india office property market overview

Office PrOPerty Market Overview iNDia

QUarterLy UPDate | JaNUary | 2013

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MACRO ECONOMIC OVERVIEW

GDP growth in the July - September quarter •of 2012 was 5.3%, contracting marginally from in the last quarter.

Headline inflation based on the wholesale •price index inched down to 7.24% for the month of November 2012, as compared to 7.45% in October 2012. It was 9.46% during the corresponding month of the previous year.

The Reserve Bank of India reduced the CRR •(Cash Reserve Ratio) of scheduled banks by 25 basis points from 4.50 to 4.25% with effect from 3 November 2012 to induce immediate liquidity in the market. However, the central bank did not provide any repo rate cut this quarter.

India’s foreign direct investment (FDI) inflow •was around USD1.94 billion in October 2012, which was nearly 65% above the same month last year.

This quarter, the commercial office markets in •India have shown mixed trends. Overall, rents and capital values remained stagnant with a downward bias. Notwithstanding the current economic difficulties, the leasing activity in Mumbai, Delhi and Gurgaon Bangalore remained steady; however, the Chennai, Kolkata and NOIDA markets experienced relatively weak demand.

COLLIERS VIEW: Business confidence is up •based on the government’s keen resolve to introduce numerous fiscal and economic reforms. RBI has indicated that they would positively review lowering the repo rate in 1Q 2013. This should increase liquidity in the market; and the positive business environment should lead to recovery in the country’s economic growth and increase in demand for commercial and residential real estate. In the medium terms, cities with lower inventory overhang (such as Bangalore and Mumbai) will witness strengthening in the rental and capital values. However in the short term rental values across board will be under stress.

ECONOMIC BAROMETER

RETuRN ON AlTERNATIVE INVEsTMENTs

RESEARCH & FORECAST REPORTsYDNEY CENTRAl BusINEss DIsTRICT

INDIA OFFICE MARKETREsEARCh & fORECAsT REpORT

Dec-11 Dec-12

REPO RATE 8.50% 8.00%

REVERSE REPO RATE

7.50% 7.00%

CRR 6.00% 4.25%

INFLATION 7.74% 7.24%

PRIME LENDING RATE

9.75% - 10.75% 10.00% - 10.75%

DEPOSIT RATE (<1 YEAR)

7.75% - 9.50% 8.00% - 9.00%

FOREIGN Ex-CHANGE

INR - USD54.96 54.43

INR- EURO 69.29 71.31

Dec-11 Dec-12 YoY %

Change

GOLD 27,670 30,885 11.62%

SILVER 52,250 60,040 14.91%

EQUITY (BSE

SENSEx) 15,881 19,317 21.64%

REALTY INDEx 1,505 2,067 37.35%

Source: Colliers International India Research

ECONOMIC INDICATORs

INR

Cror

eIn

Per

cent

age

2005

- 0

6

2006

- 0

7

2007

- 0

8

2008

- 0

9

2009

- 1

0

2010

- 1

1

2011

-12

April

-O

ct 1

2

fDI in Real Estate

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

Jan

- M

ar 0

9

Apr

- Ju

n 09

Jul -

Sep

09

Oct

- D

ec 0

9

Jan

- M

ar 1

0

Apr

- Ju

n 10

Jul -

Sep

10

Oct

- D

ec 1

0

Jan

- M

ar 1

2

Jun

- Se

p 12

Oct

- D

ec 1

1

Jul -

Sep

11

Apr

- Ju

n 11

Jan

- M

ar 1

1

Gross Domestic product at factor Cost

0.0%

1.0%

2.0%

3.0%

4Q 2012 | OFFICE

90

95

115

120

105

110

100

15-N

ov-1

2

30-N

ov-1

2

1-O

ct-2

012

16-O

ct-2

012

31-O

ct-2

012

15-D

ec-1

2

BsE sensex & Realty Index

BSE Sensex Realty Index* Rebase to 100

USD Euro

Exchange Rates

* Rebase to 100

60

55

65

70

75

50

45

40

55

60

1-O

ct-1

2

16-O

ct-1

2

31-O

ctl-1

2

15-N

ov-1

2

30-N

ov-1

2

15-D

ec-1

2

Note : All values in the above tables are as on 15th of December, 2011 and December, 2012

Apr

- Ju

n 12

Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.

COllIERs INTERNATIONAl | p. 3

iNDia | 4Q 2012 | OFFICE


MuMBAI

More than 9.3 million sq ft of commercial •Grade A office space was available for fit-out in 4Q 2012. About 24% of this total available space was concentrated in Andheri East.

A number of projects / part of the projects •were completed this quarter resulting in the addition of approximately 4 million sq ft of Grade A office space to the city’s total inventory.

Leasing activity picked up in the Mumbai Grade •A office market during 4Q 2012 and few large deals were concluded during the quarter. The city’s total absorption for 2012 totalled around 6.23 million sq ft. Sectors which primarily contributed to this absorption were Banking, Finance Services and Insurance (BFSI) and IT/ITes.

Average rental and capital values in Mumbai •remained stable in 4Q 2012 across all micro-markets due to ample availability of stock and new developments in the pipeline.

