Prime Options: The Marking Genie!

FOCUS ON GURGAON – NEW GURGAON & MUMBAI FROM THE DESK OF THE PRINCIPAL CONSULTANT Come March and a progressive Budget the direction looks clearer Moodis rating upgrade , Government maneuvering through varied policy changes , the Insurance Regulatory bill , the land acquisition bill and the introduction of GST , offering flexibility in CLU norms and focus on affordable housing , removing bottle necks in context of ling pending projects via KMP & the likelihood of removing the second Gurgaon toll in the next 6 Months and the development of Dwarka Expressway , the NPR & the SPR in the immediate horizon seem to portend well for the real estate market. An astute customer with a plethora of offerings with almost every wish fulfilled with regard to customized payment plans and a host of privileges needs to be discerning when identifying choices . In this News Letter Prime Options is unraveling the progress on various key factors which will drive growth n Gurgaon NCR & Metropolitan Mumbai. The shift is from an investor driven to an end user driven market, the final frontier which will reward investors yet again is a key variable of development set to unfold in NCR Gurgaon with growing clarity on what is in store once new roads are completed and projects in their last lap near completion . This is assisted by infusion for the largest developers like Unitech through sales of assets to Brookfield will reverberate in giving much needed fillip to projects plagued by delays and uncertainty and will definitely revive investor confidence. The Government policies are friendly and there is an element of predictability an assurance of predictable governance and adherence to policy which gives confidence of steady growth. Some key growth parameters indicate a positive outlook which will reverberate in securing investor confidence sooner than later. We are driven by the latent demand, where consumers perceive major advantages, in choosing an urban lifestyle & and increased opportunities as well. With modernization of villages and

PROPERTY INSIGHTS: QE September 2015 (INVESTOR SERIES)

contemporary living & improved connectivity a strong internal demand will drive growth of the real estate sector. In absence of a regulatory body, & Real estate being a State subject there are a surfeit of regulations which a developer has to encounter to get licenses. This is time consuming & mired in Red Tape with delays leading to long gestation cycles & obvious difficulty in monetization. Table of Contents

Real Estate as an Asset Class

Development NPR Focus

Market observation

Our Recommendations & Offerings of Interest EXPERT SPEAK : PE vs Real Estate :-

Gurgaon

Mumbai

Contact Us

Disclaimer

REAL ESTATE AS AN ASSET CLASS

What would you prefer to invest in post sustaining the hierarchy of needs which compel real estate investment the next step is to make comparable investments and choose an asset class which increases dividends and maximizes ROI It obviously pays to be careful with plethora of options in the market and concerted efforts to draw investors it is important to have an impartial perspective on variables which will drive growth and sometimes the market presents phenomenal opportunities . We believe NCR Gurgaon is sitting on one such!! An investor gauges a property from a myriad of options to give him a desired ROI . With investment norms now eased and easier funding through REITS, PE Funds / Endowment Funds, as well as likely easing of interest for DEBT capital the effect will be seen in Commercial and small spaces in Tier 2 & 3 cities, herein we recommend cities such as Coimbatore , Bengaluru , Chennai , Hyderabad , Vijayawada & along the Delhi – Mumbai corridor as key investment destinations . From an investment perspective , the likely the maximum advantage accrues at the beginning of a project which gave an investor advantage at securing a competitive price or else it results from key developmental parameters to give visible advantage in forms of infrastructure road , amenities , proximity & design development . The sentiments are moving from cautious to optimistic, easing of PE norms. REITS will offer a potent tool to channelize pension funds & private investments in an acceptable & secure format to fund real estate & repose confidence in it being a viable instrument with a significant earning potential This with easing of land acquisition norms to speed up projects and a central regulatory body to oversee project development and insurance of processes and regulations will bring transparency and confidence in Real Estate investment . Local factors such as demand and supply gaps , absorption of inventory , will effect investment in the micro perspective. IF MONETISED; A TIME TO INVEST:-

The current sluggishness presents an opportunity to investors, with the developers presenting customers with sops such as convenience payment plan from possession linked , No-EMI till

possession etc . These are in effect discounts being passed on the investors till the excess inventory is absorbed . 3 NCR- Secondary market is indicative of the correction , however the developers are securing advantage & holding from on prices unleashing the best inventory or inventory with appealing amenities & upgraded specification to justify the higher price tag ! NCR FOCUS – NPR & SPR What’s Happening!

