
South Central 9.0-10.0 8.5-9.6 9.5-13.0 10.0-18.0 10.0-18.0 10.0-18.0
South East 4.5-5.7 4.5-5.7 4.5-8.0 5.8-9.2 5.8-9.2 5.8-9.5
South West 9.5-10.0 8.6-9.8 8.9-13.0 10.0-15.0 10.0-15.0 10.0-15.0
Central 7.5-8.5 7.2-8.1 7.5-9.2 8.3-10.2 8.3-10.2 8.3-10.2
East 4.0-5.0 4.0-4.7 4.0-4.9 4.5-5.5 4.5-5.5 4.5-5.5
North East 2.5-3.0 2.4-2.9 2.4-3.9 2.8-4.5 2.8-4.5 2.8-4.5
Source: Cushman and Wakeeld Research
Note: The above values for high-end segment typically include units of 2,000-4,000 sq..
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Key to Locations:
Average Capital values Mid Segment (INR 000/Sq.ft.)
Location 2008 2009 2010 Q4 2011 Q1 2012 Q2 2012
South 2.8-4.3 2.7-3.9 3.2-4.5 3.8-5.5 3.8-5.5 3.8-5.5
South Central 4.5-5.5 4.2-5.3 4.5-6.0 5.5-8.0 5.5-8.5 5.5-8.0
South East 2.5-3.0 2.4-2.8 2.5-3.2 2.8-4.5 2.8-4.5 2.8-4.5
North East 1.8-2.2 1.9-2.2 2.2-2.7 2.4-3.0 2.4-3.0 2.4-3.0North 1.8-3.5 1.8-3.4 2.2-4.7 2.8-5.2 2.8-5.2 2.8-5.2
Source: Cushman and Wakeeld Research
NNote: The above values for mid-end segment typically include units of 1,600-2,000 sq..
South*: Southern Avenue, Dover Lane
South-Central*: Ballygunge, Queens Park, Rainy Park,
Gurusaday Road, etc.
South-East: EM Bypass
South-West: Alipore Park Road, Ashoka Road,
Belvedere Road, etc.
Central: Lansdowne, Park Street
East: Salt Lake
North-East: Rajarhat
South**: New Alipore, Golf Green, Tollygunge, etc.
South-Central**: Hindustan Park
North: Kankurgachi, Lake Town, Jessore Road,
Ultadanga, etc.
Just over 1,200 residential units were launched
during the second quarter targeting the affordable
and mid segment projects. However, the number was
significantly less than previous quarters 1,600 units.
Most of the projects were launched in the peripheral
locations within the price bracket of INR.2,200 -
3,700. A small but significant project was launched in
the prime North location at Shyambazar during this
quarter.
New Residential Launches
Project Name Developer Location Number of Units* Type Area of Units - in sqft
Arihant Garden Arihant Group Rajarhat 70 Apartment 2BHK: 965 to 1,0203BHK: 1,201 to 1,334
Urban Greens (Phase-I) Loharuka Group &Baghban Developers
Rajarhat 112 Apartment 2BHK: 687 to 9813BHK: 892 to 1,0244BHK: 1,118 to 1,354
Himadri Ginni Realty (NaihatiJute Mills subsidiary)
Shyambazar 216 Apartment 3BHK: 1,623 to 2,053
Magnolia Skyview Magnolia InfrastructurePrivate Limited
Rajarhat 300 Apartment 2BHK: 980 to 11853BHK: 1,228
BCT Sonar Sansar BCT Infrastructure LLP Sonarpur 131 Apartment 3BHK: 1,028 to 1,2644BHK: 1,188 to 1,290
Subarna Bhoomi Bengal DCL NagerBazar 140 Apartment 3BHK: 1,283 to 1,310
Panchsheel Vatika Panchsheel Birati 60 Apartment 2BHK: 851 to 8833BHK: 1,173 to 1,249
Chitrakut Dham NNP & Meridian Group Rajarhat 140 Apartment 2BHK: 795 to 1,1153BHK: 991 to 1,229
* Esmated and as per market informaon
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Under construction projects by reputed developers
in New Town Rajarhat continued to reflect a stable price
trend as the take up of the units has slowed down than
the previous quarter. However, under construction
properties alongside the emerging corridors in North
and South peripheral locations continued at a steady
pace.