The Maharashtra State Road Development •Corporation (MSRDC) has opened a second flyover, named Patlipada, on the Thane-Ghodbunder Road. A total of four flyovers — the Patlipada, Waghbil, Kapurbawdi and Manpada were planned on this road, of which Waghbil and Patlipada flyover are now operational; work on the Manpada flyover is in the final stages and is expected to be operational by the end of January 2013.

COLLIERS VIEW: 4Q 2012 witnessed an •increase in absorption of office space. The demand showed a clear preference for premium quality office space. We anticipate that in short to medium term the rental values for such properties will command a premium due to limited supply. Though, overall market rentals will witness stability on account of demand/supply equilibrium.

Andheri East 24%

CBD 1%

Thane / LBS 22%

Worli / Prabhadevi 1%

Goregoan / JVLR 8%

Powai 4%

Malad 5%

Navi Mumbai 6%

Lower Parel 20%

BKC 8%

Kalina 1%

AVAIlABlE supplY IN pRIME AREAs

CITY OffICE BAROMETER

Micro Market Rental Values

% Change

QoQ YoY

CBD 225 - 275 0% -9%

Andheri East 90 - 125 0% 0%

BKC 225 - 315 0% 3%

Lower Parel 130 - 200 0% 0%

Malad 80 - 90 0% 0%

Navi Mumbai 55 - 75 0% 0%

Powai 100 - 120 0% 0%

Worli/ Prabhdevi 175 - 225 0% 0%

Goregaon/ JVLR 80 - 110 0% -5%

Kalina 175 - 210 0% 0%

Thane / LBS 50 - 100 0% 0%

3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value

Andh

eri E

ast

BKC

Low

er P

arel

Mal

ad

Navi

Mum

bai

Pow

ai

Wor

li/Pr

abhd

evi

Gore

gaon

/

JVLR

Kalin

a

Than

e /

LBS

CBD

0

5000

10000

15000

20000

25000

30000

35000

GRADE A CApITAl VAluEs

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

4Q20

08

4Q20

09

4Q20

10

4Q20

12

4Q20

13F

4Q20

1150 5000

0 0

100 10000

150 15000

200 20000

250 25000

300 30000

AVERAGE RENTAl AND CApITAl TREND

Forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

Note:Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.

Grade A Rental/Capital Values: Indicative asking price for Grade A office space.

Prime Office Average Rental Trends: Average market rental values for Grade A properties.

KEY uNDER CONsTRuCTION pROJECTs

BUILDING NAME DEVELOPER AREA (SQ. FT.) LOCATION ExPECTED COMPLETION

Kohinoor Square Kohinoor Group 779,000 Central Mumbai 2013

Marathon Icon Marathon Group 175,500 Central Mumbai 2013

Mindspace IT SEZ Bldg. No.11 K Raheja Corp 400,500 Navi Mumbai 2013

KEY MARKET TRANsACTIONs

CLIENT BUILDING NAME AREA (SQ. FT.) LOCATION TRANSCATION TYPE

Covidien Boomerang 9,900 Andheri Lease

Lhoist Sahar Plaza (Windfall) 6,630 Andheri Lease

QAD India Techniplex 15,000 Goregaon Lease

Vertex Group Sigma IT Park 22,490 Rabale Lease

Visa The Capital 20,000 BKC Lease

Woodfield Systems (India) Ltd. NITCO Biz Park 10,000 Thane Sale

MUMBAI

p. 4 | COllIERs INTERNATIONAl



DElhI

About 1.6 million sq ft of Grade A office space •was ready for fit-out in 4Q 2012. The majority of this supply was located in SBD locations such as Jasola and Saket.

No new supply was added during the surveyed •quarter to the Delhi commercial Grade A office stock.

Occupier demand remained steady during the •quarter. A number of small transactions were concluded in the CBD while SBD locations like Jasola and Saket recorded few mid-size transactions.

Amid steady occupier demand and limited •supply availability the rental values for Grade A offices remained stable in almost all micro-markets.

Capital values remained stable in almost all •micro-markets and no major activity was witnessed in the sales market. However, the state government has announced the new circle rates with effect from 5 December 2012 in the capital. As per the notification, the circle rate in Category A colonies went up by 200%, in Category B by 50% and the rest by 22%. At present, there are eight categories of colonies in Delhi (A through H). The circle rate is the minimum rate for registration of properties.

COLLIERS VIEW: While the demand has come •down marginally as compared to previous years, the rental values remained stable during 2012. Most of the developers are adopting a wait and watch approach awaiting for new announcement on city development plans. No major supply is expected in near term except in Aerocity which is an emerging location in Delhi near International Airport. We anticipate rental values to remain stable due to limited supply and muted demand.

Jasola 59%

Nehru Place 10%

Saket 29%

Connaught place 2%




% Change

QoQ YoYNehru Place 180 - 192 1% 4%

Connaught Place 330 - 384 0% 2%

Netaji Subhash 65 - 75 0% 0%

Jasola 112 - 130 -2% -5%

Saket 162 - 180 7% 1%

Nehr

u Pl

ace

Conn

augh

t Pla

ce

Jaso

la

Sake

t

0

10000

20000

30000

40000

50000

60000


Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

4Q20

08

4Q20

09

4Q20

10

4Q20

12

4Q20

13F

4Q20

1150 5000

0 0

100 10000

150 15000

200 20000

250 25000

400

350

300 30000

35000

40000


Forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.






