CONNECT - Vestian...Widening of home loan slabs likely to boost demand Moreover, the banks were also...
Transcript of CONNECT - Vestian...Widening of home loan slabs likely to boost demand Moreover, the banks were also...
RBI also announced a revision in the repo and reverse
repo rates in October 2013 increasing it by 25 basis points
to 7.75% and 6.75% respectively.
0
5,000
10,000
15,000
20,000
25,000
Points
Sensex
Source: www.bseindia.com
Q4 2013
Strategic Advisory Group | Page 1
INDIA: ECONOMIC INDICATORS
Headline inflation eases; Rupee recuperates against the US Dollar
India's Gross Domestic Product (GDP) at factor cost grew
by 4.8% during the period July-September, 2013. Finance,
insurance, real estate and business services sectors
registered a growth of 10%; electricity, gas & water supply
grew by 7.7%; and were the primary growth drivers.
The inflation rate that had been trending upwards during
2013 recorded a high of 7.5% in November 2013 and then
slumped to 6.2% in the last month of the year. This decline
was primarily due to easing of the headline inflation
(chiefly the food prices). However, the Index of Industrial
Production registered decline to -1.8% and -2.1% in
October 2013 and November 2013 respectively owing to
the poor performance of the manufacturing sector and
the lower output of consumer goods in view of the high
inflationary conditions.
The rupee value appreciated against US dollar during
October-December, 2013. This was largely on account of
the Reserve Bank of India (RBI) interventions and capital
controls coupled with comparatively better trade
numbers, leading to the stabilization.
Widening of home loan slabs likely to boost demand
Moreover, the banks were also observed to increase their
Prime Lending rates. A major move was State Bank of
India (SBI), India's largest lender, widening its home loan
slabs and also providing an additional concession for
women borrowers. The widening of the home loan slabs
will be beneficial for both the developers and the
customers' thereby augmenting the demand, which has
been curtailed in view of the high price points.
Table 2: Home Loan Interest Rates of SBI
Loan Amount Base Rate (p.a)
Upto INR 75L
INR 75L & Above
10.00%
10.00%
*Source: www.sbi.co.in
Effective Rate (p.a)
10.15%
10.30%
Sensex soars with return of investors
The quarter was characterized by positive sentiments
with return of investors. The Sensex peaked to an all-time
high of 21,483.74 in December 2013. Foreign Institutional
Investors have been the major drivers with most
investments in blue chip stocks. Moreover, with the RBI
maintaining the repo rates in its Mid Quarter Monetary
Policy Review in December, 2013; the overall sentiment
was quite optimistic, citing signs of recovery.
1
Figure 2: Performance of BSE Sensex
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
Poin
ts
Figure 1: GDP, Inflation & Index of Industrial Production
Pe
rce
nta
ge (
%)
-4
-2
0
2
4
6
8
10
Jul/
12
Au
g/1
2
Sep
t/1
2
Oct
/12
No
v/1
2
Dec
/12
Jan
/13
Feb
/13
Mar
/13
Ap
r/1
3
May
/13
Jun
/13
Jul/
13
Au
g/1
3
Sep
t/1
3
Oct
/13
No
v/1
3
Dec
/13
Inflation GDP IIP
Source: www.tradingeconomics.com, www.economictimes.com
Table 1: Key Policy Rates
Key Rates OCT-13 NOV-13 DEC-13
PLR*
Repo Rate
Reverse Repo Rate
CRR
14.45%
7.75%
6.75%
4.00%
14.75%
7.75%
6.75%
4.00%
14.75%
7.75%
6.75%
4.00%
*Source: www.rbi.org.in, www.sbi.co.in
According to Manpower Employment Outlook Survey “Net Employment
Outlook” figure is derived by taking the percentage of employers anticipating
total employment to increase and subtracting from this the percentage
expecting to see a decrease in employment at their locations in the next quarter.
Strategic Advisory Group | Page 2
The realty index, on the other hand, registered over 30%
decline since the beginning of the year. Moreover, the
inflationary conditions in the economy accentuated the
discomfort levels, thereby, restraining any upward
movement in the real estate stocks. The Indian realty
markets too became riskier for investors to park their
funds, hence the quarter witnessed cautious investors
keen to invest in stable markets and select projects for
safer returns.
