IN THIS ISSUE India: Economic Indicators India: Capital Markets. India: PE Deals and Exits. India: Real Estate Market Trends

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Mitchell Montgomery
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OCT NOV DEC 2011 IN THIS ISSUE India s GDP growth continued to drop for the 4th consecutive quarter as a result of weakening global growth, increasing inflation and the resultant increase in interest

Read More. Bangalore: Real Estate Market Trends Office, retail and residential sectors performed well in Bangalore. The city recorded the highest absorption of 13.

1 OCT NOV DEC 2011 IN THIS ISSUE India s GDP growth continued to drop for the 4th consecutive quarter as a result of weakening global growth, increasing inflation and the resultant increase in interest rates. Read More proved to be a difficult year for the Indian stock markets with the Sensex falling nearly 24% during the year. Read More. PE Firms made 69 deals in the RE Sector during 2011, with residential and commercial sectors accounting for 57% and 19% of the deals respectively. Read More. Bangalore: Real Estate Market Trends Office, retail and residential sectors performed well in Bangalore. The city recorded the highest absorption of 13.6 mn sqft in office segment and 20,000 units in residential segment during 11. Read More. Chennai: Real Estate Market Trends Chennai's office segment witnessed total absorption of 4.15 mn sqft in Residential demand also remained stable. Read More. DISCLAIMER: This report contains information available to the public and has been relied upon by Vestian Workplace Services on the basis that it is accurate. Vestian accepts no responsibility if this should prove not to be the case. No warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change ofprice, rental or other conditions and withdrawal without notice.

GDP Growth, Inflation and Industrial Production 15 10 In percentage 5 0 5 Jan11 Feb11 Mar11 Apr11 May11 Jun11 Jul11 Aug11 Sep11 Oct11 Nov11 Dec11 10 Inflation IIP GDP Source: www.tradingeconomics.

2 GDP Growth, Inflation and Industrial Production In percentage Jan11 Feb11 Mar11 Apr11 May11 Jun11 Jul11 Aug11 Sep11 Oct11 Nov11 Dec11 10 Inflation IIP GDP Source: Key Policy Rates Key Rates PLR* Oct 11 Nov 11 Dec % 14.75% 14.75% Repo Rate 8.25% 8.50% 8.50% Reverse Repo Rate 7.25% 7.50% 7.50% CRR Source: * Source: % 6.00% 6.00% 1 Sensitive global economic conditions, government s policy inaction and high inflation contributed to a slowdown in India s GDP growth. GDP growth fell for the fourth consecutive quarter to 6.9% in Q as compared to 8.9% in the same period last year. RBI has revised its growth forecast for FY 2012 from 9.0% in Feb 2011 to 7.3% in Oct Key policy rates were increased by 25 basis points in late October due to inflationary pressures. This led to an increase in commercial and home loan interest rates as well as a 20% increase in construction costs during Inflation eased to a twoyear low of 7.47% in December 2011 thereby raising hopes of an interest rate cut by the RBI in The index for Industrial Production bounced back to 5.9% in December from 4.7% in November 2011 thereby putting to rest fears of an impending slowdown. 1 Government of India

BSE & Realty Index Performance for February 2011 2011 proved to be a difficult year for the Indian stock markets with the Sensex falling nearly 24% during the year.

3 BSE & Realty Index Performance for February proved to be a difficult year for the Indian stock markets with the Sensex falling nearly 24% during the year. Amongst the sectoral indices BSE Realty Index was the most affected losing nearly 52% during the year. 3Jan11 3Feb11 3Mar11 3Apr11 3May11 3Jun11 3Jul11 BSE Realty Index 3Aug11 3Sep11 BSE Sensex 3Oct11 Points 3Nov11 3Dec11 Company Ackruti City Anant Raj Industries DB Realty DLF Housing Dev. & Infrastructure India Bulls Real Estate Orbit Corporation Parsvanath Developers Peninsula Land Phoenix Mills Sobha Developers Suntech Realty Unitech Source: *On 31 December 2011 Performance of Realty Index Stocks Prev Close* 52 Weeks High Low INR INR INR Market Capitalization P/E Ratio Debt Ratio Cr INR % %

accounting for 57% and commercial sector accounting for 19% of the deals. Some of the large PE deals in RE sector during Q4 2011 include: l DLF Ltd. and Hubtown Ltd.