1. The quick facts: Dwarka Expressway is a high-speed link road, officially known as Northern Peripheral Road It is 18 kms long and 150 metres wide, and runs in a smooth parabola from near Kherki Daula on NH8 to Dwarka Sectors 81 to 115 have been developed along its length, with particular sectors earmarked for residential projects and commercial projects and public utilities.

2. The best builders of the country all have projects under development on Dwarka Expressway. There are more than 100 residential projects under construction in the area, and the number of residences coming up is estimated to be over 42,000.

More than half of these (22,000 apartments) have already been purchased by investors and future residents. The balance 20,000 includes apartments available for sale as well as apartments in projects yet to be launched.

3. The area around Dwarka Expressway is being developed with strict adherence to the Gurgaon-Manesar Masterplan 2031. This means the final number of apartments is already known, and so the eventual population and number of cars, etc. can easily be estimated. Wide sector roads have been planned accordingly and many of these roads have already been completed. You can drive on them today to get a feel of this well-planned area. So it’s not just a road – the entire area is coming up like a model modern city.

4. Like any model city, it’s not just residences – some of the top names in education, healthcare and hospitality have taken up sites for schools, hospitals and hotels etc. Several of them have actually brought forward their construction plans because of the astonishing speed at which development is taking place in the area. Delhi Public School is opening in Sector 84 and Sector 102A. Construction has begun in Sector 102A and Pre-Nursery to Grade 3 will be ready for the 2015-16 academic year. Modern School Barakhamba

Road is starting a school in Sector 91 with a 17-acre campus. MatriKiran Senior School is going to be operational in 2016 in Sector 83. One of PVR’s biggest multiplexes is coming up in Sector 84 in Vatika India Next. In fact, PVR will operate 14 screens in Vatika projects alone.

5. Dwarka Expressway provides the much-needed third link between Gurgaon and New Delhi. But that’s not all – this road has a greater national significance. It is an integral part of the Mumbai- Delhi Industrial Link Corridor.

6. The largest commercial belt of the Gurgaon-Manesar Masterplan 2031 is being built along Dwarka Expressway.

7. NCR’s second diplomatic enclave (Chanakyapuri is the first) is coming up next to Sector 113 on Dwarka Expressway.

8. As a part of its developmental plans for Gurgaon-Manesar Urban Complex, the Haryana Government has envisaged a Mass Rapid Transit System Corridor (or metro rail) along Dwarka Expressway. This will start at Dwarka and go on towards Manesar and Neemrana via a metro hub that is coming up in a 162-acre plot at Kherki Daula where the new Inter State Bus Terminal is also being built.

9. Thus Northern Periphery Road (NPR) or Dwarka Expressway is much more than just a road with residential projects around it. The project is fully supported by the Haryana state government, and Dwarka Expressway is in fact a shining example of government and private sector co-operation. HUDA is the State Co-ordinating Agency and a number of government departments are actively involved in clearing the way for its early completion. The Implementation Framework has been tendered and allotted to Indiabulls.

10. A lot of the information available on the internet about Dwarka Expressway is outdated and does not reflect current reality. The truth is that Dwarka Expressway isn’t 5 years away. Obstacles are being moved out of the way very quickly and Dwarka Expressway will be here before you know it.

11. Of its 18 km length, 14.5 km have been completed. Only 3.5 km remain, otherwise Dwarka Expressway is ready. You can drive on it today, and see first-hand the rapid rate at which development is taking place in this area.

12.

Of the 3.5 km of Dwarka Expressway that remains to be built, only 1.3 km is actually under litigation for compensation. This has held up another 1 km, however is being developed in parts. The construction of a 1.2 km Railway Over Bridge (ROB) is going on and is expected to be completed by the end of 2015.

13. The dispute too is now mostly settled and all issues cleared, apart from some petitioners holding out for better compensation. The matter is sub-judice, so details cannot be revealed. However, it can be mentioned that a settlement is expected quite quickly. Rehabilitation and resettlement of the petitioners is what the courts are considering. They will be rehabilitated in Sectors 110A and 37C – HUDA has over 145 acres of land in these sectors of which only 15 acres will be needed to resettle all the petitioners. This is expected to be completed within 2015. Those interested can refer to the affidavit filed in the High Court at Chandigarh by the Secretary, Department of Town and Country Planning on January 13, 2015.

