citibank property insights q1 2012

7/31/2019 Citibank Property Insights Q1 2012

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INDIA ECONOMIC OVERVIEW

Trends & UpdatesAccording to the Reserve Bank of India (RBI),

the wholesale price index (WPI) inflation moderatedto 6.9% in March 2012 from more than 9% during

April-November 2011. The consumer price index (CPI)

inflation went up to 8.8% in February indicating

the prevailing pressure on the prices. The food and

commodity prices picked up pace reversing the decline

registered during the initial month of 2012.

Despite much anticipation, the key policy rates

were kept unchanged during RBIs review of monetary

policy in March 2012. The repo and the reverse reporates were kept stable at 8.5% and 7.5% respectively,

primarily on account of the prevailing inflationary

pressures.

After depreciating for five consecutive months

since August 2011, the rupee was noticed to strengthen

against US dollar during the first quarter of 2012. The

appreciation in rupee was registered at approximately

4.7% over the exchange rate registered in December

2011. With the Foreign institutional investors (FII)pumping in money, the rupee reached a three month

high in February. However, during March 2012, the

exchange rate registered an increase of 2.4% due to

the slow growth in the economy coupled with renewed

inflationary pressures. While the reversal of trend is a

cause of worry, it is likely to benefit the exports.

According to the Department of Industrial Policy

& Promotion, Foreign Direct Investments (FDI) in the

housing and real estate sector during the first two

months of 2012 was estimated at approximately INR

782 crores. FDI in the sector has already registered an

increase of 56.1% over the last quarter of 2011. As a

result of the increased inflow of foreign investments,

the share of housing and real estate sector in the

overall FDI also increased to 3.7% during the first two

months.

9.6%

10.1%

9.3%

9.7%

9.3%

9.4%

9.7%

8.5%

7.6%

7.5%

6.1%

5.8%

6.0%

8.6%

6.5%

8.6%

8.8%

8.9%

8.3%7.8%

7.7%

6.9%

6.10%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

G r o w t h R a t e ( % )

GROSS DOMESTIC PRODUCT GROWTH RATE

Source: Central Statistical Organisation, Govt. of India

48

47 47 4746 46

45

44

4647 47 47

46

4445 45 45

4545

4445 45

4445

48

49

51

53

51

49

50

40

42

44

46

48

50

52

54

I N R

/ U S D

EXCHANGE RATE MOVEMENT (INR/USD)

Source: MInistry of Finance, Govt.of India

171

2,121

8,749

12,62113,586

5,149

3,326

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

I N R C

r o r e

FDI INFLOW IN HOUSING AN D REAL ESTATE SECTOR

Source: Dept . of Industrial Policy & Promotion, Govt.of India


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Residential markets in NCR and Bangalore have

registered significant increase in capital values on

account of buoyant demand. Subdued sales activity

and high price points have resulted in stable capitalvalues across majority of the markets in Pune,

Mumbai and Kolkata. Additionally, select markets in

Hyderabad have witnessed marginal correction due

to the moderation in demand. Majority of the cities

have seen a slowdown in demand as a result of the

prevailing property prices, compounded by stubborn

mortgage rates. End-users across markets have put

their purchasing decisions on hold, anticipating a

revision in prices and interest rates.

Southern cities continued to outweigh other

regions in terms of residential unit launches during

the first quarter of 2012. Chennai witnessed the

maximum number of project launches during the

quarter followed by Pune. Barring Hyderabad, all

markets registered increased unit launches during

the quarter. Hyderabad registered a significant

drop of around 69% due to lack of clarity on the

regulation pertaining to land reservation. Residential

unit launches were registered across both mid and

high-end segments.

Inflation and sluggish economic growth are

expected to remain the top concerns for the RBI

whilst deciding on key policy rates in the immediate

future. Though liquidity in the markets has improved,

it is still far from desired levels and market

sentiments are expected to remain subdued. Capital

values across majority of the markets are expected

to remain stable or rise marginally due to the high

input costs despite the high unsold stock levels in

some cities.

The BSE Realty Index registered an overall surge

during the first quarter of 2012. The Index closed at

1776.96 points on 30th March 2012, 29% higher than

the value on 30th December 2011. Despite registering

a substantial increase, the index is yet to reach

the January 2011 mark. While the index picked upmomentum in February 2012 to reach 2169.96 points,

it declined in March 2012.

3273.56 3196.82

3726.86

2856.22

2337.01

2019.841762.96

1375.65

1776.96

0

500

1000

1500

2000

2500

3000

3500

4000

I n

d e x

BSE REALTY INDEX

Source: BSE

BSE REALTY INDEXBSE REALTY INDEXBSE REALTY INDEXBSE REALTY INDEXBSE REALTY INDEXBSE REALTY INDEX

-

100

200

300

400

500

600

700

800

B an ga lo re (B urnt on Ro ad La valle R oa d) Ch en na i (B oa t Cl ub )

Hyderabad (Banjara Hills) Kolkata (Ballygunge)

Mumbai (South) NCR (Satya Niketan Anand Niketan)

Pune (Koregaon Park)

RESIDENTIAL CAPITAL VALUES GROWTH INDEX

Source: Cushman & Wakefield Research

11%

2%

32%

11%

21%17%

7%

0%

5%

10%

15%

20%

25%

30%

35%

New unit launches (%)

NEW RESIDENTIAL UNIT LAUNCHES ACROSS LOCATIONS IN 1Q 2012

Source: Cushman & Wakefield Research

Residential Overview


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4

Ahmedabad 5

Bangalore 8

Chennai 12

Hyderabad 15

Kolkata 19

Mumbai 22

National Capital Region 25

Pune 29

Index


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Transaction activity in Ahmedabads residential

market was subdued as sales dropped in the first

quarter of 2012. Both end-users and investors have

shown preference for ready projects or projects

nearing completion. Most of the construction activity

was witnessed in Ring Road and Sarkhej-Gandhinagar

Highway catering to the mid-segment.

The demand for commercial office space increased

during the quarter compared. The absorptionswere mainly driven by the small and medium scale

industries.

Buoyancy was observed in the retail real estate

segment during the quarter with both malls and main

streets registering rental appreciation.

AhmedabadMarket Overview

Trends & Updates

Ready Residential Property UpdateCapital values have remained stable across all

micro markets so as to sustain demand. Developers

continued to offer various incentives and favourable

payment schedules to improve demand of their unsold

inventory in the ready developments.

4600

29002600 2600

0

1000

2000

3000

4000

5000

Price (INR/s f )-March 2012

Source: Cushman & Wake eld Research

Premium Ready Residen t al Property Values in March'12

Source: Cushman and Wake eld Research

Note: The above values for high segment typically include units of 2,000-4,000 sq. .

Average Capital Values High-end (INR 000/sf)

Location Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Satellite 3.8-4.3 3.9-4.6 4.0-4.6 4.0-4.8 4.3-5.0 4.3-5.1 4.3-6 4.3-6 4.3-6

Vastrapur 3.4-3.7 3.6-4.0 3.6-4.0 3.7-4.0 3.7-4.0 3.7-4.0 3.7-5 3.7-5 3.7-5

S.G.Highway 3.5-4.1 3.5-4.1 3.6-4.3 3.7-4.3 3.7-4.3 3.7-4.5 3.7-4.5 3.7-4.5 3.7-4.5

Prahlad Nagar 4.0-5.0 4.1-5.0 4.2-5.2 4.2-5.3 4.2-5.3 4.2-5.3 4.2-6 4.2-6 4.2-6


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New Residential LaunchesNew project launches were reduced this quarter,

Ahmedabad witnessed just three significant launchesin the first quarter of 2012. Large residential

developments were launched along the S.P RingRoad and Vadsar-Kalol Road.

