NTCC REPORT

ON

VALUATION OF A NON-GREEN BUILDING (EROS CORPORATETOWER) IN COMPARISON TO A GREEN BUILDING (GREEN

BOULEVARD) LOCATED IN NOIDA MBA-REUI

2013-2015

To

RICS School of Built Environment

By

Akash Gupta

(A13558913055)

Under the guidance of

Prof. Saurabh Verma

In Partial Fulfillment of the Requirements for the Degree ofMaster of Business Administration

AtRICS SCHOOL OF BUILT ENVIRONMENT

AMITY UNIVERSITY UTTAR PRADESHSECTOR 125, NOIDA – 201303, UTTAR PRADESH, INDIA

DECLARATION

I hereby declare, this Dissertation Report “Valuation Of A Non Green

Building In Comparision With A Green Building” which is submitted

for partial time fulfillment of the requirement for the award of degree of

Masters of Business Administration (MBA)-Urban Infrastructure and

Real estate to RICS School of Built Environment, Amity University as

my own work and no part of my report has been copied from other

reports or directly from websites except where due reference has been

made.

AKASH GUPTA MR. Saurabh Verma Roll Number –A13558913055 (Faculty Guide)MBA (REUI)Batch 2013-2015

3

ACKNOWLEDGEMENT

First of all, I would like to thank almighty, whose generous blessings made the

internship a success and I want to thank my supportive parents from whom I learned

the value of writing succinct sentences.

I am very thankful to my Faculty Mentor- Mr. Saurabh Verma for giving me an

opportunity to carry out dissertation on “Valuation Of A Non Green Building

In Comparision With A Green Building”

Last but not the least; I would like to thank all the interviews and respondents

without whom it was impossible to complete my research.

AKASH GUPTA MR. SAURABH VERMARoll No. A135589113055 (Faculty Guide)MBA (REUI)Batch 2013-2015

4

CERTIFICATE

This is to certify that the dissertation done on “Valuation Of A Non

Green Building In Comparision With A Green Building” submitted to

RICS School of Built Environment, Amity School by Mr. AKASH GUPTA

a student of post graduate Degree in MBA (REUI), Batch 2013-2015), is

the student’s own work carried out under my supervision. The matter

present in this dissertation report has not been submitted anywhere else for

the award of any other degree.

AKASH GUPTA MR. SAURABH VERMARoll No. A135589113055 (Faculty Guide)MBA (REUI)Batch 2013-2015

5

Table of ContentsGreen Buildings & India............................................................................................................8

Introduction..........................................................................................................................8

The Growing Crises...............................................................................................................9

Green Rating Systems.........................................................................................................11

Green Buildings in India......................................................................................................12

Costs & benefits of Green Buildings in India.......................................................................13

Cost Premium of Green Buildings.......................................................................................14

Paharpur Business Centre......................................................................................................16

PRODUCTIVITY ANALYSIS.......................................................................................................17

Valuation............................................................................................................................22

Eros Corporate Tower............................................................................................................23

Productivity Analysis..............................................................................................................24

Location Analysis................................................................................................................27

Valuation................................................................................................................................30

Comparative Analysis.............................................................................................................31

Conclusion..............................................................................................................................32

6

Figure 1: Constituent parts of Sustainability.............................................................................5Figure 2: Performance of Green Buildings in India...................................................................9Figure 3: Paharpur Business Centre........................................................................................11Figure 4: Location Map of Paharpur Business Centre.............................................................12Figure 5: Catchment Areas of Paharpur Business Centre.......................................................13Figure 6: Eros Corporate Tower..............................................................................................14

7

Green Buildings & India...

Introduction

The tremendous growth in economic activity across the globe is placing pressure on

natural and environmental resources. There is increasing evidence that human

activities are causing an irreversible damage to the global environment, which will

have an adverse impact on the quality of life of future generations. The rising

concern for the environment in response to global warming is driving thinkers to

seek sustainable solutions.

The real estate industry is a significant contributor to the global warming due to

extensive emissions of greenhouse gases (GHGs) from the energy use in buildings. In

some countries, the built environment accounts for about 40% of the energy used.

Therefore, there is an imperative for the industry to develop sustainable building

technologies and green buildings.