Business Optimism Index Increases to an 11-quarter high
0
500
1,000
1,500
2,000
2,500
Points
Realty Ind ex
Source: www.bseindia.com
Q4 2013
0
10
20
30
40
50
60
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Percentage
Net Employment Outlook
Source: Manpower India, Q1 2014
1
Dun & Bradstreet Composite Business Optimism Index
was recorded at 157.2 (11-quarter high) for Q1 2014,
about 16.6% increase compared to the previous quarter.
The year-on-year increase was about 7.1%. The increase
in business optimism is to some extent on account of the
expectation of political stability coupled with certainty on
the policy front as the Cabinet Committee on Investment
cleared a number of large projects thus indicating revival
of the investment cycle.
23
33
33
27
30
29
31
23
38
38
30
35
31
38
0 10 20 30 40
Transportation & Utilities
Wholesale & Retail Trade
Mining & Construction
Public Administration & …
Services
Manufacturing
Finance, Insurance and Real Estate
Percentage (%)
Seasonally Adjusted Outlook Net Employment Outlook
Source: Manpower India,Q1 2014
As per Manpower Outlook Survey India report, Net
Employment Outlook for Q1 2014 stands at 29%. The
hiring plans weakened by 11% compared to the previous
quarter; however, 6% growth is observed on a year-on-
year basis. The hiring plans are most optimistic in West at
36%, closely followed by the North region at 35%. Net
Employment Outlook in South and East regions were
reported at 34% and 30% respectively. Hiring prospects
declined in all seven industry sectors compared to the
previous quarter. Highest Net Employment Outlook was
recorded in the Wholesale & Retail Trade and the Mining
& Construction sector.
Figure 3: Performance Of BSE Realty Index
1
Figure 5: Net Employment Outlook: Sector Wise Comparison
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
Figure 4: Net Employment Outlook 1
Poin
ts
Perc
enta
ge
Strategic Advisory Group | Page 3
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
As per Department of Industrial Policy & Promotion,
Government of India; the total Foreign Direct Investment
(FDI) inflows was recorded at approximately USD18,080
million during the period January-October, 2013; a decline
of about 12% when compared to the same period in the
previous year. FDI in the construction development sector
too registered significant decline by about 54% at USD 944
million. This can be attributed to the cautious investor
attitude across the globe in anticipation of recovery in the
US economy, stringent capital control mechanism in light
of the prevalent macro-economic instability and high
inflationary conditions, among others.
Private Equity deals closed in the real estate sector during
the period October-December, 2013 were primarily in the
residential asset class. High-end as well as affordable
projects witnessed PE investment.
As per VCC Edge, preliminary data on PE Investments in
real estate declined to USD1.29 billion during 2013 as
against USD1.66 billion in 2012. Total deals closed during
the year 2013, too declined to 45 in number from 60 deals
in 2012.
Table 3: Key PE Investments in Real Estate Sector, Q4 2013
PE Firm Developer Project Location Amount (In $ Million)
ICICI Prudential PMS RE Portfolio & Co-investor
Aditya BirlaReal Estate Fund
Relience PMS
Avenue VentureReal Estate Fund
Wadhwa Group
TATA Housingand Sidhartha Group
Vasthushodh Projects
Supertech
Residential
Residential
Residential
Residential
Mumbai
Gurgaon
Noida
Pune
24
20.3
14.4
6.5
Table 4: Key PE Exits in Real Estate Sector, Q4 2013
PE Firm Developer Project/Stake LocationInternal Rate of Return (In %)
Landmark Group Wave Group Hi Tech City Ghaziabad 0.32
FDI in Real EstateUSD 1.29 Billion PE Investments in Real Estate in 2013
INDIA REAL ESTATE MARKETOVERVIEW
19.1 million sqft space take-ups vs supply of 21 million sqft across thefour major cities
Irrespective of the slowing of the economy, the real estate
sector across Bangalore, Chennai, Hyderabad and
Mumbai exhibited impressive performance with total
office space absorption at 19.1 million sqft. Overall supply
was at 21 million sqft. All the four major cities followed a
similar trend with proportionate split of supply and
absorption. Bangalore recorded the highest supply at 42%
followed by Mumbai at 32%. Supply remained subdued in
Hyderabad on account of the wait-and-watch policy
adopted due to the uncertainties in the political space.