Kolkatas office market witnessed an improved
transaction scenario as compared to the last quarter.
Absorption was mainly concentrated in the locations
of Salt Lake and Rajarhat, predominantly by the IT/
ITeS companies accounting for nearly 93% of the
total office space transactions. Due to availability of
Grade A supply in peripheral locations, rental values
remained steady in Rajarhat. However rentals for
Grade A properties in Park Street/Camac Street area
continued to witness nominal appreciation, mainly
due to the low vacancy prevailing in the micro market.
Kolkatas retail market exhibited a less vibrant
scenario with its slow pace of transactions. There
was no fresh supply of mall space hence, the vacancy
level remained unaltered. Due to lack of mall supply,
major retailers were seen to pre-commit in under
construction malls and main streets. Rental values
remained stable across malls except Elgin Road where
a prime mall has started renewal of its lease at a
higher rate. Main streets in CBD continued to witness
high appreciation due to increased enquiries.
Under construction Residential Property Update
Commercial Office Sector
Retail Sector
The growing demand-supply gap in mid ranged
residential properties is expected to keep the
residential market thriving in the next quarters.
A few high-end projects are expected to be
launched during the second half of the year on
the expectations of improvement in the overall
economic scenario. Capital and rental values are
expected to remain stable across the city.
Almost 1.7 msqft Grade A office supply is likely
to get infused this year, which will be concentrated
in Salt Lake and Rajarhat locations. The high
vacancy levels in these locations will continue to
keep the rental values stable. Rental value around
Ruby connector area will appreciate further due
to increased demand and low supply. However,
rental values along the EM Bypass, Topsia side
are expected remain stable on account of ongoing
flyover construction work.
The retail market in the city is likely to see
approximately 350,000 square feet (sqft) of fresh
mall supply during the second half of the year. This
mall supply being insufficient to meet demand,
existing malls and main streets will continue to
witness appreciating rentals.
Outlook
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Mumbai
Market Overview
Mumbai witnessed a reduced number of new
launches during the quarter. This is primarily due to
developers ensuring compliance with the new DCR
rules and other regulations requiring allocation
of 20% of area in each new project admeasuring
2,000 square meters and more for the lower
income group.
The commercial office market in Mumbai
witnessed a healthy absorption of 1.45 millionsquare feet (msqft) of Grade A space. This is a 9%
increase over the previous quarter. Additionally
pre-commitments stood at approximately 500,000
square feet (sqft) mainly concentrated in Bandra-
Kurla Complex.
Mall and main street rentals have remained
stable during the quarter with the exception of
Vashi. Lower transaction activity, existing vacancy
levels and some churn resulted in stable rentals for
the quarter.
37,000 36,00033,000
11,0009,500
5,700
-
10,000
20,000
30,000
40,000
Ready Residental Property Values in June '12
Price (INR/sqf)Source: Cushman & Wakefield Research Represents mid and high-end segments
Trends & Updates
Ready Residential Property UpdateAll micro-markets have witnessed stable capital
values except North, Far North and North-East
where appreciation has been seen in the mid and
high end segment. Lack of quality options in North
Mumbai have resulted in rise of capital values
in premium projects at the location. Residential
leasing activity has remained at par resulting in
stable rental values across all micro markets.
Average Capital values High end (INR000/sq.ft.)