Under construction Residential Property Update

Retail

Office

Construction activity has witnessed a slowdown

over the last quarter. Under construction residential

projects are mainly concentrated in locations such as

Ring Road, Bopal and Satellite Road. Developers are

offering various incentives and favourable payment

schedules in the mid-range segment so as to increase

demand.

Ahmedabad witnessed buoyant demand for mall

space during the first quarter of 2012. The Alpha

One mall in Vastrapur witnessed revival in interests

from retailers with expansion and entry of bothdomestic and international retailers. Vastrapur and

S.G. Highway have emerged high on preference due

to availability of quality retail mall space, which has

led to rentals appreciation of approximately 33% and

14% respectively. Rentals in main street locations like

Satellite Road and S.G Highway appreciated 4% and6% respectively due to limited quality availability.

Ahmedabad recorded a total absorption of over 1

lakh sf, registering an increase of approximately 6%

over the fourth quarter of 2011. However, the city did

not witness any fresh supply during the first quarter

of 2012. Rental values across the city appreciated

over the last quarter, with highest appreciation of up

to 6% noted at Ashram Road and C.G. Road due to

lack of availability of Grade A office space.


Note: The above values for mid segment typically include units of 1,200-1,800 sq. .

* Es mated and as per market informa on

Average Capital Values Mid-end (INR 000/sf)

Location Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Satellite 2.8-3.4 2.8-3.6 2.8-3.8 2.8-3.8 2.8-4.1 2.8-4.2 2.8-4.3 2.8-4.3 2.8-4.3

Vastrapur 2.6-3.2 2.6-3.3 2.6-3.5 2.6-3.5 2.6-3.6 2.6-3.8 2.6-3.8 2.6-3.8 2.6-3.8

S.G.Highway 2.8-3.4 2.8-3.4 3.0-3.6 3.0-3.8 3.3-4.1 3.3-4.2 3.3-4.3 3.3-4.3 3.3-4.3

Prahlad Nagar 2.7-3.3 2.7-3.3 2.8-3.6 2.8-3.6 2.8-3.6 3.0-4.0 3.2-4.2 3.2-4.2 3.2-4.2

Project Name Developer Location Number of Units* Area of Units

Apple Woods Sandesh Propcon S.P. Ring Road 3,500 2BHK - 1,258 sf3BHK - 1,856 sf

Shubh Gruh Tata Housing Vadsar-Kalol Road 1,091 Studio - 293 sf1BHK - 384 sf1.5BHK - 457 sf

Aaryavart Heights Aaryavart Developers Satellite Road 44 2BHK - 963 sf to 1,197 sf3BHK - 1,300 sf


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Most of the new residential projects launches

are expected in the mid-end range segment. Capital

Values are expected to remain stable in the coming

months so as to attract demand.

The city is expected to see an infusion of 6,10,000

sf of new commercial space in second quarter of

2012. This infusion of commercial space is likely to

stabilize the commercial rentals in the city.

Ahmedabad is not expected to witness any new

mall supply during 2012. Therefore, with the current

upward trend in demand expected to continue,

vacancy levels are likely to reduce and rentals are

expected to remain stable due to existing vacancy

levels.

Outlook


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BangaloreMarket Overview

Bangalores residential market was characterized

by developers initiating significant project launches

during the quarter despite conservative demand. Sales

market remained subdued with buyers postponing

their buying decisions on account of the high price

points compounded further by the high mortgage

rates. The capital values mostly remained stable

during the first quarter of 2012. However, in select

micro markets they were characterized by widening

of the price bands (both in lower as well as higher

end) on account of the pricing of the new project

launches/under construction properties within the

micro markets.

The citys office space witnessed healthy

absorption and pre-commitments in the quarter.

Absorption was observed to mostly comprise of space

in the range of 10,000-40,000 sf. Whilst the IT/ITeS

sector continued to be the prime absorber, small and

medium enterprises also accounted for significant

transactions.

The city witnessed two major malls becoming

operational during the quarter with approximately 75-

80% of the spaces being leased out. Rentals in both

malls and main streets continued to remain stable

barring exceptions in select micro markets. Leasing

activities continued, though scarcity of suitable retail

space prevailed.

Trends & Updates

Ready Residential Property UpdateDemand in the primary and secondary markets

remained subdued. Capital values of ready

property mostly remained stable during the

quarter across most micro markets. Substantial

availability in new properties or project launchesacross different price bands and locations were

also influential in stabilization of the prices of

ready properties.

Demand remained persistent in the rental

market for locations in South and East Bangalore

on account of availability of premium developments

as well as their proximity and easy connectivity

to the major commercial destinations. Increaseddemand was also observed for the mid-value

properties in North-West Bangalore resulting in

marginal rental escalation in the micro market.

7,000

4,100

5,750

4,450

5,2504,500

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Premium Ready Residen t al Property Values in March '12



Average Capital Values High-end (INR000/sf)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Central 14.0-18.0 12.0-14.5 13.5-17.5 13.6- 17.6 14.0-18.0 14.00-18.00 14.0-18.0 16.0-21.0

South 7.0-9.0 6.0-8.5 6.0-9.5 6.1-9.7 6.5-10.0 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 5.2-7.1 5.5-7.5 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 6.5-7.7 6.8-8.0 6.8-8.0 6.8-8.0 6.0-8.5North 6.0-8.0 5.5-7.0 5.5-7.0 5.7-7.0 6.0-7.4 6.5-8.0 6.5-8.0 6.5-8.0


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, JalahalliOff 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 range (INR000/Sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Central 5.8-7.0 5.0-6.0 5.5-7.0 5.6-7.1 5.8-7.4 6.0-7.5 6.0-7.5 6.0-8.0

East 2.7-3.1 2.4-2.7 2.7-3.1 2.7-3.3 3.0-3.5 3.2-3.8 3.2-3.8 3.8-4.8

South East 2.9-4.0 2.5-3.2 2.8-4.0 2.8-4.3 3.0-4.5 3.4-5.0 3.4-5.0 4.0-5.5

South 5.0-6.5 4.6-5.7 4.8-6.0 4.8-6.3 5.0-6.5 5.0-6.5 5.0-6.5 5.0-7.0North 3.0-4.0 2.8-4.0 2.8-4.4 2.8-4.5 3.0-4.8 3.0-4.8 3.0-4.8 3.0-5.0

South West 2.8-4.2 2.7-3.9 3.2-4.5 3.3-4.7 3.6-5.0 3.6-5.0 3.6-5.0 3.6-5.0

Off Central* 4.0-6.0 3.7-5.7 4.0-6.2 4.2-6.4 4.5-6.7 4.5-6.7 4.5-6.7 4.5-7.0

Off Central** 3.5-6.0 3.3-5.7 3.8-6.2 3.9-6.4 4.3-6.7 4.3-6.7 4.3-6.7 4.0-6.5

North West 4.2-5.8 3.5-5.2 3.8-5.6 3.9-5.8 4.3-6.2 4.3-6.2 4.3-6.2 4.3-6.2



Even in the backdrop of subdued demand in

the market and buyers postponing their purchase

decisions, there were some significant new launches

from prominent developers. These new projects

were across all segments with a mix of apartment

and villa developments. Prominent projects include

Purva Seasons, Sobha Habitech, Clover Greens and

Provident Harmony among others. The new launches

were spread mostly across the citys suburban and

peripheral regions and were intended to cater to a

wide range of buyers.

New Residential Launches


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Work progression continued with the same

momentum across most of the under construction

projects even in the backdrop of subdued demand.

Competitively priced under construction projects

with consistent sales were observed to record most

of the appreciation in the capital values. Developers

continued to customize their offerings by providing

value added services to the customers. With significant

number of projects under construction - buyers had a

wide range of options to choose across different price

bands, type of developments and locations among

others.