This resulted in slowdown in the pace of construction and
the launch of new projects. In the space take-up segment
too, Bangalore led, registering 44% of the total
absorption, closely followed by Mumbai.
Approximately, 2.4 million sqft of office supply was
recorded across all the four major cities during Q4 2013.
Absorption was at 4.9 million sqft. Rentals across most
micro-locations remained stable during Q4 2013 barring
some fluctuations in Chennai's CBD and Off CBD markets.
New mall supply during Q4 2013 was recorded at 0.78
million sqft across two mall developments in the cities of
Chennai and Hyderabad. In total, 9 malls approximating to
6.8 million sqft became operational during 2013 across
Chennai, Hyderabad and Mumbai. Quite a few malls were
scheduled for launch in Bangalore during 2013; however,
the entire supply was deferred to 2014. Mumbai recorded
the highest mall supply in 2013 amongst the four major
cities, with 3.4 million sqft (in 4 mall developments).
0
2
4
6
8
10
12
Bangalore Chennai Hyderabad Mumbai
in
million
sqft
Supply 2013 Absorption 2013
Figure 6: Supply and Absorption of Office Space in 2013
Mall supply at 6.8 million sqft
RETAIL
0
1
2
3
4
5
6
7
Bangalore Chennai Hyderabad Mumbai
in million sqft
2013 (A) 2013 (E)
Major retail giants like Carrefour, Metro Cash & Carry,
Starbucks and luxury automobile retailer –Lamborghini
among others to expand their operations during the year.
Rentals, however, remained stable across both malls and
high streets - registering minor fluctuations in select
locations.
OFFICE
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
Strategic Advisory Group | Page 4
(In
mill
ion
sq
ft)
Figure 7: Supply and Absorption of Mall Space in 2013 (Actual v/s Estimate)
(In
mill
ion
sq
ft)
73,350 Units launched in 2013
During Q4 2013, total new unit launches across Bangalore,
Chennai and Hyderabad were at 12,929 units. The year's
total stood at 73,350 units with Bangalore accounting for
62% of the launches followed by Chennai at 21% and
Hyderabad at 14%. Most of the new project launches
across the three major cities were in the mid and premium
segment category.
In Bangalore, most of the launches were observed to be in
North Bangalore micro-location closely followed by
Whitefield and Sarjapur. Chennai witnessed most of the
activities in the OMR, GST and NH-4 locations while
Hyderabad's Gachibowli and Madhapur registered most of
the launches. Capital values across the major cities were
observed to remain stable during the quarter.
RESIDENTIAL
Strategic Advisory Group | Page 5
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
Micro Location
CBD
SBD
ORR
PBD
90-110
70-75
48-55
26-28
80-85
60-65
40-50
20-24
Rental Values (INR/sqft/Month)Grade A Grade B
Bangalore North 45-55 35-40
BANGALORE
Office space absorptions at 1.8 million sqft; Major retailer expansions & residential launches mostly in mid to premium category
Infusion of fresh office space in Bangalore was recorded at
1.6 million sqft of which approximately 0.6 million sqft
was in the SEZ space. Almost 86% of the new supply
delivered during Q4 2013 has already been leased
out/committed. Whitefield and Electronic City accounted
for 48% of the new supply followed by the SBD at 28%.
Approximately 1.8 million sqft absorption was recorded
during Q4 2013 taking the total absorbed space in the city
in 2013 to 8.4 million sqft. ORR recorded almost 53% of
the absorption at 0.96 million sqft. Couple of significant
deals in the range of 150,000-300,000 sqft accounted for
about 58% of the absorptions. Most of the transactions in
CBD and SBD locations were in the range of 10,000-20,000
sqft. Interestingly, absorption recorded during the quarter
was primarily in Grade A developments. Rental values
across all micro-markets remained stable.
