marketbeat industrial snapshot h2 2016 · 2017-01-10 · industrial snapshot h2 2016 bengaluru,...

Industrial Snapshot H2 2016AHMEDABAD, INDIA

MARKETBEAT

www.cushmanwakefield.com


MARKETBEAT

EconomyThe GDP growth of India witnessed an upswing during the July-

September quarter at 7.3%, up from 7.1% in the preceding

quarter. The manufacturing sector clocked in growth of 7.1%

during the quarter, after four quarters of growth above 9%.

Moreover, the Nikkei India Manufacturing Purchasing Managers'

Index (PMI) — an indicator that tracks the manufacturing sector’s

performance — was seen at 52.3 in November, lower than the

22-month high of 54.4 in October. The Indian manufacturing

sector not only continues to reel under slow growth of new

orders, but also due to cash shortages arising from

demonetization, which is hampering payments of wages, buying

activity for raw materials and overall production. Further, the

demonetization is also likely to impact volume of land deals,

which typically involve substantial cash component. The

implementation of the Goods & Services Tax (GST), which was

set to simplify the complex and multiple taxation system, is also

likely to be delayed by up to 6 months as the deadline has been

moved from April 1st to Sept 1st.

Market OverviewDemand for industrial land remained high as prices

remained stable. Sanand and Changodar continued to witness

buoyant demand for industrial land owing to inherent advantages

of strong connectivity through National Highway 8 and proximity

to the node at Dholera Special Investment Region (DSIR) along

the soon-to-be-completed Delhi-Mumbai Industrial Corridor

(DMIC). Despite high demand, the capital values of land

remained at similar levels during the second half of 2016 due to

sufficient availability of land parcels.

Industrial shed rentals remained consistent. Demand

remained subdued across major submarkets and no major

transactions in industrial shed leasing was recorded during the

second half of 2016. Sanand continued to be the preferred

market and witnessed higher enquiries from auto and auto-

ancillary companies during the period. Hence, industrial shed

rentals did not show any momentum from the first half of 2016.

Warehousing rentals maintained status quo across

submarkets. Changodar and Kheda witnessed healthy demand

for warehousing spaces during the second half of 2016, mainly

from companies in e-commerce and logistics sectors. However,

rentals remained range-bound across all submarkets due to

sufficient availability to cater to existing demand.

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%

Private Final Expenditure Growth 6.2% 6.3% 7.0%

Govt. Final Expenditure Growth 8.2% 6.6% 7.9%

Source: CSO, RBI, Oxford Economics

LAND RATES – DECEMBER 2016

SUBMARKET

INR

MN/ACRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

Sanand# 24 0.4 0.3 0.0%

Changodar 24 0.4 0.3 0.0%

Note: Quoted land rates for serviced industrial land parcels are mentioned# Represents government owned serviced plots in industrial parks

Percentage growth are in local currency; Y-O-Y – Year on Year

Conversion Rate: US$1= INR 67.85 and Euro 1 = INR 70.91

INDUSTRIAL AND WAREHOUSING RENTS – H2 2016

0%

50%

100%

0

5

10

15

20

25

30

Sanand Changodar Aslali Kheda

Industrial Rent (INR/sf/month) Warehousing Rent (INR/sf/month)

Industrial Rent Y-o-Y Growth (%) Warehousing Rent Y-o-Y Growth (%)


MARKETBEAT


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Copyright © 2017 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from mult iple sources considered

to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.

Siddhart GoelSenior Director

Research Services, IndiaTel: +91 80 40465555

[email protected]

OutlookLand capital values to rationalize in select submarkets. In

the aftermath of the currency demonetization, demand for land is

expected to be lower over the next few months, which could

exert some downward pressure on capital values.

Industrial shed rentals to have marginal upside. Transaction

activity for industrial sheds is expected to gain momentum,

driven by pharmaceuticals and automobile sectors, in the

submarkets of Changodar and Sanand respectively. As a result,

rentals are expected to increase marginally in the first half of

2017.

Warehousing rentals expected to remain stable across all

submarkets. Approximately 1 million square feet (msf) of

warehousing supply is currently under-construction in

Changodar. This supply infusion in an already oversupplied

market will keep the rentals stable in the first half of 2017.

SIGNIFICANT TRANSACTIONS

Buyer/

Lessee

Seller/

LessorType Submarket

Sale/

LeaseArea (sf)

LG NA Warehousing Changodar Lease 80,000

Amazon NA Warehousing Changodar Lease 75,000

Coldrush

LogisticsNA Warehousing Kheda Lease 50.000

Industrial Snapshot H2 2016BENGALURU, INDIA

MARKETBEAT



September quarter at 7.3%, up from 7.1% in the preceding quarter.