Caddie Commercial Tower Caddie Hotel 100,000 Aerocity 2013

DLF Towers Okhla DLF Ltd. 420,000 Okhla 2013

Ambience Commercial Tower Ambience Group 150,000 Vasant Kunj 2013



Franklin Templeton Ashoka Estate 5,200 Barakhamba Road Lease

Oriflame Corporate One 50,000 Jasola Lease

State Bank of India Jeevan Bharti 20,000 Connaught Place Lease

Thales Group Konnectus 18,450 Minto Road Lease

USG Corporation DLF Jasola 1,710 Jasola Lease

DELHI

3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value





MG Road 5%

Institutional Sectors /Sushant Lok

2%

Manesar 17%

DLF Cyber City 4%

NH8/Udhyog Vihar 21%

Golf Course Road/Ext /Sohna Road

51%



Golf

Cour

se

Road

/Ext

/S

ohna

Roa

d

NH8/

Udh

yog

Viha

r

Inst

itutio

nal

Sect

ors

/Su

shan

t Lok

Golf

Cour

se

Road

/Ext

/So

hna

Road

(IT)

NH8/

Udhy

og

Viha

r (IT

)

Man

esar

(IT)

Man

esar

MG

Road

0

5000

10000

15000

20000

25000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

4Q20

08

4Q20

09

4Q20

10

4Q20

12

4Q20

13F

4Q20

1120 2000

0 0

40 4000

60 6000

80 8000

100 10000

120 12000Forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.








DLF Building 14 Tower D DLF Ltd. 731,800 NH-8 2013

Success Tower Suncity Projects 200,000 Golf Course Ext Rd. 2013

Unitech Infospace, Gurgaon Phase 2 Building 7 Unitech Ltd. 432,000 NH-8 2013

KEY MARKET TRANsACTION


AB Sciex India Plot No 121 22,000 Udyog Vihar Lease

ACS xerox Park View Business Tower 40,000 Sohna Road Lease

Mudra Communications Ltd. Platinum Towers 30,000 Udyog Vihar Lease

Pepsico Ltd. Pioneer Urban 150,000 Golf Course Ext Rd. Lease

SAP India Vatika Towers 9,500 Sector 54 Lease

GURGAON

3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value


% Change

QoQ YoYM. G. ROAD 110 - 120 -2% -1%

Golf Course Rd./Ext /Sohna Rd. 55 - 110 1% -7%

NH8/Udhyog Vihar 110 - 140 0% 10%

Manesar 45 - 62 0% 5%

Institutional Sectors /Sushant Lok

60 - 117 5% 1%


GuRGAON

More than 14 million sq ft of Grade A office •space was available for fit-out in 4Q 2012. Most of the available supply was concentrated on Golf Course Road, Golf Course Road Extension, Udyog Vihar, NH-8 up to Manesar.

During the surveyed quarter, construction •activities remained upbeat and several projects / parts of the projects contributing more than 0.5 million sq ft of Grade A office space were added to the city’s total inventory.

This quarter a number of projects / parts •of the projects were launched, admeasuring about 1 million sq.ft. Most of these projects are expected to be completed by the end of 2015 and will add about 1 million sq ft of Grade A office space to the city’s total inventory.

Occupier demand remained strong and a •number of mid-size (20,000 to 25,000 sq ft) transactions were recorded during 4Q 2012. The total absorption recorded during the year was to the tune of 4 million sq ft.

Rental values recorded a marginal increase in •the range of 1 to 2% in select micro-markets such as Golf Course Road, Golf Course Extension Road and Sohna Road. However, rental values remained under pressure in the CBD and declined by 2%. All other micro-markets witnessed steady rents QoQ.

COLLIERS VIEW: In view of the sustained trend •of cost-saving initiatives adopted by most of the office occupiers, Udhyog Vihar and Sohna Road will remain the most preferred location because of affordable rentals and location advantages. The office rental value growth will be capped in medium term due to existing vacancy and the forthcoming new supply.




NOIDA

During 4Q 2012, about 8.8 million sq ft of •Grade A and Grade ‘B’ office space was available for fit-out. More than 90% of this supply was IT/ITeS office space located primarily in Sectors 16A, 62 and Sectors 125 to 143 along the NOIDA Expressway.

Following the previous quarter, construction •activities remained upbeat and about 1.5 million sq ft of Grade A office space was added to the city’s total inventory. Projects / part of the projects contributing to this new supply include Ansal Corporate Park by Ansal API and Advant IT Park, Tower-B by Advant Group, both located at Sector 143.

A new project, Ithum, was launched by Beaver •International in Sector 62 this quarter. The project, measuring approximately 0.5 million sq ft, is expected to be completed by the end of 2015.

Occupier demand remained bleak but few large •floor plate deals were concluded during 4Q 2012. The total absorption in 2012 accounted for more than 2 million sq ft of Grade A office space.

