Tier I Cities ~ Residential Market Dynamics Oct 2013

PROPEQUITY Creating Investor Intelligence

1

Tier I Cities Residential Market Dynamics Oct 2013

PropEquity


2

Index

SR. NO. TOPIC PAGE NO.

1 Glossary 3

2 Economic Snapshot 4

3 7 Prominent Cities: Real Estate Trends 7

4 National Capital Region 9

5 Mumbai Metropolitan Region 13

6 Bengaluru 17

7 Pune 21

8 Kolkata 25

8 Chennai 29

9 Hyderabad 33

12 Snapshot Q3 2013 vs. Q3 2012 37

13 Disclaimer 39


3

Glossary

Acronym Particulars

YTD Year Till Data - Represents data till October 2013

NCR National Capital Region

MMR Mumbai Metropolitan Region

Sft Square Feet

Y-o-Y Year on Year

Q-o-Q Quarter on Quarter

INR Indian Rupees

Mn Million

x Times / Multiple



Macro Economic Snapshot


5

India: A Macroeconomic Perspective

The Q-o-Q GDP growth rate of India has been persistently declining, which is attributable to a combination of factors such as weak global economic scenario, persistently high inflation rate, declining industrial output and stagnation in service sector

Any significant hopes of revival are expected to be highly dependent upon the results of the upcoming parliamentary elections

Source: RBI

9.7%

8.5%

7.8% 7.5%

6.1% 5.8%

6.3%

8.6%

7.3%

9.4% 9.3% 8.9%

8.3% 7.8% 7.7%

6.9%

6.1%

5.3% 5.5% 5.3% 4.7% 4.8%

4.4% 4.8%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2

FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

GD

P G

row

th R

ate

Indias GDP Growth Trend


6

India: A Macroeconomic Perspective

Source: MOSPI, Finance Ministry, RBI

7.2%

8.1%

4.6%

6.5%

8.5% 8.0% 7.8%

7.5% 7.3%

7.3%

7.5%

4%

5%

6%

7%

8%

9%

Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13

Perc

enta

ge

Trend ~ Inflation vs. Repo Rate Inflation (%) Repo Rate (%)

3.30% 2.60%

6.00% 6.40%

5.10% 4.60%

4.90%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Gross Fiscal Deficit as % of GDP

RBI has adopted tight monetary policy measures with a focus to tame inflation The policy has led to soaring interest rates in the economy and consequently increasing the cost of

capital Indian economy has witnessed stubbornly high inflation in the past. However, a declining trend has been

witnessed from March 2013, reflecting the efficacy of corrective measures adopted by the RBI



7 Prominent Cities: Real Estate Trends


8

October 2013 - Snapshot

NCR Oct

2012 Oct

2013

Supply Additions (Units)

9,683 3,944

Absorption (Units) 9,033 4,966

Unsold Supply (Units) 147,231 163,420

Weighted Average Launch Price (INR/Sft)

4,562 5,810

MMR Oct

2012 Oct

2013


11,492 6,361




6,802 6,303

PUNE Oct

2012 Oct

2013


3,458 4,409




3,825 4,682

KOLKATA Oct

2012 Oct

2013

Supply Additions (Units) 1,064 457

Absorption (Units) 1,221 710



2,987 3,962

HYDERABAD Oct

2012 Oct

2013

Supply Additions (Units) 1,670 1,490




2,939 4,210

BENGALURU Oct

2012 Oct

2013

Supply Additions (Units) 5,301 2,628




3,777 4,259

CHENNAI Oct

2012 Oct

2013

Supply Additions (Units) 4,563 506




3,835 3,477


9

National Capital

Region

NCR Delhi, Gurgaon, NOIDA, Greater NOIDA, Ghaziabad, Faridabad


10

11 15

15 18

22 21 19

17 17

21

30

33

0

5

10

15

20

25

30

35

0

10,000

20,000

30,000

40,000

50,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 YTD

2011 2012 2013

Month

s of In

vento

ry

In U

nits

Supply Absorption Dynamics

Supply (LHS) Absorption (LHS) Months of Inventory

89

,13

3

86

,33

5

70

,94

7

70

,72

8

NCR - Supply & Absorption Dynamics

Despite Q3 being the beginning of festive season, Q3 2013 witnessed lukewarm real estate activity, both in terms of launches & absorption

