cb richard ellis report - india office market view - q3, 2010_final

8/7/2019 cb richard ellis report - india office market view - q3, 2010_final

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www.cbre.co.in Third Quarter 2010

2010, CB Richard Ellis, Inc.

India Ofce

Quick Stats

Rental Movement from last

Quarter

National Capital Region

CBD

Secondary Market

Mumbai

CBD

Alternate Business District

Bangalore

CBD

Peripheral Business District

Chennai

CBD


Hyderabad

CBD

Surburban Areas

Pune

CBD


Kolkata

CBD


The Indian economy has been largely

unaffected by the global economic

slowdown of 2008-09 and over the

past few quarters has been riding

a high growth curve, banking upon

domestic consumption and services

growth. According to the Centre for

Monitoring Indian Economy (CMIE),

the GDP is expected to grow by 9.2%

in 2010-11 compared to 7.4% growth

observed in 2009-10 and 6.7% in 2008-

09. A buoyant economy has also had

a positive impact on the real estate

sector, with heightened level of interest

and demand across most of the top

cities from the corporate sector.

Corporate office space has witnessed a

rising occupier interest and absorption,

wherein domestic occupiers continue

to be slightly more active than their

global counterparts. But this interest

level is limited to the IT/ITeS, Telecom

and the Banking and Finance industry;

the new economy sectors wherein

maximum head count expansion hastaken place over the past few months.

While this interest is more towards the

cost effective suburban locations, an

overall demand rise has also benefitted

the CBD and the SBD.

In the seven cities presented under

this review, a definite improvement

in office space leasing has been

observed compared to the previous

year. At present, the overall trend in the

market is towards rentals firming up

on account of increase in demand and

more enquiries converting into closures

and decrease in vacancy levels. The

Central Business District (CBD) has

managed to regain its prominence in

each citys real estate dynamics, with a

halt on tenant exodus and resurgence

in demand amidst negligible supply

leading to a marginal increase in rental

values across all major cities.

Construction activity, which had stalled

during most of 2009, has also picked

up momentum and over the comingfew months is expected to provide

a substantial addition to the existing

stock levels. This supply addition, most

of which is located in the suburban

micro-markets, is expected to counter

the effects of enhanced demand levels

in suburbs and is expected to keep any

price escalation in check in the short to

medium term.

Amongst the other asset types the

residential market too witnessed a

recovery, Overall, the real estate market

is on a recovery mode, however, a

supply influx over the next few quarters

will continue to put pressures on the

pricing spectrum across all the major

cities.


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Market Outlook

As predicted, the transaction volume

increased in the National Capital Region.

The Euphoric sentiment is evident

among the developer / landlord community.

The prospective tenants are likely to adopt

and follow focused approach towards

projects with maximum value in terms of not

only low rentals but also added advantages

of metro, parking and other infrastructure

facilities. More so, the tenant focus remains

on the operational projects and those getting

operational in the next few quarters. Hence it

is imperative for developers to take a cautious

approach towards rental expectations during

this rising yet fragile market.

RENTAL VALUE TRENDS

CAPITAL VALUE TRENDS

0

50

100

150

200

250

300

350

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Rent(INRpersq.ft.permonth)

Timeline

C BD ( Co n na u gh t P la ce ) S ec on d ar y m a rk et ( Ne h ru P la ce ) S ec on da ry m a rk et ( Ja so la / S ak et ) G u rg a on N o id a

nn h l n r m rk hr l n r m rk l k r n i

nn h l n r rk hr l n r rk l k r n i

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

CapitalValues(INRp

ersq.ft.)

Timeline

C BD ( Co nn au gh t Pl ac e) S ec on da ry m ar ke t ( Ne hr u Pl ac e) Se co nd ar y m ar ke t ( Ja so la / Sa ke t) G ur ga on N oi da

Mumbai

Market Summary

The third quarter witnessed increased market

activity with closure of a number of transactions.

While no new supply was added in the third quarter,

nor is expected to be introduced in the near term,

approximately 15,000 sq.ft. of secondary stock

was absorbed in the Central Business District

(CBD) of Nariman Point during this quarter.