Under Construction Residential Property Update


Purva Seasons Puravankara Projects CV Raman Nagar 660 1BHK -705 sf2BHK -1,392 sf3BHK -1,659 sf to1,980 sf

Clover Greens Assetz Homes Sarjapur Road 167 4BHK -5,608 sf to 5,365 sf

Provident Harmony Provident Housing Thanisandra 548 1BHK - 662 sf3BHK -1,241 sf to1,262 sf

Shobha Habitech Sobha Developers Whitefield HopefarmJunction

318 2BHK -1,342 sf to 1,727 sf3BHK -1,842 sf to 2,395 sf4BHK Pent house - 3,530 sf to 3,583 sf


Bangalores commercial office market witnessed

absorption of 2.45 msf and pre-commitments of

2.9 msf approximately in the first quarter of 2012.

Peripheral markets of Whitefield and Electronics

City recorded the highest absorption on account

of comparatively reasonable rentals. The overall

vacancy level increased to 13.2% during the quarter

as majority of the new supply admeasuring 1.27 msf

was delivered in the latter part of the quarter. Rental

values in CBD/off-CBD micro markets (M.G. Road,

Millers Road, Vittal Mallya Road, Residency Road,

etc.) and suburban locations (CV Raman Nagar,

Koramangala, Bannerghatta Road, etc.) increased

17% and 12% respectively owing to limited Grade A

supply and buoyant demand.

Office

The citys retail market witnessed consistentdemand across various segments, including from

big box retailers, resulting in lease commitments

from them. The suburban micro markets witnessed

two major malls becoming operational during the

quarter. Notwithstanding the infusion of new mallsupply, scarcity of mall space prevailed, resulting in

increased pressure on the main streets which faced

by shortage of suitable retail space witnessed many

retailers vying for the same options.

Retail


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Demand in the sales market is likely to gather

momentum by the second quarter of 2012 as proper ty

buyers who have delayed their purchases are likely

to revisit their buying plans with the improvingmarket conditions. Persistent demand in the rental

market will also continue, thereby some escalations

in the rental values in select micro markets are likely.

On account of the high price points across most

micro markets, coupled with comparatively subdued

demand prevailing during the last few quarters,

significant capital value appreciations are unlikely

in the forthcoming quarters. New project launches

will continue across the citys various locations.

Moreover, in view of the high land, construction

and other associated costs, the new launches will

be at higher price bands with a greater share of

developments in the high-end segment.

Approximately 11 msf of new supply in the office

sector is likely by the end of 2012. Significant lease

transactions are expected to be closed during the

forthcoming quarters. Vacancy too is expectedto come down marginally by the end of 2012 and

absorptions in Grade B developments will continue in

the suburban markets.

Two new malls - one in CBD and another in the

peripheral market - approximating at 6,00,000 sf

are likely to become operational in the forthcoming

quarters of 2012. Scarcity of options across both the

malls and main streets are likely to get accentuated

by the end of 2012, thereby resulting in escalation inthe prime rentals.

Outlook


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Chennais housing market exhibited positive

demand sentiments during the first quarter of 2012;

end-users continued to drive the demand in the market.

Suburban locations continued to witness buoyant

demand despite the high capital values. Markets such

as Rajiv Gandhi Salai, Porur and Velachery noted

increased sales activity during the quarter.

Healthy leasing activity was registered in both

mid and high-end markets. Established markets suchas T.Nagar, Adyar and Nungambakkam registered

appreciation in rental values driven by demand due to

their close proximity to the commercial districts.

Increase in absorption over the supply of office

space during the quarter has resulted in marginal

decline in vacancy levels to 15.7%. This had effected

the rental appreciation in the CBD, off-CBD and select

suburban markets. Several lease transactions of over

50,000 sf by occupiers from the banking and financialservices sector were noted during the quarter.

Mall and main street rents remained stable during

1Q 2012 compared to the last quarter. Mall supply

admeasuring 1,50,000 sf became operational which

led to an increase in overall mall vacancy levels to

8.2% from 6.6% in the fourth quarter. Leasing activity

has been sluggish across malls and main streets due

to limited availability of quality space except in thesuburban market such as Virugambakkam which has

seen decline in vacancy levels.

ChennaiMarket Overview

13,500

9,00012,500

22,000

19,500

0

5,000

10,000

15,000

20,000

25,000




Trends & Updates

Ready Residential Property UpdateLimited availability in the premium residential

pockets was instrumental in driving the property

prices upwards in markets such as Poes Garden,

Nungambakkam, Anna Nagar and Adyar. Despite the

appreciation, these markets recorded robust sales

during the quarter.

The demand for ready property in suburban

locations persisted during the quar ter. While locations

with good connectivity and established infrastructure

such as Rajiv Gandhi Salai, Velachery and Mogappair

registered nominal price increase, the capital values

remained stable in other locations.


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Average Capital values High end (INR 000/sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Boat Club 18-24 18-20 18-23 19-23 19-23.5 20-24.5 20-25.0 20-25.0

R.A Puram* 13-15 13-15 13-16.5 13-16.5 13-16.5 13-16.5 14-17 14-18

Besant Nagar NA NA NA NA NA 12.5-13.5 12.5-13.5 12.5-13.5

Kotturpuram NA NA NA NA NA 12-14 12-14 12-14Adyar 5.5-10 5.5-9.5 8-12 8-12 8-12 10-13.5 11.5-13.5 12.5-14

Poes Garden** 14.5-20 14.5-18 14.5-20 15-20 15.5-20.5 15.5-23.5 17.5-24.5 18.5-25

Nungambakkam 13-16 13-16 13-16.5 13-16.5 13-16.5 13-17 13-17 14-18

Anna Nagar 6-9 6-9 7.5-10.5 8-10.5 8-10.5 8-11.5 8-11.5 9-12

Kilpauk 4-8 4-8 8-12 8. 5-12 8.5-12.5 8.5-12 9-15 9-15


Note: The above values for high segment typically include units of 1,800-4,000 sq. .The me series have been adjusted to re ect the updated values*RA Puram also includes Alwarpet and Abhiramapuram**Poes Garden also includes Venus Colony and Kasturi Rangan Road


Note: The above values for mid segment typically include units of 1,000-2,000 sq. .The me series have been adjusted to re ect the updated values

Average Capital values Mid range (INR 000/sq.ft.)Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Adyar 4.5-6.5 4.5-6.5 6-8.5 6-8.5 6-8.5 6.5-10 8-11 8.5-12

Rajiv Gandhi Salai (Perungudi) 2.5-3.6 2.5-2.8 3.5-4.5 3.8-5 4-5.5 4-5.5 4-5.5 4.5-6

Velachery 3.8-4.2 3.5-4 3.5-5 3.5-5 3.5-5.3 3.5-5.5 3.5-5.5 4-6

T Nagar 4-6.5 4-6.5 7.5-10.5 7.5-10.5 7.7-11 8-11 8.5-11.5 8.5-13

Mylapore NA NA NA NA NA 8-12.5 8-12.5 9-14

Mogappair NA NA NA NA NA 5-5.5 5-5.5 5-6.5

Kilpauk 4.5-6 4.5-6 6-8 6-8.5 6.5-8.5 7-9 7.5-9.5 8-10

The number of project launches during the quarter

increased threefold over the previous quarter. Around

8,000 residential units were launched during the

quarter. Locations such as Porur and Manapakkam

registered maximum number of units being launched

and accounted for nearly 40% of the total units

launched. The emerging micro markets of GST, Rajiv

Gandhi Salai and Velachery also registered several

launches during the quarter. Nearly 90% of the

inventory launched during the quarter catered to

the mid-segment, located primarily in the suburban

markets.