The construction industry in India is growing rapidly at a rate of 10% compared with

the world average of 5.2%. It is observed that buildings in India consume about 20%

of the total electricity in the country. Hence, real estate activity in India has a

significant impact on the environment and resources. This indicates that there is a

real opportunity to develop green buildings in the country.

However, developers face a major challenge in the development of green buildings

as in some cases this increases construction costs. Developers find it difficult to opt

for green buildings due to price constraints, difficulty in sourcing green building

materials, technologies and service providers or facilitators in India.

8

The Growing Crises

Global warming is the increase in the average measured temperature of the Earth’s

near-surface air and oceans since the mid-20th century. Global warming can cause a

20% recession in the world’s GDP as this phenomenon increases the possibility of

occurrence of natural disasters altering the world’s GDP. It threatens the melting of

glacial ice, increasing the seawater level and causing devastating effects on the

coastal world. It is learnt that GHGs, which are produced and emitted due to human

activity, are responsible for global warming.

The world is taking action in addressing the issues leading to global warming. The

first step in this regard was the United Nations Framework Convention on Climate

Change (UNFCCC) treaty in 1992. UNFCCC was formalised as the Kyoto Protocol on

11 December 1997, with the objective of reducing GHG emissions to prevent the

man-made global warming process. The Kyoto Protocol aims to be a holistic

guideline restricting and reducing emissions in developed countries and at the same

time facilitating emission reduction in the developing world. GHG emission in

developed countries is capped with a fixed quota. However, if countries or

companies exceed their quota of emission, they can still earn carbon reduction

credits either by buying credits in the international carbon credit market and/or

through clean development mechanisms (CDMs).

Global warming can cause a 20% recession in the world’s GDP as

this phenomenon increases the possibility of occurrence of

natural disasters altering the world’s GDP

The framework provided by UNFCCC has revived the concept of sustainability and

placed the focus squarely on GHGs emissions. It has also given a fillip to the green

industry movement such as renewable energy production and the efficient usage of

energy resources and other resources.

9

Sustainable Real Estate Development & Green Buildings

Sustainable development is defined as ‘Meeting the needs of the present generation

without compromising the ability of future generations to meet their needs’.

The field of sustainable development can be conceptually broken into three

constituent parts - social sustainability, environmental sustainability and economic

sustainability (Figure 1). The performance of the industrial economy has always been

measured through single bottom-line (financial) results. However, striking a balance

between environmental, social and economic performance is a key to achieving

sustainable outcomes. This has given rise to the concept of triple bottom line.

The real estate industry is one the major

energy consumers and GHG emitters.

According to a report by the

Intergovernmental Panel on Climate Change

(IPCC) in 1996, the real estate industry is

expected to consume 38% of the global

energy and emit 3,800 mega tonnes of GHGs

every year. This does not include the usage of

other resources such as water. Therefore, the increasing crises of global warming,

depleting resources and consumer pressures have pushed the agenda of

sustainability in the real estate sector.

Growing human activity has increased the concern for sustainability even more in

recent times. Sustainability in the real estate context is not only limited to energy

conservation, but also includes resource usage, impact on the neighbouring

environment and working conditions for tenants. This concern has led to the

development of green buildings. The green building concept broadly integrates many

interests and aspects of sustainability emphasising reduction of environmental

impacts through a holistic approach to land and building uses and construction

strategies.

10

Figure 1: Constituent parts of Sustainability

A green building uses less energy, water and natural resources than a conventional

building. It also creates less waste and provides a healthier living environment for

people living inside it compared to a conventional building. Green buildings

incorporate several sustainable features such as efficient use of water, energy-

efficient and eco-friendly environment, use of renewable energy and

recycled/recyclable materials, effective use of landscapes, effective control and

building management systems and improved indoor quality for health and comfort.

Sustainability is not just limited to energy conservation, but it has

also been expanded to resource usage, the neighbouring

environment and working conditions for tenants. This concern has

led to the development of green buildings.

The overall benefits of green buildings mostly depend on the extent to which the

sustainable features are addressed during the initial planning and design. A green

building is most likely to succeed in its objective if sustainable features are

envisioned and incorporated right at the design stage. The design has to take into

consideration the entire supply chain—from material sourcing, energy modelling,

resource reuse, civic amenities & waste disposal to tenant education.

