ncr real estate outlook report h1 2015
TRANSCRIPT
NCRRESIDENTIAL
JANUARY TO JUNE 2015
RESIDENTIAL MARKET STARES AT A FREE FALL
Is NCR still one of the largest residential markets in the country?Have government and developers failed the buyers?
NEW LAUNCHES DROP BY 68% Y-O-Y
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -
10,000
20,000
30,000
40,000
50,000
60,000
70,000 6
2,25
2
33,
516
35,
500
37,
643
11
,36
0
45,
302
26,
119
28,
500
12,
075
14,
250
Launches Absorption
STAGNANT PRICES OVER THE LAST 2 YEARS HINT AT A TIME CORRECTION
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 3,000
3,200
3,400
3,600
3,800
4,000
4,200
4,400
4,600
4,800
5,000
Wt. Avg. Price (RHS)
4,1954,330
4,400 4,444 4,511
GURGAON TREADS THE AFFORDABLE PATH
GURGAON’S SHARE OF NEW LAUNCHES UNDER INR 2.5 MN IS 91% IN JAN – JUN 2015
INR <2.5 mn 2.5-5 mn 5-7.5 mn 7.5-10 mn 10-12.5 mn 15-20 mn 20-40 mn0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Delhi Faridabad Ghaziabad Greater Noida Gurgaon Noida
INVENTORY PILES UP EVERY QUARTER;5 YEARS TO OFFLOAD CURRENT INVENTORY IN NCR
12 14 16 18 20 22 24 26 28 30 326
7
8
9
10
11
12
13
14
QTS
Ag
e o
f u
ns
old
in
ve
nto
ry i
n q
ua
rte
rs
GURGAONGHAZIABAD
GREATER NOIDA
NOIDA
FARIDABAD
OFFLOADING OF OLD INVENTORY, A CONCERN FOR GREATER NOIDA
DELHI
GURGAON CRUMBLES UNDER PRESSURE OF UNSOLD INVENTORY
PREMIUM MARKET WITH APARTMENTS OVER INR 3 CRORE HIT HARDER BY SLOWDOWN
NO NEW LAUNCHES DURING JAN – JUN 2015 IN PREMIUM MARKETS
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -
200
400
600
800
1,000
1,200
1,0
64
19
2
14
7
54
4
-
91
8
26
1
11
7
20
0
21
5
Launches Absorption
No
. o
f u
nit
s
x
OUTLOOK FOR THE NEXT 6 MONTHS
LAUNCHES (UNITS)
SALES(UNITS)
WEIGHTED AVERAGE PRICE
(INR/SQ FT)
H2 2014 37,643 12,075 4,444
H1 2015 11,360 14,250 4,511
H2 2015 E 18,000 15,000 4,578
HOW DOES NCR STAND WHEN COMPARED TO OTHER CITIES
LAUNCHES- NCR 2ND LARGEST MARKET DROPS BELOW PUNE TO 4TH
H1 2015
BENGALURU 21,400
MUMBAI 18,887
PUNE 12,762
NCR 11,360
CHENNAI 9,102
KOLKATA 8,372
AHMEDABAD 8,062
HYDERABAD 5,457
H1 2014 H2 2014
MUMBAI 35,512 26,833
NCR 35,500 37,643
BENGALURU 35,545 32,589
PUNE 16,883 16,700
CHENNAI 11,377 7,318
HYDERABAD 7,899 5,151
KOLKATA 8,444 11,891
AHMEDABAD 9,021 4,991
ABSORPTION - EVEN IN SALES, NCR
H1 2015
MUMBAI 28,446
BENGALURU 22,234
PUNE 15,524
NCR 14,250
CHENNAI 9,091
AHMEDABAD 7,751
HYDERABAD 7,123
KOLKATA 5,883
DIPS TO THE 4TH POSITION H1 2014 H2 2014
MUMBAI 31,210 36,505
NCR 28,500 12,075
BENGALURU 27,256 28,445
PUNE 14,719 20,150
CHENNAI 10,315 10,643
AHMEDABAD 10,472 8,019
HYDERABAD 7,282 7,829
KOLKATA 6,390 6,245
NCR REMAINS MORE AFFORDABLE THAN PUNE AND CHENNAI
H1 2012
H2 2012
H1 2013
H2 2013
H1 2014
H2 2014
H1 2015
H2 2015E
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Rs
/sq
ft
MUMBAI (7,994)
PUNE (4,819)
AHMEDABADHYDERABAD
KOLKATA
NCR (4,511)
BENGALURU
CHENNAI (4,526)
NCR THE WORST MARKET WITH 5 YEARS OF UNSOLD INVENTORY
5 7 9 11 13 15 17 195
7
9
11
13
15
QTS
Age
of
unso
ld in
vent
ory
in q
uart
ers
MUMBAI
PUNE
AHMEDABAD
HYDERABAD
KOLKATA
NCR
BENGALURU
CHENNAI
189,678 UNSOLD units
NCROFFICE
JANUARY TO JUNE 2015
OFFICE MARKET STEADY
Will NCR maintain the 2014 turnaround story?Which are the next preferred office locations?