Rental values declined to the tune of 2 to 3% •in the institutional and industrial sectors this quarter however, rents in the commercial sector remained stable QoQ.

COLLIERS VIEW: The market is facing stiff •competition from other preferred location like Gurgaon. Occupier demand has come down significantly in 2012 as compared to previous years and market witnessed an overall contraction of rental values by 5% YoY. In view of large upcoming supply in the pipeline and lower demand from IT/ITeS companies, rental values will continue to remain under pressure in medium term.

Commercial Sectors (Sec 18) (Grade B)

0.7%

Industrial Sectors (Sec. 1-9, 57-60, 63-65)

(Grade B) 8.6%

Commercial Sectors (Sec 18) 0.2%

Institutional Sectors (Sec.16A, 62, 125-142

90.5%




% Change

QoQ YoYInstitutional Sectors (Non IT) 61 - 72 -2% -11%

Institutional Sectors (IT) 45 - 50 -3% -5%

Comercial Sectors 95 - 100 6% -7%

IndustrialSector 23 - 32 0% 4%

Inst

itutio

nal

Sec

tors

(Non

IT)

Inst

itutio

nal

Sect

ors

(IT)

Com

mer

cial

Se

ctor

s

0

3000

6000

9000

12000

15000


Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

09

4Q20

09

4Q20

10

4Q20

11

4Q20

12

4Q20

13F

20 2000

0 0

40 4000

600060

8000

80

10000120

100


Forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.



Amigo Cyber Park Amigo Park Inc. 250,000 NOIDA Expressway 2013

Corporate Park Ansal API 186,240 NOIDA Expressway 2013

Oxygen SEZ 3C Group 250,000 NOIDA Expressway 2013



Benare (Domestic BPO) Assotech One 12,500 Sector 62 Lease

Haskoning India Green Boulevard 11,000 Sector 62 Lease

Lumata Digital Green Boulevard 25,000 Sector 62 Lease

Powertec Energy Individual Building 25,000 Sector 63 Lease

Samsung Engineering Advant IT Park 100,000 Sector 142 Lease




NOIDA

3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value





ChENNAI

Approximately 14 million sq ft of Grade A office •space was available for fit-out this quarter. The majority of this supply was located along the OMR IT Corridor.

No major new supply was added to the city’s •inventory during the quarter.

Occupiers demand remained sluggish but •leasing in Special Economic Zones remained active and most of the supply in the SEZs was absorbed as soon as it became available. The city’s annual absorption in 2012 was about 3 million sq ft which was almost half of 2011 absorption.

Demand was primarily concentrated in •Guindy, Ambattur and OMR as companies are looking at these places for relocation, taking into consideration accessibility, amenities and ease of commuting for employees.

Rental values for Grade A office space •remained stable during the survey period despite moderation in demand due to supply / demand equilibrium.

COLLIERS VIEW: Office space demand •in Chennai is mostly limited to existing enterprises expanding or relocating which is either a move for more compliant properties or for lower rentals or to a location wherein companies can attract the right human resources. Demand is still primarily driven by IT/ITeS. Due to ample supply in the city, locations closer to the city are charging nominal rentals and thus making properties away from the city less attractive.With limited space in traditionally preferred micro-markets such as Guindy, new micro-markets such as Ambattur (for ITeS) and OMR (for IT) are more sought after. There will be downward pressure on rental values.

CBD 14%

Guindy (SBD) 6%

Velachery 1%

Vadapalini 0%

GST Rd 3%

OMR (IT Corridor) 51%

Ambattur 24%




% Change

QoQ YoYCBD 65 - 85 0% -9%

Guindy (SBD) 50 - 60 0% 6%

Ambattur 25 - 30 0% 3%

OMR (IT Corridor) 25 - 40 0% 0%

GST road 35 - 40 0% 0%

Guin

dy (S

BD)

Amba

ttur

OM

R (IT

Co

rrid

or)

CBD

0

2000

4000

6000

8000

10000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

4Q20

08

4Q20

09

4Q20

10

4Q20

12

4Q20

13F

4Q20

1120

0 0

40

2000

4000

60 6000

80 8000

100 10000Forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.



Purva Moneta Puravankara Projects 300,000 Guindy 2013

Ramanujan IT City Little Wood Tower Block D Tata Realty & Infrastructure 600,000 Taramani 2013

SP InfoCity Shapoorji Pallonji Group 1,200,000 OMR 2013



Barclays DLF SEZ 69,000 Manapakkam Lease

Calsoft Espee Tech Park 40,000 Ekkatuthangal Lease

EpiSource Prince Infocity2 35,000 IT Corridor Lease

Maveric Systems DLF SEZ 20,000 Manapakkam Lease

Tata Capital Centineal Square 13,000 Ashok Nagar Lease






CHENNAI

3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value





BENGAluRu (BANGAlORE)

More than 11.5 million sq ft of Grade A office •space was available for fit-out in Bangalore this quarter. Most of this supply was concentrated in areas such as the EPIP Zone, Whitefield, Electronic City and Outer Ring Road.

Approximately 1.75 million sq ft of office •space was added to the city’s total inventory this quarter.

