may 2012 report on residential property market view by colliers international
TRANSCRIPT
Accelerating success.
Residential Property Market OverviewINDIA
QUARTERLY UPDATE | MAY | 2012
www.colliers.com
SBI Home Loan Rate for Loan upto INR 50 Lakhs. For a period of more than one year and amount below INR 1 Crore
ECONOMIC BAROMETER
RETuRN ON AlTERNATIvE INvEsTMENTs
Mar-11 Mar-12
REPO RATE 6.50% 8.50%
REVERSE REPO RATE 5.50% 7.50%
CRR 6.00% 4.75%
INFLATION 9.68% 6.95%
HOmE LOAN RATE 10.25% 11.00%
Mar-11 Mar-12 YoY %
Change
GOLd 20,730 27,300 31.69%
SILVER 52,450 56,014 6.80%
FIxEd dEPOSIT 9.5% 9.25% -0.25%
EQUITY 18,167 17,675 -2.71%
REALTY INdEx 2,054 1,821 -11.31%
RESEARCH & FORECAST REPORTsYDNEY CENTRAl BusINEss DIsTRICT
INdIA RESIdENTIAL mARkETREsEARCh REpORT
1Q 2012 | THE KNOWLEDGE
2
2
1
1
Repo Rate Reverse Repo Rate Cash Reserve Ratio Wholesale Price Index
ECONOMIC INDICATORs
In P
erce
ntag
e
MACRO ECONOMIC OvERvIEW
during 4Q 2011 GdP grew at 6.9 % in real terms suggesting a moderation in growth in comparison •to preceding two quarters. The finance minister presented India’s Union Budget 2012 -13 this quarter projecting a GdP growth rate of 7.6% for 2012-13.
The headline inflation figure moderated from 8.3% in december 2011 to 6.6 and 6.95% in •January and February 2012, respectively. keeping in view the moderation in inflation rate the Reserve Bank of India (RBI) reduced the CRR (Cash Reserve Ratio) by 50 basis points in January for the first time since one and a half year. A further reduction of 75 basis point was made in march 2012. The current CRR rate is 4.75%.
The Budget remained silent on most of the major real estate related issues. It did however •mentioned that efforts are on to arrive at a political consensus on the issue of allowing 51% Foreign direct Investment (FdI) in multi-brand retailing.
The Budget aims to provide impetus to affordable housing by providing various incentives to both •developers and end users. For example the External Commercial Borrowings (ECB) is allowed for low cost housing projects which would help developers to raise debt at a lower rate.
From an end user perspective, the budget provides few incentives including, Service tax •exemption for construction service related to residential dwelling and low cost mass housing up to an area of 60 sq mtr under the scheme of affordable housing. The existing scheme of interest subvention of 1% for housing loans up to INRs 15 lakh (where the cost of the house does not exceed INR 25 lakhs), was extended by one more year.
4.0
6.0
8.0
10.0
12.0
Jan
‘08
Jan
‘09
Jan
‘10
Jan
‘11
Apr
‘08
Apr
‘09
Apr
‘10
Apr
‘11
Jul ‘
08
Jul ‘
09
Jul ‘
10
Jul ‘
11
Oct
‘08
Oct
‘09
Oct
‘10
Oct
‘11
Jan
‘12
2.0
0.0
(-2.0)
Source: Colliers International India Research
CApITAl vAluE TRENDs
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
09
1Q20
10
2Q20
10
3Q20
11
2Q20
11
1Q20
11
4Q20
10
3Q20
10
2Q20
08
1Q20
08
INR
per
sq ft
75,000
5,000
25,000
35,000
15,000
45,000
65,000
55,000
3Q20
08
malabar Hill, Altamount Road, Carmichael Road
Powai
khar
Prabhadevi
Colaba, Cuffe ParadeBandra
Andheri
Worli
Juhu
Breach Candy, Napeansea Road, Peddar Road
1Q20
12
4Q20
11
Rebase to 100
2Q20
08
3Q20
08
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
08
1Q20
10
2Q20
10
3Q20
10
COllIERs REsIDEX 1Q 2012 - MuMBAI
50
60
70
100
90
80
120
140
130
110
Santacruz
COllIERs INTERNATIONAl | p. 3 p. 3 | COllIERs INTERNATIONAl
NEW pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
Aquino Prabhadevi Rohan Lifescapes 4Q 2015 32,500
Imperia Lower Parel Raheja Universal 4Q 2016 23,000
ITC Glory Parel Rohan Lifescapes 4Q 2014 22,000
kanakia Skywalk malad East kanakia Group 4Q 2016 9,500
CITY REsIDENTIAl BAROMETER
mUmBAI
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | MUMbAI
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
Cola
ba, C
uffe
Para
de
INR
per
sq ft
mal
abar
Hill
, Alta
mou
nt
Road
, Car
mic
hael
Roa
d
Wor
li
Brea
ch C
andy
, Nap
eans
eaRo
ad, P
edda
r Ro
ad
Prab
hade
vi
Band
ra
Sant
acru
z
Andh
eri
Pow
ai
khar
Juhu
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
Prabhadevi
Colaba, Cuffe Parade
Breach Candy, Napeansea Rd.,
Peddar rd.
malabar Hill, Altamount Road, Carmichael Road
200
150
100
50
0
Powai
Andheri
Juhu
khar
Santacruz Worli
Bandra
Note: * As quoted by developer
INR per Sq ft Per month
MuMBAI
This quarter several new residential projects •were launched in mumbai including a few premium residential projects such as “Imperia” by Raheja Universal, and “ITC Glory” and “Aquino” by Rohan Lifescapes. All of these new launches were located in western suburbs and were priced in the range of INR 22,000 to 32,500 per sq ft.