Strategic Advisory Group | Page 6
OFFICE
Table 5: Bangalore Office Rental Values , Q4 2013
With no new mall being operational during the quarter,
the city's retail market registered zero mall supply for the
year as a whole. Quite a few malls were scheduled to
become operational during the year; however, were
deferred to 2014. Leasing activities were mainly confined
to the high streets. Demand remained vibrant for high
street locations in New BEL Road and Kamanahalli Main
Road, and rental appreciation observed to be ~3%.
RETAIL
Office rentals mentioned are for Warm Shell spaces2
2
Moreover, the established high streets of MG Road,
Brigade Road & Church Street witnessed return of retailer
demand hence reported marginal appreciation in the
rentals.
Whilst the peripheral and suburban market of Hosur Road
and Rajajinagar witnessed major big box retailers like
Metro Cash & Carry and Carrefour commencing
operations; the high streets too observed luxury
automobile retailer, Lamborghini and food & beverage
major - Starbucks unveiling their first store in the city.
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
130
150
High Streets
Brigade Road
Commercial Street
Church Street
MG Road
Mall Spaces
*(INR/sqft/Month)
RentalValues
Sampige RoadMalleswaram
New BEL Road
ORR (Marathalli -Sarjapur Junction)
Bannerghatta Road
Jayanagar 11th Main Road
Indira Nagar 100 Feet Road
KamanahalliMain Road
Yelahanka Main Road
350
185
440
485
180
200
120
140
320
250
515
330
240
255
235
175
100
95
100
Magrath Road
Cunningham Road
Koramangala
Vittal Mallya Road
Whitefield
Bannerghatta Road
Mysore Road
RajarajeshwariNagar
Rajaji Nagar
Malleswaram
285
Table 6: Bangalore Retail Rental Values , Q4 2013
*RentalValues*
Central
26-28
7,000 - 25,000
20-24
Micro-Location Capital Values (INR/sqft)
Table 7: Bangalore Office Rental Values , Q4 2013
Off-Central
Bannerghatta Road
Hosur Road
Sarjapur Road
Whitefield
Bangalore North
Tumkur Road
Mysore Road
Kanakapura Road
Old Madras Road
5,000 - 11,000
2,100 - 6,300
3,300 - 5,290
4,000 - 9,000
4,000 - 8,000
3,800 - 11,500
2,800 - 5,000
4,200 - 6,600
2,100 - 6,300
3,000 - 6,000
Company Building Micro Location Location Developer
Syniverse Technologies Embassy Tech Square PBD ORR
Rajajinagar
Whitefield
1,50,000
60,000
32,000
28,000
25,000
Area (In sqft)
ABB
Nova Nordisk
CSC
Caterpillar
World Trade Centre
Neil Rao Towers
Global Research Triangle
Prestige Shantiniketan
Embassy Group
Brigade Group
Rao Computers
Bearys Group
Prestige Group
PBD
PBD
PBD
PBD
Whitefield
Whitefield
Strategic Advisory Group | Page 7
2
Approximately 7,640 units were launched during Q4 2013.
Whitefield accounted for a major share closely followed
by Sarjapur Road. Most of the new launches were
observed in mid and premium category projects and was
in apartment developments. Capital values, moreover,
remained stable as per the previous quarter figures. .
RESIDENTIAL
Micro Location Capital Values (INR/sqft/Month)
Central
Off Central
Bannerghatta Road
Hosur Road
Sarjapur Road
Whitefield
Bangalore North
Tumkur Road
Mysore Road
Kanakapura Road
Old Madras Road
7,000-25,000
5,000-11,000
2,100-6,300
3,3,00-5,290
4,000-9,000
4,000-8,000
3,800-11,500
2,800-5,000
4,200-6,600
2,100-6,300
3,000-6,000
Table 8: Bangalore Residential Capital Values , Q4 2013
Retail rental values mentioned are for Ground floor store of 1,000 sqft on
carpet with an efficiency of 80% for high streets and 65% for malls.