Location 2008 2009 2010 2011 1Q 2012 2Q 2012
South 43.0-55.0 42.5-58.0 43.0-60.0 45.0-65.0 45.0-65.0 45.0-65.0
South Central 47.0-67.0 42.0- 66.0 45.0-70.0 45.0-75.0 45.0-75.0 45.0-75.0
Central 33.0-53.0 34.0-55.0 35.0-55.0 32.0-54.0 32.0-54.0 32.0-54.0
North 27.0-31.0 22.0-30.0 24.0-32.0 24.0-32.0 24.0-32.0 24.0-32.0
Far North 9.0-13.0 10.0-16.5 11.0-16.5 11.0-16.5 11.0-16.5 12.0-18.0
North East 14.0-18.0 10.0-16.0 10.0-16.0 10.0-18.0 10.0-18.0 11.0-18.0
Source: Cushman and Wakeeld Research
Note: The above values for high-end segment typically include units of 2,500 - 6, 000 sq for South, South-Central, Central and North and units of 1, 800 4,000 sq for North (Santacruz & Juhu),Far
North and North-East
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South: Colaba, Cuffe Parade, Nariman Point,
Churchgate, etc.
South Central: Altamount Road, Carmichael Road,
Malabar Hill, Napeansea Road, Breach Candy, Pedder
Road, etc.
Central: Worli, Prabhadevi, Lower Parel/ Parel
North: Bandra (W), Khar (W), Santacruz (W), Juhu, etc.
Far North: Andheri (W), Malad, Goregaon, etc.
North-East: Powai
Key to Locations:
Average Capital values Mid Segment (INR000/sq.ft.)
Location 2008 2009 2010 2011 1Q 2012 2Q 2012
South 27.0-34.0 28.0-37.0 30.0-40.0 30.0-40.0 30.0-40.0 30.0-40.0
South Central 34.0-43.0 35.0-45.0 40.0-48.0 43.0-52.0 43.0-52.0 43.0-52.0
Central 18.0-28.0 15.0-26.0 17.0-30.0 17.0-35.0 17.0-35.0 17.0-35.0
North 13.5-19.5 16.0-24.0 16.0-25.0 16.0-25.0 16.0-25.0 18.0-27.0Far North 7.0-9.0 8.5-11.5 9.0-11.5 9.0-13.0 9.0-13.0 9.5-13.5
North East 6.0-7.4 6.4-8.5 6.5-8.5 6.5-10.0 6.5-10.0 7.5-11.0
Mumbai witnessed around 1,200 units launched
in the second quarter of 2012. The new projects were
mainly concentrated in the peripheral locations, but,
few significant ones were in the city and suburban
micro markets.
New Residential Launches
Project Name Developer Location Number of Units* Type Area of Units - in sqft
Khushi Paradise Khushi builders Dhaisar 138 Apartment 1BHK: 7452BHK: 975
Tropical Lagoon Tower 3 Soham Builders Thane 88 Apartment 2BHK: 1270 to 13303BHK: 1630
Sai Miracle Paradise Group Kharghar 110 Apartment 2 BHK: 1225 to 12653 BHK: 1685 to 1710Terrace Flat: 2500 to 3125
Indiabulls Blu Indiabulls Worli 360 Apartment 2BHK: 14803BHK: 23964BHK: 2940
Hubtown Hillcrest Hubtown Andheri East 160 Apartment 1 BHK: 730 to 7752 BHK: 1020 to 10602.5 BHK : 1150
Hubtown Sunmist Hubtown Andheri East 90 Apartment 2BHK: 17003BHK: 24004BHK: 2800
Gaurav Legend Ravi Group Andheri East 120 Apartment 1BHK: 495
Ajmera Pristine Ajmera Group Borivali 70 Apartment 3BHK: 1595
Godrej Serenity Godrej Properties Chembur 68 Apartment 3BHK: 14164BHK: 1925 to 1993Penthouse: 3538 to 3683
* Esmated and as per market informaon
Source: Cushman and Wakeeld Research
Note: The above values for mid segment typically include units of 1,400 - 2,500 sq for South, South-Central, Central and North and units of 1,200 - 1,600 sq for Far North and North-East
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Modest leasing activity was witnessed across
malls and main street locations across the city
during the last quarter. Transactions were mainly
driven by lifestyle and the food and beverage
segment. Both main street and mall rentals largely
remained stable during the quarter. Vashi was an
exception as it witnessed a 5% increase in mall
rentals.