Construction activities remained slow and no •new supply was added to the prime residential stock in mumbai.
Buyer’s sentiments remained cautious on the •backdrop of the current economic scenario and fewer transactions were recorded during the quarter.
Capital values for prime residential properties •in western suburbs such as Bandra, Santacruz, Andheri, khar and Juhu recorded an increase in the range of 3 to 9%. On the contrary, properties located in South Central locations observed downward pressure on capital values and saw a marginal correction quarter-on-quarter.
due to steady demand for high-end rental •premises, rental values for prime residential properties witnessed marginal increase in the range of 1 to 2% quarter-on-quarter in most of the micro-markets barring locations such as Worli, Andheri, Juhu and Powai where rental values remained stable on account of ample supply.
p. 4 | COllIERs INTERNATIONAl
ONgOINg pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
kings Court Greater kailash- II dLF Ltd. 1Q 2015 36,000
Queens Court Greater kailash- II dLF Ltd. 1Q 2015 26,000
Capital Greens Shivaji marg dLF Ltd. 2Q 2015 14,000
Winter Hills dwarka morh Umang Realtech 4Q 2013 7,000
DElhI
The new residential supply in the premium •segment remains restricted, as only a few redevelopment projects were completed this quarter. Similarly no new residential projects were launched this quarter, except for a few redevelopment projects undertaken by local developers.
Capital value of prime residential properties •appreciated in the range of 5 to 10% across all the micro markets in 1Q 2012. However, buyers’ sentiments remained cautions due to prevailing uncertainties in economy.
demand for premium residential properties •remained consistent in South delhi’s much sought after locations such as Prithviraj Road, Aurangzeb Road, Chanakya Puri, Golf Links, Jor Bagh and Sunder Nagar, however, in Shanti Niketan, Westend, Panchashila, Anandlok, Niti Bagh, SdA, Friends Colony, maharani Bagh, Greater kailash I & II, South Extension, Anand Niketan and Vasant Vihar rents appreciated in the range of 2 to 9%.
In order to facilitate smooth travel between •the two cities, delhi and Gurgaon, the delhi development Authority (ddA) has planned to develop three Urban Extension Roads (UERs) connecting dwarka to Palam Vihar, Najafgarh to dhansa and Nelson mandela Road to mG Road.
The delhi government has given its in-•principle approval for developing a monorail corridor of 10.8 kms in Trans-Yamuna area. This monorail line is expected to link between Shastri Park metro station and Trilokpuri via Laxmi Nagar in East delhi and will have 12 stations. It is proposed to be functional by end of 2017.
CITY REsIDENTIAl BAROMETER
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | DELhI
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
CApITAl vAluE TRENDs
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
dELHI
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
90,000
100,000
80,000
Anan
d Ni
keta
n,
Vasa
nt V
ihar
Panc
hash
ila, A
nand
lok,
Niti
Bagh
, SdA
Frie
nds
Colo
ny,
mah
aran
i Ba
gh
Shan
ti Ni
keta
n,
Wes
tend
Grea
ter
kaila
sh
I & II
, Sou
th
Exte
nsio
n
Golf
Link
s, J
or B
agh,
Su
nder
Nag
ar
Chan
akya
Pur
i
Prith
vira
j Roa
d,
Aura
ngze
b Ro
ad
INR
per
Sq F
t
10,000
0
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
1Q20
08
2Q20
08
1Q20
09
2Q20
09
3Q20
09
1Q20
10
3Q20
08
4Q20
08
4Q20
09
2Q20
10
3Q20
10
4Q20
10
3Q20
11
1Q20
11
2Q20
11
Golf Links, Jor Bagh, Sunder Nagar
Shanti Niketan, Westend
Friends Colony, maharani BaghPanchashila, Anandlok, Niti Bagh, SdA
Greater kailash I & II, South Extension
Chanakya Puri
Prithviraj Road, Aurangzeb Road
Anand Niketan, Vasant Vihar
INR
per
Sq F
t
Golf Links, Jor Bagh, Sunder Nagar
Chanakya Puri
Prithviraj Road, Aurangzeb Road
Anand Niketan, Vasant Vihar
Greater kailash I
& II, South Extension
Friends Colony, maharani Bagh
Shanti Niketan, Westend
Panchashila, Anandlok, Niti Bagh, SdA
200
160
120
80
40
0
1Q20
12
4Q20
11
COllIERs REsIDEX 1Q 2012 - DElhI
Rebase to 100
50
60
70
80
90
100
110
120
140
130
1Q20
08
2Q20
08
3Q20
08
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
10
2Q20
10
3Q20
10
Note: * As quoted by developer
INR per Sq ft Per month
CApITAl vAluE TRENDs
COllIERs REsIDEX 1Q 2012 - guRgAON
Rebase to 100
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
10
2Q20
10
3Q20
10
50
60
70
100
90
80
120
150
140
130
110
COllIERs INTERNATIONAl | p. 5
NEW pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
Amstoria Sector 102 BPTP Ltd. 4Q 2015 11,000
Centrum Park Sector 110India Bulls Real Estate
Ltd. 4Q 2013 4,500
Colour Coding Sector 89 3C Universal 4Q 2016 4,000
Gurgaon Greens Sector 102 Emaar mGF 4Q 2016 5,000
Imperia Esfera Sector 37 C Imperia Group 1Q 2015 3,500
Provence Estate Gurgaon-Faridabad Road krrish Group 4Q 2015 6,750
COllIERs INTERNATIONAl | p. 5
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
guRgAON
Various projects / phases of projects were •offered for possession during this quarter including “dLF Belaire”, “dLF Park Place” and “dLF mangnolias” at Golf Course Road developed by dLF Ltd and “Tatvam Villa” developed by Vipul Ltd located at Sohna Road.