3
3
Table 9: Bangalore - Key Office Lease Transactions, Q4 2013
Table 10: Bangalore - Key Residential Project Launches, Q4 2013
Project Developer Location Type No. of Units
Prestige Lakeside Habitat Prestige Constructions Whitefield Apartments 3,426
Brigade Cosmopolis
New Life
Brigade Group
LGCL
Whitefield
Sarjapur Road
Apartments
Villa
880
104
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
CHENNAI
0.9 million sqft of office space absorption; Peripheral locations accounting for major retail and residential expansion
Chennai's commercial office market witnessed
approximately 0.9 million sqft of absorption taking the
years' total to 3.1 million sqft. SBD accounted for almost
37% of the absorption, closely followed by PBD at 35% and
off-CBD at 25%. Almost 57% of the total number of deals
transacted was small-to-mid size transactions in the range
of 10,000-25,000 sqft.
Supply remained subdued at 0.2 million sqft; mostly
confined to the PBD location. Moreover, the year as a
whole witnessed approximately 3.5 million sqft infusion
of fresh stock.
Rentals in SBD and PBD remained stable. Fluctuations
were observed in CBD - a decline, on account of high
vacancy levels and off CBD – an increase, primarily due to
limited infusion of new supply, persistent demand and
good absorption levels.
Strategic Advisory Group | Page 8
OFFICE
Vibrancy persisted in the city's retail market with another
new mall (0.35 million sqft) becoming operational with
high occupancy levels in the Velachery micro-market.
Demand was observed across retail segments but
primarily comprised of apparel and personal care retailers.
RETAIL
Office rentals mentioned are for Warm Shell spaces4
In view of significant mall supply during the year, no
appreciation in rentals were observed across both malls
and high streets to capitalize on the demand. Newer
locations in the peripheral markets with good catchments
were observed to garner increased retailer interests.
Micro Location
CBD
Off CBD
SBD
OMR
70
65
40
30
60
40
30
18
Rental Values (INR/sqft/month)Grade A Grade B
35-25 -
Table 11: Chennai Office Rental Values , Q4 20134
PBDGST
175
135
High Streets
Khadar Nawaz KhanRoad
RK Salai
Usman Road South
Mall SpacesValues*
*(INR/sqft/Month)
Values*
Adyar Main Road
Anna NagarSecond Avenue
Pondy Bazaar
Velachery
300
175
175
230
375
230
200
200
155
125
130
100
80
Whites Road
RK Salai
Mount Road
Nelsan Manickam Rd
Velachery
Vadapalani
185
Table 12: Chennai Retail Rental Values , Q4 20135
Usman Road North
Nungambakkam High Road
PurusuvakamHigh Road
Chennai registered approximately 4,300 new unit
launches during the fourth quarter of 2013, closing the
annual total at 15,000 units. The peripheral locations
accounted for approximately 90% of the total project
launches. Peripheral markets of OMR, GST Road and NH-4
witnessed maximum launches. Most of the new projects
launched were apartment developments in the mid and
premium segment category within the price band of INR
25-50 lakhs and INR 50 lakhs - 1 crore respectively. Capital
values, however continued to remain stable.
RESIDENTIAL
Retail rental values mentioned are for Ground floor store of 1,000 sqft on
carpet with an efficiency of 80% for high streets and 65% for malls
5
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
Rental Rental
Micro Location Capital Values (INR/sqft)
Central
Off-Central
OMR
GST
NH-4
10,000-26,000
4,500-12,000
5,000-6,000
3,500-5,000
2,500-4,500
Table 13: Chennai Residential Capital Values, Q4 2013
Strategic Advisory Group | Page 9
Company Building Location Developer
Capegemini Cyber Towers Shollinganallur
Manapakkam
Taramani
3,00,000
73,187
70,000
Area (In sqft)
Societe Generale
INautix
DLF - 3
Ascendas ITPC
Prestige Constructions
DLF
Ascendas
Table 14: Chennai – Key Office Lease Transactions, Q4 2013
Table 15: Chennai – Key Residential Project Launches, Q4 2013
Project Developer Location Type No. of Units
Castle Color Homes Perumpakkam Apartments 92
Costa
Lanterns Court
VGN
Casa Grande
East Coast Road
Thoraipakkam
Apartments
Apartments
87
32
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
HYDERABAD
Absorptions at 1.2 million sqft and persistent retailer demand irrespective of political uncertainties
Hyderabad was characterized by a meager supply of 0.2
million sqft. Quite a few prominent developments were
expected to be delivered during the quarter, however,
were deferred to Q1 2014. New supply was concentrated
in the SBD and PBD locations.