4 accounting for 57% and commercial sector accounting for 19% of the deals. Some of the large PE deals in RE sector during Q include: l DLF Ltd. and Hubtown Ltd. (formerly known as Ackruti City) have sold an IT SEZ with an area of 1.8 million sqft which they jointly owned in Hinjewadi, Pune to Blackstone Group for INR 8.1 billion. l Temasek Arm Mapletree Investments acquires Assetz Global Technology park in Bangalore for 800 crore. Slowdown in global economic conditions and the federal government s unsuccessful attempts at pushing reforms policies led to heavy equity offloads by Foreign Institutional Investors (FIIs) making the net investment in equities negative. FDI inflows between January and October 2011 witnessed a 35% increase over the corresponding period in 2010.The total FDI entering the country up to Oct 2011 was USD 23,686 million out of which the Housing and Real Estate sector accounted for nearly 7.2%. With banks cutting their funding to real estate sector, Realty firms with huge debt burdens are forced to look at PE funds and NonBanking Finance Corporations for their funding requirements. Developers are offering attractive valuations for PE firms to invest. However, PE funds were cautious in making investments due to the low returns made by most funds in their previous investments. PE firms made 69 deals in the Real Estate sector during 2011 with residential l Mumbai based Godrej Properties Ltd. sold 49% of its equity stake in its subsidiary Godrej Premium Builders which is developing a residential project in Gurgaon, NCR to Sun Apollo India RE Fund for INR 45 crore. l Mauritius based Real Estate focused Pragnya Fund has invested $ 5 million in Hyderabad based Vision Heights Ltd. to develop a 50acre township in Rajamundhry, Andhra Pradesh. Other PE deals in the pipeline include: l Kotak Realty Fund is investing INR 170 crores in NCR based developer BPTP s residential project called Astaire Gardens in Gurgaon. Some of the developers under severe debt burden tried to sell their noncore businesses. Most prominent one was DLF Ltd. that sold its IT SEZ in Pune, acquired 26% stakes in Hilton Hotels thereby controlling 100% stake in the project in order to be able to the monetize the same.