On Y-o-Y basis, supply additions in Q3 2013 declined by 47% and absorptions waned by 30% over the corresponding time period of 2012

However, first ten months of 2013 and 2012 have witnessed comparable supply additions and absorption

Supply additions dropped marginally ~ 3%; Absorptions remained flat

Inventory build up has been persistently increasing and stood at 33 months as on end of Oct 2013

Average quarterly value of launches of first three quarters of 2013 has declined by approx. 9% as compared to corresponding period of 2012

Quarterly Supply Additions Y-o-Y Comparative

Jan-Oct 2012

Jan-Oct 2013

Quarterly Absorptions Y-o-Y Comparative

Jan-Oct 2012

Jan-Oct 2013

3%

Average Quarterly Value of Launches

INR 173 Bn


INR 184 Bn


INR 168 Bn


11

2,000

3,000

4,000

5,000

6,000

7,000

100

110

120

130

140

150

160

170

180


2011 2012 2013

INR P

er

Sft

Units

In T

housa

nds

Launch Price vs. Availability Trend

Availability Weighted Average Launch Price

4,5

62 5

,81

0

14

7,2

31

16

3,4

20

NCR - Pricing & Unsold Supply Trend

Increase 26%

Decrease 3%

Increase 23%

Robust absorption rates kept unsold supply in 2011 under check enabling developers to drive up capital values

Weighted average price of new launches increased 26% in 2011

The capital value momentum can be mapped to increased development focus in certain new pockets of Gurgaon & NOIDA

Unsold supply build-up ~ Inhibited capital value escalations

Stagnant average capital values attributable to increased new launches in Affordable / peripheral locations of NCR such as Greater NOIDA (West), Raj Nagar Extension, Yamuna Expressway, Etc.

Increased development focus in high capital value pockets of Gurgaon, like Dwarka Expressway, led to sharp increase in weighted average price of new launches in 2013

Oct 2012

Oct 2013

Oct 2012

Oct 2013

New Launch Pricing Y-o-Y Comparative

Unsold Supply Y-o-Y Comparative

27%

11%


12

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

NCR - Delivery Track Record & Future Commitments

Total Units

Average Annual Delivered & To Be Delivered Units

Over 5 times average annual delivery commitments between 2014 2017 in NCR Raises execution concerns

97,777 96,012 96,679 527,715

24,003 96,679 131,928

4.0x

5.5x

Y-o

-Y U

nit C

om

ple

tions

Years

UNITS COMPLETED TILL YR.

2012 ~ 96,012 UNITS

ESTIMATED TOTAL COMPLETIONS BY END OF YR. 2013 ~

192,691 UNITS


720,406 UNITS


13

A 5%

A 5%

A 4%

M 76%

M 68%

M 76%

L 19%

L 27%

L 21%

0% 20% 40% 60% 80% 100%

2011

2012

2013

Y-o-Y Segment Wise ABSORPTION Trend

A 6%

A 6%

A 3%

M 74%

M 67%

M 71%

L 20%

L 27%

L 26%

0% 20% 40% 60% 80% 100%

2011

2012

2013

Y-o-Y Segment Wise NEW LAUNCH Trend

NCR - AML Classification

Limited Affordable housing options in NCR

Mid End segment - Dominant budget segment in NCR with 70% contribution to supply as well as absorptions

Affordable 5%

Mid 71%

Luxury 24%

Segment Wise Supply Split 2011- 2013YTD

Affordable 5%

Mid 73%

Luxury 22%

Segment Wise Absorption Split 2011- 2013YTD


14

MMR Mumbai, Navi Mumbai, Thane

Mumbai

Metropolitan

Region


15

66

,92

2

49

,44

0

87

,50

9

60

,87

8

13 15 18

20 21 21 24 25 25

32

43 48

0

10

20

30

40

50

60

0

10,000

20,000

30,000

40,000

50,000


2011 2012 2013

Month

s of In

vento

ry

In U

nits



MMR - Supply & Absorption Dynamics Quarterly Supply Additions

Y-o-Y Comparative


Jan-Oct 2012

Jan-Oct 2013

Jan-Oct 2012

Jan-Oct 2013

56% 30%

26%

Thane & Navi Mumbai accounted for 75% of project launches in Q3 2013 in MMR, while Mumbais share in new launches stood at 25%