Absorptions registered buoyancy with approximately 1.2
million sqft take-ups totaling to 2 million sqft. Peripheral
micro-locations accounted for 95% of the total
absorption. During Q4 2013, a handful of large deals
accounted for almost 78% of the absorption. However,
most of the deals transacted during the quarter were
small-to-mid size transactions in the range of 10,000-
45,000 sqft.
Irrespective of good uptake, rentals remained stable to
capitalize on the demand that has been comparatively
subdued pertaining to the state's territorial division and
consequent fall-out of the same.
Strategic Advisory Group | Page 10
OFFICE
During the quarter in review, the city's retail market
continued to witness increased demand and interests
from both national and international retailers across
segments. Department stores, lifestyle brands and food &
RETAIL
Office rentals mentioned are for Warm Shell spaces6
Micro Location
CBD
SBD
PBD (West)
PBD
45-55
55-60
36-42
22-28
40-45
40-50
28-35
16-22
Rental Values (INR/sqft/month)Grade A Grade B
Table 16: Hyderabad Office Rental Values ,Q4 2013 6
New unit launches remained subdued at approximately
935 units in the last quarter, thereby totaling the annual
launch figure to 10,000 units for the year 2013. Most of the
new project launches were apartment developments in
the premium category and was concentrated in the
peripheral markets. No change in capital values was
observed across the city's various micro-locations.
RESIDENTIAL
Retail rental values mentioned are for Ground floor store of 1,000 sqft on
carpet with an efficiency of 80% for high streets and 65% for malls
7
beverage retailers were keen to commence or expand
their operations in the city. Though the peripheral market
of Kukatpally witnessed a major mall (0.4 million sqft)
becoming operational, marginal scarcity of suitable
options was observed resulting in escalation in the rentals
across select high street locations. Leasing however,
continued across both high streets as well as in the
upcoming malls. Retailers were also observed to seek
options in newer peripheries/locations with moderately
good catchments and reasonable rentals. Moreover,
consumers' demand remained persistent, irrespective of
the uncertainties in the political space; thereby
ascertaining the city's positioning to be a substantially
attractive location for retailers.
110
150
High Streets
Banjara Hills Road 1
Banjara Hills Road 2
Mall Spaces Values*
*(INR/sqft/Month)
Values*
AS Rao Nagar
Jubilee Hills Road 36
Kukutpally
230
270
280
156
125
185
170
135
135
NTR Gardens
Banjara Hills
Madhapur
175
Table 17: Hyderabad Retail Rental Values , Q4 2013 7
Panjagutta
Madhapur
Begumpet
MG Road
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
Rental Rental
Company Building
Value Labs H-02, Avance Hub
Infotech
PwC
ARENA
MB Towers
Location Developer
Hi-Tech City
Uppal
Banjara Hills
4,00,000
1,50,000
18,000
Area (In sqft)
Phoenix
NSL
Ind. Developer
Strategic Advisory Group | Page 11
Micro Location Capital Values (INR/sqft)
Banjara Hills
Jubilee Hills
Himayath Nagar
Maredpally
Begumpet, Somajiguda
Madhapur, Gachibowli
Kukatpally
4,000-8,500
4,000-8,000
3,000-4,500
3,000-5,000
3,000-5,000
3,000-6,000
3,000-4,000
Table 18: Hyderabad Residential Capital Values, Q4 2013
Table 19: Hyderabad – Key Office Lease Transactions, Q4 2013
Table 20: Hyderabad – Key Residential Launches, Q4 2013
Project Developer Location Type No. of Units
Ramky Kosmos Ramky Group Tellapur Apartments 466
Mantri Euphoria Mantri Developers Manikonda Apartments 151
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
MUMBAI
Office space leasing at 1 million sqft; Retail demand skewed towards mallprojects
Mumbai witnessed supply at 0.35 million sqft during the
quarter; which was the least compared to the previous
quarters. Total supply in Mumbai during the year
approximated to 6.7 million sqft. Almost 60% of the total
supply was delivered in the first quarter of 2013 that
mostly comprised of deferred supply of 2012.