Rental values in the CBD increased by almost 3%

in the third quarter. Despite a central location, few

existing tenants continued to evaluate options in

the Extended Business District (EBD) and the

Alternate Business District (ABD), both of which

offer good quality construction and infrastructure

along with relatively low rentals.

While no new supply came on line in the

Extended Business District (EBD) of Lower

Parel, preleasing of space at aggressive rentals

resulted in a reduction (6%) in the prevailing rental

values. Absorption was recorded at approximately

250,000 sq.ft. In Worli Prabhadevi, around

400,000 sq.ft. of new supply came into this market

while absorption stood at a minimal 35,000 sq.ft.

However, as the building is perceived to be a

premium development and the preference among

corporates for Worli Prabhadevi, the rental values

here have actually seen a marginal increase of 4%.

Additionally, two large land auctions witnessed in

this micro market during this review period signals

a strong revival of the real estate market. Indiabulls

Infratech won the bid for two - first being the 8.37

acres National Textile Corporation (NTC) Bharat Mill

land in Central Mumbai for Rs 1,505 crore and the

second being NTCs 2.3 acre Poddar Mill land for

Rs 474 crore. Few under construction projects are

schedule to be completed by mid of next month.

The Alternate Business District (ABD) of BKC

continued to witness maximum market activity

with prime interest observed from the financial

institutions. No fresh supply is slated to hit the


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Rental Market Indicators

Sub-market Average Rentin Sept 10 (INRper sq.ft. per

month)

Average Rentin June10 (INRper sq.ft. per

month)

CBD (NarimanPoint, Fort, CuffeParade) Grade A

300 290

CBD (NarimanPoint, Fort, CuffeParade) Grade B

200 190

EBD (Lower Parel)Grade A

165 175

market until Q2 2012. Approximately 0.25 million

sq.ft. was absorbed, thus leading to a drop in

vacancy level from 18.9% in Q2 2010 to 13% in

Q3, 2010.

The Secondary Business District (SBD)

continued to be an attractive destination for a large

number of occupiers, owing to a cost effective

rental pricing. Almost 2.3 million sq.ft. of space

was absorbed in the third quarter. Shipping and

airline companies in particular continued to show

active interest in relocating to this micro market.

Rental values remained stable and are expected

to firm up in the coming quarters.

The Peripheral Business District (PBD) ofPowai

and Vikhroli witnessed steady enquiries from

KPOs and large IT companies. This micro marketis mostly replete with IT supply, thus a restricted

commercial supply is its limitation. While there

is limited availability of ready stock, substantial

supply is expected to hit the market in the next two

quarters. The micro market has availability of land

parcels suitable for the development of built-to-

suit options. The rental values in this micro market

increased by 6%, q-o-q.

The Navi Mumbai and Thane micro marketsremained vibrant in terms of enquiries and leasing

activity due to the availability of quality supply,

although there were limited closures reported.

EBD (Worli,Prabhadevi)Grade A

260 250

ABD (Bandra KurlaComplex, Kalina)Grade A

275 275

ABD (Bandra KurlaComplex, Kalina)

Grade B

180 180

SBD (Andheri, VileParle, Jogeshwari)Grade A

115 115

SBD (Andheri, VileParle, Jogeshwari)Grade B

80 80

PBD (Malad)Grade A

65 65

PBD (Powai,Vikhroli) Grade A

85 80

PBD (Thane, NewMumbai) Grade A

40 40

Major Leasing Transactions

Tenant Building,Location

Approx. size(sq.ft.)

BNP Paribas Bandra Kurla

Complex

113,000

Schering Plough Bandra Kurla

Complex

27,000

Aegon Religare Hiranandani

Business Park,

Powai

25,000

RENTAL VALUE TRENDS

0

50

100

150

200

250

300

350

400

450

500

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010


Timeline

C BD ( Na ri ma n Po in t, F or t, C uf f e P ar ad e) EB D ( Lo we r P ar el ) EB D ( Wo rl i, P ra bh ad ev i) A BD ( Ba nd ra K ur la C om pl ex , Ka li na )

SBD ( An dh er i, Vi le Pa rl e, J og es hwa ri ) PBD ( Ma la d) PBD ( Po wa i, Vi kh ro li ) PBD ( Th an e, N ew M um ba i)


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Bangalore

Market Summary

The Central Business District (CBD) ofMG Road,

Richmond Road and Residency Road witnessed

closure of significant mid size transactions during

this review period. Large numbers of enquiries

were recorded from both the existing occupiers

as well as new entrants. Absorption was estimated

at approximately 0.3 million sq.ft., while the fresh

Grade A supply added was at 0.42 million sq.ft.