Green Rating Systems

The green building movement has led to the emergence of various green rating

systems. The predominant ones are:

11

BREEAM Building Research Establishment Environmental Assessment MethodWidely used in UK

LEEDLeadership in Energy & Environmental DesignDeveloped by US Green Building CouncilUsed in the US

Green Star

Developed by the Green Building Council of Australia and used in AustraliaNew Zealand GBC have their own version of Green Star

CASBEEComprehensive Assessment System for Building Environmental EfficiencyDeveloped by Japan Sustainable Building ConsortiumUsed in Japan

Green Mark

Used in SingaporeMandated by the Building & Construction Authority for all new development and retrofit works

NABERSNational Australian Built Environment Rating SystemManaged by NSW Dept. of Environment & Climate ChangeOnly rating system to measure ongoing operational performance

The green rating systems followed in India are:

LEED India - administered by the Indian Green Building Council (IGBC);

GRIHA - Green Rating for Integrated Habitat Assessment developed by TERI (The

Energy and Research Institute).

These tools are relatively new and have not fully evolved. There is no doubt that

more and more developers are resorting to these systems to get their buildings

certified. Rating systems provide a tool to enable comparison of buildings on their

sustainability credentials. Many occupiers and investors are using these tools as a

guide to selecting properties for lease or acquisition. Meanwhile, these systems are

also being constantly improved. Therefore, the entire green building ecosystem is

getting in place. Among all these rating systems, LEED has emerged as the most

popular and is followed across 24 countries across the globe, including India.

A green building is most likely to succeed in its objective if

sustainable features are envisioned and incorporated right at the

design stage.

Green Buildings in India

The green building movement in India started with the establishment of the IGBC in

2001, which was an initiative of the Confederation of Indian Industries (CII) along

with the World Green Building Council and the USGBC. The first green building in

India, CII-Sohrabji Godrej Green Business Centre in Hyderabad, was inaugurated on

14 July 2004. This was a great symbolic achievement. Since then, the number and

volume of green buildings in India has been phenomenal. The movement started

with 20,000 sq. ft. in 2004 and has grown exponentially, with an expected green

building footprint of 15 million sq. ft. by end-2008. There are 18 LEED certified

buildings with a total area of about 8.5 million sq. ft. and 195 projects registered for

LEED certification with a total area of about 110 million sq. ft. as of year-end 2007.

12

The real estate industry is one of the biggest emitter of GHGs in India. According to a

report by the Ministry of Power in June 2004, 20–25% of the electricity consumed in

government buildings is wasted due to inefficient design. ‘The scenario is almost the

same in the private sector.

It is heartening to know that the green building concept is widely being adopted in

the Indian real estate industry. However, efforts are not enough and a greater push

is required to make real estate development sustainable. In the next 3-4 years about

200 million sq. ft. of commercial space and 45 million of retail space is expected to

be constructed across the major cities of India which indicates that there is a great

opportunity for developers and occupiers to promote green buildings.

Costs & benefits of Green Buildings in India

In terms of appearance or use, there is no difference between green buildings and

conventional ones. The major differences are that green buildings have improved

indoor environment and they offer operational savings. Green buildings have been

observed to have tangible and intangible benefits. The tangible benefits such as the

economic advantages are not immediately visible. However, the lifetime payback is

much higher compared with that of conventional buildings, which mainly accrue

from operational cost savings, reduced carbon emission credits and potentially

higher rental or capital values.

The intangible benefits such as social advantages are due to the positive impact of

green buildings in the neighbourhood environment. Moreover, due to better

working conditions, the productivity of occupier increases and health problems

decreases.

The tangible benefits such as the economic advantages are not

immediately visible. However, the lifetime payback is much

higher compared with that of conventional buildings, which

mainly accrue from operational cost savings, reduced carbon

emission credits and probably higher rental or capital values.

13

Figure 2: Performance of Green Buildings in India

The performance of green buildings in India, as mentioned in Table 2 below,

indicates that platinum-rated buildings have a higher payback period of five to seven

years, while gold-rated and silver-rated buildings have a payback period of three to

four years. These tangible and intangible benefits define the triple-bottom-line

returns of green buildings.