First ten months of 2013, compared with corresponding period of 2012, also registered a sharp drop in supply additions and absorptions

Supply additions dropped by 30%; Absorptions declined by 26%

Significant decline in absorption levels led to sharp increase in inventory overhang which stood at 48 months as on end of Oct 2013

Average quarterly value of launches of first three quarters of 2013 compared to 2012 registered a modest growth of 6%


INR 165 Bn


INR 115 Bn


INR 122 Bn


16

15

2,8

86

16

6,9

45

6,8

02

6,3

03

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

-10

10

30

50

70

90

110

130

150

170

190


2011 2012 2013

INR P

er

Sft

Units

In T

housa

nds



MMR - Pricing & Unsold Supply Trend

Oct 2012

Oct 2013



Oct 2012

Oct 2013

9%

7%

Increase 20%

Increase 31%

Decrease 8%

Unsold supply in 2011 was constant in MMR

The spike noticed in weighted average launch price in Q2 2011 is attributable to large ticket size launches in Mumbai such as Razzak Heaven, Iris, Darshan Pride, Crescent Aria, etc.

Drop in average capital values in Q1 & Q2 2012 mapped to larger share of new launches in Thane & Navi Mumbai Navi Mumbai & Thane

accounted for 90% of new supply additions

Q3 & Q4 witnessed higher concentration of new supply in Mumbai, approx. 20% ~ Resulting in increased capital values

Approx. 8% increase in unsold supply in tandem with declining absorption rates inhibiting capital value escalations

Weighted average capital values on launch basis exhibited a decrease of 8%


17

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

MMR - Delivery Track Record & Future Commitments

Total Units


Approx. 1.9 times average annual delivery commitments between 2014 2017 in MMR Likely to meet future delivery commitments

However, Navi Mumbai may witness execution slippages due to large scale project launches

97,777 187,550 96,050 353,441

46,887 96,050 88,360

2.0x

1.9x

Years


2012 ~ 187,550 UNITS


283,600 UNITS


637,041 UNITS

Y-o

-Y U

nit C

om

ple

tions


18

A 24%

A 28%

A 24%

M 53%

M 49%

M 53%

L 23%

L 22%

L 24%

0% 20% 40% 60% 80% 100%

2011

2012

2013


A 28%

A 30%

A 25%

M 51%

M 50%

M 47%

L 21%

L 21%

L 28%

0% 20% 40% 60% 80% 100%

2011

2012

2013


Affordable 28%

Mid 50%

Luxury 22%


Affordable 26%

Mid 51%

Luxury 23%


MMR - AML Classification

Expanding Mid-End segment owing to majority launches in satellite cities Increased share of Luxury segment in 2013 ~ Mapped to new launches in Mumbai


19

Bengaluru


20

37

,59

5

40

,46

4

46

,34

1

51

,96

1

12

15 15 15

18 18

15 15 15

18

24 26

0

5

10

15

20

25

30

0

5,000

10,000

15,000

20,000

25,000


2011 2012 2013

Month

s of In

vento

ry

In U

nits



Bengaluru - Supply & Absorption Dynamics Quarterly Supply Additions

Y-o-Y Comparative


Jan-Oct 2012

Jan-Oct 2013

Oct 2012

Oct 2013

56% 12%

8%

Moderate correction in supply additions and absorptions witnessed in Q3 2013 On Y-o-Y basis, supply additions in Q3 2013 declined by 14% and absorptions waned by 17% over

the corresponding time period of 2012 However, on comparison of first ten months of 2013 with the corresponding period of

2012, an increase in supply additions and absorptions was registered Supply additions increased by 12%; Absorptions increased by 8%

Gradual decline in quarterly absorptions beginning from Q1 2013 contributing to inventory pile up ~ Inventory overhang increased from 15 months in Q1 2013 to 26 months as on end of Oct 2013

Average quarterly value of launches of first three quarters of 2013 increased by approx. 24% as compared to corresponding period of 2012 primarily due to capital value escalations


INR 90 Bn


INR 82 Bn


INR 102 Bn


21

65

,19

9

79

,06

6

3,7

77

4,2

59

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

0

10

20

30

40

50

60

70

80

90


2011 2012 2013

INR P

er

Sft

Units

In T

housa

nds



Bengaluru - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative


Oct 2012

Oct 2013

Oct 2012

Oct 2013

13%

21%

Increase 10%

Increase 6%

Increase 20%

Build-up of unsold supply witnessed in Bengaluru in 2011

Weighted average price of new launches increased by 10% in 2011 ~ Primarily on account of high ticket price launches such as Century Square, Nitesh Logos, Four Seasons Private Residences, etc.