Occupiers demand for Grade A office space •remained steady and a few large floor plate deals were executed during 4Q 2012. The IT/ITeS sector remained the major contributor of this demand. The yearly absorption of Grade A office space was around 8 million sq ft during 2012 which was approximately 60% of the total absorption of last year.

Outer Ring Road, Whitefield and Electronic •City remained the more preferred office locations. In addition, an increased interest is being observed in the North Bangalore micromarket. The area is getting attention with the development of the KIADB Industrial area and a few Special Economic Zones like Hinduja and Karle SEZ.

Amid cautious market sentiments and more •prime office supply in the pipeline, the average rental values remained stable across all micro-markets this quarter.

COLLIERS VIEW: Unlike in 2011 and 2012, •there are fewer 100,000+ sq.ft. requirements in the market. Most of the demand is being generated by small and medium IT enterprises. Demand is still primarily from IT companies; Due to uncertainty in the future performance of IT companies developers are refraining from speculative developments. There is ample proposed inventory pile up in the city, we anticiapate a lot of it will be deferred. Rental values will remain stable due to the low rental base.

Hosur Road 4%

CBD 6%

Bannerghatta Road 2%

Electronic City 15%

EPIP Zone/ Whitefield 46%

Outer Ring Road 27%




% Change

QoQ YoYCBD 80 - 100 0% 6%

Hosur Rd. 20 - 40 0% 0%

EPIP Zone/ Whitefield 23 - 32 0% 3%

Electronic City 25 - 35 0% 0%

Bannerghatta Rd. 48 - 54 4% 4%

Outer Ring Rd. 47 - 58 0% 5%

-

Hos

ur R

oad

EPIP

Zon

e/

Whi

tefie

ld

Elec

tron

ic

City

Bann

ergh

atta

Ro

ad

Out

er R

ing

Road

CBD

0

5000

10000

15000

20000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

4Q20

08

4Q20

09

4Q20

10

4Q20

12

4Q20

13F

4Q20

1120 2000

0 0

40 4000

600060

80 8000

100 10000Forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.



Bagmane Constellation - Pheonix Bagmane Developers 450,000 SBD 2013

Hiranandani Ashford Hiranandani Group 437,500 Electronic City 2013

Prestige tech park III Prestige Group 379,100 SBD 2013



Britannia Ltd. Prestige Shanthiniketan 70,000 Whitefield Sale

Mindteck Prestige Atlanta 68,000 Koramangala Lease

Netmagic SVR Platinum 110,000 Electronic City Lease

Novel Group GNR Tech Park 145,510 Hosur Road Sale

Onmobile E City 100,000 Electronic City Lease

Verizon Prestige Tech Park 60,000 Outer ring road Lease






BENGALURU

3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value





KOlKATA

About 0.28 million sq.ft. of new supply was •added to the Kolkata Grade A office inventory this quarter. Construction activities were slow and the projects which were due for completion this quarter were deferred to the next quarter. Similarly, no new Grade A office projects were launched in the Kolkata market, however, a few projects launched previously were re-launched this quarter.

The rental market remained slow and only a •few deals were concluded during 4Q 2012. Most of these leases were in the PBD micro-markets such as Sector 5 and New Town Rajarhat.

Average rents for Grade A remained stable •during the quarter, but in view of the overall dismal market sentiments, landlords have started reducing asking rents.

COLLIERS VIEW: Rental values are stable •at the moment, but there will be significant downward pressure due to low demand from IT/ITeS sector, the traditional demand driver. Few companies are setting up offices in Kolkata. We anticipate that most of the demand in Kolkata in near term will be based on consolidation requirements. East Kolkata – Rajarhat, Sector V, Topsiya and By-pass will continue to be the preferred areas because of better infrastructure, better grade buildings and lower rentals.

Sector-5 31%

East Kolkata 65%

Ballygunge Circular Road 4%




% Change

QoQ YoYCBD 110 - 130 0% 4%

Ballygunge Circular Rd. 105 - 115 0% 0%

East Kolkata 75 - 85 0% 0%

Sector-5 45 - 55 0% 0%

PBD (New Town, Rajarhat) 34 - 39 0% 0%

CBD

(Par

k St

,Cam

ac S

t,AJC

Bo

se R

oad)

Bally

gung

e Ci

rcul

ar

Road

East

Kol

kata

Sect

or-5

PBD

(New

To

wn,

Ra

jarh

at)0

5000

10000

15000

20000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

4Q20

08

4Q20

09

4Q20

10

4Q20

12

4Q20

13F

4Q20

1120 2000

0 0

40 4000

60 6000

80 8000

100 10000

120 12000Forecast

Rent

al V

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R Pe

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Ideal Unique Centre Ideal Group 700,000 EM Bypass 2013

IT Godrej Simocco Phase 2 Godrej Waterside 1,000,000 Sector 5, Saltlake 2013

Unitech Infospace, Kolkata Phase 3 B Unitech Ltd. 1,306,800 Rajarhat 2013



Burckhardt Compression Eco Space 14,000 New Town, Rajarhat Lease

CDE Asia Limited Eco Space 8,800 New Town, Rajarhat Lease

ICICI Bank Ltd. BIPL 6,000 Sector 5, Saltlake Lease

Indian Coast Guard Synthesis Business Park 45,600 New Town, Rajarhat Lease

Nomura Institue of Capital Market Research Globsyn 33,000 Sector 5, Saltlake Lease

Sunrise Spices Corporate Park 12,000 Sector 5, Saltlake Sale






KOLKATA

3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value





puNE

Approximately 4.5 million sq ft of Grade A •office space was available for fit-out in Pune during 4Q 2012. Most of this supply was concentrated in the micro-markets of Kharadi, Hadapsar, Fursungi, Hinjewadi and Nagar Road.