Bella Vista Prestige Group Mount Poonamallee Road,Porur

2,613 1BHK 600 sf2BHK 1,340 sf to1494 sf3BHK 1,990 sf4BHK 2,621 sf

Sobha Meritta Sobha Developers Vandalur-KelambakkamRoad

556 1BHK 600 sf2BHK 1,340 sf to1,400 sf3BHK 1,650 sf

Epica Casa Grande Mahalingapuram Main Road 12 2BHK -952 sf3BHK 1,377 sf4BHK 1,815 sf

Olympia Grande Olympia Group Pallavaram 780 2BHK 1,152 sf to1,313 sf3BHK 1,578 sf

Godrej Palm Grove Godrej Properties Chembarambakkam 660 2BHK 1,194 sf to1,222 sf3BHK 1,426 sf to1,489 sf


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A number of under construction projects registered

a price increase of 5-6% during the quarter, with

majority belonging to the high-end segment. A few

projects in Rajiv Gandhi Salai namely Hiranandani

Upscale, TVH Ouranya Bay and Ceebros Boulevard

were completed with some being handed over in

phases.


The demand for residential properties is

expected to persist in the following quarter.

Majority of the mid-end markets and select high-

end markets like Adyar and Anna Nagar are

expected to see price increases. On the other

hand, the rental values across most markets are

expected to remain stable.

Around 20,00,000 sf of office space is

scheduled for completion in the second quarter

of 2012. The demand levels in the market are

expected to persist in the following quarters.

The rental values are likely to register marginal

increases in the CBD and off-CBD markets.

Demand for retail spaces across main streets

is likely to remain buoyant in the forthcoming

quarters. Khader Nawaz Khan Road and Velachery

Bypass Road are expected to register moderate

rental appreciation during this time period. It is

also anticipated that close to 10,00,000 sf of mall

space will be infused during 2012.

Outlook

Fresh mall supply of 1,50,000 sf was registered

during the first quarter of 2012. Mall vacancy levels

across the city registered 8.2%. The mall rentals

across all markets remained stable during this time

period. Barring Khader Nawaz Khan Road, rentals

across other main streets registered no fluctuation

during the first quarter of 2012. The stability in rentals

may be attributed to the limited leasing options in

these markets.

Retail

Office space supply of around 3,80,000 sf

was registered during the first quarter of 2012.

Guindy witnessed the highest quantum of supply

during the quarter. The absorption was registered

at approximately 8,00,000 sf. The demand during

the quarter was driven by non-IT sectors as against

the earlier quarters. CBD and off-CBD markets have

registered a marginal rental increase in the range

of 3-4% during the quarter. Office rentals remained

stable in peripheral markets due to high vacancy

levels.

Office


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15

HyderabadMarket Overview

Hyderabads residential market witnessed a

slightly positive trend during the first quarter

of 2012. Projects located in prime residential

catchments of Miyapur, Kukatpally, Chandanagar

and Kondapur, in close proximity to IT & Financial

districts of Madhapur and Gachibowli have

witnessed higher enquiries along with a moderate

sales activity indicating continued optimism from

the last quarter from end-users and investorsalike. Peripheral locations such as Nallagandla and

Gopanpally with a presence of ready properties

have also witnessed a positive trend in terms of

sales enquiries. Proximity to Gachibowli, growing

infrastructure facilities and overall development

in the residential localities nearby have induced

a positive effect on these locations. Despite a

growth in the number of enquiries, developers

continued to keep the prices low in order to boost

sales. The overall capital value appreciation has

been modest, fluctuating between 2-4% in these

markets.

The demand for commercial office space market

in Hyderabad has remained moderate during the

first quarter. The overall absoprtion was recorded

at 7,10,000 sf., nearly 37% lower than the previous

quarter.

In the retail market, higher leasing enquiries

and scarcity of suitable spaces have pushed the

rentals upwards in the range of 9-20% (q-o-q)

across the citys prime retail locations such asPunjagutta, Madhapur, Abids and Himayatnagar.

A.S. Rao Nagar has witnessed the highest rental

growth at 26%.

Trends & Updates

Ready Residential Property Update

As the momentum witnessed in the fourth quarterof last year continued into 2012, several ready

properties in prime residential catchments of Miyapur,

Kukatpally, Madhapur, Gachibowli and their immediate

surroundings have witnessed healthy enquiries.

Projects with limited availability of ready properties

and those on the verge of completion in these locations

have marked a 7-10% rise in prices compared to lastquarter. Ready properties in distant localities such as

Nallagandla and Gopanpally that mostly cater to the

mid-value segment have also gained attention of the

end users. At the same time areas such as Begumpet,

Somajiguda and Himayatnagar have recorded price

corrections due to moderate demand.

8,3008,700

4,900

10,500

4,200

5,300

0

2000

4000

6000

8000

10000

12000

Price (INR/s f ) March 2012


Premium Ready Residen t al Property Values in March '12


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The city saw a 68% decline in new launches compared

to last quarter owing to continued uncertainty over the

land reservation regulation (G.O.45). Three projects

totalling approximately 528 units were launched across

the high-end segment in Gachibowli and Shankarpally.

Out of the three new launches, two projects in Gachibowli

had additional phases launched, whilst a retirement

community with approximately 328 units was launched

in Shankarpally, away from the city limits.


Average Capital values High end (INR 000/sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Banjara Hills 6.5-7.1 5.8-6.5 6.0-7.2 6.0-7.4 6.3-7.4 6.3-7.5 6.4-7.5 6.4-7.5

Jubilee Hills 6.5-7.1 5.5-6.3 6.0-7.0 6.0-7.0 6.2-7.0 6.2-7.1 6.2-7.2 6.1-7.2

Himayatnagar 3.4-4.4 3.3-4.0 3.7-4.0 3.7-4.0 3.7-4.0 3.7-4.0 3.7-4.2 3.7-4.1

West & East Marredpally 3.3-4.3 3.3-3.8 3.5-4.0 3.5-4.2 3.6-4.2 3.6-4.2 3.6-4.3 3.6-4.3Begumpet, Somajiguda 3.9-4.5 3.9-4.5 4.1-4.5 4.1-4.7 4.3-4.7 4.3-4.7 4.3-4.8 4.3-4.7

Madhapur, Gachibowli 3.8-4.4 3.5-4.3 3.8-4.9 3.8-5.0 4.0-5.0 3.9-5.0 3.9-5.3 4.0-5.3

Kukatpally 3.3-4.3 3.3-4.0 3.5-4.5 3.5-4.8 3.8-4.8 3.8-5.0 3.8-5.1 3.8-5.1

Miyapur, Nizampet Road NA 2.6-3.3 2.7-3.4 2.7-3.4 2.7-3.4 2.8-3.4 2.8-3.5 2.9-3.5

Average Capital values Mid range (INR 000/sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Banjara Hills 3.4-4.2 3.6-4.2 3.6-4.5 3.6-4.5 3.8-4.5 3.8-4.6 3.8-4.6 3.8-4.6Jubilee Hills 3.4-4.0 3.5-4.0 3.7-4.0 3.7-4.0 3.9-4.2 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 2.7-3.5 2.7-3.5 2.7-3.5 2.7-3.7 2.7-3.6

West & East Marredpally 2.5-3.0 2.5-2.8 2.7-3.0 2.7-3.0 2.8-3.0 2.8-3.0 2.8-3.2 2.7-3.2

Begumpet, Somajiguda 2.5-3.0 2.6-3.1 2.8-3.5 2.8-3.5 2.9-3.5 2.9-3.5 2.9-3.6 2.8-3.5

Madhapur, Gachibowli 2.6-3.0 2.5-3.1 2.6-3.4 2.6-3.4 2.8-3.4 2.8-3.3 2.8-3.5 2.8-3.7

Kukatpally 2.4-2.8 2.4-2.9 2.7-3.2 2.7-3.2 2.9-3.2 2.9-3.3 2.9-3.5 2.9-3.5

Miyapur, Nizampet Road NA 1.8-2.5 1.8-2.5 1.8-2.7 2.4-2.7 2.4-2.7 2.4-3.0 2.3-3.2


The above values for high end typically include units of 1,600-3,200 sq. .