An increase in demand for office space led to a

marginal increase in rental values of about 3%

q-o-q, paving way for larger increments in the

coming few quarters.

Corporates looking for expansion options within

the city limits are readily contemplating the Non


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

201

CapitalValues(INRpersq.ft.)

Timeline

C BD ( N ar im an P oi nt , F or t, C u ff e P ar ad e) E BD ( Lo we r P ar el ) E BD ( Wo rl i, P ra bh ad ev i) A BD ( Ba nd ra K ur la C o mp le x, K al in

SBD ( An dh er i, Vi le Pa rl e, Jo ge sh wa ri ) PBD ( Ma la d) PBD ( Po wa i, Vi kh rol i) PBD ( Th ane , N ew M um ba i)

Market Outlook

The overall trend in the market is towards

rentals firming up on account of increase

in demand and more enquiries converting

into closures in the coming quarters. While

a rising tenant demand would contribute to

a decrease in vacancy levels, large amount

of supply is also expected to come towards

the end of the year. This voluminous supply

is expected to continue to pressurize rentals

in certain micro markets in the coming few

quarters.

CBD micro market ofIndira Nagar, Koramangala,

Old Madras Road and CV Raman Nagar. This

micro market acts as a feasible option for tenants

due to ready availibility of Grade A space, relatively

lower rentals, rapidly improving infrastructure

and good connectivity. During this review period,

absorption in this micro market was estimated

at approximately 0.28 million sq.ft., whilst freshsupply was estimated at around 0.23 million sq.ft.

The demand-supply dynamics ensured that rental

values remained stable in the third quarter.

TheSouth Bangaloremicro market ofBannergatta

Road, JP Nagar, Jayanagar and Mysore Road

witnessed few small transactions with absorption

recorded at almost 70,000 sq.ft. As a result of

overall buoyancy observed in the market the rental

values increased by almost 6%, q-o-q.

Leasing activity in the Peripheral Business District

(PBD) of Outer Ring Road (ORR), Whitefield,

Electronic City and North Bangalore continued

to gain momentum. Abundant availability of

Grade A space coupled with flexible rental values

and accommodative developer attitude makes

it a viable option for clients seeking large space

requirements with availability of hard options.

The Outer Ring Road (ORR) stretch between KRPuram Junction and Sarjapur Road witnessed

closure of significant number of transactions.

Characterized by a strong pipeline of Grade

A supply offering affordable rentals, good

connectivity and infrastructure, this micro market is

now emerging as a preferred destination for large

domestic and international players. Absorption

was estimated at approximately 0.4 million sq.ft.,

while approximately 0.7 million sq.ft. of new supply

was added to the stock. Incrementing demand led

to an increase of almost 5% in the rental values in

the third quarter.

The oversupply situation in the Whitefield micro

market kept the rentals under pressure and

developer attitude extremely accommodative. A

few large transactions were concluded during the

third quarter which brought the total absorption to

about 0.13 million sq.ft. Fresh Grade A supply was

estimated at approximately 0.9 million sq.ft.


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Tenant Building, Location Approx. size(sq.ft.)

Volvo IBC Golf ViewHomes, Wind Tunnel

Road

103,000

SwissRE Vaswani Centropolis,Langford Town

116,000

Schneider Prestige Exora, ORR 55,000

JPMC First TechnologyPlace, Whitefield

60,000

GMRInfrastructure

IBC Knowledge Park,Bannerghata Road

45,000

APC Kalyani Platina,

Whitefield

35,000


Sub-market Average Rentin Sept 10

(INR per sq.ft.per month)

Average Rentin June 10


CBD (MG Road,Residency Road)Grade A

74 72

CBD (MG Road,Residency Road)Grade B

57 55

EBD (Koramangala,Indiranagar) Grade A

48 48

EBD (Koramangala,Indiranagar) Grade B

42 42

Outer Ring RoadGrade A

40 38

Outer Ring RoadGrade B

32 30

Whitefield, ElectronicCity Grade A

24 24

South BangaloreGrade A

37 35

North BangaloreGrade A

42 42

Industrial Grade 20 20

Office leasing activity remained fairly inactive

in the Electronic City, with no large scale

transaction being reported in this micro market.