Modest increase in capital values attributable to

Increased new supply additions in lower budget segment

Larger chunk of supply in locations commanding lower capital values than city average

Capital values exhibit a 20% increase from Q1 - Q4 2013

Capital value increase primarily driven by high ticket size launches such as Indraprastha by Sobha Developers, 77o Sky by DivyaSree, etc.


22

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

Bengaluru - Delivery Track Record & Future Commitments

Total Units


Approx. 2.0 times average annual delivery commitments between 2014 2017 in Bengaluru At the present rate of execution, Bengaluru may meet future delivery commitments

97,777 85,481 43,798 167,494

21,370 43,798 41,874

2.0x

2.0x

Years


2012 ~ 85,481 UNITS


129,279 UNITS


296,773 UNITS

Y-o

-Y U

nit C

om

ple

tions


23

A 18%

A 14%

A 13%

M 66%

M 64%

M 68%

L 16%

L 22%

L 18%

0% 20% 40% 60% 80% 100%

2011

2012

2013


A 11%

A 13%

A 9%

M 67%

M 66%

M 69%

L 22%

L 21%

L 23%

0% 20% 40% 60% 80% 100%

2011

2012

2013


Affordable 15%

Mid 66%

Luxury 19%


Affordable 11%

Mid 67% Luxury

22%


Bengaluru - AML Classification

Dominant Mid-End budget segment ~ Constituting two - third of supply Affordable budget segment shrinking gradually ~ Declining contribution to supply as well as

absorption


24

Pune


25

39

,93

5

29

,04

8

42

,90

4

30

,14

6

12 12

15 15 15 15

12

18 18

21

24

27

0

5

10

15

20

25

30

0

5,000

10,000

15,000

20,000

25,000


2011 2012 2013

Month

s of In

vento

ry

In U

nits



Pune - Supply & Absorption Dynamics Quarterly Supply Additions

Y-o-Y Comparative


Jan-Oct 2012

Jan-Oct 2013

Jan-Oct 2012

Jan-Oct 2013

56% 30%

27%

Q3 2013 witnessed muted real estate activity both in terms of launches & absorption On Y-o-Y basis, supply additions in Q3 2013 declined by 35% and absorptions waned by 46% over

the corresponding time period of 2012

Decline in supply additions & absorptions over the first ten months of 2013 compared to the corresponding period of 2012

Supply additions decreased by 30%; Absorptions declined by 27%


Average quarterly value of launches for the first three quarters has dropped significantly in 2013 compared to 2012 on account of sharp reduction in new supply additions in Pune


INR 52 Bn


INR 52 Bn


INR 35 Bn


26

59

,52

6

61

,53

0

3,8

25

4,6

82

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

30

35

40

45

50

55

60

65


2011 2012 2013

INR P

er

Sft

Units

In T

housa

nds



Pune - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative


Decrease 2%

Increase 7%

Increase 11%

Oct 2012

Oct 2013

Oct 2012

Oct 2013

22%

3%

Launch of large scale projects

such as Kul Ecoloch, Nanded

City, etc. led to a marginal

build-up of unsold supply in

2011 and inhibited increase

in capital values

Weighted average price of

new launches decreased by

2%

High ticket launches in Q1 & Q2 2012 such as Cascada, Divine, Rose, Icon, Suyog Pushpa, etc. drove up capital values

Approx. 38% of total new project launches in Q4 2012 were launched in > INR 5000/Sft bracket ~ Pushing up the average capital value

Average capital values on launch basis increased by 11% in first ten months of 2013

Capital values on launch basis impacted by launches in higher budget segment such as Kyra, Brisa, Basilo, Ribera, Prive, etc.