The above values for mid range typically include units of 1,200-1,600 sq. .



Ramky Towers Elite Ramky Estates Gachibowli 128 3BHK 2,410 sf to 2,610 sf4BHK 4,990 sf to 5,010 sf

Nagarjuna ResidencyPhase 2

Manjeera Constructions Gachibowli 72 3BHK 2,430 sf to 2,690 sf4BHK 3,170 sf

Serene Pragati Nagarjuna Constructions Shankarpally 328 1BHK 608 sf2BHK 850 sf to1296 sf3BHK 1,900 sf


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Despite a reduction in promotional offers duringthe first quarter, end-users have increasinglyevaluated properties in key residential locaitieswith higher locational advantages such as Miyapur,Kukatpally, Madhapur and Gachibowli. Sustainedpolitical stability, higher enquires, moderate rise insales along with a reduction in launches over the last

one year have all pushed the prices upwards by 5-7%(q-o-q) in these locations. Projects under variousstages of construction in the mid-priced segment suchas Aparna Hill Park Avenues, Vertex Prime, RainbowVistas, Prajay Megapolis and Emami Swan Lake haverecorderd a minor appreciation (3-5%) during thefirst quarter.


The market recorded approximately 7,10,000

sf. of office space absorption during the first

quarter.The supply was recorded at 5,60,000 sf.,

nearly 20% lower than the fourth quarter of 2011.

IT/ITeS absorption was impacted by the limited

availability of Grade A space in Special Economic

Zones and IT Parks in the suburban market coupled

with conservative sentiments in the domestic and

global markets. With moderate demand across the

city and continued infusion of second generation

space, the overall vacancy has increased slightly

to 15.7% (15% during Q4, 2011). With no major

variations in demand trends and stable vacancy

across most micro markets, office rentals have

also remained stable.

Growth of catchment areas, increasing

requirements and scarcity of options in prime retailmicro markets have pushed retailers into exploring

new locations such as Habsiguda, Vanasthalipuram,

A.S.Rao Nagar, L.B.Nagar and Chandanagar to

expand their operations. Some large format stores

have reserved space in the upcoming standalone

developments and malls. Adequate supply, flexibility

in leasing terms and favourable rentals have attracted

specialty retailers such as branded apparel stores,foot wear, premium furniture apart from food &

beverages outlets and hyper/super markets to these

locations. Rentals in the operational malls have

increased by 5-15% over the previous quarter due to

zoning modifications.

Office

Retail


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Key residential locations such as Miyapur and

Kukutpally as well as upcoming locations such

as Gopanpally and Nallagandla may witness new

projects in the short term. Price appreciation inprime residential localities is expected due to limited

availability of ready properties, reduced supply in the

short to medium term and growing enquiries in the

market.

In the commercial office market, demand for

ready properties with Grade A options in Gachibowli

is expected to rise on the back of low vacancy

levels and shortage of quality space in Madhapur

submarket. Office space rentals across the city are

likely to stabilize, except in the suburban markets due

to limited availability of suitable space options and

healthy enquiries.

In the retail segment, the market would

continue to expand and penetrate newer locations

such as Habsiguda, A.S.Rao Nagar, L.B.Nagar,

Vanasthalipuram and Chandanagar. Rentals in the

upcoming locations could remain stable to cash in on

growing enquiries. Minor appreciation in the short

term in prime retail markets such as Punjagutta,

Jubilee Hills, Banjara Hills, Somajiguda and Abids is

likely due to shortage of supply.

Outlook


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19

KolkataMarket Overview

During the first quarter of 2012, Kolkatas

residential market reflected positive sentiments

with increased project launches across various

segments. Steady demand for affordable and

mid-priced segments was evident and it leads

to an increased number of project launches.

Peripheral locations like Sonarpur, Kankurgachi,

and Jessore Road assumed increased importance

as a significant number of projects in bothaforementioned segments were launched in these

locations, primarily due to improved infrastructure

and affordable land prices.

The commercial office space market in Kolkata

also witnessed steady demand recording absorption

of approximately 3,00,000 sf against a supply of

6,00,000 sf in this quarter.

Retail market in Kolkata recorded increased

transactions as regional retailers seemed to expand

their operations in the city. Regional retailers

exhibited preference for standalone properties

on main streets. Simultaneously, lack of mall

supply remained a major concern which prompted

international retailers to opt for pre-commitments

in under construction malls

8,500

6,500

8,500

6,000

4,500

5,500

0

1000

2000

3000

4000

5000

6000

7000

8000

9000




Trends & Updates

Ready Residential Property UpdatePremium high-end properties across the city

witnessed stable pricing trends in view of already

high property prices. Capital values remained

stable across most micro markets except for

prime locations in South Kolkata owing to limited

availability.

Average Capital values High end (INR 000/Sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

South 5.0 - 6.0 4.8-5.9 5.3-6.8 6.0-8.0 6.3-8.0 6.3-8.5 6.3-8.5 7.0-9.0

South Central 9.0-10.0 8.5-9.6 9.5-13.0 9.5-14.0 10.0-17.0 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 5.0-8.5 5.8-9.2 5.8-9.2 5.8-9.2 5.8-9.2

South West 9.5-10.0 8.6-9.8 8.9-13.0 10.0-12.0 10.0-15.0 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 7.8-9.5 8.3-10.2 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 4.2-5.0 4.5-5.3 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 2.6-4.2 2.8-4.5 2.8-4.5 2.8-4.5 2.8-4.5


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 range (INR 000/Sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

South 2.8-4.3 2.7-3.9 3.2-4.5 3.2-5.0 3.8-5.5 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 5.0-7.0 5.5-7.2 5.5-8.0 5.5-8.0 5.5-8.5

South East 2.5-3.0 2.4-2.8 2.5-3.2 2.7-4.0 2.8-4.5 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 2.3-2.8 2.4-3.0 2.4-3.0 2.4-3.0 2.4-3.0North 1.8-3.5 1.8-3.4 2.2-4.7 2.3-4.8 2.8-5.2 2.8-5.2 2.8-5.2 2.8-5.2


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.

First quarter of 2012, witnessed almost 1,600 unit

launches as compared to 1,300 units in the fourthquarter of 2011. Most of the projects were launched

in the peripheral locations targeting the mid-income

consumers. The projects launched during this quarterwere priced between INR.1,700 - 3,000/- per sf.



Larica Green Hamlet Larica Estates Pailan 85 Rowhouse 1,080 sfBungalows 1,500 sf to 4,000 sf

Lord City Sonarpur Lord Group Sonarpur 37 Bungalows 1,093 sf to 3,174 sf

Rittika Residency SD Developers Rajarhat 355 2BHK 797 sf to 897 sf3BHK 1,000 sf to 1,139 sf

Daffodil Waterfront Daffodil Projects Maheshtala 105 2BHK 867 sf to 990 sf3BHK 1100 sf to 1300 sf

Trinath Local developer Baguiati 105 1BHK 540 sf to 560 sf2BHK 846 sf to 1,040 sf

Dream Exotica Purti Group Madhyamgram 455 2BHK 915 sf to955 sf3BHK 1,100 sf to1,220 sf

Astitva MCK PGE Projects LLP Kankurgachi 170 3BHK 2,142 sf to 2,525 sf4BHK 3,538 sf5BHK 4,500 sf to 5,200 sf

Omni Countryside Bengal Omnitech Sonarpur 30 3BHK 1,550 sf to 2,000 sf4BHK 2,630 sf

Omnitech Lakeview Bengal Omnitech Garia 68 3BHK 1,600 sf4BHK 2,100 sf

DumDum Heights Jessore RoadConstruction LLP

Jessore Road, 54 3BHK 972 sf to 1,402 sf

SGIL Residenzza SGIL Infra Project Jessore Road, 120 2BHK 980 sf3BHK 1,022 sf



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Under construction projects by reputed developers

in Rajarhat New Town have witnessed at least 5%

appreciation over the last quarter. However, quite few

large format projects by reputed developers in the

same area have seen slow construction work primarily

due to the lack of physical infrastructure.