In 1Q 2012, the projects launched included, •“Gurgaon Greens” by Emaar mGF, “Amstoria” by BPTP, “Centrum Park” by India Bulls Ltd, “Colour Coding” by 3C Universal, “Provence Estate” by krrish Group and Imperia Esfera by Imperia Group. All of these projects were located in the sectors adjoining the dwarka Expressway and were launched in a price range of INR 4,000-5,000 per sq ft.
As compared to the previous quarter, capital •values for prime residential properties recorded an marginal increase in the range of 2 to 4% across all micro markets, barring a few locations such as dLF Phase-1 and NH-8, where capital values remained stable quarter-on-quarter on the account of muted demand.
Rental values for prime residential properties •increased in the range of 2 to 9% quarter-on-quarter in locations such as dLF Phase 1, Golf Course Road, Sohna Road & Extension and Sushant Lok due to increasing demand from multinational corporations as well as domestic companies.
In a bid to improve infrastructure in the •newly-developing sectors on the Golf Course Extension Road and dwarka Expressway, the State Government has allocated INR 1,394 crore for various infrastructure projects such as strengthening roads and developing water supply and sewage systems.
CITY REsIDENTIAl BAROMETER
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2011 | REsIDENTIAL | gURgAON
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
GURGAON
Sohna Road & Ext
Golf Course Road
NH-8
Sushant LokdLF Phase I
80
60
40
20
0
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
09
1Q20
10
2Q20
10
1Q20
11
2Q20
11
3Q20
11
4Q20
11
1Q20
12
4Q20
10
3Q20
10
18,000
16,000
14,000
2,000
0
4,000
8,000
6,000
10,000
12,000
3Q20
08
NH-8
Sushant Lok
dLF Phase I
Golf Course Road
Sohna Road & Ext
INR
per
sq ft
Golf
Cour
se R
oad
Sohn
a Ro
ad &
Ext
dLF
Phas
e I
Sush
ant L
ok
NH -
8
0
3,000
6,000
9,000
12,000
15,000
INR
per
sq ft
Note: * As quoted by developer
INR per Sq ft Per month
INR per Sq ft Per month
p. 6 | COllIERs INTERNATIONAl
NOIDA
After 2 subdued quarters, real estate activities •have picked up in NOIdA with the launch of number of residential projects.
The project launched during the quarter •includes “max Bilss” by Property Guru Pvt. Ltd.,“ New Rajnigandha Greens” by Rajput Group,“ORB”by Supertech Ltd.,“Parx Laureate”by Laureate Buildwell, “ The Aranya” by Unnati Fortune Holdings Ltd. and “Victory Cross Roads” by Victory Infra Tech.
There were few projects that were ready •for possession this quarter including Lotus Boulevard Phase I developed by 3C Universal located in sector 100.
Buyers remained cautious and were delaying •their buying decisions in expectation of a decrease in mortgage rates in the near future and in anticipation of clarity over various land-related issues prevailing in nearby upcoming residential pockets such as NOIdA extension and Yamuna Expressway.
Capital values registered an increase in the •range of 5 to 8% across select prime locations during the quarter for high-end properties due to limited supply of ready to move in properties in this segment.
Similarly, the rents for prime residential •
CITY OFFICE BAROMETER
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | NOIDA
NOIdA
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
0
2,000
4,000
6,000
8,000
10,000
Sect
or 2
8, 2
9, 3
0
Sect
or 9
2/93
Sect
or 6
1, 62
., 63
Sect
or 5
0
Sect
or 4
4
INR
per
Sq F
t
3Q20
09
0
2,000
4,000
6,000
10,000
8,000
1Q20
10
2Q20
10
3Q20
10
4Q20
09
1Q20
11
2Q20
11
3Q20
11
4Q20
10
Sector 61,62,63
Sector 28,29,30
Sector 44
Sector 92 / 93
Sector 50
INR
per
Sq F
t
Sector 50
Sector 44
Sector 28,29,30
Sector 92/93 Sector 61,62,63
40
30
20
10
0
CApITAl vAluE TRENDs
1Q20
12
4Q20
11
COllIERs REsIDEX 1Q 2012 - NOIDA
Rebase to 100
60
70
80
90
100
110
120
140
150
160
130
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
10
2Q20
10
3Q20
10
NEW pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
max Bliss Sector 75 Property Guru Pvt. Ltd 4Q 2015 3,000
New Rajnigandha Greens Sector 1 Rajput Group 2Q 2014 2,775
ORB Sector 74 Supertech Limited 1Q 2015 4,550
Parx Laureate Sector 108 Laureate Buildwell 4Q 2015 4,700
The Aranya (3 New Towers) Sector 119 Unnati Fortune Holdings Ltd. 2Q 2015 3,000
Victory Cross Roads Sector 143 Victory Infra Tech 2Q 2014 3,950
Note: * As quoted by developer
CApITAl vAluE TRENDs
COllIERs REsIDEX 1Q 2012 - ChENNAI
Rebase to 100
1Q20
08
2Q20
08
3Q20
08
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
10
2Q20
10
3Q20
10
60
70
100
90
80
120
140
130
110
INR per Sq ft Per month
COllIERs INTERNATIONAl | p. 7
CITY REsIDENTIAl BAROMETER
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | chENNAI
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
ChENNAI
In 1Q 2012, the Chennai residential market saw •completion of various mid segment projects / phases of the projects including “Estancia” by Arun Excello, “marutham Classic” by marutham Group; and “SIS Safaa” by South India Shelters, in Urapakkam; and “January” by Akshaya developers and “Etopia” by doshi Housing at Old mahabalipuram Road (OmR).