The commercial office market in Mumbai
witnessed absorption of 1.45 msqft of Grade A
space. BFSI sector continued to remain the highest
demand driver with a 22% share in absorption.
Andheri (31%), Lower Parel (26%) and Nariman
Point (13%) had the highest share in absorption.
Grade A supply for the quarter stood at 1.39 msqft
a 64% increase over the previous quarter. Supply
was mainly concentrated in Andheri and Lower
Parel. Grade B supply stood at 1.08 msqft a 170%
increase over the previous quarter. Rentals have
remained stable due to prevailing high vacancies
across the city.
Retail Sector
Commercial Office Sector
Both rental and capital values are expected
to remain stable in the upcoming quarter. Most
upcoming launches are expected to cater to the
mid segment with Goregaon and Malad expected
to see new project launches in the near future.
Suburban locations like Malad and Goregaon
along with peripheral locations in Thane and
Navi Mumbai are expected to witness increased
interests by both end-users and investors alike.
Fresh supply of approximately 2.96 msqft is
expected to be infused in the next quarter. This new
supply is predominantly in Bandra-Kurla Complex
which accounts for a 65% share. Commercial office
rentals in the city will continue to remain stable
due to high vacancies and competitive pressure
from upcoming supply.
Mall rentals in Malad, Goregaon and Link road
are expected to witness a minor appreciation on
account of low vacancies and no new mall supply.
Construction has begun on the next phase of
Nirmal Lifestyle at Mulund. Viva City an under
construction mall at Thane is expected to be
completed in the first quarter of 2013.
Outlook
The city has witnessed healthy construction
activity during the last quarter especially in locations
like Thane, Goregaon, Malad and Navi Mumbai. Some
developers are offering payment schemes to attract
new customers. Prices have witnessed an appreciation
for some premium under construction projects.
Under construction Residential Property Update
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The residential real estate market recorded
a stable trend in the capital values across most
micro markets in the region. However, Gurgaon
was an exception as it recorded appreciation in
capital values in the mid and high-end segment by
4% and 6% respectively compared to the previous
quarter. The rental values in Gurgaon also recorded
appreciation by nearly 12% owing to the increase
in demand for commercial office spaces during the
quarter.
The office market recorded a total absorption
of 940,000 sqft during the quarter registering a
growth of nearly 57% over the quarter. This was
despite of a significant drop in the total number of
transactions. The demand was driven mainly by the
IT/ITeS and consulting companies.
Slow pace of construction and deferment has
resulted in no mall supply during the quarter.
The demand for space in the main streets was
witnessed from both domestic and international
retailers. Rental values remained stable across the
main streets and malls with the exception of Khan
Market and Gurgaon.
National Capital Region
Market Overview
15,250
9,7508,750
10,250
7,300 7,250
-
5,000
10,000
15,000
20,000
Ready Residental Property Values in June '12
Price (INR/sqf)Source: Cushman & Wakefield Research Represents mid and high-end segments
Trends & Updates
Ready Residential Property Update
Prices of ready properties across the micro
markets of Delhi and Noida remained stable on
account of subdued demand and prevailing high
values. Apartments in the established locations of Golf
Course Road and Sohna Road in Gurgaon continue to
see appreciation and have established new peaks.
Average Capital values High end (INR 000/Sq.ft.)
Location 2008 2009 2010 Q4 2011 Q1 2012 Q2 2012
South West 28.0-33.0 29.0-34.0 36.0-43.0 42-50.0 50.0-60.0 50.0-60.0
South East 19.0-23.0 21.0-24.0 24.0-30.0 25.0-35.0 25.0-40.0 25.0-40.0
South Central 20.0-23.0 21.0-25.0 25.0-32.0 27.0-40.0 27.0-40.0 27.0-40.0
Central 45.0-50.0 40.0-45.0 50.0-57.0 50.0-65.0 60.0-80.0 60.0-80.0
Gurgaon 5.2-11.0 5.3-12.5 6.2-18.0 8.5-21.0 9.5-25.0 10.0-26.0
Noida 5.2-6.2 5.2-6.5 5.5-7.0 5.5-7.5 5.8-8.0 5.8-8.0
Source: Cushman & Wakeeld Research
Note: The above values for high end segment typically include units of 2,000-4,000 sq..
