cb richard ellis report - india office market view - q3, 2010_final
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www.cbre.co.in Third Quarter 2010
2010, CB Richard Ellis, Inc.
India Ofce
Quick Stats
Rental Movement from last
Quarter
National Capital Region
CBD
Secondary Market
Mumbai
CBD
Alternate Business District
Bangalore
CBD
Peripheral Business District
Chennai
CBD
Peripheral Business District
Hyderabad
CBD
Surburban Areas
Pune
CBD
Peripheral Business District
Kolkata
CBD
Peripheral Business District
The Indian economy has been largely
unaffected by the global economic
slowdown of 2008-09 and over the
past few quarters has been riding
a high growth curve, banking upon
domestic consumption and services
growth. According to the Centre for
Monitoring Indian Economy (CMIE),
the GDP is expected to grow by 9.2%
in 2010-11 compared to 7.4% growth
observed in 2009-10 and 6.7% in 2008-
09. A buoyant economy has also had
a positive impact on the real estate
sector, with heightened level of interest
and demand across most of the top
cities from the corporate sector.
Corporate office space has witnessed a
rising occupier interest and absorption,
wherein domestic occupiers continue
to be slightly more active than their
global counterparts. But this interest
level is limited to the IT/ITeS, Telecom
and the Banking and Finance industry;
the new economy sectors wherein
maximum head count expansion hastaken place over the past few months.
While this interest is more towards the
cost effective suburban locations, an
overall demand rise has also benefitted
the CBD and the SBD.
In the seven cities presented under
this review, a definite improvement
in office space leasing has been
observed compared to the previous
year. At present, the overall trend in the
market is towards rentals firming up
on account of increase in demand and
more enquiries converting into closures
and decrease in vacancy levels. The
Central Business District (CBD) has
managed to regain its prominence in
each citys real estate dynamics, with a
halt on tenant exodus and resurgence
in demand amidst negligible supply
leading to a marginal increase in rental
values across all major cities.
Construction activity, which had stalled
during most of 2009, has also picked
up momentum and over the comingfew months is expected to provide
a substantial addition to the existing
stock levels. This supply addition, most
of which is located in the suburban
micro-markets, is expected to counter
the effects of enhanced demand levels
in suburbs and is expected to keep any
price escalation in check in the short to
medium term.
Amongst the other asset types the
residential market too witnessed a
recovery, Overall, the real estate market
is on a recovery mode, however, a
supply influx over the next few quarters
will continue to put pressures on the
pricing spectrum across all the major
cities.
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ThirdQuarter2010
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2010, CB Richard Ellis, Inc.
IndiaOfce
Market Outlook
As predicted, the transaction volume
increased in the National Capital Region.
The Euphoric sentiment is evident
among the developer / landlord community.
The prospective tenants are likely to adopt
and follow focused approach towards
projects with maximum value in terms of not
only low rentals but also added advantages
of metro, parking and other infrastructure
facilities. More so, the tenant focus remains
on the operational projects and those getting
operational in the next few quarters. Hence it
is imperative for developers to take a cautious
approach towards rental expectations during
this rising yet fragile market.
RENTAL VALUE TRENDS
CAPITAL VALUE TRENDS
0
50
100
150
200
250
300
350
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Rent(INRpersq.ft.permonth)
Timeline
C BD ( Co n na u gh t P la ce ) S ec on d ar y m a rk et ( Ne h ru P la ce ) S ec on da ry m a rk et ( Ja so la / S ak et ) G u rg a on N o id a
nn h l n r m rk hr l n r m rk l k r n i
nn h l n r rk hr l n r rk l k r n i
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
CapitalValues(INRp
ersq.ft.)
Timeline
C BD ( Co nn au gh t Pl ac e) S ec on da ry m ar ke t ( Ne hr u Pl ac e) Se co nd ar y m ar ke t ( Ja so la / Sa ke t) G ur ga on N oi da
Mumbai
Market Summary
The third quarter witnessed increased market
activity with closure of a number of transactions.
While no new supply was added in the third quarter,
nor is expected to be introduced in the near term,
approximately 15,000 sq.ft. of secondary stock
was absorbed in the Central Business District
(CBD) of Nariman Point during this quarter.
Rental values in the CBD increased by almost 3%
in the third quarter. Despite a central location, few
existing tenants continued to evaluate options in
the Extended Business District (EBD) and the
Alternate Business District (ABD), both of which
offer good quality construction and infrastructure
along with relatively low rentals.