Cost Premium of Green Buildings

The general sentiment among the developer community is that green buildings cost

higher than similar conventional buildings, and it is difficult to get positive returns on

this extra investment. This issue is mainly due to:

The still-evolving nature of green buildings;

The lack of technical information;

The incomplete/inefficient execution of green projects;

The short-term view on returns, instead of focusing on lifetime return on

investment (ROI) of these buildings.

In mature markets the cost premium range from 1-6%. Cost premium in India is in

the range of 6–18% (Table 2) depending on the level of rating. This can be attributed

to lack of technical know-how, immaturity of the market and lack of resources. We

foresee the cost premium in India to realign to the mature markets with the increase

in awareness and availability of resources.

Scope / Nature of Work

14

Our major objective throughout this project would remain to test the credibility and

credentials of various reports suggesting that green rated buildings accrue benefits

not only to the occupants and the environment, but also to owners of green rated

buildings. We would be working towards judging these very points and draw

conclusions based on the results we procure based on our study of the chosen

buildings in the region of Delhi NCR. Our main area of focus would remain the

owner’s perspective and his financial gains, if there are any.

The whole project entails the comparable required to compare the green building

with a conventional one. The way forward would be enlist various parameters for

comparison between the 2 buildings.

The buildings for the purpose of study have been chosen. The green building which

we are looking at is Paharpur Business Centre & the conventional buildings which

would act as comparable building is EROS Commercial Tower.

The above mentioned buildings have been visited and analysed for further research,

the facilities management team of the various buildings have been met in order to

procure the relevant information.

15

Figure 3: Paharpur Business Centre

Paharpur Business Centre

Paharpur Business Centre &

Software Technology Incubator

Park started its serviced office

business in 1990. Paharpur

Business Centre is a trusted

brand for many corporate &

multinationals. It has and is

delivering quality service to its

customers for over two

decades. It is the only business centre in Delhi meeting five international quality

standards.

Located in Nehru Place, a prime commercial centre, Paharpur Business Centre is easy

to approach.

Key Points:

Indoor Air Quality system confirms to ASHRAE Standards, ensuring fresh air in

the facility ultimately resulting to increased productivity

Accessible 24/7 and 365 days open, Business Hours: 9a.m - 7p.m (Monday to

Friday). Option available for late working, extendable to 24 hours as per

requirement

Dedicated Parking facilities for our customers

Insurance to cover immediate relocation in case of disaster (fire, earthquake,

etc.)

Paharpur Business Centre is also a signatory to UN Global Compact &

Women’s Empowerment Principles (WEP). It is a Government recognized

private STIP unit

Paharpur Business Centre is a registered Software Technology Park with

Government of India

16

PRODUCTIVITY ANALYSISCertifications-

ISO 9001:2008 for Quality Management System

ISO 14001:2004 for Environment Management System

ISO 22000:2005 for Food Safety Management System

ISO 50001:2011 for Energy Management Services

OHSAS 18001:2007 for Occupational Health & Safety

SA 8000:2008 for Social Accountability

TOTAL BUILT UP AREA 50,400 SQ.FTNO. OF FLOORS B+G+6FLOOR PLATE AREA 6300 SQ.FTLEASED UP AREA 15000 SQ.FTVACANT AREA 35,400 SQ.FTNO. OF PARKINGS 3PARKING COST 4000/CAR/MONTHCONFERENCE ROOM 20VIRTUAL OFFICE SPACE YESMEMBERSHIP CHARGES RS.4000 /LIFETIME

TENANT DETAILS

FLOOR NO TENANT NAME AREA OCCUPIED(SQ.FT)

