CHENNAI July – December 2015

Chennai residential

market continues to

hit new lows in 2015

RESIDENTIAL

Homebuyers and developers shy away

as supply and demand drop to 5 year

lows ANNUAL LAUNCHES AND ABSORPTION TREND

12,000

17,000

22,000

27,000

32,000

37,000

42,000

2010 2011 2012 2013 2014 2015

Launches Absorption

Price growth at the lowest level of

this decade

PRICE GROWTH TREND

0%

2%

4%

6%

8%

10%

12%

H2 2010 H2 2011 H2 2012 H2 2013 H2 2014 H2 2015

Price growth

Signs of recovery washed

away by the RECENT FLOODS

While new launches fall by 13%,

sales drop by 9%

H2 TREND OF LAUNCHES AND ABSORPTION

-

4,000

8,000

12,000

16,000

20,000

H2 2010 H2 2011 H2 2012 H2 2013 H2 2014 H2 2015

Launches Absorption

HOWEVER, UNSOLD INVENTORY

AT ITS LOWEST LEVEL SINCE 2012

TREND OF UNSOLD INVENTORY

Sharper fall in new launches

compared to sales volume reduces

inventory pressure

20,000

25,000

30,000

35,000

40,000

45,000

2010 2011 2012 2013 2014 2015

Unsold stock

36,350

41,000

Premium segment hit hardest

as sales GO down BY 36% Y-o-Y

High prices and poor sentiments

bring down homebuyer interest in

the premium segment LAUNCHES IN EAST HYDERABAD

0

200

400

600

800

1000

1200

2011 H2 2012 H2 2013 H2 2014 H2 2015 H2

New Launch Absorption

Comparatively steeper fall in supply

and unsold inventory improve

overall market health

QT

S

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Chennai city Premium markets

Premium Markets

Chennai City

Affordable Markets

OFFICE

CHENNAI OFFICE MARKET

MOVES FROM STRENGTH TO

STRENGTH

Demand continues to grow for the

third straight year

ANNUAL TREND OF NEW COMPLETION AND ABSORPTION

0

1

2

3

4

5

6

7

8

2011 2012 2013 2014 2015

mn

sq

ft

New Completion Absorption

Vacancy levels at a record new

low of 16% and sustained rental

growth

ANNUAL VACANCY AND RENTAL TREND

40

42

44

46

48

50

52

12%

14%

16%

18%

20%

22%

24%

26%

2012 2013 2014 2015

Ren

t p

sf

Vacan

cy %

Vacancy Rents

H2 2015 WITNESSES HIGHEST EVER

HALF-YEARLY ABSORPTION FOR

OFFICE SPACE

While 2.7 mn sq ft of space was

absorbed, only 1 mn sq ft of new supply

entered the market

NEW COMPLETION AND ABSORPTION TREND DURING H2

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2013 H2 2014 H1 2014 H2 2015 H1 2015 H2

mn

sq

ft

New completions Absorption

KEY Takeaways

RESIDENTIAL

STEADY DEMAND AND REDUCING UNSOLD

INVENTORY COUPLED WITH SALES PRESSURE

WILL SOON ENCOURAGE DEVELOPERS TO

INCREASE SUPPLY

OFFICE

REDUCING VACANCY LEVELS WILL CONTINUE TO

PUSH UP RENTAL GROWTH RATES

CHENNAI July – December 2015