While no new supply came on line in the
Extended Business District (EBD) of Lower
Parel, preleasing of space at aggressive rentals
resulted in a reduction (6%) in the prevailing rental
values. Absorption was recorded at approximately
250,000 sq.ft. In Worli Prabhadevi, around
400,000 sq.ft. of new supply came into this market
while absorption stood at a minimal 35,000 sq.ft.
However, as the building is perceived to be a
premium development and the preference among
corporates for Worli Prabhadevi, the rental values
here have actually seen a marginal increase of 4%.
Additionally, two large land auctions witnessed in
this micro market during this review period signals
a strong revival of the real estate market. Indiabulls
Infratech won the bid for two - first being the 8.37
acres National Textile Corporation (NTC) Bharat Mill
land in Central Mumbai for Rs 1,505 crore and the
second being NTCs 2.3 acre Poddar Mill land for
Rs 474 crore. Few under construction projects are
schedule to be completed by mid of next month.
The Alternate Business District (ABD) of BKC
continued to witness maximum market activity
with prime interest observed from the financial
institutions. No fresh supply is slated to hit the
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2010, CB Richard Ellis, Inc.
Rental Market Indicators
Sub-market Average Rentin Sept 10 (INRper sq.ft. per
month)
Average Rentin June10 (INRper sq.ft. per
month)
CBD (NarimanPoint, Fort, CuffeParade) Grade A
300 290
CBD (NarimanPoint, Fort, CuffeParade) Grade B
200 190
EBD (Lower Parel)Grade A
165 175
market until Q2 2012. Approximately 0.25 million
sq.ft. was absorbed, thus leading to a drop in
vacancy level from 18.9% in Q2 2010 to 13% in
Q3, 2010.
The Secondary Business District (SBD)
continued to be an attractive destination for a large
number of occupiers, owing to a cost effective
rental pricing. Almost 2.3 million sq.ft. of space
was absorbed in the third quarter. Shipping and
airline companies in particular continued to show
active interest in relocating to this micro market.
Rental values remained stable and are expected
to firm up in the coming quarters.
The Peripheral Business District (PBD) ofPowai
and Vikhroli witnessed steady enquiries from
KPOs and large IT companies. This micro marketis mostly replete with IT supply, thus a restricted
commercial supply is its limitation. While there
is limited availability of ready stock, substantial
supply is expected to hit the market in the next two
quarters. The micro market has availability of land
parcels suitable for the development of built-to-
suit options. The rental values in this micro market
increased by 6%, q-o-q.
The Navi Mumbai and Thane micro marketsremained vibrant in terms of enquiries and leasing
activity due to the availability of quality supply,
although there were limited closures reported.
EBD (Worli,Prabhadevi)Grade A
260 250
ABD (Bandra KurlaComplex, Kalina)Grade A
275 275
ABD (Bandra KurlaComplex, Kalina)
Grade B
180 180
SBD (Andheri, VileParle, Jogeshwari)Grade A
115 115
SBD (Andheri, VileParle, Jogeshwari)Grade B
80 80
PBD (Malad)Grade A
65 65
PBD (Powai,Vikhroli) Grade A
85 80
PBD (Thane, NewMumbai) Grade A
40 40
Major Leasing Transactions
Tenant Building,Location
Approx. size(sq.ft.)
BNP Paribas Bandra Kurla
Complex
113,000
Schering Plough Bandra Kurla
Complex
27,000
Aegon Religare Hiranandani
Business Park,
Powai
25,000
RENTAL VALUE TRENDS
0
50
100
150
200
250
300
350
400
450
500
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Rent(INRpersq.ft.permonth)
Timeline
C BD ( Na ri ma n Po in t, F or t, C uf f e P ar ad e) EB D ( Lo we r P ar el ) EB D ( Wo rl i, P ra bh ad ev i) A BD ( Ba nd ra K ur la C om pl ex , Ka li na )
SBD ( An dh er i, Vi le Pa rl e, J og es hwa ri ) PBD ( Ma la d) PBD ( Po wa i, Vi kh ro li ) PBD ( Th an e, N ew M um ba i)
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ThirdQuarter2010
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2010, CB Richard Ellis, Inc.
