India office property market overview october 2013

Office PrOPerty Market Overview iNDia

QUarterLy UPDate | OctOBer | 2013

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MACRO ECONOMIC OVERVIEW

India’s GDP growth rate was 4.5% in April-•June 2013. This is the slowest growth rate in the last 4 years.

Headline inflation, based on the wholesale •price index was recorded at 6.46% for the month of September 2013 as compared to 6.10% for August 2013.

The rupee slumped during the quarter and •touched a record low of 68.85 per US Dollar, however, in the subsequent weeks the rupee recovered and currently, hovering between INR 62-63 per US dollar. This volatility in the exchange rated caused a major concern to foreign investors and Indian importers.

Slowing economic growth, rising inflation, •depreciating rupee and volatile equity markets further intensified the economic risk in Indian markets. Concerned with the increasing inflation, the Reserve Bank of India increased the repo and reverse repo rate by 25 basis-points.

In 3Q 2013, relocation and consolidation were •the primary demand generators for commercial office space. Overall demand for leasing commercial real estate softened due to the conservative expansion plans of most companies. The six major cities i.e. Mumbai, NCR, Bengaluru, Chennai, Kolkata and Pune recorded an overall absorption of around 6.2 million sq ft which is approximately 20% lesser than the last quarter absorption of around 8 million sq ft.

COLLIERS VIEW : The economic environment in India is expected to remain uncertain due to overall global economic conditions and upcoming elections in 2014. We anticipate moderate leasing demand across the cities in next coming quarters. Inspite of moderate demand, rental values are expected to remain stable due to limited supply as developers deferring completion of their projects and refrained from adding more speculative supply in the market.

ECONOMIC BAROMETER

RETuRN ON AlTERNATIVE INVEsTMENTs

RESEARCH & fORECAST REPORTsYDNEY CENTRAl BusINEss DIsTRICT

INDIA OffICE MARKETREsEARCh & fORECAsT REpORT

sep-12 sep-13

REPO RATE 8.00% 7.50%

REVERSE REPO RATE 7.00% 6.50%

CRR 4.50% 4.00%

INfLATION (WPI)1 8.07% 6.46%

PLR2 9.75% - 10.50% 9.70% - 10.25%

DEPOSIT RATE3 8.00% - 9.25% 7.50% - 9.00%

ExCHANGE RATE INR - USD 54.31 63.30

INR- EURO 71.30 84.17

sep-12 sep-13 YoY %

Change

GOLD 31,925 29,675 -7.05%

SILVER 63,188 48,475 -23.28%

EQUITY (BSE

SENSEx) 18,542 19.742 6.47%

REALTY INDEx 1,735 1,292 -25.79%

Source: Colliers International India Research

ECONOMIC INDICATORs

INR

Cror

eIn

Per

cent

age

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

Apr-

July

201

3

2012

-13

fDI in Real Estate

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

4.0%

6.0%

8.0%

10.0%

12.0%

Jan

- M

ar 0

9

Apr

- Ju

n 09

Jul -

Sep

09

Oct

- D

ec 0

9

Jan

- M

ar 1

0

Apr

- Ju

n 10

Jul -

Sep

10

Oct

- D

ec 1

0

Jan

- M

ar 1

2

Apr

-Jun

13

Jan

- M

ar 1

3

Oct

- D

ec 1

2

Jun

- Se

p 12

Oct

- D

ec 1

1

Jul -

Sep

11

Apr

- Ju

n 11

Jan

- M

ar 1

1

Gross Domestic product at factor Cost

0.0%

2.0%

3Q 2013 | OFFICE

50

60

110

120

130

90

100

70

80

31-J

ul-1

3

9- S

ep-1

3

19-

Sep-

13

20-A

ug-1

3

30-A

ug-1

3

10-A

ug-1

3

1-Ju

l-13

11-J

ul-1

3

21-J

ul-1

3

29-S

ep-1

3

BsE sensex & Realty Index

BSE Sensex Realty Index* Rebase to 100

USD Euro

Exchange Rates

65

70

55

60

50

75

80

1-Ju

l-13

11-J

ul-1

3

21-J

ul-1

3

10-A

ug-1

3

20-A

ug-1

3

30-A

ug-1

3

31-J

ul-1

3

9-Se

p-13

19-S

ep-1

3

29-S

ep-1

3

Note : All values in the above tables are as on 15th of September 2012 and 20131 Wholesale Price Index2 SBI Prime Lending Rate3 SBI interest rate < INR 1 crore Term Deposits for ≤1 Year

Apr

- Ju

n 12

Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.