RENT

G CAFETERIA 1500RESTURANT 2500

1ST FLIPKART 3000 RS.200/SQ.FT- 3200

2ND EMC 1500 RS.200/SQ.FTSHELL 1500 RS.200/SQ.FTHALLMARK 2000 RS.200/SQ.FT- 1300

3RD FIRELLI 6300 RS.350/SQ.FT4TH MICROSOFT 1000 RS.350/SQ.FT5TH - 6300 RS.350/SQ.FT6TH - 6300 RS.350/SQ.FT

OTHER INCOME

20 CONFERENCE ROOMS

17

4 PERSON TO 100 PERSON – RS400 / PER PERSON / PER HOUR

VIRTUAL ROOMS

PLAN 1 - RS.3000/MONTH PLAN 2 - RS.6000/MONTH PLAN 3 - RS.9000/MONTH

OPERATION AND MAINTENANCE COSTS

MAINTENANCE COST RS.100/SQ.FTSINKING FUND RS.50/SQFT/YEARINSURANCE COST RS.1 PER SQ.FT/YEARLEASE AND MANAGEMENT CHARGES RS.1/SQ.FT/YEAR

FACILITIES

TRAINING ROOM

Training room with a capacity of 15 to 20 person Equipped with state-of-the-art computers networked with AT & T, CAT 5E Cabling XGA compatible LCD projector with laser Pointer. Internet access

CONFERENCE FACILITY

My conferencetm - Capacity 6 to 25 persons Interview cabins Meeting rooms, Video conferencing, Audio conferencing, Web conferencing

OFFICE FACILITIES

Instant fully serviced offices - modules for 2 to 150 persons Combinations of modules with areas per person ranging from 50 to 200 sq. Ft .:. 1200 nodes

on LAN

COMMON AREAS

Reception Waiting area Lounges

TRANSPORTATION FACILITY

DELHI METRO CAR POOLING SERVICES DTC BUS SERVICE

18

TAXI SERVICE AUTO STAND

EXTERNAL ENVIRONMENT

6 ACRE SURROUNDING PARKS CAR PARKING ON 3 SIDES OF THE BUILDING MAIN ROAD ON THE FRONT SIDE PETROL PUMP ON THE BACK SIDE

Lighting levels

Meets lux level requirements as per DIN 5035 part 2 - International Standard Lighting conservation initiatives 5 stars rated electrical appliances are used. Installed motion sensors to control the misuse of electricity. . Replaced all the desktops with laptops. Noise level meeting IS notification in respect of noise as per the gazette of India extraordinaire

of Feb 14, 2000. LEDs use only 2-10 watts of electricity (1/3rd to 1/30th of Incandescent or Compact

Fluorescent Lights) and last up to 10 times as long as CFL's. • Replaced CFLs with LED lights.

• Upgraded HVAC, electrical system and cooling towers that have a payback period of 8-14 years.

Noise level

Meets Indian standard notification in respect of noise, as per the Gazette of India extraordinary of Feb. 14, 2000

Security & Fire Safety

24 hours security on each floor. Access control and screening of all visitors. Closed circuit TV security systems. Fire clearance certificate from Delhi Fire Department. Fully automatic fire alarm system, smoke sensors, firefighting equipment Staff trained in the use of fire fighting and

evacuation procedures. Special diesel engine driven pump for fire wet riser, with underground 200,000 litre storage tank for fire emergency

Air Quality

It uses patented technology to detoxify indoor air and

grow mountain fresh air. They grow fresh air with the help of more than 1200 toxin-removing indoor plants.

WATER CONSERVATION TECHNIQUES

19

Sensor Taps Use of Soap Free Water for Gardening Installation of cistern based 4/2 Liter Water Closet (WC) Rain Water Harvesting

Location Analysis

Proximities Distance

Bus Stop 150 m

Metro Station 380 m

Airport 15 km

Delhi CBD 7.5 km

Paharpur Business Centre is located in Nehru Place, South Delhi, which is the most

elite location to be in. It thus, holds a high capital value as among other locations

throughout Delhi.

Catchment Area

20

Primary Catchment Area covers most of the South Delhi Area as the tenants looking

for an office in this area will give their first preference to Nehru Place.

Secondary Catchment Area covers almost all of Delhi as prospects wanting to have

an office in Delhi will give their first preference to Nehru Place too.

Tertiary Catchment Area covers the areas of Gurgaon, Faridabad & NOIDA, including

the major area of NCR. The prospects of this area will have South Delhi as their

preferable option.