A number of new residential projects were •launched in a number of micro-markets across various segments. most of the mid-range projects were located at peripheral locations in the price band of INR 3,000 to 5,500 per sq ft while premium projects were launched in the range of INR 9,000 to 10,500 per sq ft.
In 1Q 2012 average capital values for the prime •residential market increased in the range of 5 to 10% due to limited supply. However, capital values for mid-range properties remained stable during the quarter as buyer sentiments remained subdued on account of prevailing high mortgage rates.
Rental values across the market remained •stable; however, demand for high-end, smaller sized apartments was on the rise. Rents in Boat Club Road, one of the most sought-after locations of prime residential properties witnessed a marginal increase of around 2% quarter-on-quarter due to limited supply.
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
CHENNAI
Adyar
Anna Nagar
Nungambakkam
Boat Club
Siruseri/ kazipattur
Sholinganallur
Velachery
Alwarpet / R A Puram Beasant Nagar
T Nagar
75
60
45
30
15
0
0
5,000
10,000
20,000
25,000
15,000
3Q20
08
4Q20
08
2Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
09
1Q20
10
2Q20
10
3Q20
11
1Q20
12
2Q20
11
1Q20
11
4Q20
10
3Q20
10
1Q20
08
Boat ClubBeasant Nagar
NugambakkamSiruseri/ kazipattur
Velachery
Sholinganallur
Alwarpet / R A Puram
Anna Nagar
T NagarAdyar
INR
per
sq ft
Boat
Clu
b
Nung
amba
kkam
Anna
Nag
ar
T Na
gar
Beas
ant N
agar
Adya
r
Shol
inga
nallu
r
Alw
arpe
t / R
A P
uram
Vela
cher
y
Siru
seri/
kaz
ipat
tur0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
INR
per
sq ft
NEW pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
Atlantis Nelson manickam Road RWd 4Q 2012 10,500
Bella Vista PH Road, Porur Prestige Group 1Q 2013 5,500
kG Signature City mogaper kG developers & Promoters 4Q 2012 4,400
Elysium kelambakkam RWd 4Q 2012 3,000
merritta Vandalur - kellambakkam Sobha developers 4Q 2013 3,300
P dot G Express Pallavaram - kundrathur Rd P dot G Construction Ltd 1Q 2013 2,800
Note: * As quoted by developer
4Q20
11
p. 8 | COllIERs INTERNATIONAl
BENgAluRu (BANgAlORE)
A number of projects / phases of the projects •were completed this quarter in Bengaluru. Projects / phases of the projects ready for possession were “Godrej Crest” by Godrej Properties at Hebbal, “dimoro” by Legacy Group at Jakkur, “Beau monde” by ETA Group and “Brigade Cresent” by Brigade Group both located at Binny Cresecnt Road, “Skyline Eternity” by Skyline developers at Richmond Town and “Shipani Grande” by Shipani Builders at koramangala.
The residential market remained active with a •number of projects launched across all of the segments. most of the projects launched were in the price band of INR 3,500 to 6,500 per sq ft due to steady demand for mid-income affordable housing.
In 1Q 2012 average capital values for the prime •residential market increased in the range of 5 to 10% in locations like Cooke Town, Central, Palace Orchads, koramangala and Yelahanka due to limited supply and consistent demand for high-end properties. However, capital values in suburban and peripheral locations remained stable during the quarter.
demand from corporate occupiers was on the •rise in locations like Cooke Town, Indranagar, Bannerghatta Road and Whitefield due to proximity to the well-established commercial hubs. This has resulted in an increase in rental values in the range of 2 to 5% in these locations.
For efficient property tax mobilisation, the •Bangalore Corporation has introduced a geographical information system (GIS) based property identity (PId) system this quarter.
