Pulse. Mid-segment Residential a Safer Bet in Realestonomics. Deal of the month. Think About It!! Green Wall

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Juniper Fitzgerald
6 years ago
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Mid-segment Residential a Safer Bet in 2013 2013 was a challenging year for Indian Economy, with weak macroeconomic conditions, slowing income growth, sustained weakening rupee, fast rising inflation

This strongly affected the housing absorption which consistently witnessed negative growth over 2013. The weakening rupee steadily eroded purchasing power of home buyers.

Developers in India were already troubled by increasing borrowing rates, less availability of debt, increase in construction costs and significant drop in selling leading to piling inventory.

About 31% of the total units were launched in the price range of INR 3000-4000per sq ft in 2013 from a 28% in 2012.

1 Mid-segment Residential a Safer Bet in was a challenging year for Indian Economy, with weak macroeconomic conditions, slowing income growth, sustained weakening rupee, fast rising inflation and increased borrowing rates resulted in consistently falling consumer confidence index over the year. This strongly affected the housing absorption which consistently witnessed negative growth over The weakening rupee steadily eroded purchasing power of home buyers. Amidst all the developers adopted a very cautious and cognitive approach to launch homes in the mid-segment. Developers in India were already troubled by increasing borrowing rates, less availability of debt, increase in construction costs and significant drop in selling leading to piling inventory. Amidst this in our recent 4Q13 REIS all India residential market analysis we observed that most cities witnessed launches in the mid segment which were priced between INR INR 5000 per sq ft. About 31% of the total units were launched in the price range of INR per sq ft in 2013 from a 28% in While about 25% of the total units were launched in the price range of INR per sq ft in 2013 from a 12% in In 2012 most of the launches were in affordable segment. However this segment did not seem much feasible segment for developers in And therefore they opted for launching midsegment projects which were the fastest selling and therefore a safer bet in the tough times. % No of units in total units launched 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Residential 4Q12-4Q13 12% 28% 4Q12 25% 31% 4Q13 More than Less than 2000 Realestonomics Market Sentiment Deal of the month Think About It!! The Reserve Bank of India (RBI) has increased the repo rates to 8% in January as a measure to control inflation. This, however came as a blow to real estate developers who are already in pain due to increased cost of borrowing capital. Therefore supply and new launch of real estate projects will likely slowdown. This policy decision is likely to increase the lending rates. This in turn will increase the interest rates of home loans which will dampen the residential sales even further. Investment climate cautious due to slow macro economic factors. US-based private equity giant Blackstone and Panchshil Realty have emerged as frontrunners for buying Citibank s old headquarters at the BKC for INR 1.86 billion. India s largest retirement village projects called Clover Renaissance by Clover Builders. They are partnering with Covai Property Centre of Coimbatore, a pioneer in senior care for technical expertise on the project. Green Wall GRIHA-Prakriti Rating for Sustainable Schools was launched at the fifth edition of the annual conference for GRIHA. As per GRIHA schools have immense potential to save energy and water. Legend: Market Sentiment Favourable Neutral Unfavourable

Weather Map Cities Office Rental Value Retail Rental Value Residential Capital values DELHI MUMBAI DELHI PUNE BANGALORE CHENNAI KOLKATA HYDERABAD KOLKATA MUMBAI PUNE HYDERABAD Legend Growing

2 Weather Map Cities Office Rental Value Retail Rental Value Residential Capital values DELHI MUMBAI DELHI PUNE BANGALORE CHENNAI KOLKATA HYDERABAD KOLKATA MUMBAI PUNE HYDERABAD Legend Growing Stabilise Stagnate Falling BANGALORE CHENNAI For more information about our research, contact Ashutosh Limaye Head, Research and REIS Trivita Roy Assistant Vice President, Research Research Dynamics 2014 Pulse reports from Jones Lang LaSalle are frequent updates on real estate market dynamics.