5 Bangalore: Real Estate Market Trends Office Market Fresh supply of office space in Q was close to 0.5 million sqft taking the cumulative supply of Grade A office space in Bangalore in 2011 to 6.4 million sqft. 75% of the fresh supply was in the PBD especially in. Bangalore saw a healthy absorption of 13.6 million sqft in 2011 driven by the IT/ITeS industry. Nearly 52% of the absorption was witnessed in the PBD areas of and Electronics City followed by (stretch between Hebbal and Silk Board) which witnessed 43% of the absorption. Out of the total absorption 5.0 million sqft was SEZ space. Majority of the SEZ absorption was along (3.5 million sqft) and (1.5 million sqft) million sqft of Grade A office space are likely to enter the market in Out of this almost 5 million sqft space is precommitted. The expected supply for Q is close to 0.5 million sqft and 77% of this supply is along. Retail Market Bangalore saw a supply of close to 2.7 million sqft of mall space in Q with the opening of Phoenix Market City Mall (2.5 million sqft) in Mahadevpura and Gopalan Signature Mall (0.2 million sqft) on Old Madras Road. Both malls and high streets witnessed healthy leasing activities. s have gone up by 810% in and off areas, whereas rental values in and PBD have increased by 1215%. Residential Market Bangalore s residential market performed remarkably well in 2011 with absorption of 20,031 units and a CAGR of 22%. The number of units launched in 2011 was 12% higher than the number of units launched in Annual appreciation rate and rental yield rates are 12% and 5% respectively for this segment. Highest absorption has been witnessed for apartments in INR Lakhs segment and for Villas in INR 1 CR INR 3 CR segment. Preferred residential micromarkets are Sarjapur Road, Outer Ring Road, Bangalore North and. Micro Location Retail* Office PBD Residential Central Off Central Banneraghatta Road Hosur Road Sarjapur Road Bangalore North Tumkur Road Mysore Road Kanakapura Road Old Madras Road Rental & Capital Values in Key Micro Locations M.G. Road, Kasturba Road, Lavelle Road, V.M. Road, Ulsoor Road, Residency Road, Infantry Road Indiranagar, Koramangala, Inner Ring Road, Old Airport Road, Bannerghatta Road Stretch from Hebbal to Silk Board junction, Electronics Ciity, Mysore Road, Bellary Road, Sarjapur Road High Street Brigade Road, Commercial Street Koramangala 80 Road Indiranagar 100 Road Jayanagar 11th Main Bannerghatta Road Yelahanka Lavelle Road, Brunton Road, Kasturba Road, Ulsoor Road, RC Road, etc. Indiranagar, Koramangala, Jayanagar, J.P. Nagar, Malleshwaram, RMV Extension, Sanjay Nagar, Old Airport Road, etc. BTM layout, Vijaya Bank Colony, Arekere, Gottigere, Bilekahalli, Bannerghatta Road Begur Road, Bommanahalli, Electronics City, Bommasandra, Chandapura, Jigani, Anekal HSR layout, Sarjapur Road, (between Silk Board & Marthahalli), Haralur Road, Kasavanahalli Road,Brookefield, Mahadevpura, (Marthahalli to K. R. Puram) Banaswadi, HRBR layout, Hennur Road, Thanisandra Main Road, Bellary Road, Yelahanka, Kogilu, Bagalur Jalahalli, HMT layout, Yeshwanthpur, Peenya, Hesarghatta Main Road Vijayanagar, Kengeri, RR Nagar, Uttarahalli, Mysore Road (Banashankari to JP Nagar), Kanakapura Road VKR Puram, Old Madras Road, Battarahalli, Avalahalli, Budigere, Hoskote Grade A Mall Space McGrath Road VM Road Koramangala Malleshwaram s 8,50019,500 5,50012,000 8,00013,000 2,5006,600 2,0004,200 2,0008,800 3,2007,100 2,0009,200 2,1004,850 1,9003,590 8,50019,500 3,4005,100 Grade B Villas 2,0005,000 4,00010,000 5,00010,000 4,0006,000 3,5004,500 4,0009,200 Note: The retail rentals mentioned are on carpet areas with 85% efficiency for high street and 62%65% efficiency for mall spaces and for Line Stores in GF only Bannerghatta Road 180 Mysore Road 100 Capital Value 5,0007,000 2,3005,000

Chennai: Real Estate Market Trends Office Market Chennai saw no fresh supply of office space in Q4 2011 thereby keeping the supply for 2011 at 3.45 million sqft. However, Chennai saw absorption of 1.

4 million sqft in the. Retail Market Ramee Mall with a Gross Leasable Area (GLA) of 150,000 sqft and developed as part of the Hyatt Regency Hotel in Teynampet was opened to public in Q4 2011.

6 Chennai: Real Estate Market Trends Office Market Chennai saw no fresh supply of office space in Q thereby keeping the supply for 2011 at 3.45 million sqft. However, Chennai saw absorption of 1.2 million sqft in Q4 alone taking the total absorption for the year to 4.15 million sqft. Majority of the space takeup in Q4 was in nonsez spaces. Q is expected to see fresh supply of nearly 0.4 million sqft in the. Retail Market Ramee Mall with a Gross Leasable Area (GLA) of 150,000 sqft and developed as part of the Hyatt Regency Hotel in Teynampet was opened to public in Q With limited mall space, the city witnessed increase in rental values in high streets. The Gold Souk Grand Mall in Vandalur with a GLA of 600,000 sqft is expected to be operational in Q Apart from this, four more malls are likely to be operational in 2012 adding nearly 2.5 million sqft retail mall space. Residential Market Demand remained stable for residential properties in Chennai and is growing at a CAGR of 19%. The year saw close to 100 project launches. Majority of the activity was observed in OMR, GST, Oragadam and Sriperumbudur. The anticipation of a change in the Government guideline value has seen a rise in the number of registrations during this quarter. Capital values have increased by about 22% in central locations of Chennai. Micro Location Retail* Office PBD Residential Central Off Central Rental & Capital Values in Key Micro Locations Anna Salai Velacherry, Guindy, Poonamallee Ambattur High Street Madhya Kailash, Perungudi, Sholinganallur, Siruseri IT Park Shriram, L&T Estancia, Mahindra World City Khadar Nawaz Khan Road Numgambakkam High Road RK Salai Pondy Bazaar Adyar Main Road Annanagar II Avenue Velachery Purusuvakam High Rd Boat Club Road, Poes Garden, Besant Nagar, Annanagar, T. Nagar, R.A. Puram Vadapalani, Saligramam, KK Nagar, Porur, Ambattur, Pallavaram, Medavakkam Grade A Mall Space Whites Road RK Salai Mount Road Capital Value (INR/Sq.ft.) s 9,00026,000 3,2008,500 Grade B Nelsanmanickam Rd Villas OMR Madhya Kailash, Perungudi, Thoraipakkam, Sholinganallur, Navalur 3,50010,000 3,0007,000 GST Tambaram, Vandalur, Potheri, Guduvancherri, Mahindra World City 2,3003,800 3,2004,800 NH4 Poonamallee to Sriperumbudur 2,2003,200 2,5003,500 Note: The retail rentals mentioned are on carpet areas with 85% efficiency for high street and 62%65% efficiency for mall spaces and for Line Stores in GF only

