Realty Decoded - Q4 FY 18 April 2018

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Jemimah Dortha Owen
5 years ago
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1 Realty Decoded - FY 18 April 2018

2 Executive Summary Indian real estate has finally come out of bottom of down- cycle in FY 18 with sales growing by more than 35% over FY 17 Sales increase is not limited to few cities. Hyderabad is the only exception to this upward trend Sales of under- construction units which was consistently reducing over the years, finally saw an up move in FY 18. Though ready to move in unit sales still grew more than under- construction Ahmedabad and Chennai have most unsold units in ready to move in category Launches were down by 60% compared to FY 17. Bangalore and Kolkata are the only two cities where new launch units increased Higher sales and lower launches has lowered inventory overhang to 36 months Except Mumbai, Hyderabad and Pune pricing pressure was visible in all other cities Affordable housing of <50 Lakhs budget continued to have >50% share in sales as well as launches

Residential Landscape: Top- 9 cities as of FY 18 Except Hyderabad,

the only cities where launches increased compared to last year

o- Y (%) Launches 50% Launches - 24% Sales 0% Sales 46% Sales 25% BSP

Inventory Overhang 18% (37) HYDERABAD Y- o- Y (%) - 14% (27)

Launches - 24% Launches - 57% Launches 8% Sales 134% Sales - 29%

Overhang MUMBAI - 47% (30) Inventory Overhang NOIDA Y- o- Y (%)

Launches - 81% Launches - 66% Launches - 66% Sales 40% Sales 69%

previous year and the current quarter 2. BSP is represented in Rs./sq.

3 Residential Landscape: Top- 9 cities as of FY 18 Except Hyderabad, all cities saw increase in sales whereas Bengaluru and Kolkata are the only cities where launches increased compared to last year AHMEDABAD BENGALURU Y- o- Y (%) Launches -100% CHENNAI Y- o- Y (%) Y- o- Y (%) Launches 50% Launches - 24% Sales 0% Sales 46% Sales 25% BSP 1% (2,957) BSP 4% (5,028) BSP 0% (5,068) Inventory Overhang GURUGRAM Inventory Overhang 18% (37) HYDERABAD Y- o- Y (%) - 14% (27) Inventory Overhang KOLKATA Y- o- Y (%) - 20% (28) Y- o- Y (%) Launches - 24% Launches - 57% Launches 8% Sales 134% Sales - 29% Sales 16% BSP - 4% (5,897) BSP 9% (4,322) BSP 0% (3,815) Inventory Overhang MUMBAI - 47% (30) Inventory Overhang NOIDA Y- o- Y (%) Inventory Overhang 4% (23) PUNE Y- o- Y (%) 7% (34) Y- o- Y (%) Launches - 81% Launches - 66% Launches - 66% Sales 40% Sales 69% Sales 56% BSP 11% (9,267) BSP - 2% (3,888) BSP 10% (5,136) Inventory Overhang - 11% (45) Notes: 1. Y- o- Y is comparison between the corresponding quarter of the previous year and the current quarter 2. BSP is represented in Rs./sq.ft. over super area 3. Inventory overhang is represented in months. Inventory Overhang - 10% (45) Inventory Overhang - 6% (36) Source: PropTiger DataLabs Mar 18

4 Except new launches, all parameters are in green compared to last quarter Residential trends in top- 9 cities* Q- o- Q Launches 9% - 30% - 11% - 30% - 2% Sales 14% 2% - 15% - 8% 69% Price Trend 0% 1% 3% 2% 2% Inventory Overhang 7% 2% 5% 0% - 15% / Strong/Marginal Decline Stable FY 17 FY 18 FY 18 FY 18 FY 18 Strong/Marginal Increase Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

5 1...Launches: RERA ContinuedTo ImpairLaunches

Launches continued to stagnate at bottom of cycle # of units 1,20,000 1,00,000 1,09,028 Total number of launches in top- 9 cities* 1,01,195 94,304 80,000 76,495 70,171 73,215 66,707 63,757 69,489

6 Launches continued to stagnate at bottom of cycle # of units 1,20,000 1,00,000 1,09,028 Total number of launches in top- 9 cities* 1,01,195 94,304 80,000 76,495 70,171 73,215 66,707 63,757 69,489 60,000 40,000 48,299 43,125 30,048 29,300-58% 20,000 0 FY'15 Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

7 Except Bengaluru & Kolkata, all other cities witnessed decline in launches # of units 30,000 Total unit launches FY 17 vs FY 18 27,257 25,000 20,000 15,000 10,000 5,000 4,252 3,791 5,676 2,996 2,266 5,501 4,166 7,920 3,419 3,305 3,554 5,296 4,531 1,553 9,936 3, Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune Notes: * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna.