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Average Capital values Mid range (INR 000/Sq.ft.)
Location 2008 2009 2010 Q4 2011 Q1 2012 Q2 2012
South East 14.0-16.0 14.5-16.5 15.0-20.0 15.0-28.0 20.0-30.0 20.0-30.0
South Central 18.0-20.0 18.5-20.5 20.0-23.5 25.0-30.0 25.0-30.0 25.0-30.0
Gurgaon 3.8-5.2 4.0-6.5 4.5-7.5 5.0-9.0 6.5-9.0 6.5-10.0
Noida 3.0-4.5 3.2-5.5 3.8-5.6 4.2-5.8 4.5-6.0 4.5-6.0Source: Cushman & Wakeeld Research
Note: The above values for mid range segment typically include units of 1,600-2,000 sq..
High-end Segment
South-West: Shanti Niketan, Westend, Anand Niketan,
Vasant Vihar
South-East: Friends Colony East, Friends Colony West,
Maharani Bagh, Greater Kailash - I, Greater Kailash II.
South Central: Defence Colony, Anand Lok, Niti Bagh,
Gulmohar Park, Hauz Khas Enclave, Safdarjung
Development Area, Mayfair Gardens, Panchsheel Park,
Soami Nagar, Sarvodaya Enclave.
Central: Jorbagh, Golf Links, Amrita Shergil Marg,
Aurangzeb Road, Prithviraj Road, Sikandara Road, Tilak
Marg, Ferozshah Road, Mann Singh Road, Sunder Nagar,
Nizamuddin, Tees January Marg, Chanakyapuri.
Mid Segment
South-East: New Friends Colony, Kalindi Colony, Ishwar
Nagar, Sukhdev Vihar, Kailash Colony, Pamposh Enclave.
South Central: Uday Park, Green Park, Saket, Asiad
Village, Geetanjali Enclave, Safdarjung Enclave,
Sarvapriya Vihar, Panchsheel Enclave, Navjeevan Vihar.
Key to Locations:
Several projects were pre launched this quarter
mainly in the mid segment and are expected to be
formally launched in the coming months to capitalise
on the opportunities provided in the festive season.
The rates of these projects are also likely to move
upwards. Majority of the projects in Gurgaon expected
to be concentrated in the Dwarka Expressway and the
Southern Periphery Road
New Launches
Project Name Developer Location Number ofUnits*
Type Area of Units - in sqft
International City Phase II Shobha Developers Sec 109, DwarkaExpressway, Gurgaon
180-200 Villas 3,493
Wind Chants Experion Sector 112, Gurgaon 550 600 Apartments 2 BHK: 2,2753 BHK: 2,676 to 3,6504 BHK: 4,600Penthouse: 8,800
The Orchards Jaypee Group Sector 131, Noida 1,200 1,300 Apartments 2 BHK: 1,2353 BHK: 1,798 to 2,1054 BHK: 2,600
* Esmated and as per market informaon
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Construction activities for projects in their
advanced stages were noticed to be brisk. Few
developments in Gurgaon were completed
and handed over. Several other residential
developments are in their final stages and are likely
to be handed over in the coming months. Almost
all the projects under construction in Gurgaon and
Noida have registered appreciation in the range of
5-8% over the quarter.
Under construction Residential Property Update
The supply of office space during the second
quarter was recorded at 925,000 sqft with Noida
accounting for nearly 725,000 sqft. The CBD
location of Connaught Place also recorded an
infusion of around 200,000 sqft all of which was
Grade B stock.