14. HUDA has already disbursed Rs. 1233 crores to land owners as compensation. Similarly, the factory belonging to Padmavati VNA Mechatronics that was in the path of the carriageway has also been acquired from the company and demolished. Construction at the factory site is proceeding at speed.

15. In a meeting chaired by the Hon’ble Lt. Governor of Delhi in April 2014, DDA gave its approval for the construction of a crucial overbridge across the Delhi-Karnal railway line. Since then, construction of the rail overbridge has been nearly completed. This work is being carried out by Indian Railways.

16. Construction of the Metro Rail on Northern Peripheral Road (Dwarka Expressway) and Southern Peripheral Road has been approved by the Government and it has been taken up as an early bird project by Delhi-Mumbai Industrial Corridor Development Corporation. The Town And Country Planning Department has determined the Change of Land Use fee for constructing the Metro, and work can commence as soon as this fee is deposited. These funds will be al-located this year, so construction will begin this year as well.

17. At the Delhi end, DDA has finalized the exact alignment of Dwarka Link Road, which will be a continuation of Dwarka Expressway up to Dwarka. The proposal for land acquisition and construction was also cleared on April 21, 2014.

18. 626 hectares of land has been kept aside for public utilities in Sector 37D, 99A, 100, 101 and 107. Electricity lines are being laid down, and all electric cables up to 66 KV will be underground.

19.

Infrastructural development is going on at speed all along the Expressway. In fact, work on sewer lines, electricity cabling and water supply is likely to be completed within 2015.

20. The investor community is seeing the area around Dwarka Expressway as a serious investment opportunity. Early investments have shown excellent growth; and with the Expressway heading towards completion, investor interest is very positive. Gurgaon’s 5 micro-markets Average rate per sq ft (approx.)

M G Road Rs 14,000

Golf Course Road Rs 15,000

Golf Course Extension Road Rs 14,000

Sohna Road Rs 10,000

Dwarka Expressway (Sectors 81 to

115)

Rs 7,000-8,000

WHAT LIES IN STORE

A Sluggish market till the oversupply is absorbed. More distinguished addresses and well differentiated offering in terms of design and

conveniences. Price remaining firm with lesser bureaucratic interference . Development of affordable housing with improved connectivity on National Highways . Development of Tier 2 cities with advantage of community living Easing of loans to make ownership easier. FDI norms eased & REITS to give developers access to easy capital . On time delivery of offering predictable cash outflows & inflow. Impetus to commercial Real Estate with a focus on development of commercial

ITSEZ/Commercial SEZ /Industrial SEZ . A deluge of FDI/NRI Capital infusion cowing to investor friendly policies reduction in

downtime and availability of trained and cheap manpower .

Indian Real Estate today has same communalities :-

End User driven with a latent demand for affordable housing . Realistic growth parameters will drive prices , infrastructure , need , supply, connectivity &

demand Housing with increased FSI .(Commercial FSI in NCR as already increase to 3, this will lead to

abundant and cheap office space) Greater flexibility in land acquisition norms to remove obstructive barriers for expedient use

of land for affordable housing , road connectivity , re-alignment , creation of dedicated expressway , street scarping & ground water preservation !

Market observation

Headquarters of Blackstone Group Lp in New York, US. Photo: Bloomberg Bangalore: Global

private equity (PE) firm Blackstone Group Lp is poised to become the largest owner of commercial office real estate in India after an aggressive, three-year acquisition drive in which it spent $900 million (Rs.5,400 crore) buying prime assets. Blackstone has acquired 29 million sq. ft of office space in cities such as Bangalore, Pune, Mumbai and Noida, on the outskirts of New Delhi. This includes 26 million sq. ft of operational, leased-out space and three million sq. ft under construction, said people familiar with the development. To be sure, Blackstone doesn’t own a 100% stake in its real estate portfolio and has partners in some of the investments. Blackstone hasn’t disclosed the exact stake it owns in these projects. The New York-based PE firm’s office portfolio in India closely rivals the size of the country’s largest developer DLF Ltd’s rental assets that include both office and shopping malls. Until some time ago, DLF was the single-largest office portfolio owner in India. DLF’s rental portfolio is about 29 million sq. ft.