8 <Rs.50 Lakh budget housing continues to have more than 50% share in new launches % of units 100% 80% 60% 40% 15% 14% 13% 6% 9% 6% 14% 17% 17% 36% 35% 34% Q- o- Q budget- wise unit launches in top- 9* cities 14% 19% 15% 11% 9% 8% 7% 6% 7% 7% 10% 9% 14% 16% 21% 16% 12% 19% 27% 42% 34% 33% 31% 33% 12% 9% 24% 34% 19% 20% 16% 7% 8% 10% 20% 22% 18% 28% 22% 32% 20% 29% 25% 30% 27% 27% 26% 29% 28% 43% 21% 26% 28% 24% 0% FY'15 < Rs.25 Lakhs Rs Lakhs Rs Lakhs Rs Lakhs > Rs.1 Crore Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

9 2 Consumer & Demand : Sales Momentum Regained

10 Sales during the quarter increased 35% Y- o- Y, highest in last 13 quarters # of units 1,00,000 Sales trend in top- 9 cities* 80,000 60,000 80,229 75,140 71,781 75,462 74,868 70,339 65,270 52,618 59,970 61,027 52,059 47,896 80,950 35% 40,000 20,000 0 FY'15 Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

11 Except Hyderabad, all cities have shown improvement in sales # of units 30,000 Total unit sales FY 17 vs FY 18 25,281 25,000 20,000 18,070 15,885 15,000 10,000 5,000 3,193 3,205 8,043 11,706 4,070 5,075 1,244 2,915 7,132 5,077 3,342 3,873 4,702 7,933 10,174 0 Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune Notes: * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna.

12 Declining trend of under- construction unit sales reversed in H2 FY 18 # of units 2,50,000 2,00,000 2,19,696 Sales in top- 9* cities: Completed vs Under- Construction projects 1,89,840 1,50,000 1,00,000 1,57,980 1,52,270 1,35,556 1,35,589 1,19,033 96,317 94,194 1,04,379 CAGR - 14% 50, ,015 8,744 9,179 9,742 11,365 14,741 16,576 16,271 18,892 24,467 H1 FY'14 H2 FY'14 H1 FY'15 H2 FY'15 H1 H2 H1 H2 H1 H2 22% Completed Under Construction Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

13 <Rs.50 Lakhs segment continued to contribute >50% to sales % of units 100% 80% Sales in top- 9* cities by budget segment 13% 14% 14% 15% 16% 16% 16% 15% 15% 15% 17% 17% 18% 7% 8% 8% 7% 8% 8% 9% 8% 8% 8% 9% 10% 9% 60% 18% 18% 18% 17% 18% 20% 19% 18% 18% 19% 20% 21% 20% 40% 36% 35% 34% 35% 33% 35% 36% 37% 34% 35% 32% 32% 34% 20% 26% 25% 26% 26% 25% 21% 20% 22% 25% 23% 22% 20% 19% 0% FY'15 < Rs.25 Lakhs Rs Lakhs Rs Lakhs Rs Lakhs > Rs.1 Crore Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

14 Ahmedabad, Mumbai and Pune have >25% share of sales in < Rs.25 Lakhs budget segment % of units 100% 80% 60% 40% 20% 0% 15% 7% 14% 36% 28% 19% 16% 11% 28% 39% 3% Budget- wise sales in top- 9* cities FY 18 9% 24% 40% 11% 27% 25% 16% 12% 21% 24% 16% 31% 24% 4% 11% 8% 16% 42% 29% 9% 16% 21% 23% 25% 8% 6% 6% 6% 19% 20% Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune < Rs.25 Lakhs Rs Lakhs Rs Lakhs Rs Lakhs > Rs.1 Crore Notes: * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna. 55% 12% 42% 26%

15 3 Inventory: Inventory Overhang Erodes

16 Inventory overhang came down by 6 months in FY 18 # of months Q- o- Q overall inventory overhang in top- 9* cities months FY'15 Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

17 Overall unsold inventory decreased by 7% Q- o- Q # of units 10,00,000 8,00,000 7,52,224 7,53,389 Q- o- Q overall unsold inventory in top- 9* cities (Mar 18) 7,51,812 7,77,550 7,96,646 7,99,020 8,00,402 8,11,477 8,20,771 8,07,704 7,98,910 7,81,190 7,29,108 7% 6,00,000 4,00,000 2,00,000 0 FY'15 Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad.