IndiaOfce
Bangalore
Market Summary
The Central Business District (CBD) ofMG Road,
Richmond Road and Residency Road witnessed
closure of significant mid size transactions during
this review period. Large numbers of enquiries
were recorded from both the existing occupiers
as well as new entrants. Absorption was estimated
at approximately 0.3 million sq.ft., while the fresh
Grade A supply added was at 0.42 million sq.ft.
An increase in demand for office space led to a
marginal increase in rental values of about 3%
q-o-q, paving way for larger increments in the
coming few quarters.
Corporates looking for expansion options within
the city limits are readily contemplating the Non
CAPITAL VALUE TRENDS
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
201
CapitalValues(INRpersq.ft.)
Timeline
C BD ( N ar im an P oi nt , F or t, C u ff e P ar ad e) E BD ( Lo we r P ar el ) E BD ( Wo rl i, P ra bh ad ev i) A BD ( Ba nd ra K ur la C o mp le x, K al in
SBD ( An dh er i, Vi le Pa rl e, Jo ge sh wa ri ) PBD ( Ma la d) PBD ( Po wa i, Vi kh rol i) PBD ( Th ane , N ew M um ba i)
Market Outlook
The overall trend in the market is towards
rentals firming up on account of increase
in demand and more enquiries converting
into closures in the coming quarters. While
a rising tenant demand would contribute to
a decrease in vacancy levels, large amount
of supply is also expected to come towards
the end of the year. This voluminous supply
is expected to continue to pressurize rentals
in certain micro markets in the coming few
quarters.
CBD micro market ofIndira Nagar, Koramangala,
Old Madras Road and CV Raman Nagar. This
micro market acts as a feasible option for tenants
due to ready availibility of Grade A space, relatively
lower rentals, rapidly improving infrastructure
and good connectivity. During this review period,
absorption in this micro market was estimated
at approximately 0.28 million sq.ft., whilst freshsupply was estimated at around 0.23 million sq.ft.
The demand-supply dynamics ensured that rental
values remained stable in the third quarter.
TheSouth Bangaloremicro market ofBannergatta
Road, JP Nagar, Jayanagar and Mysore Road
witnessed few small transactions with absorption
recorded at almost 70,000 sq.ft. As a result of
overall buoyancy observed in the market the rental
values increased by almost 6%, q-o-q.
Leasing activity in the Peripheral Business District
(PBD) of Outer Ring Road (ORR), Whitefield,
Electronic City and North Bangalore continued
to gain momentum. Abundant availability of
Grade A space coupled with flexible rental values
and accommodative developer attitude makes
it a viable option for clients seeking large space
requirements with availability of hard options.
The Outer Ring Road (ORR) stretch between KRPuram Junction and Sarjapur Road witnessed
closure of significant number of transactions.
Characterized by a strong pipeline of Grade
A supply offering affordable rentals, good
connectivity and infrastructure, this micro market is
now emerging as a preferred destination for large
domestic and international players. Absorption
was estimated at approximately 0.4 million sq.ft.,
while approximately 0.7 million sq.ft. of new supply
was added to the stock. Incrementing demand led
to an increase of almost 5% in the rental values in
the third quarter.
The oversupply situation in the Whitefield micro
market kept the rentals under pressure and
developer attitude extremely accommodative. A
few large transactions were concluded during the
third quarter which brought the total absorption to
about 0.13 million sq.ft. Fresh Grade A supply was
estimated at approximately 0.9 million sq.ft.
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2010, CB Richard Ellis, Inc.
Major Leasing Transactions
Tenant Building, Location Approx. size(sq.ft.)
Volvo IBC Golf ViewHomes, Wind Tunnel
Road
103,000
SwissRE Vaswani Centropolis,Langford Town
116,000
Schneider Prestige Exora, ORR 55,000
JPMC First TechnologyPlace, Whitefield
60,000
GMRInfrastructure
IBC Knowledge Park,Bannerghata Road
45,000
APC Kalyani Platina,
Whitefield
35,000
Rental Market Indicators
Sub-market Average Rentin Sept 10
(INR per sq.ft.per month)
Average Rentin June 10
(INR per sq.ft.per month)
CBD (MG Road,Residency Road)Grade A
74 72
CBD (MG Road,Residency Road)Grade B
57 55
EBD (Koramangala,Indiranagar) Grade A
48 48
EBD (Koramangala,Indiranagar) Grade B
42 42
Outer Ring RoadGrade A
40 38
Outer Ring RoadGrade B
32 30
Whitefield, ElectronicCity Grade A
24 24
South BangaloreGrade A
37 35
North BangaloreGrade A
42 42
Industrial Grade 20 20
Office leasing activity remained fairly inactive
in the Electronic City, with no large scale
transaction being reported in this micro market.