Kolkatas office market continued the previous

trend of absorptions at just over 280,000 sf and

continued to witness healthy demand as absorption

remained high by approximately 33.7% compared to

the last quarter. Rentals in prime office locations like

Park Street and Chowringhee continued to appreciate

on account of steady demand from various non-IT/

ITeS companies. Supply was recorded at 6,00,000 sf,

almost 41% higher than last quarters supply.

Kolkatas retail market exhibited positive

sentiments with increased lease transactions during

the first quarter of the year. Retailers seemed to be

on expansion spree. However, lack of mall supply

remained a major concern for retailers. Established

main streets continued to witness rental appreciation

due to increased demand from national and regional

retailers. There was no fresh mall supply during the

quarter. Mall rentals remained stable and vacancy

remained low. A number of international retailers

were seen to opt for pre-commitments in under

construction malls in view of lack of ready mall space.


Office

Retail

The residential market in Kolkata is expected

to see continued demand for affordable and mid

ranged properties. However, if high inflation rate

continues, transactions may have an impact.

Capital values are likely to remain stable as more

supply is expected to get infused in the coming

quarters. Peripheral locations like Barasat in

North and Garia in South will continue to witness

increased importance due to more numberof affordable project options and improved

infrastructure facility.

Rental values across the peripheral office

locations are expected to decline owing to the

planned supply and increase in vacancy levels in

the coming quarters. However, rental values across

central business district are likely to strengthen

owing to sustained demand and highly limited

scope for increasing supply.

Kolkatas retail market is expected to witness

approximately 3,50,000 sf of mall supply in the

next few quarters. Rents across established main

streets and malls in CBD are likely to appreciate on

account of persistent demand.

Outlook


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MumbaiMarket Overview

The residential market in Mumbai was

characterized by a cautious approach by buyers as

sales continued to be subdued and no reductions

in prices were observed over the last quarter.

High inventory levels of ready stock have lead the

developers to follow a cautious approach leading

to fewer launches compared to last quarter. End-

users exhibited reluctance to invest in under-

construction and newly launched projects due tothe high mortgage rates and price points resulting

in reduced sales activity.

The commercial office market in Mumbai

regained some momentum in the first quarter of

2012. Absorption levels improved significantly by

30% over the last quarter and were noted at 14 lakh

sf. BFSI sector remained the highest demand driver

with nearly 27% of share in absorption.

Mall rentals have remained stable during the

quarter. The existing vacancy levels and some

activity in retail locations resulted in stable rentals.

11,000

32,000

46,000

40,000

13,000

0

10,000

20,000

30,000

40,000

50,000




Trends & Updates

Ready Residential Property UpdateDespite the poor sales, capital values at most

residential locations were observed to remain

stable over the quarter as developers cited high raw

material costs and high cost of funding. However,

capital values in the high-end segment of South

Mumbai and mid-end segment of Central Mumbai

were recorded to register an annual appreciation of

7% and 11% respectively.

Average Capital values High end (INR000/sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

South 43-55 42.5-58 43-60 43-60 45-65 45-65 45-65 45-65

South Central 47-67 42- 66 45-70 45-70 45-75 45-75 45-75 45-75

Central 33-53 34-55 35-55 35-55 35-55 35-55 32-54 32-54

North 27-31 22-30 24-32 24-32 24-32 24-32 24-32 24-32

Far North 9-13 10-16.5 11-16.5 11-16.5 11-16.5 11-16.5 11-16.5 11-16.5

North East 14-18 10-16 10-16 10-16 10-17 10-18 10-18 10-18



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Note:

High-end

- Approximately 2,500 - 6,000 sf for South, South-

Central, Central and North (Bandra & Khar)

- Approximately 1,800 - 4,000 sf for North (Santacruz

& Juhu), Far North and North-East

Mid-end

- Approximately 1,400 - 2,500 sf for South, South-

Central, Central and North

- Approximately 1,200 - 1,600 sf for Far North and

North-East

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 range (INR000/sq.ft.)

Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

South 27-34 28-37 43-60 30-40 30-40 30-40 30-40 45-65

South Central 34-43 35-45 45-70 40-48 40-48 40-48 39-47 45-75

Central 18-28 15-26 35-55 17-30 17-30 17-35 17-35 32-54

North 13.5-19.5 16-24 24-32 16-25 16-25 16-25 16-25 24-32Far North 7-9 8.5-11.5 11-16.5 9-12 9-12 9-13 9-13 11-16.5

North East 6-7.4 6.4-8.5 10-16 6.5-8.5 7-8.5 7-10 6.5-10 10-18

Mumbai witnessed around 7,000 units launched

in the first quarter of 2012. Ghodhbunder Road

witnessed about 5,000 units launched in the quarter.

Several developers were also seen to launch their

successive phases, concentrated mainly in Thane.



Codename Dawn Lodha Group Thane 1,800 1BHK 648 sf2BHK 864 sf to 1,068 sf3BHK 1,485 sf

Lodha Dioro Lodha Group Wadala 240 2BHK 1,300 sf to 1,400 sf3BHK 1,600 sf to 2,300 sf

Hiranandani Basilus Hiranandani Developers Thane 28 5BHK 3,668 sf

Serita Uma Group Thane 24 2BHK 1,065 sf to 1,280 sf3BHK 1,375 sf

Cosmos Enclave Cosmos Group Thane 150 1BHK 700 sf2BHK 1,065 sf

Cosmos Garden Cosmos Group Thane 560 1BHK 710 sf2BHK 1,100 sf

Dosti Imperia Phase 2 Dosti Group Thane 315 2BHK 1,155 sf to 1,328 sf3BHK 1,581 sf to 1,759 sf




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The retail market in Mumbai witnessed an

increase in enquires from new as well as existing

retailers in both malls and main street locations.

Majority of the landlords in prime main street

locations are pressing for an upward revision in

rentals so as to capitalize on higher demand and

lack of quality supply.

The commercial office market in Mumbai

regained some momentum in the first quarter of

2012 and recorded absorption of approximately 14

lakh sf spread across all micro markets. The BFSI

sector remained the highest demand driver with

nearly 27% of share in absorption. Absorption was

concentrated in BKC (29%) followed by Thane-

Belapur Road (23%) and Lower Parel (19%). The

city saw decline in pre-commitments during the

quarter since companies preferred to take up space

in ready developments due to high availability.

Additionally, supply remained subdued during

the first quarter of 2012 and was recorded at 14.4

lakh sf which is 47% less than the last quarter.

There was no change seen in the rental values

compared to last quarter and it is likely remain at

current levels owing to competitive pressure from

upcoming supply.

Retail

Office

Capital values are expected to remain stable

in the next quarter. Thereafter, capital values of

new project launches may appreciate due to the

new Development Control Rule norms announced

by the State, whereby the developers will have to

pay a premium for additional Floor Space Index forresidential developments.

Fresh supply of approximately 17.5 lakh sf of

commercial office space is expected to be infused

in the next quarter. This is likely to increase

vacancy levels in the upcoming quarters.

Main street rentals are expected to remain

stable in the upcoming quarter. However, mall

rentals in locations like Malad, Lower Parel

and Link Road are expected to exhibit a minorappreciation on account of low vacancy levels and

reduced supply in these micro markets.