18 Hyderabad has the lowest inventory overhang at the end of FY 18 Age of unsold inventory (months) 60 Age of unsold inventory vs inventory overhang in top- 9* cities (Mar 18) 50 Chennai Noida 40 Ahmedabad Mumbai 30 Bengaluru Gurugram Pune 20 Hyderabad Kolkata Inventory overhang (months) Notes: * Top 9 Cities are Mumbai (including Navi Mumbai & Thane), Pune, Noida (including Greater Noida & Yamuna Expressway), Gurugram (including Bhiwadi, Dharuhera & Sohna), Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. Size of the bubble indicates total inventory in units.

19 Noida holds the highest share of unsold inventory aged above 3 years followed by Chennai & Gurugram % of units 100% Age of unsold inventory in top- 9 cities (Mar 18) 80% 60% 43% 44% 52% 51% 24% 16% 35% 16% 48% 72% 33% 22% 40% 20% 0% 22% 26% 19% 18% 9% 24% 13% 13% 17% 16% 11% 22% 31% 29% 31% 16% 18% 18% 18% Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune Notes: * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna. 1 Yr 1 to 2 Yrs 2 to 3 Yrs > 3 Yrs 11% 11% 6% 28% 17%

20 Kolkata and Ahmedabad have more than 70% of the unsold inventory in the <Rs.50 Lakhs segment % of units 100% 12% 6% 80% 11% 60% 34% 40% 20% 37% 0% Budget breakup of unsold inventory (Mar 18) 7% 13% 21% 25% 6% 12% 33% 14% 14% 25% 21% 14% 35% 29% 16% 29% 37% 20% 30% 13% 17% 6% 7% 7% 30% 7% 6% 19% 19% 8% 16% 37% 20% 55% 38% 22% 26% 31% 12% 3% Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune < Rs.25 Lakhs Rs Lakhs Rs Lakhs Rs Lakhs > Rs.1 Crore Notes: * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna.

21 Ahmedabad and Chennai have the highest share of ready to move in units in unsold inventory % of units Unsold inventory as on Mar 18 Completed Vs Under- Construction 100% 80% 49% 60% 80% 68% 92% 83% 87% 92% 84% 92% 40% 20% 0% 51% 20% 32% 8% 17% 13% 8% 16% 8% Ahmedabad Bengaluru Chennai Gurugram^ Hyderabad Kolkata Mumbai** Noida* Pune Notes: * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna. Completed Under Construction

22 4 Pricing:PositiveChanges

23 Mumbai witnessed highest price appreciation followed by Pune and Hyderabad, NCR saw a price decline Weighted average^^ BSP (Rs./sq.ft.) of apartment units as at the end of quarter City FY 17 FY 18 Price Change (Y- o- Y) Ahmedabad 2,922 2,957 1% Bengaluru 4,838 5,028 4% Chennai 5,071 5,068 0% Gurugram^ 6,139 5,897-4% Hyderabad 3,970 4,322 9% Kolkata 3,825 3,815 0% Mumbai** 8,370 9,267 11% Noida* 3,960 3,888-2% Pune 4,675 5,136 10% Notes: ^^ Price weighted on number of units supply in respective projects in a city. * Noida includes Greater Noida and Yamuna Expressway. ** Mumbai includes Navi Mumbai and Thane. ^ Gurugram includes Bhiwadi, Dharuhera and Sohna. Analysis includes apartments across the regions.

24 Outlook for FY 19 Headwinds faced by real estate industry in 2017 is over now. Teething issues of RERA and GST, two key reforms have been resolved. Consumer confidence is back, reflecting in increased sales volume Real estate launch cycle has bottomed out and many developers are planning large launches in coming quarters, this will further boost sales Most of the sales will continue to be in <50 Lakh budget and hence developers will restructure their projects to launch smaller size units Prices will start moving up in cities such as Pune, Bengaluru and Hyderabad where distress of unsold inventory is reducing

25 Thank You

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