Fresh Grade A supply was estimated at a low
60,000 sq.ft. Rental values remained stagnant and
developers continued to be flexible with respect
to commercial terms. The North Bangalore micro
market recorded no significant leasing activity forthis review period.
CAPITAL VALUE TRENDS
RENTAL VALUE TRENDS
0
10
20
30
40
50
60
70
80
90
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Rent(INRpersq.ft.permonth)
Timeline
CBD (MG Road, Richmond Road, Residency Road) EBD (Koramangala, Indiranagar) Outer Ring Road
PBD (Whitef ield, Elect ro nic City) So ut h Ban galo re N or th Ban galo re
-
-
-
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
CapitalValues(INRpersq.ft.)
Timeline
CBD (MG Road, Richmond Road, Residency Road) EBD (Koramangala , Ind iranagar) Outer Ring Road
PBD (Whit ef ield, Elect ro nic Cit y) Sou th Bang alo re N or th Bang alor e
Market Outlook
Large numbers of companies have started torevive their expansion plans. Demand levels
in the SEZ domain witnessed an increase.
The rentals are expected to remain stable in
the near term.
Chennai
Market Summary
The Central Business District (CBD)
encompassing areas ofAnna Salai, T Nagar, RK
Salai, Alwarpet and Nungambakkam witnessed
absorption of approximately 0.11 million sq.ft.,
largely dominated by medium size office spaces
catering to banks and the corporate sector. No
new supply came into this micro market in the
third quarter; however there are a few projects in
the pipeline which are expected to be completed
by the end of 2010. The overall vacancy level
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Rental Market Indicators
Sub-market Average Rentin Sept 10
(INR per sq.ft.per month)
Average Rentin June 10
(INR per sq.ft.per month)
CBD (Anna Salai,Nungambakkam, KSalai,T Nagar, Egmore,Alwarpet) Grade A
62 62
CBD (Anna Salai,Nungambakkam, R.K.Salai, T Nagar,Egmore,
Alwarpet) Grade B
46 46
remained stable in the range of 5% - 6%. The rental
values also remained stable, but the capital values
appreciated by almost 6%, q-o-q. If a demand
surge occurs in the near term, then rental values
are also expected to face an increment.
The Off/Non CBD micro market ofMRC Nagar,
Guindy and Taramani witnessed an increase in
absorption of approximately 0.12 million sq.ft.
of office space, while approximately 0.74 million
sq.ft. of new supply was introduced in this quarter.
The rental values in this micro market remained
stable owing to active tenant enquiries amidst
limited projects on offer. The vacancy levels in this
micro market stood at 3% - 4%.
The Suburban Business District (SBD) including
areas like Velachery, Perungudi and Mount
Poonamallee Road witnessed minimum activity
as compared to the other micro markets. The
fresh supply added in the micro market stood at
approximately 0.80 million sq.ft., while the space
absorption witnessed was at approximately
50,000 sq.ft. The rental values in this micro market
continued to remain stable and the vacancy was
estimated in the range of 5% - 7%.
Abundant supply and low demand levels wereobserved in the Peripheral Business District
(PBD) of Perungalathur, Sholinganallur,
Siruseri, Ambattur and GST Road. No new supply
was released into the market and absorption was
recorded at approximately 0.13 million sq.ft. The
vacancy levels in this micro market continued to
remain between 18% 20%.
Off CBD ( Guindy,Kiplauk, Taramani,Adyar, Anna Nagar)Grade A
44 44
Suburban BusinessDistrict (Velachery;Perungudi,MountPoonamallee Road)
Grade A
35 35
Peripheral BusinessDistrict (Perungalathur;Sholinganallur;Siruseri; Ambattur,GSTRoad) Grade A
24 24
Major Leasing Transactions
Tenant Building, Location Approx. size(sq.ft.)