Fresh Grade A supply was estimated at a low

60,000 sq.ft. Rental values remained stagnant and

developers continued to be flexible with respect

to commercial terms. The North Bangalore micro

market recorded no significant leasing activity forthis review period.


RENTAL VALUE TRENDS

0

10

20

30

40

50

60

70

80

90

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010


Timeline

CBD (MG Road, Richmond Road, Residency Road) EBD (Koramangala, Indiranagar) Outer Ring Road

PBD (Whitef ield, Elect ro nic City) So ut h Ban galo re N or th Ban galo re

-

-

-

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010


Timeline

CBD (MG Road, Richmond Road, Residency Road) EBD (Koramangala , Ind iranagar) Outer Ring Road

PBD (Whit ef ield, Elect ro nic Cit y) Sou th Bang alo re N or th Bang alor e

Market Outlook

Large numbers of companies have started torevive their expansion plans. Demand levels

in the SEZ domain witnessed an increase.

The rentals are expected to remain stable in

the near term.

Chennai

Market Summary

The Central Business District (CBD)

encompassing areas ofAnna Salai, T Nagar, RK

Salai, Alwarpet and Nungambakkam witnessed

absorption of approximately 0.11 million sq.ft.,

largely dominated by medium size office spaces

catering to banks and the corporate sector. No

new supply came into this micro market in the

third quarter; however there are a few projects in

the pipeline which are expected to be completed

by the end of 2010. The overall vacancy level


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CBD (Anna Salai,Nungambakkam, KSalai,T Nagar, Egmore,Alwarpet) Grade A

62 62

CBD (Anna Salai,Nungambakkam, R.K.Salai, T Nagar,Egmore,

Alwarpet) Grade B

46 46

remained stable in the range of 5% - 6%. The rental

values also remained stable, but the capital values

appreciated by almost 6%, q-o-q. If a demand

surge occurs in the near term, then rental values

are also expected to face an increment.

The Off/Non CBD micro market ofMRC Nagar,

Guindy and Taramani witnessed an increase in

absorption of approximately 0.12 million sq.ft.

of office space, while approximately 0.74 million

sq.ft. of new supply was introduced in this quarter.

The rental values in this micro market remained

stable owing to active tenant enquiries amidst

limited projects on offer. The vacancy levels in this

micro market stood at 3% - 4%.

The Suburban Business District (SBD) including

areas like Velachery, Perungudi and Mount

Poonamallee Road witnessed minimum activity

as compared to the other micro markets. The

fresh supply added in the micro market stood at

approximately 0.80 million sq.ft., while the space

absorption witnessed was at approximately

50,000 sq.ft. The rental values in this micro market

continued to remain stable and the vacancy was

estimated in the range of 5% - 7%.

Abundant supply and low demand levels wereobserved in the Peripheral Business District

(PBD) of Perungalathur, Sholinganallur,

Siruseri, Ambattur and GST Road. No new supply

was released into the market and absorption was

recorded at approximately 0.13 million sq.ft. The

vacancy levels in this micro market continued to

remain between 18% 20%.