The manufacturing sector clocked in growth of 7.1% during the

quarter, after four quarters of growth above 9%. Moreover, the

Nikkei India Manufacturing Purchasing Managers' Index (PMI) — an

indicator that tracks the manufacturing sector’s performance — was

seen at 52.3 in November, lower than the 22-month high of 54.4 in

October. The Indian manufacturing sector not only continues to reel

under slow growth of new orders, but also due to cash shortages

arising from demonetization, which is hampering payments of

wages, buying activity for raw materials and overall production.

Further, the demonetization is also likely to impact volume of land

deals, which typically involve substantial cash component. The

implementation of the Goods & Services Tax (GST), which was set

to simplify the complex and multiple taxation system, is also likely to

be delayed by up to 6 months as the deadline has been moved from

April 1st to Sept 1st.

Market OverviewLand rates remained stable across locations. Owing to adequate

availability capital values for industrial land across all the

submarkets remained stable during the second half of the year.

Rental values of industrial sheds and warehouses have

maintained status quo across all submarkets. After an increase

in rental values in select submarkets in the first half of the year,

rental values have stabilized across the submarkets owing to

adequate availability of vacant spaces. This is largely because

occupiers from sectors such as ecommerce, cargo and third party

logistics providers are more keen on going on built-to-suit (BTS)

options to ensure quality and lower rentals.

The submarkets of Nelamangala, Hoskote and Jigani-Bannerghata

belt are currently in high demand by occupiers given their

connectivity and infrastructure. Besides online retailers, demand for

warehousing space is also being driven by traditional offline retailers

and hypermarkets who are looking at tapping into online / digital

sales as well.

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%




LAND RATES – JUNE 2016

SUBMARKET INR

MN/ACRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

Bengaluru Hardware

Park25 0.37 0.35 0.2%

Narsapura 15 0.22 0.21 1.5%

Bommasandra 54 0.80 0.77 13.6%

Bidadi 23 0.34 0.32 5.0%

Dabaspet 20 0.29 0.28 9.8%

Harohalli 13 0.19 0.18 -14.3%

Peenya 135 1.99 1.90 3.3%

Note: Quoted land rates for serviced industrial land parcels are mentioned




0%

10%

20%

30%

0

5

10

15

20

25

30

35

BommasandraIndustrial Area

PeenyaIndustrial Area

Bidali IndustrialArea

Hosur Road Nelamangala Whitefield/Soukya Road



Industrial Snapshot H2 2016BENGALURU, INDIA

MARKETBEAT











Siddhart GoelSenior Director Research Services, India

Tel: +91 80 40465555

[email protected]

OutlookIndustrial land rates expected to remain stable. Owing to the

recent currency demonetization, the demand of land is expected

to remain stable, keeping the land values firm throughout all the

submarkets. However, we anticipate that new industrial parks

and large warehousing facilities catering to more organized

demand will find favour with developers and funds looking to

diversify their investment portfolios.

Rental values for commercial warehouses and industrial

sheds are expected to remain stable. The rental values are

expected to remain stable during the first half of 2017 given

existing business sentiments.


Buyer /

Lessee

Seller /

Lessor

Type Submarket Sale /

Rent

Area (sf)

Rajdhani

Papers

Various

individuals

Land Dabaspet Purchase 33 acres

Rashi

Granites

Indian

Packaging

Land Jigani

Industrial Area

Purchase 3 acres

Big Basket Individual Warehousing Jigani Link

Road

Rent 80,000

Industrial Snapshot H2 2016CHENNAI, INDIA

MARKETBEAT





during the quarter, after four quarters of growth above

9%. Moreover, the Nikkei India Manufacturing Purchasing

Managers' Index (PMI) — an indicator that tracks the

manufacturing sector’s performance — was seen at 52.3 in

November, lower than the 22-month high of 54.4 in October. The

Indian manufacturing sector not only continues to reel under slow

growth of new orders, but also due to cash shortages arising

from demonetization, which is hampering payments of wages,

buying activity for raw materials and overall production. Further,

the demonetization is also likely to impact volume of land deals,






Market OverviewNo change in industrial land capital values. Land rates in all

the submarkets maintained status quo from the first half of 2016

on account of limited transaction activity in the city.

lndustrial shed and warehousing rentals decline in select

submarkets. Submarkets like Sriperumbudur – Oragadam, Red

Hills – Periyapalayam, and Maraimalai Nagar recorded a dip of

4-13% in industrial shed rentals from H1 2016. Warehousing

rentals witnessed a 4-7% decrease in most of the submarkets.