This seemingly is in preparation , for REITS investments as well as to capitalise on restricted Grade ‘A’ office space in Tier 1 & 2 cities .

OUR RECOMMENDATIONS Gurgaon/NCR:-

VILLA OFFERINGS IN GATED COMMUNITY :- Click Here PLOTS :- Click Here AFFORDABLE HOUSING :- Click Here RESALE :- Click Here

Mumbai :- ( Great Prices & Affordable Offerings ) Bespoke Opportunity !! Shapoorji Pallonji :- Click Here Kolte patil Vile Parle:- Click Here Godrej Prana:- Click Here Omkar Investor Series:- Click Here

Why Does The India Story Look Good?(Attributes driving investor sentiments)

Our growth is driven by a latest demand with a population of 1.3 billion 65% of the Demography at age less than 35 with h increased income threshold, manufacturing growing from 7.5 to 9.6 % & stock market growing 5 ½ times the last year .

EXPERT SPEAK : PE vs Real Estate :- Atul Marwaha :” While I reserve the right to be wrong ! If you look at a historical perspective and let's look at a five year canvas equity will score! With temporary glitches and corrections you will see a

near bull run for at least the next five years! Look at infrastructure, banking, oil and gas, power, fmcg as the key growth sectors you can look at food processing too! As drivers for growth In a scenario of 7 years. However, Real estate sector investments will be more promising the growth drivers being Commercial real estate aided by REITS, the other segments which will witness growth are the affordable housing and the luxury segment. Tier 2 Cities will see a spurt of investor interest with easing of FDI Norms in Real Estate. Each of the Prime Minister’s visit has a potential of an infusion of more than 20 Billion in FDI with an estimated infusion of 150 Billion in 2015-16 there will be an immediate need for SEZ spaces for IT & Industry and Commercial & Retail spaces which need an immediate fillip”

City wise assessment of Real Estate parameters and growth indicators

Delhi - National Capital Region (NCR)

Market Overview Market Nearly 4,500 residential units were launched in Delhi-NCR during the third quarter of 2014, almost 36% decline from the previous quarter. This decline was primarily due to delayed launches, as developers planned new offerings for the upcoming festive season, during which, generally, the demand improves. Capital values increased by 3-6% in the submarkets of Gurgaon and Noida, whilst most submarkets in Delhi witnessed a marginal decline of 2-3%. During the quarter, rental values maintained status quo across the submarkets of Delhi-NCR in both mid and high-end segment. The office sector witnessed robust demand during the third quarter of 2014. Grade A supply addition was around 1.8 msf, around 40% decline from the previous quarter. However, net absorption in Grade A office spaces was recorded at 1.9 msf, an increase of almost 70% from the previous quarter. No office space was pre-committed during the third quarter of 2014. Rental values firmed up in the CBD locations of Gurgaon and Delhi due to healthy demand. No new mall supply was added during the third quarter of 2014. Exits by large format multi-brand retailers in select malls resulted in the overall mall vacancy rising by 1.5 percentage points, to 15.0% in the third quarter of 2014. Besides Central and South Delhi locations, retailers depicted interest at main street locations of West Delhi such as Paschim Vihar and Punjabi Bagh. Rental values in Connaught Place, South Extension and DLF Galleria increased by 4- 8% from the previous quarter. Local F&B retailers and few fitness sector brands depicted a keen interest for malls in Greater Noida. Trends & Update