27

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

Pune - Delivery Track Record & Future Commitments

Total Units


Approx. 1.1 times average annual delivery commitments between 2014 2017 in Pune Focus on managing unsold supply leading to attainable projection of supply commitment

97,777 127,627 49,512 136,370

31,907 49,512 34,092

1.6x

1.1x

Years


2012 ~ 127,627UNITS


177,139 UNITS


313,509UNITS

Y-o

-Y U

nit C

om

ple

tions


28

A 20%

A 27%

A 18%

M 69%

M 62%

M 70%

L 11%

L 11%

L 12%

0% 20% 40% 60% 80% 100%

2011

2012

2013


A 25%

A 24%

A 15%

M 63%

M 64%

M 70%

L 12%

L 12%

L 14%

0% 20% 40% 60% 80% 100%

2011

2012

2013


Affordable 22%

Mid 67%

Luxury 11%


Affordable 22%

Mid 65%

Luxury 13%


Pune - AML Classification

Dominant budget segment ~ Mid-End Real estate activity picking up in the Luxury segment with considerable shrinkage in Affordable

budget segment


29

Kolkata


30

12

,44

0

10

,90

4

17

,46

1

11

,25

1

Kolkata - Supply & Absorption Dynamics Quarterly Supply Additions

Y-o-Y Comparative


Jan-Oct 2012

Jan-Oct 2013

Jan-Oct 2012

Jan-Oct 2013

56% 36%

12%

Despite Q3 being the beginning of festive season, fewer new supply additions were observed in Kolkata ~ Developers resorting to supply adjustment in the wake of mounting

inventory overhang

On Y-o-Y basis, supply additions in Q3 2013 declined by 53% and absorptions waned by 29% over

the corresponding time period of 2012


37% drop in average quarterly value of launches in first three quarters of 2013 over corresponding time period of 2012 primarily on account of fewer new launches

12 15 15 15 15

18

21 21 18

21

30

34

0

5

10

15

20

25

30

35

40

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000


2011 2012 2013

Month

s of In

vento

ry

In U

nits

Supply - Absorption Dynamics



INR 16 Bn


INR 24 Bn


INR 15 Bn


31

24

,02

5

24

,42

4

2,9

87

3,9

62

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

0

5

10

15

20

25

30


2011 2012 2013

INR P

er

Sft

Units

In T

housa

nds



Kolkata - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative


Decrease 6%

Decrease 4%

Increase 27%

Oct 2012

Oct 2013

Oct 2012

Oct 2013

33%

2%

Weighted average price of new launches exhibit a decrease of 6%

Increasing absolute unsold supply coupled with sizable new supply addition in lower budget segment ~ Negatively impacting average capital values

Several launches in the price falling in the price range of INR 2,000 INR 3,000/Sft

Build-up of unsold supply led to a correction in new launch project pricing ~ 4% decrease

The sporadic movement of price in Q2 2012 is attributable to project launches in higher budget segment (P.S. Magnum, Himadri, Mandeville Garden, etc.)

Developers resorted to adjusting new supply additions inline with absorption trend ~ Resulting in steady absolute unsold supply levels

High ticket price launches witnessed in micro markets of Topsia, Rajarhat, etc. ~ Driving up the average capital values in the city


32

0

5,000

10,000

15,000

20,000

25,000

30,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

Kolkata - Delivery Track Record & Future Commitments

Total Units


Approx. 1.9 times average annual delivery commitments between 2014 2017 in Kolkata Relatively smaller market size of organized real estate development in Kolkata