No new major supply was added to the city’s •total inventory this quarter. Similarly, no major office projects were launched except a small 50,000 sq ft project by Chordia Group in Baner.

During this quarter, overall occupier demand •for office space has contracted, however, a few large floor plate deals were signed during 4Q 2012 and more than a million sq ft of Grade A office space was leased in micro-markets such as Hadapsar, Bavdhan, Hinjewadi and Wakewadi. IT/ITeS and the automobile sectors were the main occupiers for commercial space.

Restricted supply in both IT and SEZ has led •to a marginal upward pressure in the rental values for Grade A buildings in select micro-markets resulting in an average increase of around 5% in rents across micro-markets.

COLLIERS VIEW: Rents are expected to remain •stable in view of upcoming supply in eastern corridor locations such as Viman Nagar and Kharadi. IT/ITES will continue to play a vital role in Pune’s overall absorption. This could be attributed to the projects that have already seen pre-commitments or long-established interest from various IT/ITES companies.

Bavdhan 4%

Kalyani Nagar 7%

Senapati Bapat Road 3%

Aundh 3%

Baner 6%

Bund Garden 4%

Airport road/pune station

4%Hinjewadi 26%

Nagar Road 14%

Kharadi 21%

Hadapsar/Fursungi 8%




% Change

QoQ YoYBaner 40 - 50 0% 0%

Bund Garden 55 - 65 0% 0%

Airport Rd. 47 - 58 0% 4%

Aundh 40 - 45 0% 0%

Senapati Bapat 60 - 90 0% -3%

Bavdhan 35 - 40 0% 0%

Kalyani Nagar 45 - 60 0% 0%

Nagar Rd. 40 - 45 0% 5%

Hinjewadi 30 - 40 0% 8%

Hadapsar/Fursungi 35 - 50 0% 6%

Kharadi 40 - 50 0% 7%

Bund

Gar

den

Airp

ort r

oad/

pune

sta

tion

Aund

h

Sena

pati

Bapa

t Roa

d

Bavd

han

Kaly

ani N

agar

Naga

r Ro

ad

Hin

jew

adi

Had

apsa

r/Fu

rsun

gi

Khar

adi

Bane

r

0

2000

4000

6000

8000

10000

12000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

4Q20

08

4Q20

09

4Q20

10

4Q20

12

4Q20

13F

4Q20

11

20 2000

0 0

40 4000

60 6000

80 8000

100 10000Forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

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R Pe

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Commerzone Building 5 K Raheja Corp. 350,000 Jail Road 2013

DLF IT Park, Pune Phase 2 Building 6 DLF Ltd. 750,000 Hinjewadi 2013

SP InfoCity, Fursungi Building 6 Shapoorji Pallonji Group 500,000 Fursungi 2013



Credit Suisse Wipro Campus 200,000 Hinjewadi Lease

iNautix Magarpatta Tower 8 150,000 Hadapsar Lease

Netscout Bajaj IT Park 52,000 Wakdewadi Lease

NVIDIA Commerzone 260,000 Yerwada Lease

Symantec EON IT Park 99,000 Kharadi Lease

Synechron Embassy 54,000 Hinjewadi Lease






PUNE


3Q 2012 4Q 2012

Vacancy

Absorption

Construction

Rental Value

MumbaiThe major business locations in Mumbai are the CBD (Nariman Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandra Kurla Complex (BKC) and Andheri Kurla stretch. Powai, Malad and Vashi are the preferred IT/ITES destinations, while Airoli at Navi Mumbai and Lal Bahadur Shastri Marg are emerging as new office and IT/ITES submarkets.

DelhiThe commercial areas in New Delhi metropolitan area can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola and Saket .

GurgaonThe prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also emerging as the city’s new office destination.

NOIDANOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and 125-142, industrial sectors include sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector.

ChennaiPrime office properties in Chennai are located in four principal sub-markets: the CBD, the IT Corridor, the SBD and the PBD. The SBD comprises Guindy, Manapakkam, Velachery and other areas. The PBD primarily includes Ambattur and GST Road, while the IT Corridor is the Old Mahaballipuram Road (OMR) in south Chennai.

Bengaluru (Bangalore)Prime office properties in Bengaluru can be divided into three principal sub-market— CBD, the SBD consisting of Banerghatta Road & Outer Ring Road (ORR) and PBD including Hosur Road, EPIP Zone, Electronic City and Whilefield.

PuneThe prime office sub-markets of Pune include Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp (CBD), while the Off CBD includes Aundh, Airport Road and Kalyani Nagar, among other locations. The eastern corridor, along with Nagar Road and Kharadi, have emerged as a preferred location for financial and IT/ITES companies.