7 Key Lease Transactions Office Company Building Developer Location Area (sq. ft) Retail: Key Operational Malls Mall Location Developer Area (sq. ft) Bangalore Bangalore HSBC Prestige Shanitiniketan Prestige Group 350,000 Phoenix Market City Mahadevpura Phoenix Mills 1,500,000 Infosys Bagmane WTC Bagmane Group 100,000 Chennai Capgemini Prestige Shanitiniketan Prestige Group 358,802 Ramee Mall Teynampet 200,000 Manyata Business Park Embassy Group, Nagwara 114,873 Mumbai Chennai RCity Phase II Ghatkopar Runwal Developers 400,000 Accenture TECCI Park ECCI Sholinganallur 280,000 Neptune Magnet Mall Bhandup Neptune Developers 1,000,000 FIS SKCL Sholinganallur 150,000 Phoenix Market City Kurla Phoenix Mills 1,000,000 Foster Wheeler Ascendas ITPC Ascendas Taramani 100,000 Alcatel TVH Agnito TVH Kottivakkam 100,000 BNP Paribas Ascendas ITPC Ascendas Taramani 75,000 Qualcomm TVH Agnito TVH Kottivakkam 58,000 Mumbai Mumbai Chicken Ltd. 349 Business Point Kanakia Developers Andheri (E) 10,805 Istaile Consulate Marathon FutureX Marathon Lower Parel 11,000 Trafigura Godrej IT Park Godrej Vikhroli 25,000 Usha International Oberoi Commerze Oberoi Developers Goregaon(E) 15,000 Hyderabad Facebook Raheja Mindspace Raheja Hitech City 120,000 Ness Technologies Maximus 2A Raheja Hitech City 70,000 AT&T Ascendas Vega Ascendas Hitech City 24,000 Rockwell Collins DLF Cybercity DLF Gachibowli 27,291 Residential Key Project Launches Project Location Developer Type Area (sq. ft) Bangalore Embassy Pristine Urbana Aqua Bellandur Chickaballapur Fiesta Homes Electronic City Century Central Kanakapura Road Chennai Olympia Grande Pallavaram Boulevard Kelambakkam Vandalur Amara Ananta Palavakkam, ECR Green 201 Pudupakkam Mumbai Embassy Group 416 Ozone Group SJR PrimeCorp Century Rel Estate Khivraj Estate Vijayashanti AR Group Green Tree Homes Amantra Thane Kalyan Road Tata Housing Hyderabad Lanco Hills Manikonda Lanco Aparna Sarovar Tellapur Aparna Villas

Bengaluru (Bangalore)

Accelerating Success Bengaluru (Bangalore) CBD 0-00.7 -.9 % 6.7% SBD (Indiranagar- Koramangala) Outer Ring (Sarjapur-Marathahalli) Outer Ring (K.R. Puram Hebbal) 90-50. -. %.% 8-9. -. %.9% 78-88. -. %