COllIERs INTERNATIONAl | p. 3

iNDia | 3Q 2013 | OFFICE


Andheri East 24%

Thane / LBS 21%

CBD1%

Worli / Prabhadevi

1%

Goregoan / JVLR

4%Powai 4%Navi Mumbai

2%

Malad6%

Lower Parel 20%

BKC 15%

Kalina 2%

AVAIlABlE supplY IN pRIME AREAs

3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value

CITY OffICE BAROMETER

Micro Market Rental Values

% Change

QoQ YoY

CBD 225 - 260 0% -3%

Andheri East 90 - 125 0% 0%

BKC 225 - 320 0% 1%

Lower Parel 140 - 180 0% -3%

Malad 80 - 90 0% 0%

Navi Mumbai 55 - 75 0% 0%

Powai 100 - 120 0% 0%

Worli/ Prabhdevi 175 - 225 0% 0%

Goregaon/ JVLR 80 - 110 0% 0%

Kalina 175 - 210 0% 0%

Thane / LBS 50 - 100 0% 0%

Andh

eri E

ast

BKC

Low

er P

arel

Mal

ad

Navi

Mum

bai

Pow

ai

Wor

li/Pr

abhd

evi

Gore

gaon

/

JVLR

Kalin

a

Than

e /

LBS

CBD

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

GRADE A CApITAl VAluEs

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

1Q20

08

1Q20

09

1Q20

10

1Q20

14f

1Q20

13

1Q20

15f

1Q20

12

1Q20

11

505,000

0 0

100

10,000

150

15,000

200

20,000

250

25,000

30,000

AVERAGE RENTAl AND CApITAl VAluE TREND

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

Note:Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter.

Grade A Rental/Capital Values: Indicative asking price for Grade A office space.

Prime Office Average Rental Trends: Average market rental values for Grade A properties.

KEY uNDER CONsTRuCTION pROJECTs

BUILDING NAME DEVELOPER AREA (SQ. fT.) LOCATION ExPECTED COMPLETION

fulcrum Hiranandani Group 342,000 Andheri East 2014

Green Span BK Birla Group 320,000 Lower Parel 2013

Zillion Kanakia Spaces 525,000 Kurla 2014

KEY MARKET TRANsACTIONs

CLIENT BUILDING NAME AREA (SQ. fT.) LOCATION TRANSCATION TYPE

CGG Veritas Reliable Tech Park 18,000 Navi Mumbai Lease

DHfL TCG financial Center 30,000 BKC Lease

HSBC India Bulls finance Center 72,000 Lower Parel Lease

PVR Pictures India Lotus Corporate Park 12,000 Jogeshwari Lease

Rabo Bank Peninsula Business Park 30,000 Lower Parel Lease

Sandwell Nitco Business Park 20,000 Thane Lease

MUMBAI

forecast

MuMBAI

The Mumbai commercial market remained •sluggish during 3Q 2013. Except for few large deals (75,000 - 150,000 sq ft), demand in the primary market remained moderate. The market recorded absorption of approximately 0.65 million sq ft of Grade A office space, which is comparatively less than the last two quarter’s absorption of 1.8 and 1.5 million sq ft.

The third quarter saw no major new •completions of Grade A commercial office projects except “Sahar Business Center” by The Continental Group at Andheri, measuring about 0.1 million sq ft. Projects launched during this quarter include, “fulcrum” by Hiranandani Developers at Andheri (East) having more than 0.3 million sq ft of Grade A commercial office space. The project is likely to be completed by 2Q 2014.

Vacancy levels remain stable due to moderate •demand and limited addition of new supply in the market. About 8 million sq ft of commercial Grade A space was available for fit-out, which is approximately 2% less than in the last quarter.