CITY REsIDENTIAl BAROMETER
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | bENgALURU
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
0
2,000
4,000
8,000
6,000
10,000
14,000
16,000
18,000
12,000
Yela
hank
a
Whi
tefie
ld (A
ppts
)
kora
man
gala
Bann
ergh
atta
Ro
ad
Indi
rana
gar
Airp
ort R
oad
Pala
ce O
rcha
rd
Jaya
naga
r
Cook
e To
wnIN
R pe
r Sq
Ft
Cent
ral
1Q20
08
2Q20
08
3Q20
08
INR
per
Sq F
t
0
2,000
4,000
6,000
8,000
10,000
14,000
12,000
16,000
18,000
2Q20
10
4Q20
09
1Q20
10
4Q20
08
1Q20
09
2Q20
09
3Q20
09
3Q20
10
4Q20
10
1Q20
11
2Q20
11
1Q20
12
4Q20
11
3Q20
11
Central
Yelahanka
koramangala
Indiranagar
Cooke Town Jayanagar
Bannerghatta Road
Palace Orchard
Airport Road
Whitefield
CApITAl vAluE TRENDs
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
Palace Orchard
Jayanagar
Cooke Town
Central
Yelahanka
Whitefield (Appts)
koramangala
Bannerghatta Road Airport Road
Indiranagar
80
60
40
20
0
BENGALURU
COllIERs REsIDEX 1Q 2012 - BENgAluRu
Rebase to 100
50
60
70
80
90
100
110
120
130
1Q20
08
2Q20
08
3Q20
08
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
10
2Q20
10
3Q20
10
NEW pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
Brigade Exotica Old madras Road Brigade Group 4Q 2015 4,100
Century Central kanakapura Road Century Real Estate 4Q 2014 4,200
Godrej Platinum Hebbal Godrej Properties 4Q 2015 6,490
Orchards devanahalli Brigade Group 4Q 2015 6,000
Pashmina Water Front Old madras Road Pashmina developers 4Q 2014 3,450
Note: * As quoted by developer
INR per Sq ft Per month
Rebase to 100
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
10
2Q20
10
3Q20
10
COllIERs REsIDEX 1Q 2012 - KOlKATA
50
60
70
100
90
80
120
140
130
110
NEW pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
Orbit Anveshan Orbit Group New Alipore 4Q 2013 4,200
Ideal Exotica Ideal Group New Alipore 1Q 2014 4,500
Natural City Natural Group Baguihati 2Q 2015 2,800
Urban Sabujayan Bengal Abasan kalikapur 1Q 2014 2,600
COllIERs INTERNATIONAl | p. 9
CITY REsIDENTIAl BAROMETER
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | KOLKATA
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
CApITAl vAluE TRENDs
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
kOLkATA
Alipore
Tollygunge
PA Shah Road
Bhawanipur
VIP Road
Em Bypass
Ballygunge
Salt Lake
Behela
Loudon Street
40
30
20
10
0
3Q20
08
4Q20
08
2Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
09
1Q20
10
1Q20
11
2Q20
10
2Q20
11
3Q20
10
3Q20
11
4Q20
10
1Q20
12
4Q20
11
2,000
0
4,000
8,000
6,000
10,000
12,000
14,000
1Q20
08
Bhawanipur
Em BypassBallygunge Loudon Road
Behela
Alipore Tollygunge
P A Shah RoadNew Town - Rajarhat
VIP RoadSalt Lake
INR
per
sq ft
Bhaw
anip
ur
PA S
hah
Road
Tolly
gung
e
Loud
on S
tree
t
Behe
la
Alip
ore
Em B
ypas
s
Bally
gung
e
Salt
Lake
VIP
Road
New
Tow
n Ra
jarh
at
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
INR
per
sq ft
INR per Sq ft Per month
Note: * As quoted by developer
KOlKATA
In 1Q 2012, projects / phases of the projects •ready for possession included “Eden City“ by Eden Group at mahestala, “Jubilee Park” by PS Group at Tollygunge, “Arya kunj” by m/s Soumita Project Pvt. Ltd and “Emerald Garden” by Real Tech Nirman both located at Rajarhat. In addition a 324 studio apartment project “xanadu Studio” developed by Siddha Group was also ready for possession this quarter.
Various projects launched during this quarter •include “Urban Sabujayan“ by Bengal Abasan, “Natural City“ by Natural Group, “Ideal Exotica” by Ideal Group and “Orbit Anveshan” by Orbit Group. All of these projects are located in peripheral areas like kalikapur, Baguihati and New Alipore in the price band of INR 2,600 to 4,500 per sq ft and are expected to be ready for possession by the end of 2014.
demand for luxury projects were on hold, •however, a number of queries arose for mid-range properties. due to moderate demand, capital values in kolkata remained stable during 1Q 2012 across all the micro-markets.
Rental values remained stable in almost all of •the major micro-markets except a few prime locations such as VIP Road and Park Street where rents appreciated in the range of 5 to 7% due to limited supply.
In order to provide a single window clearance •system for sanction of the plans for affordable residential projects, the kolkata municipal Corporation (kmC) has introduced an online system for sanctioning the building plans for middle-class homes.
p. 10 | COllIERs INTERNATIONAl
magarpatta/Hadapsar
deccan/Camp/Boat Club
kalyani Nagar/Viman Nagar/kharadi
Pimpri/Chinchwad/Chakan
NIBm/Undri/kondhwa
kothrud/Bavdhan/Wajre Baner/Hinjewadi/Wakad/Pashan
30
25
15
10
5
0
INR per Sq ft Per month
CITY REsIDENTIAl BAROMETER
4Q 2011 1Q 2012
RENTAl vAluE
CApITAl vAluE
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | PUNE
1Q 2012 pREMIuM REsIDENTIAl AvERAgE CApITAl vAluE
CApITAl vAluE TRENDs
1Q 2012 pREMIuM REsIDENTIAl AvERAgE RENTAl vAluE
PUNE
1Q20
09
2Q20
09
3Q20
09
4Q20
09
1Q20
10
2Q20
10
3Q20
10
2Q20
11
1Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
10
3,000
2,000
4,000
7,000
8,000
9,000
6,000
5,000
10,000
kalyani Nagar/Viman Nagar/kharadi deccan/Camp/Boat Club/Central Pune
magarpatta/Hadpsar Baner/Hinjewadi/Wakad/Pashan/Balewadi
kothrud/Bavdhan/Wajre NIBm/Undri/kondhwaIN
R pe
r sq
ft
kaly
ani N
agar
/Vi-
man
Nag
ar/k
hara
di
Bhaw
anip
ur
decc
an/C
amp/
Boat
Clu
b
Bane
r/H
inje
wad
i/W
akad
/Pas
han
mag
arpa
tta/H
adap
sar
NIBm
/Und
ri/ko
ndhw
a
koth
rud/
Bavd
han/
Waj
re
Pim
pri/C
hinc
hwad
/Ch
akan
0
2,000
4,000
6,000
8,000
10,000
INR
per
sq ft
COllIERs REsIDEX 1Q 2012 - puNE
Rebase to 100
50
60
70
80
90
100
110
120
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
10
1Q20
11
2Q20
11
3Q20
11
1Q20
12
4Q20
11
4Q20
09
1Q20
10
2Q20
10
3Q20
10
NEW pROJECTs
PROJECT NAmE LOCATION dEVELOPER NAmE TENTATIVE POSSESSION RATE (PER SQ.FT.)*
9 Abhimanshri Aundh Lunawat Associate and Bhoomi Infracon 2Q 2013 5,500
Aspiria Hinjewadi Sreemaangal Projects 4Q 2013 4,300
Aureli katraj Acme Landmark 1Q 2014 3,200
Basil NIBm Phinix multicon 4Q 2012 5,000
dream Sky Lohegaon Shree developers 4Q 2013 3,600
Ganga kalas Vishrantwadi Goel Ganga developments 1Q 2014 3,450
Note: * As quoted by developer
puNE
In 1Q 2012, various projects / phases of •projects were completed, including Erande Pooja by Rama Erande & Associates at kharadi, Aloma County Phase-1 by Pride Housing at Aundh and the two projects located at Wakad, malpani Greens by malpani Estate and Park Titanium Phase-1 by Pride Purple Group. All these projects were in the mid-range category with current prices from INR 4,600-5,500 per sq ft.