Outlook

Construction activity has witnessed a revival

during the last quarter in locations like Thane and

Navi Mumbai. Developers were noticed to offer

various incentives and favourable payment schedules

to induce demand. Under construction projects have

maintained price points quoted in the previous quarter

while projects nearing completion have witnessed a

minor appreciation.



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25

The residential market was seen to be depicting

signs of improvement, both on demand and supply

side. The high demand and supply gap led to an

increase in capital values of 22% over the previous

quarter in select high-end locations in Delhi. On the

back of improving demand, developers have been

re-focussing on luxury/high-end projects although

mid segment projects continue to be the mainstay.

Rental values across the city saw an appreciationin the range of 5-11% compared to last quarter,

with highest increase noted in Gurgaon. According

to the media sources, the stamp duty collection

in Gurgaon in 2011 increased at least 30% in

comparison to the previous year. Also, Gurgaon

contributed more than 40% to the States total

revenue from property transactions. This indicates

the increasing real estate activity in the location.

The office market during the first quarterseemed sluggish with reduction in both supply and

demand compared to last quarter. Approximately

20 lakh sf of new developments were completed

which was double of the demand noted during the

quarter.

The retail sector also saw reduced supply with

only one mall getting operational in Gurgaon during

the quarter. Leasing activity was buoyant across

main street locations compared to the malls due tolimited availability of quality space in malls.

Infrastructure sector is the focal point of the

Government as it increased allocation to the sector

in Budget 2012-13. The allocation for Metro projects

has increased by over 12% from INR 5,166 crore to

INR 5,798.57 crore, in line with finance ministers

push for infrastructure projects through the Budget.

Out of this, the Delhi Metro Rail Corporation (DMRC)

continues to have majority share of INR 2,116.69

crore which increased by 41%. Delhi Metro Rail

Corporation is expected to utilise the funds to add

around 104 km to the network in the National CapitalRegion in phase-III by the year 2016. In addition,

the Delhi Cabinet approved the transfer of INR 621

crores to the National Highway Authority of India

as its contribution to accelerate the construction

of the Kundli-Manesar (KMP Expressway). The

expressway would connect National Highway 1 at

Kundli north of Delhi with National Highway 10 just

north of Bahadurgarh, National Highway 8 south of

Manesar in Gurgaon and National Highway 2 near

Palwal. This is expected to create several corridors

that will encourage housing developments.

National Capital RegionMarket Overview

14,250

10,00012,500

10,250

26,500

-

5,000

10,000

15,000

20,000

25,000

30,000

Premium Ready Residen t al Property Values in March' 12

Price (INR/s f )-March 20 12



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26

Trends & Updates

Ready Residential Property UpdatePrices of ready property have increased

significantly compared to the last quarter. Select

locations in Delhi such as South West and Central saw

a quarterly price increase of up to 20%. Similarly, the

suburban locations also saw notable increase in the

range of 5-10% during the first quarter of the year,

owing to limited completions and high demand.

Overall, rentals values across the city increased

in the range of 5-10% during the first quarter of the

year with relatively higher increment noticed in the

suburban locations.


Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

South West 28-33 29-34 36-43 36-45 40-47 42-50 42-50 50-60South East 19-23 21-24 24-30 24-30 25-32 25-35 25-35 25-40

South Central 20-23 21-25 25-32 25-35 27-40 27-40 27-40 27-40

Central 45-50 40-45 50-57 50-60 50-60 50-65 50-65 60-80

Gurgaon 5.2-11 5.3-12.5 6.2-18 7.5-20 8.5-21 8.5-21 8.5-21 9.5-25

Noida 5.2-6.2 5.2-6.5 5.5-7 5.5-7 5.5-7.5 5.5-7.5 5.5-7.5 5.8-8.0


Note: The above values for high end segment typically include units of 2,000-4,000 sq. .


Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

South East 14-16 14.5-16.5 15-20 15-22 15-25 15-28 15-28 20-30

South Central 18-20 18.5-20.5 20-23.5 20-25 22-27 25-30 25-30 25-30

Gurgaon 3.8-5.2 4-6.5 4.5-7.5 4.8-8.5 5-9 5-9 5-9 6.5-9

Noida 3-4.5 3.2-5.5 3.8-5.6 4-5.6 4.2-5.8 4.2-5.8 4.2-5.8 4.5-6.0


Note: The above values for mid range segment typically include units of 1,600-2,000 sq. .

High 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, AsiadVillage, Geetanjali Enclave, Safdarjung Enclave,

Sarvapriya Vihar, Panchsheel Enclave, Navjeevan Vihar.

Key to Locations:


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27

Improved demand led to increased luxury and high-

end segment project launches during the quarter in the

suburban locations; by quantum the mid-value segment

projects continue to dominate the new launches. Most

of the developers continued to increase prices of new

projects/launches on account of improved demand.


Project Name Developer Location Number ofUnits*

Area of Units*

Amstoria BPTP Sec 102, Dwarka Ex-pressway, Gurgaon

700-800 3BR+3T 2,384 sf3BR+3T 2,435 sf to 5,374 sf4BR+6T+1ST 5,709 sf

Regal Garden DLF Ltd. Sector 90, Gurgaon 400-500 3BHK 1693 sf to 1,818 sf4BHK 2,215 sf


Construction activity was noticed to continue at

a modest pace with a few projects in the finishing

stage in Gurgaon and Noida Expressway which are

likely to be handed over in 2012. In addition, a few

developers have commenced construction in the

upcoming pockets such Yamuna Expressway in

Greater Noida, Dwarka Expressway and Southern

Periphery Road in Gurgaon.


During the first quarter, new office supply

admeasuring 20 lakh sf was completed registering

a 10% decline compared to the last quarter.

Entire addition to the stock during the first

quarter was in Gurgaon and most of it catered to

the IT/ITeS segment. There was low absorption,

registered at 5,50,000 sf with pre-commitments

further accounting for nearly 4,50,000 sf. The

CBD locations recorded a rental appreciation

of approximately 14% over the last quarter,

attributable mainly to the prevailing low vacancy

levels and lack of supply. However, across most

other micro markets, the rental values remained

stable in the light of weak demand during the

quarter.

Office

The first quarter saw limited mall supply of

approximately 125,000 sf in Gurgaon. Due to limited

quality supply and less churn, mall rents remained

stable over the previous quarter. However, leasing

activity was buoyant across main streets mainly

driven by local retailers in the Jewellery and Food

& Beverages segments. This lead to increase in

rental values up to 10% in select markets such as

Connaught Place, South Extension and Karol Bagh.

Retail


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28

In the residential markets, rental values across

Delhi locations are expected to remain stable in

the short term. However, in Gurgaon they are likely

to appreciate due to limited new supply in the next

quarter. In contrast, capital values are expected to

rise for both mid and high-end properties across

prominent locations in Delhi, Gurgaon and Noida.

Approximately 43 lakh sf of new office

developments are expected to be offered for fit-

outs in the second quarter, with majority of the new

supply concentrated in Gurgaon. The rents across

the city are likely to remain stable with moderate

appreciation expected in Central Business Districts

and Gurgaon.

New mall supply admeasuring 34 lakh sf isexpected to be completed during the year 2012,

which depicts a 50% increase in supply compared

to last year. Therefore, mall rents are likely to be

under pressure in select locations such as West

Delhi and Noida where majority of the supply is

planned.

Outlook


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29

PuneMarket Overview

The capital values and rents remained stable across

most micro markets in Pune during the first quarter of

2012 except for Aundh and Koregaon Park. The city saw

a healthy infusion of new residential launches in the first

quarter of 2012. Locations like Somatne and Wagholi

saw the maximum number of new residential launches in

affordable housing segment. The precincts of Manjri and

Wakad saw maximum residential launches for mid and

high-end segments.