Marg Futura 110,000
GeometricsGlobal
SP Info City,Perungudi
10,600
I Gate Jayanth Tech Park,Manapakkam
22,500
OLAM Ascendas, Taramani 34,000
SBI Rani Towers, Egmore 40,000
ABCO Advisory Tamarai Tech Park 39,000
RENTAL VALUE TRENDS
0
10
20
30
40
50
60
70
80
90
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Rent(INRpersq.ft.permonth)
Timeline
CBD (Anna Salai, Nungambakkam, RK Salai,T Nagar,Egmore,Alwarpet) Off CBD ( Guindy, Kiplauk, Taramani, Adyar, Anna Nagar)
Suburban Business District (Velachery, Perungudi, Mount Poonamallee Road) Peripheral Business District (Perungalathur, Sholinganallur, Siruseri, Ambattur,GST Road)
nn l i, n m kk m , l i, T r , m r , l r in , i l k, T r m ni, r , nn r
r n i n i r i l h r , r n i , n n m l l r i h r l i n i r i r n l h r , h l in n l l r , i r r i, m r , T
CAPITAL VALUE TRENDS l i, m kk m, l i,T r , m r , l r i , i l k, T r m i, r, r
r i i r i l r , r i, m ll r i r l i i r i r l r, li ll r , ir r i, m r , T
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
CapitalValues(INRpersq.ft.)
Timeline
CBD (Anna Salai, Nungambakkam, RK Salai,T Nagar,Egmore,Alwarpet) Off CBD ( Guindy, Kiplauk, Taramani, Adyar, Anna Nagar)
Suburban Business District (Velachery, Perungudi, Mount Poonamallee Road) Peripheral Business District (Perungalathur, Sholinganallur, Siruseri, Ambattur, GST Road)
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2010, CB Richard Ellis, Inc.
Hyderabad
Market Summary
As observed in the previous quarters, the real
estate market in Hyderabad continued to witness
an increase in demand for office space, with the
IT/ITES industry leading the demand spectrum in
the city.
With most of the IT tenants relocating to the Western
Corridor (HITEC City, Kondapur, Nanakramguda,
Madhapur, Gachibowli, etc.), approximately
0.4 million sq.ft. of secondary space became
available in the Central Business District (CBD)
ofBegumpet, Somajiguda and parts of Banjara
Hills. However, with an increase in demand for
office space observed in the non IT segment, therental values are expected to appreciate in the near
term. Vacancy level remained constant at around
5%.
The non-CBD micro market comprising areas
such as parts of Banjara Hills, Jubilee Hills,
Himayatnagar and Ameerpet continued to
experience a lack of demand for office space, with
rental values remaining stable as the previous
quarter.
The IT corridor consisting of Madhapur,
Gachibowli and Nanakramguda witnessed a rise
in demand for space in Special Economic Zones
(SEZ) by various IT companies. An approximate
0.8 million sq.ft. of SEZ supply was released into
this micro market in the third quarter. Furthermore,
due to limited availability of SEZ space vis--vis
rising demand, the rental values increased by
Market Outlook
There has been a substantial improvement
in the market activity in terms of demand
for office space. Higher absorption levels
are expected to be observed in the next few
months. The rental values across all micro
markets are likely to remain stable in the
short term.
10%, q-o-q. The vacancy level currently stands at
approximately 8%.
The Peripheral Business District (PBD) of
Pocharam and Shamshahbad continued to
witness minimal real estate activity during this
review period, primarily due to lack of good quality
infrastructure. Due to an absence of fresh supply
and low demand levels, rental values remained
relatively low as compared to rest of the micro
markets in the city.
Rental Market Indicators
Sub-market Average Rentin Sept 10 (INRper sq.ft. per
month)
Average Rentin June 10
(INR per sq.ft.per month)
CBD (Begumpet/
Rajbhavan Road,Banjara Hills)Grade A
45 45
CBD (Begumpet/Rajbhavan Road,Banjara Hills) GradeB
45 45
Secondary market(Jubilee Hills, partsof Banjara Hills)Grade A
44 44
Secondary market
(Jubilee Hills, partsof Banjara Hills)Grade B
42 43
Secondary market(Ameerpet,Himayatnagar,Sarojini Devi Road)Grade A
25 25
Secondary market(Ameerpet,Himayatnagar,Sarojini Devi Road)
Grade B
25 25
IT Corridor (HITECCity, Madhapur,Kondapur,Gachibowli)Grade A
32 29
IT Corridor (HITECCity, Madhapur,Kondapur,Gachibowli) Grade B
26 25
PBD (Shamshabad,Pocharam) Grade A
22 22
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RENTAL VALUE TRENDS
CAPITAL VALUE TRENDS
0
10
20
30
40
50
60
70
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Rent(INRpersq.ft.permonth)
Timeline
CBD (Begumpet / Rajbhavan Road, Banjara Hills) Secondary market (Jubilee Hills, parts of Banjara Hills)
Secondary market (Ameerpet, Himayatnagar, Sarojini Devi Road) IT Corridor (HITEC City, Madhapur, Kondapur, Gachibowli)
PBD (Shamshabad, Pocharam)
- -
- -
0
2,000
4,000
6,000
8,000
10,000
12,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
CapitalValues(INRpersq.ft.)