Meanwhile, absorption was recorded at 1 million sqft.
Suburban micro-locations accounted for a significant
share. This was primarily on account of the comparatively
good rentals and also availability of quality space options.
Moreover, the total absorption for the year as a whole
were recorded at 5.6 millions sqft. Rental values across all
the micro-locations remained as per the previous quarter
numbers.
Strategic Advisory Group | Page 12
OFFICE
No new mall became operational in Mumbai during the
quarter in review. Leasing activities across categories
persisted in the city's retail market in view of steady
consumer demand. Demand for retail space was observed
to be inclined towards mall projects on account
RETAIL
Office rentals mentioned are for Warm Shell spaces8
Micro Location
CBD
Western Suburbs
275-320
170-260
280-340
Rental Values (INR/sqft/Mnth)Grade A
Table 21: Mumbai Office Rental Values ,Q4 2013 8 Retail rental values mentioned are for Ground floor store of 1,000 sqft on
carpet with an efficiency of 80% for high streets and 65% for malls
9
of quality mall developments in strategic locations.
Additionally, the comparatively high rentals quoted across
the high streets further enhanced the demand for mall
projects.
Micro Location
BKC
Western Suburbs
Mall Rental Value*
*(INR/sqft/Month)
High StreetRental Value*
Navi Mumbai
650
700
450
400
250
225
Table 22: Mumbai Retail Rental Values , Q4 2013 9
Eastern Suburbs
Linking Rd - Juhu
South Mumbai
Eastern Suburbs
Navi Mumbai
BKC
SBD
60-110
90-150
50-120
650
-
-
300
170
170
Leasing however, continued in the high streets with
retailers like Puma, Clarks and Vijay Sales among others
opening their outlets.
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
OUTLOOK
As per Reserve Bank of India, GDP growth for 2013-14 is
likely to fall below 5% owing to the continued poor
performance of the manufacturing sector. Expectations
for the financial year 2014-15 remain conservative with
GDP growth projections at 5.5%. If the projects cleared by
the Cabinet Committee on Investments translate into
investments, a positive growth in the economy can be
expected provided inflation eases and the global economy
revives. Rupee value can slide further if investors chose to
withdraw investments and surge into the US markets in
wake of economic recovery. In case the inflation comes
down, investments in India are likely to be less riskier. This
would ensure continuous inflow of investments to the
country and eventually translate into higher growth and
investor confidence.
The demand in residential sector is anticipated to gain
momentum owing to the widening of the home loan slabs
and reduction in the interest rates offered by various
banks. In the backdrop of spiraling property prices across
all the cities, the end consumers' investment plan has
been drastically hit due to affordability issues. With the
slabs widened, consumers will be able to stretch their
budget further; thereby properties that were earlier
beyond stipulated budget will now be within their ambit.
Property prices are expected to remain stable in the
short term and new launches are anticipated to be at
more realistic prices.
In the retail domain, most retailers including the foreign
entrants will seek ambiguity related to FDI resolved.
Although, sudden thrust of retailers' expansion is not
likely, most entries will be systematically phased.
With rentals already at comparatively high levels, any
drastic increase is ruled out. Retailers are expected to
venture into newer locations with good catchments and
reasonable rentals.
The mall concept is already undergoing significant
transformations and is likely to undergo further
refinement with more structured developments and
unviable projects either refurbishing its model or exiting
the scene.
Strategic Advisory Group | Page 13
In the commercial office space sector, absorption will be
higher in the initial quarters of 2014 on account of spill
over of year end deals from 2013. Demand is likely to
remain positive in 2014.
Office rentals too will remain stable. Moreover,
developers are expected to align their supply line–up in
accordance with the absorption in the market.
With the benefits for operating from SEZ developments
phasing out, new absorptions will continue, however, they
will be at par with other business / IT parks. Rentals in
these developments too, will remain stabilized.