Muted demand in comparison to the supply is a major reason

behind the fall in rentals in both industrial shed and warehousing

spaces. Warehousing rents for Sriperumbudur – Thiruvallur

remained stable over the period, while Maraimalai Nagar

witnessed an increase of 5% over H1 2016 on account of steady

demand from the automobile sector.

Entry of large developers in the industrial space as well as

investment by major private equity players in logistics parks in

the city will bode well by making the industrial market more

organized.

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%




LAND RATES – DECEMBER 2016SUBMARKET INR

MN/ACRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

NH 4 –

Sriperumbudur –

Oragadam SIPCOT#

10 0.1 0.1 25%

Sriperumbudur –

Tiruvallur*

12.5 0.2 0.2 0%

NH 5 –

Gummidipoondi

SIPCOT#

4 0.06 0.06 0%

NH 5 – (Red Hills –

Gummidipoondi)*

15 0.2 0.2 0%

Tada* 7.7 0.1 0.1 10%


*Represents land rates for serviced land parcels of private land owners

#Represent government owned serviced plots in industrial parks




-15.0%

-12.0%

-9.0%

-6.0%

-3.0%

0.0%

3.0%

6.0%

0

5

10

15

20

25

30

Industrial Rent (H2 2016) Warehousing Rent (H2 2016)

Industrial Rent Y-o-Y Growth Warehousing Rent Y-o-Y Growth

Industrial Snapshot H2 2016CHENNAI, INDIA

MARKETBEAT











Siddhart GoelSenior Director Research Services,

India

Tel: +91 80 40465555

[email protected]

OutlookLand capital values to remain unchanged. Industrial land

values in most submarkets are expected to maintain status quo

over the first half of 2017 due to steady demand.

Industrial sheds and warehouse rentals expected to remain

stable. Rentals for industrial sheds and warehousing spaces are

likely to remain largely unchanged in most of the submarkets due

to sufficient space availability.


Buyer /

LesseeSeller / Lessor Type Submarket

Sale /

LeaseArea (sf)

Microchip Nucleus

Technologies

Industrial

land

Chemmenchery Sale 1.5 acres

LG Sugal &

Damani

Warehouse Red Hills Lease 100,000

Intex Individual

landlord

Warehouse Vanagaram Lease 6,500

Industrial Snapshot H2 2016DELHI-NCR, INDIA

MARKETBEAT




















Market OverviewLand prices witnessed mixed trends.

Land prices increased by about 5% in the Rohtak submarket of

Haryana and by around 3% in the Khushkhera submarket in

Rajasthan from the first half year of 2016 due to a revision in

allotment rates. Noida Phase I in Uttar Pradesh witnessed a 11%

decline on a sequential basis, as a fallout of the demonetization

exercise.

Land prices in all other submarkets across Haryana, Uttar

Pradesh and Rajasthan maintained status quo from the first half

year on account of steady demand.

Industrial shed rentals largely stable across Delhi-NCR.

Industrial shed rentals maintained status quo from the first half of

2016 in all the submarkets of Haryana, Uttar Pradesh and

Rajasthan. However, the submarket of Faridabad in Haryana

recorded a 2% decline on account of slower demand.

Warehousing rentals maintained status quo.

Warehousing rentals for NH-8, Dharuhera, Hassangarh and

Palwal submarkets remained unchanged from the first half of

2016. E-commerce companies were the key demand drivers in

warehousing during the half year period, with corporates like

Amazon and BigBasket transacting large warehouse spaces in

NH-8 (in Haryana) and Greater Noida (in Uttar Pradesh).