CORPORATE DEMAND FOR PREMIUM OFFICES KEEPS LEASING STEADY DURING JAN – JUN 2015
H1 2013 H2 2013 H1 2014 H2 2014 H1 20150
1
2
3
4
5
6
3.40 3.20 3.504.10 3.70
New completions Absorption
mn
sq
ft
3.5 3.5 4.0 4.1 5.5
ALL NUMBERS IN MN SQ FT
RENTALS FIRM UP DUE TO ROBUST CORPORATE DEMAND & LACK OF QUALITY SUPPLY
DOUBLE DIGIT RENTAL GROWTH IN JAN - JUN 2015
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 201550
52
54
56
58
60
62
64
53 5352
53
56
58
62
Weighted average rent
INR
/sq
ft/
mo
nth
IT/ITES NO LONGER THE LARGEST DEMAND DRIVER FOR JAN – JUN 2015
BFSI * IT/ITeS Manufacturing Other services sector
4%
54%
19%23%
11%
37%
9%
44%
8%
30%
14%
48%
2014 H1 2014 H2 2015 H1
OTHER SERVICES SECTOR INCREASE SHARE ON THE BACK OF E-COMMERCE AND CONSULTING
* INCLUDES SUPPORT SERVICES
0.1
4 0.4
5
0.3
0
ALL NUMBERS IN MN SQ FT
1.8
9
1.5
2
1.1
1
0.8
1
1.8
0
1.7
7
0.6
7
0.34 0.5
2
WITHIN NCR, GURGAON WITNESSES MAXIMUM OFFICE DEALS IN JAN – JUN 2015
CBD - Delhi PBD - Faridabad PBD - Gurgaon PBD - Noida SBD - Delhi
1% 0%
66%
24%
8%3%
0%
61%
23%
13%
3% 2%
76%
12%
5%
2014 H1 2014 H2 2015 H1
RENTALS FIRM UP IN KEY LOCATIONS OF GURGAON DUE TO CONTINUED OCCUPIER PREFERENCE
NE
GL
IGIB
LE
0.0
7
2.3
3
2.4
8
2.7
9
0.8
5
0.9
3
0.4
5
0.2
9 0.5
4
0.1
9
0.0
2
0.1
3
0.1
2
NE
GL
IGIB
LE
NEW SUPPLY TO JUMP BY NEARLY 40% IN H2 2015, BUT IN LOCATIONS LEAST PREFERRED BY OCCUPIERS
OUTLOOK FOR THE NEXT 6 MONTHS
NEW
COMPLETIONS (MN SQ FT)
ABSORPTION (MN SQ FT)
VACANCYWEIGHTED AVERAGE
RENT (INR/SQ FT/MONTH)
H2 2014 4.1 4.1 20.2% 58
H2 2015E 5.6 3.7 21.3% 63
HOW DOES NCR STAND COMPARED TO OTHER CITIES
VACANCY LEVELS IN NCR ONE OF THE HIGHEST NEXT TO MUMBAI
Mumbai NCR Bengaluru Pune Chennai Hyderabad -
1
2
3
4
5
6
7
0%
5%
10%
15%
20%
25%22% 21%
8%
15%
18%16%
New completions Absorption Vacancy (RHS)
mn
sq
ft
H1 2015
AT 10%, RENTS IN NCR APPRECIATED FASTER THAN MUMBAI & BENGALURU BETWEEN JAN – JUN 2015
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 -15%
-10%
-5%
0%
5%
10%
15%
20% Mumbai NCR Bengaluru Pune Chennai Hyderabad
Gro
wth
in R
enta
ls
MUMBAI 5% INR 117/sq ft
BENGALURU 6% INR 50/sq ft
16% INR 50/sq ft
NCR 10% INR 62/sq ft
RESIDENTIALNCRWORST PERFORMING MARKET IN INDIA; NO SIGNS OF REVIVAL IN NEXT 6 MONTHS; UNSOLD INVENTORY STANDS TODAY AT 5 YEARS
OFFICENCRMAINTAINS THE 2014 TURNAROUND STORY – OFFICE ABSORPTION TOUCHES 3.7 MN SQ FT IN H1 2015
KEY TAKEAWAYS
NCRREAL ESTATE
JANUARY TO JUNE 2015