21

Figure 4: Catchment Areas of Paharpur Business Centre

ValuationYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Gross Income (GI) 59460000.00 62433000.00 65554650.00 68832382.50 72274001.63 75887701.71 79682086.79 83666191.13 87849500.69 92241975.72Outflows 23721400 24515956 25349916.52 26225245.23 27144003.85 28108357.05 29120577.6 30183051.74 31298284.92 32468907.68

Net Operating Income (NOI) 357,38,600.00 379,17,044.00 402,04,733.48 426,07,137.27 451,29,997.77 477,79,344.65 505,61,509.19 534,83,139.39 565,51,215.76 597,73,068.04 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Gross Income (GI) 59460000.00 62433000.00 65554650.00 68832382.50 72274001.63 75887701.71 79682086.79 83666191.13 87849500.69 92241975.72Outflows 23721400 24515956 25349916.52 26225245.23 27144003.85 28108357.05 29120577.6 30183051.74 31298284.92 32468907.68

Net Operating Income (NOI) 357,38,600.00 379,17,044.00 402,04,733.48 426,07,137.27 451,29,997.77 477,79,344.65 505,61,509.19 534,83,139.39 565,51,215.76 597,73,068.04

Inflow Escalation

VIRTUAL ROOM CHARGES ESCLATION 3%RENT ESCALATION 5%

PARKING CHARGES ESCLATION 2%INCREASE IN CONFERENCE FACILITY CHARGES 5%

Insurance Expenses 0.50% of cost of constructionCAM Charges 100 Rs. Per sq ft per monthLease and asset management charges 1% of basic rent & parking chargesMarketing Expenses 50,00,000.00 per yearSINKING FUND 50 /SQ.FT/YEAR

Outflows

By following the DCF method under Income Approach, the value of the building is

same as its NPV.

From the above calculations, the Value of the building is ₹ 2517,56,381.96

22

Eros Corporate Tower

Eros Corporate Tower is strategically located in the Nehru Place District Centre

situated opposite to Nehru Place Metro Station. The tower is one of the world class

premium addresses in the business

world.

Many leading multinational companies

like Microsoft, Barclays Bank, ENI India,

Jetro, BT India Pvt. Ltd., Sinosteel India,

Suzlon, Finmeccanica, Sjitz India, HDFC

Ergo, Axis Bank, Russell Reynold, Regus,

Korean Exim Bank, OOCL India, Royal

China etc., have chosen to operate

their businesses from this tower with

its perfect location.

It is a sixteen storey commercial

tower with interconnected seven storey car parking which can accommodate 1000

cars and 50 buses, thus being just one of its kind to match international quality

standards.

The complex has a built-up area of approx. 6,50,000 sq ft. (60,400 sq mtr.). The

commercial tower offers approx. 14,000 sq.ft. (1300 sq.mtr.) per floor.

23

Figure 5: Eros Corporate Tower

Productivity AnalysisThe Location: South Delhi

Sub Location Name: Nehru Place

Developer Name: Eros Group

Property Type: Commercial Properties

Property Sub Type High Rise (Campus type)

Property Status: Functional Building

Floor Available: Office space is subject to the availability

Total Floors in Building Ground + 16 Floors

Building Facing North East

Internal Emenities

Air Conditioned Intercom Facility Internet / Wi-Fi Connectivity RO Water System

External Emenities

Power Back Lift Reserved Parking Security Water Storage Service/Goods Lift Visitor Parking Cafeteria/Food Court Conference Room 24 HRS SECURITY

24

Area specifications

AREA CALCULATION AREA(SQ.FT)

LAND AREA 196,020TOTAL BUILT UP AREA 650,000COMMERCIAL TOWER AREA 247,337PARKING AREA 372,663SOLDOUT AREA 46,243SELF OCCUPIED 23,377LEASED UP AREA 156,263VACANT AREA 21454RETAIL SHOPS 30,000

FLOOR PLATE AREA 13740.94444

CONSTRUCTION COST 445206600

CAR PARKING

TOTAL BUILT UP AREA 3,72,663 SQ.FTTOTAL CARS PARKED 1000 CARSTOTAL BUSSES 50 BUSESSPACE ACQUIRED BY 1 CAR- 372 SQ.FT

TOTAL CARS IN A DAY 700 CARSIN A YEAR 2,10,000 CARSAVERAGE RENT/CAR RS.30/CARFIXED CARS RENTAL RS.5000/ MONTHNO. OF FIXED CARS 200TOTAL RENT FROM FIXED CARS 1,20,00,000INCOME RS.2,04,00,000/- ANNUALLY