Commercial Office Sector
Demand for space in the prominent main
streets of Khan Market and Greater Kailash 1
was mainly from the domestic retailers in lifestyle
and jewellery segments. Rents across the main
streets remained stable except for Khan Market
recording a marginal appreciation of 2%. Leasing
activities in malls were limited during the quarter
leading to stable rentals. However, select malls in
Gurgaon offering quality retail spaces saw a rental
appreciation of 7% over the previous quarter.
Retail Sector
The rental and capital values for the residential
micro markets in Delhi are likely to remain stable in
the short term. However, the locations of Gurgaon
and Noida may witness marginal appreciation
owing to increased demand as the economy
improves.
An increased pace of absorption is anticipated
to continue in the second half of the year and will
be mainly in Gurgaon and Noida. Approximately
7.5 msqft of office space is under construction and
is likely to be added in the second half of the year,
which is likely to keep the rentals under pressure.
New mall developments of nearly 1.7 msqft are
likely to be added in the second half of the year
across all the micro markets. This is likely to exert
pressure on the rental values and prevent them
from appreciating in the short term. However,
demand across the main streets is anticipated to
remain buoyant and they may witness a marginal
rental increase by the end of the year.
Outlook
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Pune
Market Overview
The second quarter witnessed launch of new
residential projects catering to the mid and high-
end segments and was concentrated in the western
corridor spreading across the micro markets of Wakad,
Baner, Hinjewadi, Chinchwad and Mulshi. Several micro
markets registered appreciation in capital values during
the quarter. Rental values have been stable across most
micro markets except Baner.
The city has recorded a marginal decrease of 1.9%
in absorption of commercial space, from the previous
quarter. Supply of this quarter was recorded at 110,000
sqft and the overall vacancy rate at just under 20%. The
rentals across the city have remained stable. The office
segment has observed overall slowdown due to delayed
expansion plans of the occupiers given the current
economic conditions.
The main streets in Pune continue to generate
demand among the retailers and witnessed rental
appreciation over the quarter. Despite no new mall supply,
the prevailing high vacancy levels in the malls have led to
the stabilisation of rental values as the developers are
keen to attract tenants.
8,500
7,500 7,500
4,600 4,538 4,500
-
2,000
4,000
6,000
8,000
10,000
Residental Property Values in June '12
Price (INR/sqf)Source: Cushman & Wakefield Research Represents mid and high-end segments
Trends & Updates
Ready Residential Property Update
Micro markets such as Aundh and Baner have
witnessed capital appreciation by 9% in the highend
segment in comparison to previous quarter. While
prime locations such as Koregaon Park and Kalyani
Nagar recorded a marginal upward trend, Wanowrie
also recorded a quarterly 10% increase, primarily due
to launch of new projects.
Average Capital values High end (INR 000/Sq.ft.)
Location 2008 2009 2010 Q4 2011 Q1 2012 Q2 2012
Koregaon Park, Bundh Garden 9.6-12.7 8.5-10.7 9.0-13.0 13.0-15.5 14.0-16.0 14.0-17.0
Aundh 4.9-6.1 5.0-5.2 5.5-6.5 13.0-15.5 7.5-9.0 8.0-10.0
Kalyani Nagar 7.6-9.6 7.3-9.2 8.0-10.5 11.5-13.0 12.0-14.0 12.0-14.0
Wanowrie 3.4-4.5 3.3-3.6 4.0-5.0 4.0-5.5 4-5.5 5.0-6.0
Source: Cushman & Wakeeld Research
Note: The above values for high-end segment typically include units of 1,650-3,000 sq
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Nearly 6,600 units, catering to both mid as
well as high-end segments, were launched in the
second quarter 2012. Also new locations such as
Wagholi are witnessing launch of several projects
by prominent builders. Primarily these have been
launched at prices similar to previous quarter
except few select projects which are launched at
higher prices respective to their micro markets
such as Baner, Wakad.
New Residential Launches
Average Capital values Mid Segment (INR 000/Sq.ft.)