3 Bangalore rate increased in January in the city with slowing demand. Tribune and NASDAQ leased space at Vittal Mallya Road, CBD Walmart leased space at Outer Ring Road, SBD First Advantage, Qualcomm and Idea Cellular leased space at Whitefield CBD ,000 20,000 Old Airport Road ,000 10,000 Outer Ring Road (Eastern) ,500 6,500 Old Madras Road ,000 6,500 Electronic City ,800 3,200 Bangalore s retail market saw moderate demand for retail space. No major leases were concluded in January. With the sluggish demand and slow leasing activity in upcoming malls, any significant change could not be anticipated for at least another six months. Koramangala ,000 16,000 Indiranagar ,000 16,000 New BEL Road ,000 10,000 Commercial Street ,000 20,000 Residential markets exhibited continued steady demand. New : Sobha Silicon Oasis by Sobha Developers at Hosa Road Sumadhura Shikaram by Sumadhura Constructions at Whitefield Mirabills by Kolte Patil at Horamavu Century Ethos by Century Real Estate at Bellary Road. The Union Cabinet approved the second phase of the Namma Metro project (Bangalore Metro Rail) which will have six lines of total 72-km network with 61 stations among which about 12 of them will be underground. Jayanagar ,000 15,000 Old Madras Road 15,000 25,000 5,000 6,000 Indiranagar 20,000 30,000 10,000 25,000 Bellary Road 12,000 18,000 4,500 9,000 Hosur Road 10,000 14,000 3,000 6,500 Whitefield 18,000 25,000 4,500 8,000 Tumkur Road 8,000 12,000 3,000 5,000 Kanakapura Road 8,000 12,000 3,000 5,500 Mysore Road 8,000 10,000 3,000 4,000 / () / s ()

4 Chennai Tenants continued to consolidate their operations to cost-effective locations and space efficient projects and with healthy upcoming deals in the pipeline. These will result in good volume of leasing activity in the coming months. Fresh desk expanded its operation within SP Infocity Mount Road ,000-15,000 RK Salai ,000-15,000 Pre-toll OMR ,000-6,500 Post-toll OMR ,500-5,000 Guindy ,000-9,000 Chennai continued to see retail demand mostly in expansion of restaurants and eat-outs in January. Dominos Pizza in GN Chetty Road Pizza Hut in RA PuramCafé Nilgiris in Nelson Manikam Road Lifespace Furniture in Perungudi T.Nagar ,000-15,000 Nungambakkam ,000-16,000 Velachery ,000-12,000 Pre-toll OMR ,000-11,000 Anna Nagar ,000-13,000 Affordable new launches in the suburban locations improved the demand for housing during the month. New One City by Shriram properties in Valarpuram Santorini by Tata Housing near Poonamallee Landmark by Ruby in Varadarajapuram Chennai Metropolitan Development Authority completed land acquisition for the 32.8 km Outer Ring Road Phase II from Nemilichery to Minjur. This stretch when completed will become a major corridor connecting four national highways NH 4, NH 5, NH 45 and NH 205. LB Road (Adyar) ,500-13,500 Adyar 20,000 30,000 12,000-22,000 Medavakkam 7,000-14,000 3,600-5,500 Tambaram 6,000-12,000 3,500-4,500 Anna Nagar 15,000 25,000 9,000-15,000 Porur 5,000-10,000 3,800-6,200 Sholinganallur 9,000-12,000 4,250-5,800 / () / s ()

5 Delhi NCR remained stable driven by relocation and consolidation by occupiers and is likely to go up with RFPs for large space requirements becoming active Arion leased space in NH 8 and Biogen Idec in Golf Course Extension Road-Gurgaon Hanover in CBD Barakhamba Road ,000-35,000 Jasola ,000-21,000 DLF Cybercity NA MG Road ,000-19,000 Golf Course Road ,500-15,000 continued to remain stable as retailers retained focus on portfolio rationalisation and pre-commitment in upcoming malls as part of new expansion. PVR, Kidzania, HCL Healthcare Clinic, KFC & Sagar Ratna, all in Noida South Delhi ,000-32,000 West and North Delhi ,000-23,000 Gurgaon-MG Road ,500-23,000 Rest of Gurgaon ,000-14,000 Noida ,000-25,000 With demand remaining sluggish, residential sales were slow in January. New : Unitech Ivy Terraces by Unitech & Arete by ILD, both in Sohna Road- Gurgaon Amrapali Riverview by Amrapali, ATS Dolce by ATS Infrastructure, and La Palacia by New tech Group, all in Noida DMRC approved 9.71 km metro expansion from Dilshad Garden to New bus stand in Ghaziabad DDA to raise floor area ratio for hotels by up to 66% The Noida authority will construct a new U-turn to ease traffic on the 25-km Noida expressway that connects Delhi with the Yamuna expressway, a high-speed link between Greater Noida and Agra. Ghaziabad ,500-16,000 Golf Course Road 22,000-32,000 12,000-16,000 Sohna Road 15,000-20,000 5,800-7,500 Golf Course Extension Road 16,000-22,000 8,000-9,500 Dwarka Expressway NA Noida- Greater Noida Expressway 12,000-14,000 4,000-6,100 Noida City 12,000-14,500 4,700-6,000 Indirapuram 10,000-12,000 4,200-5,000 / () / s ()