Meeting delivery commitments might not be a challenge

97,777 32,251 13,141 62,582

8,063 13,141 15,645

1.6x

1.9x

Years


2012 ~ 32,251 UNITS


45,392 UNITS


107,974 UNITS

Y-o

-Y U

nit C

om

ple

tions


33

Affordable 27%

Mid 55%

Luxury 18%


Affordable 32%

Mid 53%

Luxury 15%


Kolkata - AML Classification

Decreasing share of Affordable and Luxury segment launches

Consolidation of real activity in the Mid-End budget segment

A 35%

A 35%

A 23%

M 49%

M 50%

M 65%

L 16%

L 15%

L 12%

0% 20% 40% 60% 80% 100%

2011

2012

2013


A 25%

A 31%

A 25%

M 54%

M 50%

M 62%

L 20%

L 18%

L 13%

0% 20% 40% 60% 80% 100%

2011

2012

2013



34

Chennai


35

25

,00

4

20

,39

1

28

,61

6

20

,41

6

Chennai - Supply & Absorption Dynamics Quarterly Supply Additions

Y-o-Y Comparative


Jan-Oct 2012

Jan-Oct 2013

Jan-Oct 2012

Jan-Oct 2013

56% 29%

18%

Q3 2013 witnessed muted real estate activity both in terms of launches & absorption, however, absorptions outpacing supply additions indicate cleanup from old inventory

On Y-o-Y basis, supply additions in Q3 2013 declined by 47% and absorptions declined by 27% over the corresponding time period of 2012

Supply additions & absorptions also declined over the first ten months of 2013 compared to the corresponding period of 2012

Supply additions decreased by 29%; Absorptions declined by 18% Gradual decline in quarterly absorptions beginning from Q1 2013 contributing to inventory

pile up ~ Inventory overhang increased from 18 months in Q1 2013 to 27 months as on end of Oct 2013

Average quarterly value of launches for the first three quarters exhibits declining trend 17% drop in supply additions in the first three quarters of 2013 over the corresponding period of

2012 resulted in 19% drop in average quarterly value of launches

12 12

15 15 15 15

18

15

18

21

24

27

0

5

10

15

20

25

30

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000


2011 2012 2013

Month

s of In

vento

ry

In U

nits




INR 52 Bn


INR 43 Bn


INR 35 Bn


36

41

,81

4

42

,85

7

3,8

35

3,4

77

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

0

5

10

15

20

25

30

35

40

45

50


2011 2012 2013

INR P

er

Sft

Units

In T

housa

nds



Chennai - Pricing & Unsold Supply Trend New Launch Pricing Y-o-Y Comparative


No Change

Decrease 2%

Decrease 8%

Oct 2012

Oct 2013

Oct 2012

Oct 2013

9%

2%

High unsold supply build up in

2011 inhibited launch capital

value escalations

Weighted average price of

new launches remained

unchanged in 2011

Year 2012 witnessed a

build up in absolute

unsold supply which kept

capital values under

check

Weighted average price

of new launches

decreased 2% in 2012

Weighted average price of new launches increased 18% till Q3 2013 due to launches in higher budget segment such as to high ticket new launches like Prestige Downtown, Czars, Isha Poriyagham, Sundaram, etc.

Sharp decrease in capital values was recorded in Q4 2013 YTD owing to larger share of launches in the Affordable segment


37

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

Chennai - Delivery Track Record & Future Commitments

Total Units


Approx. 2.2 times average annual delivery commitments between 2014 2017 in Chennai Lower average annual delivery commitments from 2014 onwards as compared to 2013 project

deliveries

97,777 45,172 35,522 97,261

11,293 35,522 24,315

3.1x

2.2x

Years


2012 ~ 45,172 UNITS


80,694 UNITS


177,955 UNITS

Y-o

-Y U

nit C

om

ple

tions


38

A 25%

A 20%

A 20%

M 56%

M 64%

M 67%

L 19%

L 16%

L 14%

0% 20% 40% 60% 80% 100%

2011

2012

2013


A 20%

A 14%

A 17%

M 61%

M 71%

M 70%

L 18%

L 14%

L 13%

0% 20% 40% 60% 80% 100%

2011

2012

2013


Affordable 22%

Mid 61%

Luxury 17%


Affordable 17%

Mid 67%

Luxury 16%


Chennai - AML Classification

Dominant Mid-End segment ~ Registered 15% increase in supply share from 2011 to 2013

Waning Supply additions in Affordable segment


39

Hyderabad


40

14

,61

1

13

,679

14

,40

7

14

,24

6

Hyderabad - Supply & Absorption Dynamics Quarterly Supply Additions

Y-o-Y Comparative


Jan-Oct 2012

Jan-Oct 2013

Jan-Oct 2012

Jan-Oct 2013

1%

6% Persistent uncertainty over the fate of Hyderabad with regards to Telangana issue translated

into cautious approach from developers as reflected by fewer new launches in Q3 2013