Capital values in Gurgaon and Noida submarkets improved by 4-6% from the previous quarter. This was primarily due to a higher interest from end-users and investors, who wanted to strike a good deal before prices hardened further. However, demand remained subdued in the high ticket-price market of Delhi, in that capital values largely declined by 2-3% from the previous quarter. New Residential Launches With around 4,500 unit launches in the third quarter of 2014, Delhi-NCR registered a q-o-q decline of around 36%. Nearly 63% of the units launched during the quarter were in the mid segment, followed by 29% in the high-end and the remaining 8% in the affordable category. Noida accounted for more than 66% of unit launches in this quarter Under Construction Residential Property Update Developers continued to focus on completion of projects as several projects were in advanced stages of construction. More than 30 under construction projects might offer possession during the next quarter. Commercial Office Sector With Grade A supply of around 1.8 msf in the third quarter of 2014, Delhi-NCR registered a decline of more than 40% from the previous quarter. Approximately 77% of the new supply pertained to commercial offices whilst the remaining were IT-SEZs. The third quarter of 2014 witnessed a total net absorption of nearly 1.9 msf in grade A developments, an increase of approximately 70% from the previous quarter. IT-ITeS had the highest share (63%) followed by Consulting (7%) and BFSI (5%). No office space was pre-committed during the quarter. With net absorption exceeding supply, overall vacancy level in Grade A properties decreased by 0.7 percentage points during the quarter, and was at 27.5%. Vacancy levels declined in CBDs, both in Delhi and Gurgaon, as significant spaces were absorbed in these regions. Grade A rental values softened by 0.5-1.5% in the peripheral sub-markets of Gurgaon and Noida as high vacancies led to downward revision in quoted rentals. In Gurgaon CBD, rental values improved by 3.6% from the previous quarter, primarily due to a low availability amidst robust demand. Retail Sector No new mall supply was added during the third quarter of 2014. Exit by large format retailers in select malls of East Delhi and Ghaziabad led to an overall vacancy rise of 1.5 percentage points to 15.0% in the third quarter of 2014. Lack of significant churn in malls resulted in rental values remaining stable during the quarter. Robust demand led to rentals increasing by 3-4% at prime main street locations such as Connaught Place and South Extension. In DLF Galleria (Gurgaon) as well, rentals increased by 7.7% from the previous quarter. Connaught Place witnessed significant transactions of F&B brands. Main street locations of West Delhi witnessed healthy take-up by F&B and apparel brands such as Kebab Express, Pizza hut, Dunkin Donuts, Levi's and Fab India. Primarily apparel brands drove the Transaction activity at Defence Colony and South Extension. Outlook Rental values of residential properties across all submarkets are likely to remain stable in the next quarter, as there exists a high level of supply in the market. Whilst inherent strong demand from IT-ITeS employees may lead to an improvement in capital

values in the North, East and South-west submarkets, other submarkets are expected to remain stable. Improved market sentiments coupled with absorption of pre-committed office spaces may lead to robust leasing activity in the next quarter. Continued interest from occupiers for office spaces in the peripheral submarkets may lead to a slight improvement in rentals at these locations. Due to a probable churn in established malls, rental values at select locations may improve in the next quarter. Limited supply of quality retail spaces and high enquiries from apparels, jewellery and F&B brands may lead to a marginal rental uptick in Kormanagala Road, Jayanagar 4th Block, 11th Main and Kamanahalli Road main streets. Rentals for all other main streets may remain stable during the next quarter.

MUMBAI

Market Overview Market During the third quarter of 2014, around 6,400 units were launched in Mumbai; nearly twice the number of units launched in the previous quarter. This substantial increase was primarily due to low level of launches in the previous quarter. New launches during the third quarter of 2014 were concentrated in the suburban locations, compared to the previous quarter, when majority of the launches were in peripheral locations. Although transaction activity remained stable, improved market sentiments resulted in capital values increasing in the suburbs and Thane. The commercial office sector witnessed healthy transaction activity during the quarter with net absorption of approximately 1.7 msf, a q-o-q increase of 48%. Net absorption was concentrated in the submarkets of Lower Parel (21%), Andheri-Kurla Road (20%) and Thane-Belapur Road (16%). BFSI, IT/ITeS and Pharmaceutical sectors together accounted for around 50% of the overall transaction activity during the quarter. Overall supply declined by 54% from the previous quarter, and stood at 800,000 sf. Low supply and high transaction activity resulted in reduced vacancy levels (by 1.4 percentage points from the previous quarter), which stood at 18.9% at the end of the third quarter. Lower demand for space in the CBD resulted in a rental decline, whilst rentals at all other sub-markets remained stable. With stagnant demand, rentals at all major main streets remained stable during the quarter. Apparel, F&B and lifestyle brands expanded operations at prime main streets, such as Colaba and Linking Road. Overall mall vacancy levels declined