Off CBD ( Guindy,Kiplauk, Taramani,Adyar, Anna Nagar)Grade A

44 44

Suburban BusinessDistrict (Velachery;Perungudi,MountPoonamallee Road)

Grade A

35 35

Peripheral BusinessDistrict (Perungalathur;Sholinganallur;Siruseri; Ambattur,GSTRoad) Grade A

24 24



Marg Futura 110,000

GeometricsGlobal

SP Info City,Perungudi

10,600

I Gate Jayanth Tech Park,Manapakkam

22,500

OLAM Ascendas, Taramani 34,000

SBI Rani Towers, Egmore 40,000

ABCO Advisory Tamarai Tech Park 39,000

RENTAL VALUE TRENDS

0

10

20

30

40

50

60

70

80

90

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010


Timeline

CBD (Anna Salai, Nungambakkam, RK Salai,T Nagar,Egmore,Alwarpet) Off CBD ( Guindy, Kiplauk, Taramani, Adyar, Anna Nagar)

Suburban Business District (Velachery, Perungudi, Mount Poonamallee Road) Peripheral Business District (Perungalathur, Sholinganallur, Siruseri, Ambattur,GST Road)

nn l i, n m kk m , l i, T r , m r , l r in , i l k, T r m ni, r , nn r

r n i n i r i l h r , r n i , n n m l l r i h r l i n i r i r n l h r , h l in n l l r , i r r i, m r , T

CAPITAL VALUE TRENDS l i, m kk m, l i,T r , m r , l r i , i l k, T r m i, r, r

r i i r i l r , r i, m ll r i r l i i r i r l r, li ll r , ir r i, m r , T

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010


Timeline

CBD (Anna Salai, Nungambakkam, RK Salai,T Nagar,Egmore,Alwarpet) Off CBD ( Guindy, Kiplauk, Taramani, Adyar, Anna Nagar)

Suburban Business District (Velachery, Perungudi, Mount Poonamallee Road) Peripheral Business District (Perungalathur, Sholinganallur, Siruseri, Ambattur, GST Road)


8/12

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Hyderabad

Market Summary

As observed in the previous quarters, the real

estate market in Hyderabad continued to witness

an increase in demand for office space, with the

IT/ITES industry leading the demand spectrum in

the city.

With most of the IT tenants relocating to the Western

Corridor (HITEC City, Kondapur, Nanakramguda,

Madhapur, Gachibowli, etc.), approximately

0.4 million sq.ft. of secondary space became

available in the Central Business District (CBD)

ofBegumpet, Somajiguda and parts of Banjara

Hills. However, with an increase in demand for

office space observed in the non IT segment, therental values are expected to appreciate in the near

term. Vacancy level remained constant at around

5%.

The non-CBD micro market comprising areas

such as parts of Banjara Hills, Jubilee Hills,

Himayatnagar and Ameerpet continued to

experience a lack of demand for office space, with

rental values remaining stable as the previous

quarter.

The IT corridor consisting of Madhapur,

Gachibowli and Nanakramguda witnessed a rise

in demand for space in Special Economic Zones

(SEZ) by various IT companies. An approximate

0.8 million sq.ft. of SEZ supply was released into

this micro market in the third quarter. Furthermore,

due to limited availability of SEZ space vis--vis

rising demand, the rental values increased by

Market Outlook

There has been a substantial improvement

in the market activity in terms of demand

for office space. Higher absorption levels

are expected to be observed in the next few

months. The rental values across all micro

markets are likely to remain stable in the

short term.

10%, q-o-q. The vacancy level currently stands at

approximately 8%.

The Peripheral Business District (PBD) of

Pocharam and Shamshahbad continued to

witness minimal real estate activity during this

review period, primarily due to lack of good quality

infrastructure. Due to an absence of fresh supply

and low demand levels, rental values remained

relatively low as compared to rest of the micro

markets in the city.



month)



CBD (Begumpet/

Rajbhavan Road,Banjara Hills)Grade A

45 45

CBD (Begumpet/Rajbhavan Road,Banjara Hills) GradeB

45 45

Secondary market(Jubilee Hills, partsof Banjara Hills)Grade A

44 44

Secondary market

(Jubilee Hills, partsof Banjara Hills)Grade B

42 43

Secondary market(Ameerpet,Himayatnagar,Sarojini Devi Road)Grade A

25 25

Secondary market(Ameerpet,Himayatnagar,Sarojini Devi Road)