Demand and supply equilibrium had kept the •overall price levels in check, and rental and capital values remained stable during the surveyed quarter.

COLLIERS VIEW :• A number of corporate are looking for consolidation and relocation options in order to optimise their real estate costs. Overall rental values are expected to remain stable except for SBD where a marginal increase can be witnessed in premium projects due to limited supply.

p. 4 | COllIERs INTERNATIONAl

3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value



Jasola 59%

Nehru Place 10%

Saket 29%

Connaught place 2%




% Change

QoQ YoYConnaught Place 231 - 475 0% -7%

Nehru Place 150 - 250 0% 8%

Saket 140 - 190 0% 3%

Jasola 100 - 125 0% 9%

Netaji Subhash 65 - 75 0% 0%

Nehr

u Pl

ace

Conn

augh

t Pla

ce

Jaso

la

Sake

t

Neta

ji Su

bhas

h

0

10,000

20,000

30,000

40,000

50,000

60, 000


Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

50

5,000

0 0

100

10,000

150

15,000

200

20,000

250

25,000

300

30,000

35,000

40,000


forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.






NBCC Plaza NBCC Ltd. 350,000 Okhla 2014

NBCC Commercial Complexes NBCC Ltd. 1,300,000 Kidwai Nagar 2016

Parsvnath 27 Parsvnath Ltd. 150,000 K.G. Marg 2016



Kensar Rasvilas 1,500 Saket Lease

Oriflame Corporate One 50,000 Jasola Lease

Raheja Developer Rectangle One 10,000 Saket Lease

Samsung Data M6 Plaza 21,500 Jasola Lease

Yes Bank TDI 8,500 Jasola Lease

DELHI


1Q20

08

1Q20

09

1Q20

10

1Q20

13

1Q20

14f

1Q20

15f

1Q20

12

1Q20

11

DElhI

The Delhi commercial office market continued •to see sluggish occupier demand in 3Q 2013. Only a few mid-sized deals were concluded in Connaught Place, Jasola and Saket, resulting in 0.15 million sq ft of Grade A office space absorption during the quarter.

There were no major new completions in •Delhi in 3Q 2013. However, a commercial project was launched by Parsvanath Ltd in KG Marg in the CBD, called “Parsvnath 27”. Infrastructure Leasing & financial Services Limited (ILfS) also announced a commercial development at East Kidwai Nagar under the “National Buildings Construction Corporation Ltd. (NBCC) Redevelopment Scheme”. These projects together will add more than 1.4 million sq ft of Grade A commercial office supply to the city’s total inventory by the end of 2016.

Due to supply - demand equilibrium, the •city witnessed stable vacancy levels QoQ. Approximately, 1.7 million sq ft of Grade A commercial office space was available for fit-out primarily concentrated in Saket and Jasola.

Rental values for Grade A office space remained •unchanged during the quarter. Capital values remained stable, as the city witnessed almost no strata-title sales in secondary markets due to increased circle rates.

COLLIERS VIEW : Amid economic uncertainties, occupiers are likely to remain cautious, thus demand is expected to remain moderate in the coming quarter. Rental and capital values are expected to remain stable with an upward bias due to limited supply of Grade A office space in Delhi.




MG Road 5%

Golf Course Road 4%

DLf Cyber City4%

Institutional Sectors (Sec44, 32, 18)

3%

Manesar 26%

National Highway 818%

Udyog Vihar & Industrial Sectors

4%

Golf Course Road Ext./Sohna Road

36%



Inst

itutio

nal S

ecto

rs

(Sec

44, 3

2, 1

8)

Golf

Cour

se R

oad

Ext./

Sohn

a Ro

ad

Man

esar

Golf

Cour

se

Road

Ext

./So

hna

Road

(IT)

Udy

og V

ihar

& In

dus-

tria

l Sec

tors

(IT)

Udy

og V

ihar

&

Indu

stria

l Sec

tors

Natio

nal H

ighw

ay 8

(IT

)

Man

esar

(IT)

Natio

nal H

ighw

ay 8

MG

Road

Golf

Cour

se R

oad

0

5,000

10,000

15,000

20,000

25,000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

20 2,000

0 0

40 4,000

60 6,000

80 8,000

100 10,000

120 12,000forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.