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%





SUBMARKET

INR

MN/ACRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

DELHI-NCR-

HARYANA

Faridabad 91 1.3 1.3 0.0%

IMT Manesar 87 1.3 1.2 0.0%

Bawal 30 0.4 0.4 11.1%

Rohtak# 31 0.5 0.4 5.6%

DELHI-NCR-

UTTAR PRADESH

Noida Phase I 324 4.8 4.6-

17.9%

Noida Phase II 75 1.1 1.1 0.0%

Noida Phase III 202 3.0 2.9 -4.8%

Greater Noida 44 0.6 0.6 0.0%

Yamuna

Expressway#19 0.3 0.3 0.0%

DELHI-NCR-

RAJASTHAN

Bhiwadi 42 0.6 0.6 -2.3%

Khushkhera* 24 0.4 0.3 2.6%

Neemrana 42 0.6 0.6 0.0%


#Represents primary land rates by Infrastructure Development Corporation of

respective states

*Khushkhera includes Khushkhera, Tapukara and Chaupanki



Industrial Snapshot H2 2016DELHI-NCR, INDIA

MARKETBEAT












India

Tel: +91 80 40465555

[email protected]

OutlookSelect submarkets might see a decline in industrial land

rates. Select submarkets in Haryana and Rajasthan that have

been witnessing weak demand due to recent regulatory changes

may witness a decline in circle rates, which could eventually

Higher business activity anticipated in industrial sheds.

The demand for industrial sheds is expected to witness higher

momentum in the first half of 2017. Land acquisition for a

dedicated pharma park in the Kundli-Manesar-Palwal (KMP)

corridor will lend impetus to business in the NH-1 and NH-2

submarkets.

Implementation of the Goods & Services Tax is expected to have

a positive impact on the warehousing business in NH-8, which is

expected to take a lead among all other submarkets. We may

also witness a consolidation of warehouse spaces in the NH-8

submarket.

Both warehousing and industrial shed rentals are expected to

remain largely unchanged due to sufficient space availability.


Buyer/

Lessee

Seller/

LessorType Submarket Sale/Lease Area (sf)

Amazon Individual Warehousing NH-8 Lease 275,000

BigBasket Individual WarehousingGreater

NoidaLease 90,000

Compal

ElectronicsIndividual Industrial

Greater

NoidaLease 200.000


Delhi-NCR-Haryana

Delhi-NCR-Uttar Pradesh

Delhi-NCR-Rajasthan

-10%

-5%

0%

5%

10%

0

5

10

15

20

25



0%

1%

1%

2%

2%

3%

0

5

10

15

20

25

30

35

40

Noida Ph I Noida Ph II Noida Ph III Greater Noida

Industrial Rent (INR/sf/month) Industrial Rent Y-o-Y Growth (%)

0%

20%

40%

60%

80%

100%

14.00

14.50

15.00

15.50

16.00

Bhiwadi Khushkhera Neemrana

Industrial Rent (INR/sf/month) Industrial Rent Y-o-Y Growth (%)

Industrial Snapshot H2 2016HYDERABAD, INDIA

MARKETBEAT









November, lower than the 22-month high of 54.4 in October.

The Indian manufacturing sector not only continues to reel under

slow growth of new orders, but also due to cash shortages

arising from demonetization, which is hampering payments of

wages, buying activity for raw materials and overall production.

Further, the demonetization is also likely to impact volume of

land deals, which typically involve substantial cash component.

The implementation of the Goods & Services Tax (GST), which

was set to simplify the complex and multiple taxation system, is

also likely to be delayed by up to 6 months as the deadline has

been moved from April 1st to Sept 1st.

Market OverviewLand capital values remained stable.

The capital values of land maintained status-quo from the first

half of 2016 across all the sub-markets. Kothur and Sangareddy

continued to be the most preferred locations for industrial

segment, owing to their established presence, affordability and

strong connectivity to Bengaluru and Mumbai highways.

Industrial shed rentals maintained staus quo.

Demand remained subdued across major submarkets and no

major transaction was recorded in industrial sheds during the

second half of 2016. While industrial rentals remained at similar

levels across most of the submarkets, it increased by 9% in

Shamshabad from the first half of 2016.

Stable warehousing rentals across submarkets.

Transactions in warehousing were mainly witnessed in Malkapur

(Vijayawada highway) and Gudlapochampally during H2 2016,

mainly driven by FMCG sector. However, warehousing rents

remained stable from the first half of 2016 across all submarkets

owing to ample availability.

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%





SUBMARKET

INR

MN/ACRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

Medchal* 23 0.3 0.3 0.0%

Shamirpet 5 0.1 0.1 0.0%

Fab City 6 0.1 0.1 0.0%

Kothur* 5 0.1 0.1 0.0%

Moulali, Nacharam 46 0.7 0.6 0.0%

Uppal 44 0.6 0.6 0.0%

Patancheru 20 0.3 0.3 0.0%





0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

5

10

15

20



Industrial Snapshot H2 2016HYDERABAD, INDIA

MARKETBEAT












Tel: +91 80 40465555

[email protected]

OutlookLand rates to rationalize in select submarkets. On the back of

demonetization, transaction volumes are likely to be hit hard and

the land values are expected to decline in the outskirts of the

city.