marginally by 0.1 percentage points to 15.2% at the end of the quarter. This decline was due to space take-up by apparel and F&B brands in Malad, Vashi and Thane. Healthy demand led to mall rentals at Goregaon appreciate by 6% compared to the previous quarter. Rentals at all other mall locations remained stable during the quarter. Trends & Update With a number of under construction projects facing completion delays, end-users preferred ready properties. Improved market sentiments resulted in capital values increase by 3-8% in the mid segment of central suburbs, Far North, North east and Thane. High-end segment capital values in North and Far North also increased 3% and 7%, respectively from the previous quarter. New Residential Launches Around 6,400 units were launched in the third quarter of 2014, nearly two times the number of launches in the previous quarter. This substantial increase was due to a low-base effect as the previous quarter had witnessed tepid project launches. Launches during the quarter were concentrated in the Central Suburbs (45%), Far North (28%) and Thane (11%). Approximately 72% of the units catered to the high-end segment in suburban locations such as Powai, Goregaon, Andheri and Wadala. Only 16% of the units catered to the mid segment whilst the affordable segment contributed 6%. Remaining 6% of the units were launched in a branded luxury project in Central Mumbai. Under Construction Residential Property Update Both peripheral and suburban locations witnessed healthy construction activity during the quarter. With improving market sentiments, capital values of under-construction projects in Far North locations, central suburbs and Thane increased during the quarter. However, capital values were stable in South and Central Mumbai locations. A few developers also offered attractive discounts in highend, under construction projects. Commercial Office Sector In the third quarter of 2014, 800,000 sf (54% q-oq decline) supply was added in Mumbai, 78% of which was in Grade A developments. Supply influx was specifically noted in Thane-Belapur Road (44%), Kurla (34%) and Thane (22%). Net absorption also witnessed a substantial increase, driven by demand from BFSI (18%), IT-ITeS (17%), Pharmaceuticals (15%), Logistics (14%) and Media (12%) sectors. Decline in supply and healthy net absorption resulted in a decline in vacancy levels by 1.4 percentage points to 18.9%. Low demand resulted in rentals at the CBD declining 2% during the quarter, whilst the rental values remained stable in all other markets. Lower demand for offices in CBD locations led to a 2% decline in rentals. Retail Sector Rentals in all major main streets remained stable during the quarter. Main street locations such as Colaba and Linking Road witnessed healthy demand and transactions from apparel, F&B and lifestyle brands. Demand from F&B and apparel brands also led to a decline in mall vacancy levels in Malad, Vashi and Thane. Overall mall vacancies declined by 0.1 percentage points to 15.2%. Despite high overall vacancy, availability of quality spaces remains low in

the city, indicating vacant spaces exist only in few, low-quality malls. Rentals in Goregaon increased by 6% compared to the previous quarter due to healthy demand, whilst rentals in all other mall locations remained stable. Outlook Housing demand may improve in the short term due to an improvement in market sentiment. Considering the upcoming festive season, new project launches are also likely to increase in the next quarter. Developers may not increase capital values significantly, as an increase might have a negative impact on demand, which is just beginning to pick-up. New commercial office supply of 1.2 msf may become operational during the fourth quarter of 2014. Transaction activity may remain high considering positive market sentiments due to which, companies might execute their growth

PUNE

Market Overview Market Approximately 4,500 residential units were launched in Pune in the third quarter of 2014. Unit launches improved more than 60% from the previous quarter due to an improvement in market sentiment. The Mid segment continued to dominate launch activities, contributing 76% to new launches. The high-end segment contributed 13% to new launches during the quarter, followed by 11% contribution by the affordable segment. Capital values recorded a quarterly rise, ranging from 1-6% in certain submarkets, mainly due a decline in availability of properties at lower capital values and launch of new projects at higher rates. Nearly 339,700 sf office space was added in the third quarter of 2014, entirely contributed by non- Grade A developments. The overall supply declined by 73% from the previous quarter as completion of several Grade A developments was delayed. However, transaction activity improved significantly in this quarter and as a result, vacancies across All Grades declined by 1.3 percentage points and were noted at 24.5%. Mall supply expected to be added in the third