6 Hyderabad remained slow in Hyderabad in January. Most of the leases were closed in Hitec City. Digital mind, Cambridge Tech, Paradigm and Syngenta leased space at Hitec City remained stable on high streets and malls of Hyderabad in January. Pai International leased space at Uppal Lazer Max leased space at high street of Himayatnagar and in City Center Mall Banjara Hills Residential sales continued to remain slow in January. New launches in both apartments and villas were slow over the month. New Luxor Apartments at Kondapur by Trishala Infrastructure Orchid Avenues Villas at Velimalla near Kollur by Vitus Infrastructure. L&T Metro Rail Hyderabad (L&TMRH), the concessionaire of the Hyderabad Metro Rail (HMR) project are planning to use Bailey bridges (pre-fabricated steel bridges) to cross Musi River and various railway tracks. Begumpet ,500 6,500 Banjara Hills ,500 7,500 Hitec City ,000 5,200 Gachibowli ,000 5,000 Uppal ,000 4,000 Banjara Hills ,000 13,000 Jubilee Hills ,000 14,000 Secunderabad ,000 10,000 Hitec City ,000 13,000 Kukatpally ,000 12,000 Dilsukhnagar ,000 12,000 Banjara Hills 20,000 25,000 7,500 14,000 Begumpet 12,000 16,000 4,000 5,500 Kondapur 8,000 16,000 3,200 5,000 Gachibowli 8,000-16,000 3,500-4,200 Tellapur 6,000 12,000 2,800 3,500 Kukatpally 7,000 10,000 3,500 3,800 Miyapur 5,000 8,000 2,400 3,500 / () / s ()

7 Kolkata was slow in the city in January. However, PBDs, witnessed enquiries with some activity in the CBD and SBD. Cost-effective locations and efficient projects with better facilities remained the key behind the occupier enquiries. Park Street ,500-22,000 Topsia ,500-10,000 Kasba ,000-11,000 Salt Lake Sector V ,300-5,200 New Town and Rajarhat ,300-4,300 remained stable in with absorption taking place across different sub-markets. Alcove Gloria commenced operation on VIP Road with Big Bazaar as a major tenant. Anita Dongre on Elgin Road high street Bombay Dying in Prime City Body Shop in Suburbs Residential demand remained moderate in the city. New Hiland Greens by Hiland Group at Maheshtala Pratham by Dhoot Group at Rathtala- BT Road Kshitij by a JV of Space Group, Empress Group and Prudent Infrarealty at Dumdum The finance department of the West Bengal government has corrected the valuation of built-up space in certain localities of the city and its periphery for residential sector as well as for offices in Sector V of Salt Lake. This has been treated as a welcome move for both buyers and sellers and is likely to encourage real estate investment in the city. Elgin Road ,000-30,000 Park Street (high street) ,000-35,000 Prince Anwar Shah Road ,000-15,000 Salt Lake , ,000 New Town and Rajarhat ,000-8,000 Gariahat (high street) ,000-22,000 Alipore 43,000-50,000 14,000-22,000 Prince Anwar Shah Road 19,000-30,000 7,000-14,000 EM Bypass (Topsia) 15,000-25,000 5,000-10,000 Lake Town 11,000-17,000 3,500-7,500 New Town (AA- I, II & III) 10,000-16,000 3,500-6,000 Rajarhat 8,000 14,000 2,500-4,700 Behala 8,000-14,000 3,000-5,500 / () / s ()

Mumbai remained moderate in January. Transactions that took place were majorly for small offices; nevertheless occupiers with large requirements remained fence-sitters.