OPERATING AND MAINTENANCE COSTS

INSURANCE COST RS.1/SQ.FT ANNUALLYSINKING FUND RS.24/SQ.FT/ANNUALLYMAINTENANCE CHARGES RS.25/SQ.FT/MONTHLEASE AND ASSET MANAGEMENT CHARGES RS.1/SQ.FT ANNUALLY

Key tenants

25

FLOOR NO

TENANT NAME

GROUND BARCLAYS BANK PLCHDFC ERGO GENERAL INSURANCE CO.LTD

1 BARCLAYS BANK PLC2 FINMECCANICA

AGUSTA WESTLANDFINCANTIERI

3 ABC CONSULTANTS PVT.LTDVRACKAL TRADINGOOCL LOGISTICSINABENSA BHARAT PVT.LTD

4 JAPAN EXTERNAL TRADE ORGANISATIONINTERNATIONAL ENTERPRISE SINGAPOREBELTECHINDUSTRIAL KOREAWESTERN DIGITAL

5 MICROSOFT CORPORATION INDIA PVT LTDTRANSASIA INFRASTRUCTURE INDIA PVT.LTSALEXES INDIA PVT.LTD

6 KYOSON INDIA PVT.LTDANDRITZ INDIA PVT.LTDIDEMITSUEFACEC INDIA PVT.LTDJETRO

7 SOJITZ INDIA PVT.LTDSOJITZINDIA PVT.LTD

8 EROS OFFICE9 SUZLO.N ENERGY LTD

FIRST SOLAR POWER INDIA PVT. LTDSINGAPORE TOURISM

10 TREND MICRO INDIA LTDSTEVEN ROCKEROS OFFICE

11 YANMAR INDIA PVT. LTDDT INDIA PVT.LTD

12 ST ENGINEERINGVOSSLOHSINO Steel India Pvt.LtdHITACHI

14 LINTECINDRAEni India ltd

15 Regus

Space available for rent

26

Figure 6: Location Map of Eros Corporate Tower

Figure 7: Catchment areas of Eros Corporate Tower

FLOOR NO. SPACE AVAILABLE

rent/sq.ft total rent CONTACT PERSON

CONTACT NO.

1 6000 250 15,00,000 Sanjeet Sharma

9810069114

5 7500 175 13,12,5007 2500 200 5,00,00012 5500 175 9,62,500

Location Analysi s

Proximities Distance

Bus Stop 150 m

Metro Station 380 m

Airport 15 km

Delhi CBD 7.5 km

Eros Corporate

Tower is located in

Nehru Place, South Delhi, which is the most elite location to be in. It thus, holds a

high capital value as among other locations throughout Delhi.

Catchment Area

27

Primary Catchment Area covers most of the South Delhi Area as the tenants looking

for an office in this area will give their first preference to Paharpur Business Centre.

Secondary Catchment Area covers almost all of Delhi as prospects wanting to have

an office in Delhi will give their first preference to Nehru Place.

Tertiary Catchment Area covers the areas of Gurgaon, Faridabad & NOIDA, including

the major area of NCR. The prospects of this area will have South Delhi as their

preferable option.

Areas near Nehru Place Chirag Delhi Okhla Kalkaji Sarita Vihar Govindpuri Jasola Vihar Chittaranjan Park Siri Fort

NEARBY COMMERCIAL BUILDINGS

International Trade Tower Eros Corporate Tower IFCI Tower Devika Tower Chiranjeevi Tower Ansal Tower Hemkunt Tower Paharpur Business Centre

RENT IN NEARBY BUILDINGS

1. ANSAL TOWER- RS100/SQFT2. DEVIKA TOWER- RS 80/SQFT3. MODI TOWER- RS 100/SQFT4. INTERNATIONAL TRADE TOWER- RS125/SQF

28

ValuationInflowsRent Offi ce Space:

Ground 34,35,236.11 Rest 205,81,569.44 Retail -

Parking 2,04,00,000Other Virtual Rooms 24,00,000.00 Total Inflows 264,16,805.56

OutflowsMaintenance 61,83,425.00 Asset Management 2,40,168.06 Insurance 20,611.42 Total Outflow 64,44,204.47

Net Operating Income Monthly 199,72,601.08 Annual 2396,71,213.00

Offi ce rentals 1-16 FLOOR/MONTH 170 Per Sq FtOffi ce rentals (GF)/MONTH 250 Per Sq FtRetail Rentals/MONTH 300 Per Sq Ft

No. of paid car parking slots occupied 150Parking charges per car per month 5000

Inflows

Insurance Expenses 1 SQ.FT/ANNUMCAM Charges 25 Rs. Per sq ft per monthLease and asset management charges 1% of basic rent & parking chargesSINKING FUND 24 RS/SQ.FT/YEAR

Outflows

Following an Income Approach, the value of the building is assessed by dividing the Net Operating Income of the Building with the Capitalization rate of the Area.

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In Nehru Place, the Cap. Rate is at 9%

Thus, the value of the building = NOI/Cap. Rate

=23,96,71,213/0.09

= ₹ 26630,13,477.78

Comparative AnalysisEros Corporate Tower is a successful commercial building in the area. It has reputed

clients & is having a good amount of profit. It even has a decent value to itself.

Paharpur Business Centre on the other hand, though being Green, is making a Y-o-Y

loss. It still has a lot of area vacant but has managed to lease out to some reputed

tenants.

The reasons for Paharpur Business Centre not performing as good as Eros Corporate

Tower are:

o Higher Rent because of higher construction cost

o Market not willing to pay for Green

PBC has incurred high construction costs for its LEED Platinum Certification. Which is

why it is demanding higher rent than ECT. Also, the people still think that Green

Buildings are a gimmick & just a marketing strategy, making them unwilling to pay

higher rent for the Green.

However, due to the rise of Green buildings in India, people are becoming aware of

the benefits they can derive from Green Building. Thus, over a few years’ time, PBC is

ought to be able to lease out its vacant space & make higher profits.

Eros Corporate Tower, on the other hand, can benefit by inculcating some green

practices in the building. These can include glazed windows, solar panels, natural

ventilation, efficient equipment, etc. These features will reduce the operating

expenses of the building, thus, making it even more profitable.

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Conclusion

The idea of energy efficient, healthy buildings has been around for a long time, now

that the concept of “green” or “sustainable” building is entering the mainstream and

catching the attention of fortune 500 companies like Wall Mart, Dupont, and Home

Depot etc. There are probably several reasons; Global Warming, rising energy costs,

the growing awareness and liability costs associated with “Sick Building Syndrome”,

declining oil reserves, and concerns about our limited water supply. The list goes on,

but whatever the reason or reasons; sustainable building is a concept whose time

has come.

Green building revolves around four key issues:

1. Designing for energy efficiency including the use of renewal energy sources

such as wind, geothermal, and solar.

2. Creating a healthy indoor air environment with adequate ventilation and

making material choices that minimize volatile organic compound (VOC’s)

outgassing within the home.

3. Specifying building materials and resources that are sustainable, have low

embodied energy, and produce a minimal amount of upstream environmental

impact.

4. Providing for the efficient use of water via appliance, faucet, and shower head

choices and in arid climates by xeriscaping and recycling grey water and

capturing rain water for landscaping and other non-potable uses.

All these above features can exactly be seen in AECOM building whereas Oberthur

Company does not stand for any of these features.

A green building costs less than a conventional building. Despite public perception to

the contrary, today here is no statistically significant difference in construction cost

between LEED and non LEED building. And the LEED building will have energy cost

savings, on average, of more than 33% compared with the non LEED building.

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The green building market has matured such that we can today, state with certainty

the hard data on performance proves that when first costs of green building are

considered with direct energy savings, a green building costs less than a

conventional building.

Though the AECOM building cost much more than the Oberthur building if area is

taken into consideration also the initial cost of building is very high but when the

other benefits of the building are seen than the cost is really low and benefits are

many of a green building.

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