Paras Square Paras Group 250,000 Sector 63A 2016

Spaze Arrow Spaze Group 300,000 Sector 78 2016

Spaze forum Spaze Group 250,000 Sector 70 2016

KEY MARKET TRANsACTION


Aon Hewitt Unitech Infospace 800,000 Sohna Road Lease

CB&I DLf Infinity Towers 94,450 DLf Cyber City Lease

fluor Daniel DLf Building No. 10B 70,000 DLf Cyber City Lease

GSK One Horizon Centre 68,400 Golf Course Road Lease

Michelin Orchid Business Park 73,400 Sohna Road Lease

GURGAON

3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value


GuRGAON

Gurgaon observed persistent occupier •demand during 3Q 2013. The city’s overall absorption was approximately 1.6 million sq ft which is double that of the last quarter. However, this increase in absorption was primarily attributed to the 0.8 million sq ft of office space leased by “Aon Hewitt” in the Unitech Infospace SEZ.

The city witnessed completion of 0.5 million •sq ft of Grade A office space. Projects contributing this supply were “BPTP Centra One” developed by BPTP Ltd at Sector 61 and “Splendor Trade Tower” developed by Splendor Group at Sector 65.

Projects launched during 3Q 2013 include •“Paras Square” by Paras Group at Sector 63A; “Spaze Arrow” and “Spaze forum”, both by Spaze Group located in Sectors 78 and 70, respectively. These projects together will contribute more than 0.8 million of Grade A commercial office space to the city’s inventory by the end of 2016.

Vacancy in Grade A office space has increased •marginally; approximately 15.6 million sq ft of Grade A commercial office space was available for fit-out in 3Q 2013.

Despite consistent demand, the rental values •witnessed downward pressure in the IT/ITeS driven micro-markets such as Golf Course Road and Sohna Road, and rents declined 2 - 5% QoQ. Rents for non-IT/ITeS office space remained stable due to limited availability.

COLLIERS VIEW : Demand will be primarily driven by corporate looking for large facilities to consolidate their business operations. Considering the large vacant stock and cost-conscious occupiers, rental values for IT/ITeS office space will remain stable with a downward bias. However, rental values in commercial office space may see marginal appreciation.

1Q20

08

1Q20

09

1Q20

10

1Q20

13

1Q20

15f

1Q20

14

1Q20

12

1Q20

11


% Change

QoQ YoY

MG RD 95 - 140 -2% -2%

Golf Course Rd 85 - 140 0% 13%

Institutional Sect. (18,32,44) 50 - 65 -4% -9%

Golf Course Rd Ext./Sohna Rd 48 - 65 -2% -10%

NH8 97 - 125 0% 13%

Manesar 45 - 50 0% -17%

Cyber City 75 - 78 2% 2%

Udyog Vihar & Industrial Sectors

45 - 65 0% 10%




Commercial Sectors (Sec 18) (Grade B)

0.2%

Industrial Sectors (Sec. 1-9, 57-60, 63-65)

(Grade B) 1.0%

Commercial Sectors (Sec 18) (Grade B)

10.6%

Institutional Sectors (Sec.16A, 62, 125-142

90.5%




% Change

QoQ YoYInstitutional Sectors (Non IT) 50 - 90 0% 3%

Institutional Sectors (IT) 30 - 75 0% 6%

Comercial Sectors 90 - 110 0% 3%

IndustrialSector 18 -45 0% 13%

Inst

itutio

nal

Sec

tors

(Non

IT)

Inst

itutio

nal

Sect

ors

(IT)

Indu

stria

l Se

ctor

s

Com

mer

cial

Se

ctor

s

0

3,000

6,000

9,000

12,000

15,000


Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

10

2,000

0 0

20

4,000

6,000

40

30

8,000

50

10,00080

70

60


forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.