A mood of cautiousness prevailed across the

commercial real estate market of Pune in first quarter

of 2012. An uncertain global economy coupled with the

slowdown in Indian economy has resulted in a marginal

reduction in demand for commercial real estate space

across Pune.

Pune saw an infusion of 5,00,000 sf of retail space in

first quarter of 2012. The mall rentals across most micro

markets in the city did not see any fluctuations in the

first quarter of 2012. Also, limited leasing activities have

led to stable rentals across the main streets of Pune.

5,0004,563

5,3805,125

4,3894,000

0

1000

2000

3000

4000

5000

6000




Trends & Updates

Ready Residential Property UpdateThe first quarter of 2012 saw the completion and

handover of highend residential projects like Lunkad

Sky Vie at Viman Nagar and Castel Royale Towers at

Baner.

The established residential micro markets of Aundh

and Kalyani Nagar recorded an appreciation of 18%

and 7.5% in capital values respectively in the high-end

segment in the first quarter of 2012 compared to the

previous. Similarly, Koregaon Park witnessed a slight

appreciation of approximately 4% at the upper end of

mid-range capital values.


Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Koregaon Park, Bundh Garden 9.6-12.7 8.5-10.7 9-13 9-13 9-13 9-13 9-13 9-13

Aundh 4.9-6.1 5-5.2 5-5.5 5-6 5-6 5-6 5-6 6-7

Kalyani Nagar 7.6-9.6 7.3-9.2 8-12 8-12 8-12 7.5-12 8-12.5 8.5-13

Wanowrie 3.4-4.5 3.3-3.6 4-5 4-5 4-5 4-5.5 4-5.5 4-5.5


Note: The above values for high segment typically include units above 1500 sq. .


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30

Nearly 5,000 units consisting primarily of

apartments catering to all segments were launched

in the first quarter of 2012. Primarily located in the

suburban and peripheral locations of the city, these

projects were launched at pricing levels almost

similar to the pricing levels of projects launched in

the previous quarter.



Location 2008 2009 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

Koregaon Park, Bundh Garden 4.5-5 4.5-5.5 6-7 6-7 6-7 6-7 6-7 6-7.5

Aundh 3.5-4 3.6-4.2 4-5 4.5-5.5 4.5-5.5 4-5 4.5-5.5 4.5-5.5

Baner 3-3.8 2.9-3.6 3.5-5.5 3.8-5.5 4-5.5 4-5 4-5.5 4-5.5

Wakad 2.5-3 2.2-2.8 3.5-4 3.5-4.2 3.8-4.4 3.7-4.5 3.7-4.5 3.7-4.5Kalyani Nagar 4.5-5.5 4.5-5.5 6.5-7 6.5-7.5 6.5-7.5 6.5-7 6.5-7.5 6.5-7.5

Wanowrie 3-3.2 2.8-3.1 4-5.5 4-5.5 4-5.5 4-4.7 4-5.5 4-5.5





B.A. Vermont Bhandari Associates Wagholi 84 1BHK 675 sf2BHK 885 sf to 978 sf

Marvel Cascada Marvel Realtors Balewadi 124 2BHK 1,370 sf3BHK 1,920 sf3.5BHK 2,610 sf

Forest Trail (Phase II) Paranjape Schemes Construc-tion Limited

Bhugaon 396 2BHK 765 sf to 790 sf3BHK 965 sf to 1,245 sf

Suyog Nisarg PureHomes Suyog Development Corpora-tion Ltd Wagholi 600 1BHK 585 sf to 597 sf2BHK 810 sf to 1,015 sf

Manjri Greens Annexe B.K. Jhala & Associates Manjri 416 2BHK 795 sf to 982 sf3BHK 1,221 sf to 1,608 sf

Park Titanium (PhaseII)

Pride Purple Group Wakad 52 3BHK 1,450 sf to 1,800 sf

Sai Eshanya Manikchand- Vasudha JV Balewadi 116 2BHK 1,059 sf to 1,200 sf2.5BHK 1,321 sf

Avenair Goldfinger Infra Ventures PvtLtd.

Wakad 73 2BHK 1,102 sf to 1,128 sf3BHK 1,395 sf to 1,402 sf

Elmwoods Sukhwani Constructions Pimple Saudagar 112 2BHK 1,060 sf to 1,175 sf2.5BHK 1,400 sf to 1,475 sf3BHK 1,502 sf to 1,550 sf

Daffodil Next Sree Mangal Projects Somatne 800 1BHK 600 sf2BHK 900 sf3BHK 1,400 sf

Meadows Mystique Nagpal Group Wagholi 24 3BHK 2,393 sf to 2,683 sf

Elementa Akshar Group Wakad 1200 1.5BHK 950 sf2BHK 1,075 sf to 1,330 sf2.5BHK 1,445 sf

Florence Kolte Patil Developers Limited Margosa Heights, NIBMAnnexe

190 2BHK/3 BHK/4 BHK 1,015 sf to1,630 sf

Gini Viviana Gini Construction Pvt Ltd Balewadi 226 2BHK 1,075 sf to 1,110 sf2.5BHK 1,190 sf to 1,280 sf3BHK 1,480 sf to 1,550 sfPenthouse 2,170 sf to 2,490 sf

Lagoona Woods Sudarshan Developers Near Temghar Dam 37 3BHK 12,000 sf

Simpli-City (Phase II) B.K. Jhala & Associates Handewadi Road, Ha-dapsar 532 2BHK 820 sf to 1,110 sf


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31

The city saw an infusion of 5,00,000 sf of retail

space in first quarter of 2012. With the rise in number

of malls, a number of national and international brands

have opened up their outlets in Pune. Some of the new

retailers who have opened up their stores in the firstquarter of 2012 include The Collective, LOccitane,

Adolfo Dominique, Kitsch, Sukho Thai and Riva Lounge

among others. Retailers have been in a better position

to negotiate with the landlords/developers due to high

supply infusion. Limited leasing activities across the

main streets of Pune have led to stable rental valuesin the first quarter of 2012.

Approximately 55% Punes office space supply

was in Special Economic Zones (SEZs) during Q1 2012.

During the same period, the city recorded absorption

of just over 7,00,000 sf. Absorption was highest

in SEZs which accounted for 47% followed by the

Software Technology Parks (STPs) and commercial

non-IT office buildings, absorbing 38% and 15% of

the office space respectively. Rentals across the city

have been stable compared to the last quarter except

for minor appreciation noted at approximately 3% in

micro markets of Kharadi, Hadapsar and Hinjewadi.

Retail

Office

Owing to a slew of residential projects in

pipeline, the capital values in new developments

are not likely to see any fluctuations in Pune. The

demand from employees working in IT/ITeS sector

is likely to keep the rental values high across micromarkets located closest to offices catering to the

sector viz., Baner, Aundh, Kharadi and Hadapsar.

The city is likely to see an infusion of

approximately 20 lakh sf of commercial space in

the second quarter of 2012. With this infusion, the

rental values are likely to remain stable across

most micro markets in Pune.

The city is likely to witness an additional supply

of 7,00,000 sf of retail space in the second quarter

of 2012 in the micro market of Hadapsar. The mainstreets of Pune like J.M. Road, F.C. Road and M.G.

Road may witness some rental appreciation, due to

lack of availability of quality space and continued

enquiries from international brands looking to

establish their presence in these micro markets.

Outlook

A slew of residential projects catering to the mid

and high-end segments in suburban and peripheral

like NIBM Road and Wakad are in advanced stages

of construction. The micro markets of Hadapsar andLulla Nagar has seen the completion of residential

projects catering to the affordable segment.

Construction activities have been noticed across

the upcoming residential locations of Talegaon,

Hinjewadi, Pimpale Saudagar, Wakad and Ravet.



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