8 Mumbai remained moderate in January. Transactions that took place were majorly for small offices; nevertheless occupiers with large requirements remained fence-sitters. Symantec in SBD BKC Faber castle in SBD North Indo Japan Polymers in Eastern submarket Lower Parel ,000-23,000 BKC ,000-35,000 Andheri ,000-15,000 Goregaon-Malad ,100-10,000 Wagle Estate ,200-6,200 for mall space remains negligible in January. Apparels and F&B categories generated some demand at the moment owing to largely stable business from fastfashion and food. Global Desi in Suburbs (Western) Ponchos (F&B) in Prime North high street The residential sales continued to be subdued in January mainly due to unaffordability. Select new launches witnessed upsurge in enquires. New : White City by Rajesh Buildersat Kandivali Godrej Central by Godrej Properties at Chembur Wadhwa Platina by Wadhwa Group at Thane The Prime Minister of India inaugurated the Integrated Terminal 2 (T2) Chhatrapati Shivaji International Airport on 10, January This terminal is spread over 4.4 million sq ft. Lower Parel ,000-32,000 Malad ,500-20,000 Ghatkopar ,100-18,000 Mulund ,500-15,500 Thane ,000-14,000 Navi Mumbai ,000-12,000 Lower Parel 65,000-1,10,000 24,000 35,000 Wadala 40,000-55,000 15,000 20,000 Andheri 35,000-55,000 12,500 21,000 Ghatkopar 30,000-45,000 10,000 15,000 Ghodbunder Road 12,000 25,000 5,800 9,000 Kharghar 10,000 18,000 5,000 8,000 / () / s ()

9 Pune remained stable in the city with vacancy decreasing marginally during the month Shakti Sports in SBD East Rathi Group of Companies in Viman Nagar Hadapsar ,500-7,500 Kharadi ,500-6,000 Hinjewadi ,000 5,500 Viman Nagar ,500 7,500 SB Road ,500 8,000 The overall retail market continued to remain stagnant in terms of new transactions and rent movement in the city. Crossword in Aundh and on Tilak Road MG Road ,000 21,000 Bund Garden Road ,000 17,000 FC Road ,000 20,000 JM Road ,000 20,000 DP Road ,000 16,000 for the residential properties remained stable over the month. New : Mumbai based Nahar Group announced a partnership with Eiffel Developers (Pune) Fashion TV launched the first F- Residences in India in Balewadi Downtown Beryl in North East submarket Double-decker flyover at Kasarwadi is nearing completion. In July 2010, the Pimpri Chinchwad Municipal Corporation began work at Kasarwadi in Pimpri at a cost of INR 1 billion. The upper two-lane unidirectional flyover will carry traffic coming from Pune to Bhosari and Nashik. While the lower flyover has two parallel stretches for two-way traffic and links Nashik Road with Pimpale Gurav, Pimpale Saudagar, Sangvi, Wakad and Aundh. SB Road ,000-16,000 Wakad 10,000 13,000 4,700 5,700 Hinjewadi 9,000 11,000 4,800 6,300 Kharadi 11,000 15,000 4,500 5,600 Hadapsar 13,000 18,000 5,000 7,500 Undri 8,000 11,000 4,000 5,200 Pimri-Chinchwad 8,000 13,000 4,500 6,000 / () / s ()

About Jones Lang LaSalle Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by

10 About Jones Lang LaSalle Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet and completed $63 billion in sales, acquisitions and finance transactions in Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management. Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 26,100 employees operating in 79 offices in 14 countries across the region. The firm was named Best Property Consultancy in nine Asia Pacific countries at the International Property Awards Asia Pacific 2012, in association with HSBC, and was named the number one real estate advisory firm in Asia Pacific in the Euromoney Real Estate Awards For further information, please visit our website, About Jones Lang LaSalle India Jones Lang LaSalle is India s premier and largest professional services firm specializing in real estate. With an extensive geographic footprint across 11 cities (Ahmedabad, Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and a staff strength of over 6800, the firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, analytics, consultancy, transactions, project and development services, integrated facility management, property and asset management, sustainability, industrial, capital markets, residential, hotels, health care, senior living, education and retail advisory. The firm was named the Best Property Consultancy in India (5 Star Winner) at the International Property Awards - Asia Pacific for For further information, please visit For more information about our research, contact Ashutosh Limaye Head, Research and REIS ashutosh.limaye@ap.jll.com Trivita Roy Assistant Vice President, Research trivita.roy@ap.jll.com Research Dynamics 2014 Pulse reports from Jones Lang LaSalle are frequent updates on real estate market dynamics.

Pulse. Market Highlights OCTOBER Get city Pulse by clicking below. Monthly Real Estate Monitor November 2014

Pulse. Market Highlights OCTOBER Get city Pulse by clicking below. Monthly Real Estate Monitor November 2014 Market Highlights OCTOBER 2014 Office space leasing activity remained upbeat across cities Get city Pulse by clicking below remained stable across all cities except for Delhi. remained stable except for