Amigo Cyber Park Amigo 250,000 NOIDA Expressway 2013

Oxygen SEZ Tower f 3C Group 250,000 NOIDA Expressway 2013

NOIDA One KLJ Group 600,000 Sector 62 2016



Alpha Media MMR Towers 80,000 Sector 126 Lease

HCL Advant IT Park 80,000 Sector 142 Lease

Honnex NCPL Web Tower 5,300 Sector 9 Lease

Pearson VUE SB Tower 9,400 Sector 16A Lease

Standard & Poor Stellar IT Park 2,000 Sector 62 Lease




NOIDA

3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value


1Q20

09

1Q20

10

1Q20

13

1Q20

15f

1Q20

14

1Q20

12

1Q20

11

NOIDA

Demand in NOIDA office market decreased •marginally in the third consecutive quarter. The city witnessed absorption of approximately 0.4 million sq ft primarily from IT/ITeS sector followed by banking and financial services sector.

Developers abstained from adding more •speculative supply in the market and no new office project was launched during this quarter. However, a few projects located in sector 62 were completed this quarter including “Okaya Blue” by Okaya Group “Jagran IT Park” by Dainik Jagran Group and “Highway Tower by Sun Ramified Solutions Pvt. Ltd. & Capital Broadcasting Company Pvt. Ltd. All of these projects contributed around 1.2 million sq ft of grade A office space.

Grade “A” & “B” office space vacancy rate •remained unchanged in 3Q 2013. About 8.6 million sq ft of Grade A & B office space was available for fit-out primarily located in Institutional Sectors 16A, 62 and Sectors 125 to 143 along with NOIDA Expressway.

Rental and capital values remained stable •across all the micro markets barring few premium projects which recorded marginal increase in capital values.

COLLIERS VIEW : Looking ahead, corporate occupiers are expected to largely remain cost cautious and incline towards deferring expansion plans due to uncertain economic sentiments. However, leasing will remain moderate due to demand for consolidation and relocation. Rentals are expected to remain stable with downward bias due to large supply availability.



PROJECT NAME DEVELOPER AREA (SQ. fT.) LOCATION ExPECTED COMPLETION

Chennai One (BPO Park) Phase 2 ETL 1,100,000 OMR 2013

Ramanujan IT City Little Wood Tower Block D Tata Realty & Infrastructure 1,340,000 Taramani 2013

SP InfoCity Shapoorji Pallonji Group 1,200,000 OMR 2013



ChENNAI

The Chennai commercial market witnessed •increased demand this quarter. The overall absorption of Grade A office space was approximately 1.68 million sq ft compared to 1.67 and 1.02 million sq ft in the previous two quarters. This increase in absorption is attributed to the few large floor size deals registered in the SEZ (Special Economic Zone) in Manapakkam and Taramani.

New project completions this quarter include •“Centre Point 2” at Guindy and “Padmavati” at Nungambakkam. These projects together add approximately 0.2 million sq ft of Grade A office supply to the city’s inventory. Projects launched this quarter were “Rajkamal Suites” at Nungambakkam and “Srikanth” at Ekkaduthangal measuring 0.1 million sq ft.

During the surveyed quarter, overall vacancy •levels remained stable, except for Taramani and Perungudi, which witnessed a marginal increase due to the addition of new supply in the previous quarter. More than 13.5 million sq ft of Grade A commercial office space was available for fit-out. About 65% of this available supply was concentrated in OMR IT and Ambattur.

Despite increased demand, rental and capital •values for Grade A office space remained stable across all micro-markets due to persistent large vacancy levels.

COLLIERS VIEW : Despite a revival in overall occupier demand, rental values are expected to remain stable in view of large accumulated vacant stock. Vacancy levels are expected to dip marginally due to limited prime office supply in the pipeline in next three months.




% Change

QoQ YoYCBD 65 - 85 0% 0%

Guindy (SBD) 50 - 60 0% 4%

Ambattur 25 - 30 0% 0%

OMR (IT Corridor) 25 - 40 0% 0%

GST road 35 - 40 0% 0%

Guin

dy (S

BD)

Amba

ttur

OM

R (IT

Co

rrid

or)

CBD

0

2,000

4,000

6,000

8,000

10,000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

0

1Q 2

008

1Q 2

010

1Q 2

011

1Q 2

012

1Q 2

013

1Q 2

009

1Q 2

014

1Q 2

015 f

10

0

20

2,000

1,000

4,000

3,000

30

6,000

5,00040

50

8,000

7,000

60

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.