Grade B

25 25

IT Corridor (HITECCity, Madhapur,Kondapur,Gachibowli)Grade A

32 29

IT Corridor (HITECCity, Madhapur,Kondapur,Gachibowli) Grade B

26 25

PBD (Shamshabad,Pocharam) Grade A

22 22


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RENTAL VALUE TRENDS


0

10

20

30

40

50

60

70

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010


Timeline

CBD (Begumpet / Rajbhavan Road, Banjara Hills) Secondary market (Jubilee Hills, parts of Banjara Hills)

Secondary market (Ameerpet, Himayatnagar, Sarojini Devi Road) IT Corridor (HITEC City, Madhapur, Kondapur, Gachibowli)

PBD (Shamshabad, Pocharam)

- -

- -

0

2,000

4,000

6,000

8,000

10,000

12,000

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010


Timeline

CBD (Begumpet / Rajbhavan Road, Banjara Hills) Secondary market (Jubilee Hills, parts of Banjara Hills)

Secondary market (Ameerpet, Himayatnagar, Sarojini Devi Road) IT Corridor (HITEC City, Madhapur, Kondapur, Gachibowli)



AmericanSolutions

Navayuga Inspire,Serilingampally

28,000

UTC Building Number 9, Madhapur

25,000

Liquid Air SEEC Building,Madhapur

40,000

IBM Lanco Hills,Manikonda

13,500

BHEL Central BusinessDistrict

14,200

Market Outlook

In the next few months, Hyderabad is

expected to witness higher rental values

owing to an increase in demand for

commercial office space. Fresh supply

in the IT corridor is expected to come up

only in the second quarter of 2011. Owing

to limited supply and increasing rentals

in areas like Madhapur and HITEC City,

many IT companies looking for smaller

format spaces may consider areas such as

Pocharam and Uppal, which offer abundant

ready supply at relatively low rentals.

Pune

Market Summary

The Central Business District (CBD) ofMG Road,

Koregaon Park, Bund Garden, Kalyani Nagar,

Dhole Patil, FC Road and JM Road witnessed

slight increase in demand and enquiry levels for

small format office spaces. Many occupiers are

moving within the CBD to more efficient buildings.

Approximately 0.1 million sq.ft. of new supply was

released, but the absorption was comparatively

lower at approximately 85,000 sq.ft. Vacancy level

remained constant at around 15%, while the rental

values increased by almost 4%, q-o-q.

Approximately 0.2 million sq.ft. of fresh supply was

released in the Off CBD micro market of Viman

Nagar, Magarpatta, Aundh, Baner, Shanker

Seth Road, S.B Road and Nagar Road and the

absorption was recorded at approximately 0.23

million sq.ft. The rental values remained constant

whereas the capital values observed a marginal

increase. The vacancy level remained constant at

around 18% in the third quarter.

The Peripheral Business District (PBD) of

Hinjewadi, Kharadi, Hadapsar, Talawade and

Kharadi observed an increase in tenant enquiries

and absorption levels for SEZ space. Enquiries

by IT/ITES companies with smaller set ups have

witnessed an increase over the last quarter due

to the uncertainty over the further extension of

STPI scheme. Approximately 0.5 million sq.ft.

of new supply was added, total absorption was

recorded at around 0.5 million sq.ft., with vacancy

levels hovering at around 24%. The rental values

remained stable this quarter, while capital values

increased marginally by 2%, q-o-q.


10/12

Page 10




month)

Average Rentin June10 (INRper sq.ft. per

month)

CBD (Shivaji Nagar,Bund Garden Road,Koregaon Park)

Grade A

57 55

CBD (Shivaji Nagar,Bund Garden Road,Koregaon Park)Grade B

50 48

Off CBD(Kalyani Nagar,ShankarshethRoad, F.C. Road)Grade A

45 45

Off CBD (Kalyani

Nagar, VimanNagar, Nagar Road)Grade B

36 35

PBD (Hinjewadi,Kharadi, Hadapsar)Grade A

30 30

PBD (Hinjewadi,Kharadi, Hadapsar)Grade B

24 24



Barclays DLF Akruti SEZ,Hinjewadi

100,000

Tech Mahindra DLF Akruti SEZ,Hinjewadi

130,000

Capgemini Cerebrum , KalyaniNagar

80,000

PWC Panchshil Tech Park 13,000

Cross CountryInfotech AG IT Park, Aundh 20,000

Motorola Cerebrum , KalyaniNagar

20,000

Atos Origin Embassy Tech park,Hinjewadi

50,000

Dresser Rand Magarpatta SEZ 44,000

Market Outlook

During this review period, Pune witnessed an

increase in enquiries as well as absorption

levels compared to the previous quarter.