Industrial shed rents and warehousing rents for all

submarkets are expected to hold steady. Due to sufficient

availability and subdued demand, all submarkets are expected to

witness stable rentals.


Buyer/Lessee Seller/Lessor Type Submarket Sale/Rent Area (sf)

FMCG firm Indo Aarya Warehouse Vijayawada

Higway

Rent 80,000

FMCG firm Individual Warehouse Gundla

Pochampally

Rent 40,000

Industrial Snapshot H2 2016KOLKATA

MARKETBEAT




















Market OverviewLand rates remain stable. Capital values for land in both

Bombay Road – NH6 and Delhi Road – NH2 remained

unchanged from the first half year of 2016 due to steady market

conditions.

Rents for industrial sheds and warehouses largely

unchanged. Rents for industrial sheds maintained status quo

from the first half year for Bombay Road submarket. However,

Delhi Road submarket witnessed an increase of 8% on a

sequential basis due to increased traction in the area owing to its

proximity to Dankuni railway station.

Rentals for warehousing spaces remained at similar levels from

the first half of 2016 for both Bombay Road and Delhi Road

submarkets due to stable demand coupled with adequate

availability. Retail sector was a major demand driver for

warehousing spaces in the city during the half year period,

largely due to new brands making an entry into east India.

The rollout of GST, interest from private equity players in the

logistics space and addition of more organized supply in the

market is expected to lend impetus to the city’s logistics markets

in 2017.

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%





SUBMARKET

INR

MN/ACRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

Bombay Road –

NH654 0.8 0.8 0.0%

Delhi Road – NH2 42 0.6 0.6 27.0%





0%

2%

4%

6%

8%

10%

0

5

10

15

20

Bombay Road - NH6 Delhi Road - NH 2



Industrial Snapshot H2 2016KOLKATA

MARKETBEAT












India

Tel: +91 80 40465555

[email protected]

OutlookLand rates expected to remain stable. Land rates are likely to

remain unchanged in the first half of 2017, especially in an

environment of regulatory changes leading to transaction

decisions being put on hold.

Positive prospects for warehousing. The Eastern Dedicated

Freight Corridor project is expected to lend impetus to the

warehousing markets in the city. Rents are likely to witness slight

increase over the next few months.

SIGNIFICANT TRANSACTIONS – H2 2016


Win Pen

Linc Pen

Corporate

Corporate

Warehousing

Warehousing

Bombay

Road

Bombay

Road

Rent

Rent

27,000

25,000

Industrial Snapshot H2 2016MUMBAI, INDIA

MARKETBEAT




















Market OverviewCapital values of land parcels remained stable. The capital

values of land continued to remain stable across most of the

submarkets in the second half of 2016 on the back of weak

demand sentiments. The prospective buyers are adopting a

cautious approach to assess the impact of the Real Estate

Regulation Act (RERA) and demonetization, thus prolonging

closure of transactions.

Lacklustre industrial activity. The industrial activity lacked

momentum during second half year of 2016, with no major

closure of transactions. Thus, rentals for industrial sheds

continued to remain stable across most of the submarkets

(except Thane-Belapur Road) during this period. Industrial rents

in Thane-Belapur Road witnessed an increase of 3% on a

sequential basis on the back of steady demand from IT-BPM

sector and limited availability of quality space.

Warehousing rents appreciated in select submarkets.

Transactions in warehousing were mainly concentrated in

Bhiwandi and rentals in Bhiwandi continued to remain in line with

market expectations.

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%





SUBMARKET

INR

MN/A

CRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

Bhiwandi 20 0.3 0.3 0.0%

Thane-Belapur Road# 109 1.6 1.5 0.0%

Taloja Industrial Estate# 65 1.0 0.9 0.0%

Rasayani Patalganga# 20 0.3 0.3 0.0%

Pen-Khopoli Road 16 0.2 0.2 4.9%


# Represents government owned serviced plots in industrial parks




-10%

-5%

0%

5%

10%

15%

20%

0

5

10

15

20

25

30

35

40

45



Industrial Snapshot H2 2016MUMBAI, INDIA

MARKETBEAT











OutlookLand rates to remain unchanged. Given that transaction

volumes are likely to be slower in the first half of 2017 in the

aftermath of demonetization, capital values for land are expected

to largely remain stable.