Location 2008 2009 2010 Q4 2011 Q1 2012 Q1 2012
Koregaon Park, Boat Club 4.5-5.0 4.5-5.5 6.0-7.0 8.0-9.0 8.0-9.5 8.0-9.5
Aundh 3.5-4.0 3.6-4.2 4.0-5.0 4.5-5.5 5.0-6.0 5.0-6.0
Baner 3.0-3.8 2.9-3.6 3.5-5.5 4.0-5.5 4.0-5.5 4.5-5.5
Wakad 2.5-3.0 2.2-2.8 3.5-4.0 3.7-4.5 3.7-4.5 4.0-4.7Kalyani Nagar 4.5-5.5 4.5-5.5 6.5-7.0 6.5-7.5 6.5-7.5 7.0-8.0
Wanowrie 3.0-3.2 2.8-3.1 4.0-5.5 4.0-5.5 4.0-5.5 4.0-5.0
Source: Cushman & Wakeeld Research
Note: The above values for mid segment typically include units of 1,200-1,400 sq
* Esmated and as per market informaon
Project Name Developer Location Number of Units* Type Area of Units
Sereno Amit enterprises Baner 468 Apartment 2BHK: 11613BHK: 1631
Renaissance Monarch Wakad 250 Apartment 2,3 & 4 BHK: 1262 to 3200
Eon Homes Kasturi Housing Hinjewadi 160 Apartment 2BHK: 1185 to 1415
L-axis Pharande Space Mulshi 600 Apartment 2BHK: 9453BHK: 1557
Empire Square Sukhwani - Agarwal group Chinchwad 850 Apartment 2 BHK: 11603 BHK: 1550
Fria Marvel Wagholi 700 Apartment 2 BHK: 12553 BHK: 1660
Arisrolia Fortune Group Hadapsar 141 Apartment 2BHK: 1019 to 1085
Umang Kolte patil developers Kharadi 3,000 Apartment 1 BHK: 6702 BHK: 965
The second quarter of 2012 saw the completion
and handover of mid segment residential projects
located at Viman Nagar, Hinjewadi, Pashan, Baner,
and Wakad. A few projects located in the suburban
and peripheral locations like Hinjewadi, Baner and
Wagholi are in advanced stages of construction and
are likely to get completed in a few months. Fast
paced construction activities have led to capital
appreciation in under construction projects in
micro markets such as Wagholi, Wakad, and Baner.
Under construction Residential Property Update
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Major international brands such as Calvin Klein,
FCUK, and Nautica have established their presence
in the city. The prime main streets such as M.G. Road
and J.M. Road have witnessed rental escalation in the
range of 7-9%, mainly due to lack of quality main street
space available. Also, Aundh witnessed increased
enquiries from apparels, food and beverages, and
furniture stores in terms of retail space due to its
proximity to Hinjewadi.
During the second quarter, Pune witnessed a
supply of 110,000 sqft of office space in the CBD.
During the same period, the city recorded absorption
of nearly 700,000 sqft of which 70% was recorded in
Grade A properties. Rentals have been stable across
most micro markets except for a marginal increase in
Hadapsar.
Retail Sector
Commercial Office Sector
The residential markets in Pune are likely to
witness a capital appreciation in select locations
such as Wanowrie, Baner, Wakad, and Chinchwad
due the increasing demand for these mid-segment
residential hubs. Rentals across the micro markets
are likely to remain stable. The residential market
in Pune is expected to maintain its momentum
across the city in the medium term.
The city is likely to witness an infusion of
approximately 1.7 msqft of commercial space
during the next quarter, catering mainly to micro
market such as Viman Nagar, Yerwada, and
Kharadi. Increased development activities are
likely to be expected on the eastern corridor. The
rentals are expected to remain stable for the next
quarter.
Main street rental appreciation is likely to
continue over the next quarter. An additional
supply of 700,000 sqft is expected at the end
of the year in Hadapsar. With pre-commitments
observed in the upcoming supply at Hadapsar,
mall rentals are expected to remain stable during
the next quarter.
Outlook
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GENERAL DISCLOSURE
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