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
Strategic Advisory Group | Page 14
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
OFFICE: LOCATION MASTER
City Metro Location Location
Bangalore
CBD
SBD
ORR
PBD
M.G. Road, Kasturba Rd, Lavelle Rd, V.M. Rd, Ulsoor Rd,
Indiranagar, Koramangala, Inner Ring Rd, Old Airport Rd,
Stretch from Hebbal to Silk Board junction
Whitefield, Electronics City, Mysore Rd, Bellary Rd,
Chennai
CBD
Off CBD
SBD
Hyderabad
CBD
SBD
PBD (West)
PBD
Begumpet, Somajiguda, Raj Bhavan Rd and SP Rd
Banjara Hills, Jubilee Hills
Mumbai
Off CBD
BKC
Western Suburbs
Eastern Suburbs
PBD
Bangalore North
OMR
GST
CBD
Navi Mumbai
Bannerghatta Rd
Sarjapur Rd
Bellary Rd ( Hebbal to BIAL)
Ambattur, OMR (Tharamani to Perungudi Toll)
OMR (Perungudi Toll, Thoraipakkam, Shollinganallur,
Velacherry, Guindy, Mt. Poonamallee Rd, OMR (Madhya Kailash to Tharamani)
Siruseri, Padur)
Shriram, L&T Estancia, Mahindra World City
Anna Salai, Cathedral Rd, Dr. R. K. Salai, Nungambakkam, T Nagar, Alwarpet & Egmore
Madhapur, Gachibowli, Raidurgam, Manikonda, Hi-Tech City
Pocharam, Uppal, Shamshabad
Fort, Church Gate, Cuff Parade, Colaba
Worli, Lower Parel, Prabhadevi
Bandra Kurla Complex
Andhei, Goregaon, Malad
Vikhroli, Powai, Mulund, Thane
Vashi, Belapur
Residency Rd, Infantry Rd
Strategic Advisory Group | Page 15
CONNECTVESTIAN QUARTERLY NEWSLETTER Q4 2013 An ISO 9001:2008 Certified Company
RESIDENTIAL: LOCATION MASTER
City Metro Location Location
Central
Off Central
ORR (Marathalli-Silk Board Jn) & Sarjapur Rd
Old Madras Rd
Bangalore North
Kanakapura Rd
Tumkur Rd
Chennai
Off Central
Whitefield
Hosur Rd
Banneraghatta Rd
CentralBoat Club Rd, Poes Garden, Besant Nagar, Annanagar, T. Nagar, RA Puram
Vadapalani, Saligramam, KK Nagar, Porur, Ambattur, Pallavaram, Medavakkam
Madhya Kailash, Perungudi, Thoraipakkam, Sholinganallur, Navalur
Tambaram, Vandalur, Potheri, Guduvancherri, Mahindra World City
Poonamallee to Sriperumbudur
Bangalore
OMR
GST
NH-4
Indiranagar, Koramangala, Jayanagar, JP Nagar, Malleswaram, RMV Extension, Sanjay Nagar, RT Nagar
HSR Layout, ORR (Marathalli - Silk Board Junction), Sarjapur Rd, Haralur Main Rd, Kasavanahalli Main Rd
Whitefield, Brookefield, Mahadevpura, ORR (K.R.Puram to Marathahalli), Varthur RdK.R. Puram, Ramamurthy Nagar, Battarahalli, Sonnenahalli, Hirandahalli, Budigere, Devanahalli-Hoskote Rd
Hosur Main Rd, Electronics City, Neeladri, Chandapura, Anekal
Bannerghatta Rd, Begur, BTM Extention
Mysore Rd, Kengeri Satellite Town, Vijayanagar, Magadi Rd, RR Nagar
Kanakapura Main Rd, Banashankari Extension and Uttarahalli
Tumkur Rd, Rajajinagar, Hesarghatta, Jalahalli, HMT Township, Yeshwantpur
Mysore Rd
MG Rd, Kasturba Rd, Brunton Rd, Lavelle Rd, Richmond Rd, Residency Rd, Frazer Rd, Cox Town and Hanes Rd
Banaswadi, HRBR Layout, Hennur Rd, Thanisandra Main Rd, Bellary Rd, Yelahanka, Kogilu, Chokkanahalli, Bagalur Rd, Doddaballapur Rd, New Town Yelahanka, Jakkur