Industrial and warehousing rentals to remain range-bound.

Industrial transactions are expected to remain subdued in the

first half of 2017, keeping rentals at stable levels across

submarkets. Submarkets such as Bhiwandi, Panvel and Pen-

Khopoli Road are likely to witness momentum in warehousing

transactions during 2017.



DHL Antariksh Warehousing Bhiwandi Rent 85,000

Interglobe

Hotels

Modi Auto

Corporation

Land Thane Sale 35,221


Tel: +91 80 40465555

[email protected]

Industrial Snapshot H2 2016PUNE, INDIA

MARKETBEAT





during the quarter, after four quarters of growth above 9%.

Moreover, the Nikkei India Manufacturing Purchasing Managers'

Index (PMI) — an indicator that tracks the manufacturing sector’s

performance — was seen at 52.3 in November, lower than the

22-month high of 54.4 in October. The Indian manufacturing

sector not only continues to reel under slow growth of new

orders, but also due to cash shortages arising from

demonetization, which is hampering payments of wages, buying

activity for raw materials and overall production. Further, the

demonetization is also likely to impact volume of land deals,






Market OverviewStable land capital values.

The capital values of land across various submarkets remained

stable from the first half of 2016. Post the currency

demonetization, enquiries dropped and no major transaction was

closed during the second half of 2016. Chakan continued to be

most preferred location for companies looking to expand or set

up new base in Pune due to sufficient availability of land parcels.

Buoyant leasing activity in industrial sheds.

The second half of 2016 witnessed buoyant leasing activity in

industrial sheds, which was concentrated in Chakan and driven

by companies in automobile and auto-ancillary sectors. The

presence of an established ecosystem and comparatively lower

transportation costs on the back of better connectivity aided the

increased demand in this submarket. However, industrial shed

rentals maintained status-quo across all submarkets during the

second half of 2016 due to sufficient availability.

Warehousing rentals maintained status-quo.

Transactions in warehousing were mainly witnessed in Chakan

during H2 2016, driven by e-commerce and logistics sectors.

However, warehousing rents continued to remain stable across

all submarkets owing to ample availability of warehousing space.

ECONOMIC INDICATORS

National 2014 2015 2016F

GDP Growth 6.9% 7.3% 7.5%

CPI Growth 6.7% 6.0% 5.9%





SUBMARKET

INR

MN/ACRE

US$

MN/ACRE

EURO

MN/ACRE

Y-O-Y

Change

Talegaon 20 0.3 0.3 0.0%

Chakan 30 0.4 0.4 0.0%

Pimpri-Chinchwad 65 1.0 0.9 25.7%

Pirangut 30 0.4 0.4 0.0%

Hinjewadi 60 0.9 0.8 0.0%

Lonikand 25 0.4 0.3 0.0%

Sanaswadi

Ranjangaon#

Khed

Shirwal

20

16

15

12

0.3

0.2

0.2

0.2

0.3

0.2

0.2

0.2

0.0%

0.0%

0.0%

0.0%

Note: Quoted land rates for serviced industrial land parcels are mentioned#Represents government owned serviced plots in industrial parks

Pimpri Chinchwad includes Bhosari; Lonikand also includes Phulgaon, Sanaswadi also

includes Shikrapur, Kondhapuri and Koregaon Bhima




0%

20%

40%

60%

80%

100%

05

10152025303540



Industrial Snapshot H2 2016PUNE, INDIA

MARKETBEAT












Tel: +91 80 40465555

[email protected]

OutlookLand prices expected to remain at similar levels. While

transaction volumes are likely to be hit as a fallout of the recent

demonetization, land rates are expected to remain stable in the

first half of 2017.

Warehousing rentals and industrial shed rentals likely to

remain stable. Expected demand from companies in automobile

and home furnishing sectors is likely to aid healthy transaction

volumes, mainly in Chakan. However, industrial shed rentals are

expected to remain at the current levels due to sufficient

availability. Also, warehousing transactions are expected to

witness steady demand in the first half of 2017, keeping the

rentals range-bound.


Buyer / LesseeSeller /

LessorType Submarket

Sale /

LeaseArea (sf)

Mahindra

Logistics

Agility

LogisticsWarehousing Chakan Lease 110,000

Nexteer

Automotive

India

Individual Industrial Shed Chakan Lease 35,000

marketbeat industrial snapshot h2 2016 · 2017-01-10 · industrial snapshot h2 2016 bengaluru,...

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