quarter 2014 was deferred due to a delay in approvals, leading to stable inventory levels. Transaction activity was concentrated the main streets, whilst quarterly mall leasing volume declined from the previous quarter. Overall transaction activity levels remained moderate and led to a decline in mall vacancy by 0.39 percentage point, which was noted at 24.6%. Trends & Update The residential market did not witness a significant pick-up in transaction activity despite an increase in enquiries. Capital values across submarkets largely remained stable from the previous quarter. However, quoted rates of certain ready properties increased due to an improvement in demand for these projects. Forest County in Kharadi started offered possession of nearly 400 units in this quarter. Launch of new projects at higher price points led to a marginal quarterly increase in capital values. New Residential Launches With around 4,500 unit launches in the third quarter of 2014, Pune witnessed a 60% improvement in quarterly launch activity. 2 Bedroom-Hall-Kitchen (BHK) offerings comprised more than 50% of the total number of unit launches. New projects continued to be concentrated along the NH4 Bypass in locations such as Hinjewadi, Mahalunge, Pashan, Sus, etc. and peripheral locations such as Lohegaon, Pirangut, Katraj Kondhwa Bypass Road, Sinhagad Road, etc. Under Construction Residential Property Update Similar to the past few years' trend, peripheral locations along the NH4 Bypass in the west and areas such as Wagholi, Kharadi, Phursungi, Pashan, Sus, etc. in the east witnessed maximum construction activity. Capital values continued to remain stable in under- onstruction projects, possessing high levels of unsold inventory. However, new launches quoted capital values towards the upper end of the market range, resulting in marginal improvement in capital values in certain submarkets. Commercial Office Sector Pune witnessed a total net absorption of nearly 1 msf during the quarter, with 74% contribution from Grade A developments. Net absorption and leasing activity registered a quarterly increase of 75% and 56% respectively due to an overall improvement in business sentiment. Grade A spaces contributed 76% to the leasing activity, primarily in commercial. developments in Yerwada, Kharadi and Hinjewadi. IT/ITeS and BFSI sector continued to be major contributors with 51% and 41% share respectively to overall leasing activity. In the third quarter of 2014, weighted average rentals declined marginally across submarkets from the previous quarter. Retail Sector In the third quarter of 2014, main streets continued to drive majority of the demand, with Mahatma Gandhi (MG) Road witnessing good transaction activity. However, rentals in MG Road remained stable from the previous quarter, primarily due to existing demand-supply equilibrium.

Fergusson College (FC) Road continued to witness an upward rental movement as demand that spilled over from Jungli Maharaj (JM) Road looked to set up shop in FC Road. Main Street in Aundh also recorded a 5.6% rental increase due to higher demand from lifestyle retailers. Mall rentals in locations such as Koregaon Park and Nagar Road remained stable. Quoted rentals in the areas of Camp and Hadapsar increased by 3-4% due to continued demand from occupiers. Outlook The number of residential unit launches are expected to improve in the next quarter due to the upcoming festive season. In order to boost sales after a period of subdued demand, developers are likely to offer attractive schemes, freebies, etc. during this period. Transaction activity is expected to pick-up on the back of higher enquiries. Pune is likely to witness an infusion of approximately 2.2 msf office space in the fourthquarter of 2014. However, a likely stability in transaction activity may lead to a slight increase in vacancy levels. Quoted rental values are likely to remain stable, despite supply addition, until leasing improves significantly. Retail transaction activity is expected to gear up in the last quarter of 2014 as many retailers are exploring options to set up new stores. Rentals across malls are expected to remain stable but select main streets such as Aundh and FC Road might witness a slight upward bias due to a higher demand.

Contact Us :

NCR:- Atul Marwaha (Principal Consultant) 09717500111 Email:- atul@primeoptions.in Anish Kumar (Senior Manager Gurgaon) 09717330111 Email:- anish@primeoptions.in Mumbai:- Ajay Singh (Business Head) :- 07738183763 Email:- ajay@primeoptions.in

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COPYRIGHT: Prime Options: The Marketing Genie! No part of this document & advisory may be reproduced in part or whole without the explicit permission of the management. Prime Options Research & Advisory : All Rights reserved ACK: Citibank Report on Cities Central Statistical Organization BSE RBI