KolkataThe major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge circular Rd, East Kolkata), East Kolkata and PBD (New Town & Rajarhat). The area around Park Street, Camac Street and AJC Bose road houses number of high-rises commercial buildings such as Chatterjee International Centre, Tata Centre, Everest House and Industry House among others.

OffICE suBMARKETs



CITY BAROMETER

Increasing as compared to previous quarter

Decreasing as compared to previous quarter

Remained stable from previous quarter


Colliers International (India) provides property services to property Investors and Occupiers. We deliver customised service solutions utilising local and global knowledge in partnership with our clients via our property Investment and Occupier service lines. These service lines include - Office Services, Facility Management, Project Management, Residential Services, Investment Services and Valuation & Advisory Services.

www.colliers.com/india

For national offices services related queries please contact:

George Mckay, South Asia Director Vikas Kalia, National DirectorOffice & Integrated Services Office [email protected] [email protected]: +91 22 4050 4553 Tel: +91 124 456 7531

INDIA OFFICE INDIA RESIDENTIAL APAC OFFICE APAC INDUSTRIAL GLOBAL RETAIL INDIA BUDGET

Mumbai : Vaibhav Kumar, Office Director [email protected] 31/A, 3rd floor, Film Center, 68, Tardeo Road, Mumbai, India - 400 034. Tel : +91 22 4050 4527, fax : +91 22 2351 4272

Delhi NCR : Ajay Rakheja, Office Director [email protected]

New Delhi : Statesman House, 4th Floor, Barakhamba Road, Connaught Place, New Delhi, India - 110001 Tel : +91 11 3044 6423, fax : +91 11 3044 6500

Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 456 7500, fax : +91 124 456 7502 Bengaluru : Goutam Chakraborthy, Office Director [email protected] Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru, India - 560 042 Tel : +91 80 4079 5500, fax : +91 80 4112 3131

Pune : Suresh Castellino, Office Director [email protected] Hotel Le Meridian, 101, R.B.M. Road, Pune, India - 411 001 Tel : +91 20 4120 6438, fax : +91 20 4120 6434

Chennai : Kaushik Reddy, Office Director [email protected] Heavitree Complex, Unit 1C, 1st floor, 23, Spurtank Road, Chetpet, Chennai, India - 600 031 Tel : +91 44 2836 1064, fax : +91 44 2836 1377

Kolkata : Soumya Mukherjee , Office Director [email protected] Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1, Block EP & GP, Salt Lake Sector V, Kolkata - 700 091 West Bengal, India Tel : +91 33 2357 6501, fax : +91 33 2357 6502

Recent Reports :

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AUTHORS

Amit Oberoi MRICSNational Director, Valuation & Advisory; ResearchEmail: [email protected]

Surabhi Arora MRICSAssociate Director, ResearchEmail: [email protected]

Sachin SharmaAssistant Manager, ResearchEmail: [email protected]

Heliana ManoAssistant Manager,Valuation & Advisory Email: [email protected]

For general queries and feedback :[email protected] Tel: +91 124 456 7580

This report and other research materials may be found on our website at www.colliers.com/India. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from.

© Copyright 2012 - 2013 All Rights Reserved.

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Residential Property Market OverviewINDIA

QUARTERLY UPDATE | NOVEMBER | 2012

ASIA PACIFICOFFICE MARKET OVERVIEW3Q 2012


ASIA PACIFICINDUSTRIAL MARKET OVERVIEW


May 2012

STREET/PRECINCTRENT

(USD)**

ANNUAL CHANGE

(%)

New York – Fifth Avenue ��,�� .�

Hong Kong – Queen's Road Central, Central (tie)

��,�� .�

Hong Kong – Canton Road (tie)

��,�� .�

London – Old Bond St.*** ��,�� .�

Paris – Avenue des*** Champs-Élysées

��,�� flat

Hong Kong - Causeway Bay

��,�� .�

New York – Madison Avenue

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Zurich – Bahnhofstrasse �� flat

Milan – Via Monte Napoleone

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Sydney – Pitt Street Mall �� (��.�)

HIGHLIGHTSGLOBAL

www.colliers.com

MID-YEAR 2012 | RETAIL

ANN T. NATUNEWICZ Manager | Retail Research | USA

Colliers’ 2012 Global Retail Streets survey found that of 129 locations tracked, 51 posted higher year over year average rental rates, 49 were flat, and 24 were down (5 lacked comparable data).

Retailers entering new markets—both developed and developing—continue to hedge risk by targeting the same one or two premier locations, generating heated competition and outsized rental rate growth in a handful of space-constrained corridors.

Companies with the most ambitious long-term expansion plans remain focused on emerging markets with rapidly growing middle-class populations, but recently institutional capital has pulled back somewhat to favor core markets and investments.

While economic and political turmoil did affect rental rates in headline-generating markets (such as Cairo and Athens), high streets with strong fundamentals remained remarkably resilient, suggest-ing, at least for now, some separation between macroeconomic issues and underlying real estate fundamentals.