The new projects launched were primarily •concentrated in peripheral areas like Balewadi, Wagholi, NIBm Road and Hinjewadi. However, a few high-end residential projects were also launched in locations like Aundh and Singhad Road.
Overall demand for mid-range residential •housing remained upbeat and capital values witnessed an increase in the range of 1 to 3% in the peripheral locations like magarpatta City, Hadpsar, Baner, Pashan, Hinjewadi, Wakad, Pashan, Pimpri-Chinchwad and Chakan. However, capital-values prime locations such as kalyani Nagar, kharadi, deccan, Camp and Boat Club Road remained stable due to limited activity in this segment.
Rental values have increased in the range of •6-8% in locations such as magarpatta City, Hadapsar, kothrud, Bavdhan and Wajre due to increasing demand from the people working in nearby upcoming commercial and industrial hubs.
This quarter the Pune municipal Corporation •(PmC) and Pimpri Chinchwad municipal Corporation (PCmC) both revised the ready-reckoner rate in their respective areas in the range of 10 to 30%.
COllIERs INTERNATIONAl | p. 11
THE KNOWLEDGE | 1Q 2012 | REsIDENTIAL | sUbMARKETs
MumbaiThe high-end residential real estate markets in mumbai include malabar Hill, Altamount Road, Carmichael Road, Napean Sea Road, Breach Candy, Colaba, Cuffe Parade, Prabhadevi, Worli, Bandra, khar, Santacruz, Juhu and Powai.
DelhiThe prime residential areas in delhi are in the South region and comprise Vasant Vihar, Westend, Shanti Niketan, Anand Niketan and Central delhi locations. These areas enjoy proximity to embassies, the airport and central commercial areas - Connaught Place.
GurgaonThe prime residential locations of Gurgaon include Golf Course Road, dLF Phase I, Sushant Lok and Sohna Road. The delhi- Jaipur Highway (NH-8) is also emerging as a preferred residential location owing to its proximity to the national capital.
NOIDANOIdA premium residential market is comprised of sectors 44, 50, 92, 61, 62, 63 , 28, 29, 30 and Taj Express Highway.
ChennaiThe prime residential areas in Chennai include Thiruvanmiyur, Valmiki Nagar and Besant Nagar, R.A Puram, mylapore and Adyar in South Chennai, Nungambakkam, Chetpet, Poes Garden, Egmore, Alwarpet, T. Nagar in Central Chennai; and Anna Nagar, kilpauk in North West Chennai.
Bengaluru (BANGALORE)The residential market of Bengaluru comprises both apartments and independent residences. Currently, high-end residential developments are mainly concentrated along the CBd, and Eastern and South precincts of the city. Recently, Northern Bengaluru has also witnessed a spree of realty activity facilitated by the new International Airport at devanhalli.
KolkataThe prime residential areas in kolkata include PA Shah Road, Tollygunge and Bhawanipur in South kolkata, Alipore and Behala in South-west kolkata, Loudon Street and Ballygunge in Central kolkata; and Salt Lake, Em Bypass and VIP Road in North kolkata.
Pune The prime residential areas in Pune include kalyani Nagar, Viman Nagar, Boat Club Road, NIBm Road, magarpatta, Hadapsar, koregaon Park. Recently, increased activities has been witnessed in Pimpri-Chinchwad, Baner-Pashan and kondhwa.
REsIDENTIAl suBMARKETs
CITY BAROMETERs
COllIERs REsIDEX
Increasing as compared to previous quarter
decreasing as compared to previous quarter
Remained stable from previous quarter
Colliers Residex represents the average secondary sale prices of high end properties. Residex has been derived by rebasing the capital values as 100 as on 1Q 2008.
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 residential services related queries please contact:
Poonam mahtani, National director Residential Services & knowledge Systems [email protected]: +91 22 4050 4551
Mumbai : Prabhu Raghavendra, Office director [email protected] 31/A, 3rd floor, Film Center, 68, Tardeo Road, mumbai, India - 400 034. Tel : +91 22 4050 4500, 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 - 110 001 Tel : +91 11 4360 7500 - 23, fax : +91 11 2335 6624
Gurgaon : Technopolis Building, 1st floor, dLF Golf Course main Road, Sector 54, Gurgaon, India - 122 002 Tel : +91 124 437 5807, fax : +91 124 437 5806
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
This book is printed on 100% Recyclable paper
THE KNOWLEDGE | 1Q 2012
Accelerating success.