Timeline
CBD (Begumpet / Rajbhavan Road, Banjara Hills) Secondary market (Jubilee Hills, parts of Banjara Hills)
Secondary market (Ameerpet, Himayatnagar, Sarojini Devi Road) IT Corridor (HITEC City, Madhapur, Kondapur, Gachibowli)
Major Leasing Transactions
Tenant Building, Location Approx. size(sq.ft.)
AmericanSolutions
Navayuga Inspire,Serilingampally
28,000
UTC Building Number 9, Madhapur
25,000
Liquid Air SEEC Building,Madhapur
40,000
IBM Lanco Hills,Manikonda
13,500
BHEL Central BusinessDistrict
14,200
Market Outlook
In the next few months, Hyderabad is
expected to witness higher rental values
owing to an increase in demand for
commercial office space. Fresh supply
in the IT corridor is expected to come up
only in the second quarter of 2011. Owing
to limited supply and increasing rentals
in areas like Madhapur and HITEC City,
many IT companies looking for smaller
format spaces may consider areas such as
Pocharam and Uppal, which offer abundant
ready supply at relatively low rentals.
Pune
Market Summary
The Central Business District (CBD) ofMG Road,
Koregaon Park, Bund Garden, Kalyani Nagar,
Dhole Patil, FC Road and JM Road witnessed
slight increase in demand and enquiry levels for
small format office spaces. Many occupiers are
moving within the CBD to more efficient buildings.
Approximately 0.1 million sq.ft. of new supply was
released, but the absorption was comparatively
lower at approximately 85,000 sq.ft. Vacancy level
remained constant at around 15%, while the rental
values increased by almost 4%, q-o-q.
Approximately 0.2 million sq.ft. of fresh supply was
released in the Off CBD micro market of Viman
Nagar, Magarpatta, Aundh, Baner, Shanker
Seth Road, S.B Road and Nagar Road and the
absorption was recorded at approximately 0.23
million sq.ft. The rental values remained constant
whereas the capital values observed a marginal
increase. The vacancy level remained constant at
around 18% in the third quarter.
The Peripheral Business District (PBD) of
Hinjewadi, Kharadi, Hadapsar, Talawade and
Kharadi observed an increase in tenant enquiries
and absorption levels for SEZ space. Enquiries
by IT/ITES companies with smaller set ups have
witnessed an increase over the last quarter due
to the uncertainty over the further extension of
STPI scheme. Approximately 0.5 million sq.ft.
of new supply was added, total absorption was
recorded at around 0.5 million sq.ft., with vacancy
levels hovering at around 24%. The rental values
remained stable this quarter, while capital values
increased marginally by 2%, q-o-q.
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Page 10
2010, CB Richard Ellis, Inc.
Rental Market Indicators
Sub-market Average Rentin Sept 10 (INRper sq.ft. per
month)
Average Rentin June10 (INRper sq.ft. per
month)
CBD (Shivaji Nagar,Bund Garden Road,Koregaon Park)
Grade A
57 55
CBD (Shivaji Nagar,Bund Garden Road,Koregaon Park)Grade B
50 48
Off CBD(Kalyani Nagar,ShankarshethRoad, F.C. Road)Grade A
45 45
Off CBD (Kalyani
Nagar, VimanNagar, Nagar Road)Grade B
36 35
PBD (Hinjewadi,Kharadi, Hadapsar)Grade A
30 30
PBD (Hinjewadi,Kharadi, Hadapsar)Grade B
24 24
Major Leasing Transactions
Tenant Building, Location Approx. size(sq.ft.)
Barclays DLF Akruti SEZ,Hinjewadi
100,000
Tech Mahindra DLF Akruti SEZ,Hinjewadi
130,000
Capgemini Cerebrum , KalyaniNagar
80,000
PWC Panchshil Tech Park 13,000
Cross CountryInfotech AG IT Park, Aundh 20,000
Motorola Cerebrum , KalyaniNagar
20,000
Atos Origin Embassy Tech park,Hinjewadi
50,000
Dresser Rand Magarpatta SEZ 44,000
Market Outlook
During this review period, Pune witnessed an
increase in enquiries as well as absorption
levels compared to the previous quarter.