Due to lack of office supply in the CBD, the

rentals are expected to rise marginally.

Kolkata

Market Summary

The Central Business District (CBD) of

Chowringhee, B.B.D Bag, Park Street and

Camac Street witnessed a substantial increase

in tenant enquiries and transaction velocity in

the third quarter. The total supply (both fresh and

RENTAL VALUE TRENDS

0

20

40

60

80

100

120

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

Q32009

Q42009

Q12010

Q22010

Q32010


Timeline

CBD (Shivaji Nagar, Bund Garden Road, Koregaon Park) Off CBD (Kalyani Nagar, Shankarsheth Road, F.C. Road) PBD (Hinjewadi, Kharadi, Hadapsar)


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

CapitalValu

es(INRpersq.ft.)

Timeline

CBD (Shivaji Nagar, Bund Garden Road, Koregaon Park) Off CBD (Kalyani Nagar, Shankarsheth Road, FC Road) PBD (Hinjewadi, Kharadi, Hadapsar)


11/12

ThirdQuarter2010

Page 11


IndiaOfce

existing) stood at approximately 0.45 million sq.ft.,

while the absorption witnessed was almost 15,000

sq.ft. Vacancy level was estimated in the range of

8% - 10% and the rental values increased by 10%,

q-o-q.

Leasing activity in the Secondary Business

District (SBD) of EM Bypass, Kasba-Gariahatand Sarat Bose Road gained some traction. Total

supply available stood at almost 80,000 sq.ft.,

while the absorption was recorded at 20,000 sq.ft.

Vacancy level in Topsia was recorded at around

15%, whilst that in Kasba was estimated in the

range of 35% - 45%. The rental values remained at

the same level as in last quarter.

Demand levels in the Peripheral markets of

Salt Lake and Rajarhat continued to witness asteady upward movement. Total supply (new and

existing) is estimated to be approximately 4 million

sq.ft. The rental and capital values both increased

by 13% in the third quarter.



KirloskarMotors

KCI Plaza, Ballygunge 4,500

LGElectronics

Vishnu Tower, Sec-V,Saltlake

4,331

CMC Vishnu Tower, Sec-V,Saltlake

4,200



(INR per sq.ft.

per month)

Average Rentin June 10 (INR

per sq.ft. per

month)CBD (Park Street,Camac Street,Theatre Road)Grade A

110 100

SecondaryBusiness DistrictGrade A

60 60

Peripheral BusinessDistrict (Salt Lake,Rajarhat)Grade A

45 40

RENTAL VALUE TRENDS

0

20

40

60

80

100

120

140

160

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Rent(INRpersft.permonth)

Timeline

CBD (Park Street, Camac Street, Theatre Road) Secondary Business District Peripheral Business District (Salt Lake, Rajarhat)

r k r , m r , Th r n r in i r i r i h r l in i r i l k , rh

Market Outlook

An increase in enquiry levels will contribute

to an increment in the leasing activity in the

next few months. However, demand-supply

dynamics in the city will ensure that the

rental and capital values across most micro

markets remains stable in the near term.

rk r , m r , Th r n r in i ri r i h r l in i ri l k , rh

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

CapitalValues(INRpersft.)

Timeline

CBD (Park Street, Camac Street, Theatre Road) Secondary Business District Peripheral Business District (Salt Lake, Rajarhat)



12/12

Copyright 2010 CB Richard Ellis (CBRE). We obtained the information abovefrom sources we believe to be reliable. However, we have not verified its accuracyand make no guarantee, warranty or representation about it. It is submitted subjectto the possibility of errors, omissions, change of price, rental or other conditions,prior sale, lease or financing, or withdrawal without notice. We include projections,opinions, assumptions or estimates for example only, and they may not representcurrent or future performance of the property. You and your tax and legal advisorsshould conduct your own investigation of the property and transaction.

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