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, Research 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.
522 offices in 62 countries on 6 continents
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201EmEA: 118
$1.8 billion in annual revenue 2.55 billion square feet under management
Over 12,300 + professionals
Recent Reports : INdIA OFFICE INdIA RESIdENTIAL APAC INdUSTRIAL GLOBAL INdUSTRIAL GLOBAL OFFICE INdIA BUdGET 2012-13
Accelerating success.
Residential Property Market OverviewINDIA
QUARTERLY UPDATE | FEBRUARY | 2012
ASIA PACIFICINDUSTRIAL MARKET OVERVIEW
Accelerating success.
December 2011
HIGHLIGHTSGLOBAL INDUSTRIAL
WWW.COLLIERS.COM
SECOND HALF 2011 | INDUSTRIAL
JAMES COOK Director of Research | USA
Global Industrial Trend ForecastGrowing global trade will steady demand for quality warehouse space in many regions.Industrial vacancy rates will further drop in most markets. Some markets, U.S. and Australia among them, will experience a lack of new supply in the face of growing demand.Prime warehouse rents will climb in most Asia Pacific markets, remain stable in EMEA and LATAM, and continue to strengthen in North American markets.
Citing deteriorating financial conditions and dimming growth prospect, the International Monetary Fund’s (IMF) revised its September 2011 World Economic Outlook growth projections downward in January 2012. However, the IMF still forecasts that global trade volume will rise by 3.8 percent in 2012 and 5.4 percent in 2013; as global trade rises, so too will demand for warehouse space.
While warehouse rents have stabilized in most EMEA and Latin American markets, prime warehouse rents quoted in local currencies increased in the majority of Asia Pacific and North American markets in 2011 over the previous year. We expect this trend to continue, with prime warehouse rents climbing in most Asia Pacific and North American markets in the next year.
Latin American Rents Poised to Stabilize In Latin America, prime warehouse rental rates took a fall. In 71.4 percent of the markets we track, year-end rents decreased in 2011 from a year earlier. However, we expect warehouse rents in Latin America to stabilize in the coming year.
São Paulo saw a 12.4 percent drop in warehouse rents in local currency, due to increased supply. However, with absorption set to outpace supply,
we expect overall warehouse rents in the São Paulo region to rise by as much as four percent in the coming year.
Mexico City saw a three percent decrease in its industrial vacancy rate in the second half of 2011, down to 4.8 percent. Mexico was more negatively affected by the recession than most countries in North America, and its economic future is largely tied to that of its key trading partner, the United States. But with U.S. growth on the upswing, Mexico too is poised to grow at a modest rate and we expect that vacancies could make further drops in the country.
Steady Demand in North America Since peaking in 2010, growth in the manufacturing and distribution industry has kept the U.S. vacancy rate dropping in a mostly regular fashion. Vacancy dropped to 9.72 percent in Q4 2011. With construction proceeding at low levels, we expect vacancies to continue to drop at a measured rate into 2013.
Toronto, Canada’s biggest industrial market, saw 13.7 million square feet of industrial space absorbed in 2011, and the city’s prime warehouse rents grew by 7.1 percent in the second half of 2011.
Dropping Vacancies in Most Asian MarketsAsia Pacific saw dropping vacancies in nearly every market. Prime warehouse rents grew in more than half of the markets, and observers in more than half of those markets expect that warehouse rents will continue to climb over the next six months.
Australian industrial has been especially strong in most major markets. Retail purchases, made more attractive by the relatively strong Australian dollar, have pushed up demand for large warehouse space in several port markets. While there is growing demand for large modern warehouse
Global Warehouse Demand Shows Consistent Growth
GLOBAL INDUSTRIAL CAPITALIZATION RATES (Prime Yield/Percent)
MARKET (Select Markets) REGION
DEC 2011
DEC 2010
Hong Kong Asia Pacific �.�� �.�� Singapore Asia Pacific �.�� �.�� London (Heathrow) EMEA �.�� �.�� Tokyo Asia Pacific �.�� �.�� Los Angeles – Inland Empire, CA NA �.�� �.��
Chicago, IL NA �.�� �.�� Paris EMEA �.�� �.�� Munich EMEA �.�� �.�� Vancouver, BC NA �.�� �.�� Marseilles EMEA �.�� �.�� New Jersey – Northern NA �.�� �.�� Dallas-Ft. Worth, TX NA �.�� �.�� Shanghai Asia Pacific �.�� �.�� Seoul Asia Pacific �.�� �.�� Madrid EMEA �.�� �.�� Sydney Asia Pacific �.�� �.�� Mexico City LATAM �.�� �.�� Prague EMEA �.�� �.�� Athens EMEA �.�� �.�� Bucharest EMEA ��.�� ��.��
GLOBAL TOP TEN INDUSTRIAL WAREHOUSE RENTS
MARKET REGION
RENT (USD/
PSF/Year)6-MONTH CHANGE*
Tokyo Asia Pacific ��.�� -�.�%London (Heathrow) EMEA ��.�� �.�%Hong Kong Asia Pacific ��.�� �.�%Singapore Asia Pacific ��.�� �.�%Zurich EMEA ��.�� �.�%Oslo EMEA ��.�� �.�%Moscow EMEA ��.�� �.�%Geneva EMEA ��.�� -�.�%São Paulo LATAM ��.�� -��.�%Helsinki EMEA ��.�� �.�%Marseilles EMEA ��.�� �.�%Paris EMEA ��.�� �.�%
*Local currency
Continued on page 8
HIGHLIGHTSGLOBAL OFFICE
WWW.COLLIERS.COM
SECOND HALF 2011 | OFFICE
JAMES COOK Director of Research | USA
Global Office Trend ForecastGlobal office vacancies will continue their decline, due to steady demand and low levels of new construction in North America and Europe. The “flight to quality” trend will continue in many major markets, with occupiers trading up to higher-quality space or a better location as their leases expire.The European sovereign debt crisis will likely push the Eurozone into a mild recession in early 2012. This contraction will be felt most profoundly in a handful of commercial property markets within the most troubled nations.