Due to lack of office supply in the CBD, the
rentals are expected to rise marginally.
Kolkata
Market Summary
The Central Business District (CBD) of
Chowringhee, B.B.D Bag, Park Street and
Camac Street witnessed a substantial increase
in tenant enquiries and transaction velocity in
the third quarter. The total supply (both fresh and
RENTAL VALUE TRENDS
0
20
40
60
80
100
120
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Rent(INRpersq.ft.permonth)
Timeline
CBD (Shivaji Nagar, Bund Garden Road, Koregaon Park) Off CBD (Kalyani Nagar, Shankarsheth Road, F.C. Road) PBD (Hinjewadi, Kharadi, Hadapsar)
CAPITAL VALUE TRENDS
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
CapitalValu
es(INRpersq.ft.)
Timeline
CBD (Shivaji Nagar, Bund Garden Road, Koregaon Park) Off CBD (Kalyani Nagar, Shankarsheth Road, FC Road) PBD (Hinjewadi, Kharadi, Hadapsar)
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ThirdQuarter2010
Page 11
2010, CB Richard Ellis, Inc.
IndiaOfce
existing) stood at approximately 0.45 million sq.ft.,
while the absorption witnessed was almost 15,000
sq.ft. Vacancy level was estimated in the range of
8% - 10% and the rental values increased by 10%,
q-o-q.
Leasing activity in the Secondary Business
District (SBD) of EM Bypass, Kasba-Gariahatand Sarat Bose Road gained some traction. Total
supply available stood at almost 80,000 sq.ft.,
while the absorption was recorded at 20,000 sq.ft.
Vacancy level in Topsia was recorded at around
15%, whilst that in Kasba was estimated in the
range of 35% - 45%. The rental values remained at
the same level as in last quarter.
Demand levels in the Peripheral markets of
Salt Lake and Rajarhat continued to witness asteady upward movement. Total supply (new and
existing) is estimated to be approximately 4 million
sq.ft. The rental and capital values both increased
by 13% in the third quarter.
Major Leasing Transactions
Tenant Building, Location Approx. size(sq.ft.)
KirloskarMotors
KCI Plaza, Ballygunge 4,500
LGElectronics
Vishnu Tower, Sec-V,Saltlake
4,331
CMC Vishnu Tower, Sec-V,Saltlake
4,200
Rental Market Indicators
Sub-market Average Rentin Sept 10
(INR per sq.ft.
per month)
Average Rentin June 10 (INR
per sq.ft. per
month)CBD (Park Street,Camac Street,Theatre Road)Grade A
110 100
SecondaryBusiness DistrictGrade A
60 60
Peripheral BusinessDistrict (Salt Lake,Rajarhat)Grade A
45 40
RENTAL VALUE TRENDS
0
20
40
60
80
100
120
140
160
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Rent(INRpersft.permonth)
Timeline
CBD (Park Street, Camac Street, Theatre Road) Secondary Business District Peripheral Business District (Salt Lake, Rajarhat)
r k r , m r , Th r n r in i r i r i h r l in i r i l k , rh
Market Outlook
An increase in enquiry levels will contribute
to an increment in the leasing activity in the
next few months. However, demand-supply
dynamics in the city will ensure that the
rental and capital values across most micro
markets remains stable in the near term.
rk r , m r , Th r n r in i ri r i h r l in i ri l k , rh
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
CapitalValues(INRpersft.)
Timeline
CBD (Park Street, Camac Street, Theatre Road) Secondary Business District Peripheral Business District (Salt Lake, Rajarhat)
CAPITAL VALUE TRENDS
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Copyright 2010 CB Richard Ellis (CBRE). We obtained the information abovefrom sources we believe to be reliable. However, we have not verified its accuracyand make no guarantee, warranty or representation about it. It is submitted subjectto the possibility of errors, omissions, change of price, rental or other conditions,prior sale, lease or financing, or withdrawal without notice. We include projections,opinions, assumptions or estimates for example only, and they may not representcurrent or future performance of the property. You and your tax and legal advisorsshould conduct your own investigation of the property and transaction.
India Ofce
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