However, marginal correction in supply additions & absorption has been witnessed over the first ten months of 2013 compared to the corresponding period of 2012

Supply additions decreased by 1%; Absorptions declined by 6%

Since Q1 2013, Inventory has been on an increase, which stood at 37 months as on end of October 2013

Average quarterly value of launches of first three quarters of 2013 has increased by approx. 33% as compared to corresponding period of 2012, primarily driven by low base effect

21 24

30 30

24 24 27

24 24 27

33

37

0

5

10

15

20

25

30

35

40

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000


2011 2012 2013

Month

s of In

vento

ry

In U

nits




INR 27 Bn


INR 21 Bn


INR 28 Bn


41

37

,48

6

38

,81

1

2,9

39

4,2

10

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

30

31

32

33

34

35

36

37

38

39

40


2011 2012 2013

INR P

er

Sft

Units

In T

housa

nds



Hyderabad - Pricing & Unsold Supply Trend

Unsold supply in 2011 was fairly high in Hyderabad inhibiting any capital value escalations

Weighted average price of new launches decreased by 7%

The drop in capital values can also be mapped to weak investment sentiments in Hyderabad owing to the persistent Telangana issue

2012 witnessed marginal build-up in unsold supply primarily driven by new activity in tandem with increase in capital values

Increase in capital values attributable launches in higher budget segment in regions such as Gachibowli, Madhapur, Kukatpally, etc.

Unsold supply level increases marginally by 1.5%,

However, declining absorption rate leading to increase of months of inventory

Weighted average Capital value on launch basis increase by 38% ~ primarily driven by high budget segment launches witnessed in Jubilee Hills, Hi-Tech City, Gachibowli, etc.



Decrease 7%

Increase 27%

Increase 38%

Oct 2012

Oct 2013

Oct 2012

Oct 2013

43%

4%


42

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

Hyderabad - Delivery Track Record & Future Commitments

Total Units


Approx. 1.3 times average annual delivery commitments between 2014 2017 in Hyderabad Persistent overhang of Telangana issue compelled developers to adopt cautious approach

Changes in political environment may lead to execution challenges

97,777 55,685 30,312 71,776

13,921 30,312 17,944

2.2x

1.3x

Years


2012 ~ 55,685 UNITS


85,997 UNITS


157,773 UNITS

Y-o

-Y U

nit C

om

ple

tions


43

A 14%

A 11%

A 8%

M 66%

M 69%

M 75%

L 21%

L 20%

L 17%

0% 20% 40% 60% 80% 100%

2011

2012

2013


A 11%

A 13%

A 4%

M 71%

M 66%

M 71%

L 18%

L 20%

L 25%

0% 20% 40% 60% 80% 100%

2011

2012

2013


Affordable 11%

Mid 69% Luxury

20%


Affordable 10%

Mid 70% Luxury

20%


Hyderabad - AML Classification

Hyderabad depicting signs of a gradual transition to dominant Mid-End segment market Shrinking Affordable supply share ~ Dropped from11% to 4% over 2011 to 2013 YTD

Luxury segment supply gradually picking up



Snapshot - Jan-Oct 2013 vs. Jan-Oct 2012


45

Snapshot - Jan-Oct 2013 vs. Jan-Oct 2012

Parameters NCR MMR Bengaluru Pune Kolkata Chennai Hyderabad

Supply Addition

Total Absorption

Unsold Supply

Capital Values (Oct 2013 vs Oct 2012)

Avg. Annual Future Committed Units / Avg. Annual Delivered Units

Drop -3%

Drop -30%

Rise +12%

Drop -30%

Drop -36%

Drop -29%

Drop -1%

No Change

Drop -26%

Rise +8%

Drop -27%

Drop -12%

Drop -18%

Drop -6%

Rise +11%

Rise +9%

Rise +21%

Rise +3%

Rise +2%

Rise +2%

Rise +4%

Rise +27%

Drop -7%

Rise +13%

Rise +22%

Rise +33%

Drop -9%

Rise +43%

5.5 x 1.9 x 1.1 x

1.9 x 2.2 x 1.3 x 2.0 x

Positive Neutral Negative


46

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Thank You

Tier I Cities ~ Residential Market Dynamics Oct 2013

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