Economic prospects in the Eurozone have slightly reduced overall positive global expectations for market performance in 2012. We expect continuing modest demand for office space, with most cities seeing a drop in vacancy rates. But global averages do not speak to the nuances of individual markets, and—while we expect positive absorption due to business growth and expansion in the United States, China and Australia—some Eurozone countries may see negative absorption and increased vacancy as the region enters a mild recession.
Global Office Demand Growth Slow and Steady
GLOBAL CAPITALIZATION RATES /PRIME YIELDS: 10 LOWEST CITIES
MARKET (Ranked byDec 2011)
DEC 2011
JUNE 2011
DEC 2010
Taipei �.�� �.�� �.�� Hong Kong �.�� �.�� �.�� Vienna �.�� �.�� �.�� London – West End �.�� �.�� �.�� Zurich �.�� �.�� �.�� Singapore �.�� �.�� �.�� Geneva �.�� �.�� �.�� Beijing �.�� �.�� �.��Paris �.�� �.�� �.��Munich �.�� �.�� �.��Tokyo �.�� �.�� �.��
GLOBAL OFFICE OCCUPANCY COSTS:TOP 10 CITIES
MARKET (Ranked byDec 2011)
DEC 2011
JUNE 2011
DEC 2010
Hong Kong ���.�� ���.�� ���.�� London – West End ���.�� ���.�� ���.�� Paris ��.�� ���.�� ��.�� Rio de Janeiro ��.�� ��.�� ��.�� Moscow ��.�� ��.�� ��.�� London – City ��.�� ��.�� ��.�� Perth ��.�� ��.�� ��.�� Singapore ��.�� ��.�� ��.�� Geneva ��.�� ��.�� ��.�� São Paulo ��.�� ��.�� ��.��
CBD CAP RATE (%)
Latin America Boasts the Tightest Office MarketsSome of the world’s lowest office vacancy rates are found in Latin American cities. Santiago, Chile; Rio de Janeiro, Brazil; São Paulo, Brazil; and Lima, Peru all have vacancy rates below three percent, resulting in a market that strongly favors landlords, prompts new construction and might squeeze some tenants that desire to expand. For the most part, we expect the strength of these markets to persist. While decreases in European demand for its commodities will likely hurt Latin America, this will be tempered by continued demand from China. In São Paolo, heightened demand has spurred the highest rates of new development in the region, which will eventually put downward pressure on asking rents.
Select Asia Pacific Markets See Big Vacancy DropsThe global trend in dropping vacancy rates should be evi-dent in Asia and continue through 2012. Markets that saw a drop in vacancy in the second half of 2011 outnumbered by a two-to-one margin those where vacancy increased.
Of the world’s most populous markets, those with the most significant declines in six-month vacancy rates were nearly all in the Asia Pacific region. Chengdu, propelled by its strong manufacturing sector, saw its vacancy rate drop by 7.8 percent in the period, and Shanghai saw a 3.2 percent drop in vacancy.
Two other large Asian markets saw vacancy rates drop by 1.5 percent or more: Jakarta, which has also seen sustained growth in CBD rental rates and renewed global investor interest; and Singapore, where occupancies are expected to stabilize.
Marquee Markets See Rent DeclineWhile Hong Kong, London’s West End and Paris command the top three highest asking rents for Class A office space,
each has shown apparent decline in rents between June and December of 2011, when quoted in U.S. dollars. Substantial declines, in fact: led by a $10.87 USD drop in Parisian Class A rents.
But how significant are these figures? The change in London and Paris rents is due to the strengthening dollar relative to the euro and pound sterling. In local currency, prime rents in these markets are holding ground. Although smaller, the decline in Hong Kong of $7.56 USD ($5.10 HKD) per square foot may be a more important indicator of things to come, as demand from the banking and financial sector continue to weaken.
EMEA and Asia Pacific Lead Global ConstructionA significant percentage of the office space under construction is in Europe, the Middle East and Africa (EMEA), and much of that is occurring in Moscow and Dubai. While both of these markets should expect strong economic growth in 2012, the fact that Dubai—with a vacancy rate of 50 percent—is constructing at such a pace leads us to expect that supply will continue to outpace demand in that market.
The other two top markets for office construction are in the Asia Pacific region. Guangzhou—China’s leading commercial port city—and Tokyo have 19.6 and 15.6 million square feet under construction respectively. Asian economic growth rates will remain strong in the coming months, with China and India leading the pack. Rents are on the rise in most cities in the region. However, dropping rents in Seoul and Hong Kong are a potential indicator of global economic uncertainty. In Tokyo, where new supply has been increasing for the past three years, we expect construction to peak and begin to decline in the coming year.
CLASS A / NET RENT (USD/SQ FT)
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 | JANUARY | 2012
Accelerating success.