Since we conducted our survey, however, weakening consumer sentiment among affluent shoppers has already begun to impact retailers’ revenues and could hinder landlords’ near-term ability to raise rents, suggesting flattening growth rates for the coming year.

This spring proved to be a tricky time to conduct global benchmarking, as market sentiment has deteriorated markedly since April. During the past year, virtually every entity making a forecast—including Colliers in our 2012 U.S. Retail Outlook —included a caveat related to not-yet-quantifiable global fallout from Europe’s fiscal issues. As the past few months have illustrated, the time to face Eurozone issues has finally arrived, spawning a new wave of financial uncertainty.

More than two years post-recession, though, results from our annual survey of High Street rents illustrate that the world’s priciest retail corridors continue to attract the most sought-after tenants at lofty rental rates. Eight of Colliers’ top ten Global Retail Streets in 2011 made the list again this year. The big story, however, lies with the explosive year over year rental growth achieved in a handful of markets. Six of our Top 10 grew at double-digit levels year over year in local currency units, five of them by more than 20%.

At a regional level, streets in areas that entered 2007-08 better-positioned economically—Australia, Canada, parts of Eastern Europe—had a higher percentage of this year's flat-to-higher rents than those slower to emerge from the recession. We will be watching these areas closely. Even as they represent some of the most attractive destinations for expansion-minded companies and yield-seeking investors, they too are vulnerable to softening consumer demand and, for those with reliable data, encroachment of e-commerce.

This report contains two parts. The first summarizes the results of our annual Global Retail Streets survey, conducted in April 2012. The second incorporates content from Colliers’ brokerage and research teams worldwide who contributed market operational metrics, nuanced commentary on retail conditions, and forward-looking opinions on what the next year will hold for consumers, landlords, and investors.

Record Rents for Top Retail Corridors; Global Slowdown Impacts Momentum Elsewhere

TOP 10 GLOBAL RETAIL STREETS*(USD PER SQUARE FOOT PER YEAR)

REGIONAL RETAIL RESEARCH CONTACTS

AMERICAS > Ann T. Natunewicz [email protected]

EUROPE/MIDDLE EAST/AFRICA > Zuzanna Baranowska [email protected]

ASIA > Simon Lo [email protected]

AUSTRALIA/NEW ZEALAND > Nora Farren [email protected]

Source: Colliers International* selected cities** exchange rate as of March 31, 2012*** Zone A rents

www.colliers.com/india

Budget Highlights | Real Estate

Finance Minister Pranab Mukherjee started his budget speech 2012-13 in the backdrop of challenging macroeconomic scenario. The finance minister projects the economy to grow by 7.6% in the next fiscal up from 6.9% in 2011-12. He mentioned that due to adverse global economic sentiments there has been a slowdown in the Indian Economy but the fact is India still remains among the front runners in the economic growth in any cross country comparison. The budget aims at faster, sustainable and more inclusive growth across sectors emphasizing on five focus areas including revival of domestic consumption, rapid revival of high growth in private investment, removal of supply bottlenecks, addressing malnutrition in 200 high burden districts and expedite improvement in delivery system, governance and transparency.

From a real estate perspective, the budget remained silent on most of the major issues including status of STPIs (Software Technology Parks of India), Real Estate Regulatory Bill, Land Bill etc. however, it mentioned that efforts are on to arrive at a political consensus on the issue of allowing 51% Foreign Direct Investment (FDI) in multi-brand retail.

THE KEY HIGHLIGHTS OF THE BUDGET WHICH MAY IMPACT REAL ESTATE SECTOR ARE AS FOLLOWS:

- External Commercial Borrowings (ECB) for low cost affordable housing projects. Impact: Real estate companies developing large affordable housing projects with large fund requirements will benefit the most from the easing of external commercial borrowing (ECB) norms as interest rate charged is lower in case of external borrowings in comparison to rates charged by domestic institutions.

- Increase in provision under Rural Housing Fund to INR 4,000 crore from the existing INR 3,000 crore.Impact: It will provide housing finance to targeted groups in rural areas at competitive rates.

- Extension of the existing scheme of interest subvention of 1% on housing loans up to INR 15 lakh where the cost of the house does not exceed INR 25 lakh for another year. Impact: This will boost the affordable housing segment by providing cheaper loan to the end users.

MARKET REACTION TO BUDGET

Q1 2012 | RESEARCH

Source: www.bseindia.com | Mar 16, 2012

Company Change (%)BSE SENSEX -1.19Realty Index -1.26Anant Raj Inds -6.04D B Realty -2.02DLF 0.15Godrej Properties -2.82HDIL -5.21Hubtown Ltd. -4.13Indiabulls Real Estate -1.95Mahindra Lifespaces -0.72Orbit Corp. -3.37Parsvnath Developers -4.04Peninsula Land -3.18Phoenix Mills -2.65Sobha Developers 3.04Sunteck Realty -1.13Unitech -1.68

UNION BUDGET 2012 -13

A SNEAK PREVIEW

P. 1 | COLLIERS INTERNATIONAL

OFFICE PROPERTY MARKET OVERVIEW INDIA

QUARTERLY UPDATE | OCTOBER | 2012