CHENNAI

3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value


forecast

Guindy (SBD)7%

CBD14%

Vadapalani0%

GST Rd3%Velachery

1%

OMR (IT Corridor)50%

Ambattur24%



Amazon S P Infocity 645,000 Perungudi Lease

Bank of New York Mellon DLf SEZ 70,000 Manapakkam Lease

E & Y DLf SEZ 73,000 Manapakkam Lease

fidelity Ramanujam IT SEZ 270,000 Taramani Lease

Kotak Mahindra Bank TVH Agnitio 60,000 Perungudi Lease

L & T Infotech DLf SEZ 189,000 Manapakkam Lease




Hosur Road 5%

CBD 6%

Bannerghatta Road 3%

Electronic City 12%

EPIP Zone/ Whitefield 44%

Outer Ring Road 30%




% Change

QoQ YoYCBD 80 - 100 0% 0%

Hosur Rd. 20 - 40 0% 0%

EPIP Zone/ Whitefield 24 - 33 0% 4%

Electronic City 23 - 32 0% 0%

Bannerghatta Rd. 50 - 60 0% 4%

Outer Ring Rd. 50 - 60 0% 1%

Hos

ur R

oad

EPIP

Zon

e/

Whi

tefie

ld

Elec

tron

ic

City

Bann

ergh

atta

Ro

ad

Out

er R

ing

Road

CBD

0

5,000

10,000

15,000

20,000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

10 1,500

0 0

20

4,500

3,000

7,500

6,000

30

40

9,000

50

60forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.



Brigade Summit - Annexe Brigade Group 550,000 Whitefield 2015

Gopalan Axis - SEZ Gopalan Group 536,000 Whitefield 2014

Prestige Platina Tech Park Prestige Group 1,000,000 Outer Ring Road 2015



Accenture Prestige Technopolis 250,000 HMT Layout Lease

Adobe Prestige Platina Tech Park 250,000 Outer Ring Road Lease

Genpact Pritech Park 120,000 Outer Ring Road Lease

Global Edge Global Village 40,000 Mysore Road Lease

Happiest Mind Suhas Tech Park 70,000 Electronic City Lease

Qualcomm Prestige Tech Park 60,000 Outer Ring Road Lease






BENGALURU

3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value


1Q20

08

1Q20

09

1Q20

10

1Q20

13f

1Q20

14f

1Q20

15f

1Q20

12

1Q20

11

BENGAluRu (BANGAlORE)

The Bengaluru commercial market witnessed •weakening demand this quarter. The absorption of Grade A commercial office space was approximately 1 million sq ft, which is significantly less than the previous two quarter’s absorption of 2.9 and 2.7 million sq ft. This decline in absorption is primarily due to circumscribed demand from the IT/ITeS occupiers during the quarter.

The third quarter saw completion of •approximately 1 million sq ft of Grade A commercial office space. Projects completed this quarter include; “Mind Comp Tech Park” by Sattva Group at Whitefield; “Pritech – STPI” by Primal Group; and “Embassy Tech Square - Omega Block” by Embassy Group, both at Outer Ring Road (ORR).

Projects launched during this quarter include, •“Brigade Summit - Annexe” by Brigade Group and “Gopalan Axis – SEZ”, both located at Whitefield. The projects are expected to be completed by the end of 2015 and will contribute around 1 million sq ft of Grade A office space in the city.

The vacancy rate increased marginally and •approximately 11.5 million sq ft of Grade A commercial office space was available for fit-out.

Both rental and capital values were remained •largely stable across the micro-markets owing to large vacant stock and cautious demand.

COLLIERS VIEW : The fourth quarter is expected to witness a moderate level of absorption as decision-making is expected to remain slow by corporations due to economic and political uncertainties. Considering the large available stock and cautious occupier demand, the price levels are likely to remain steady with marginal downward bias.




Sector-5 52%

East Kolkata 48%


NEW supplY IN pRIME AREAs


% Change

QoQ YoYCBD 100 - 125 -6% -6%

Ballygunge Circular Rd. 90 - 105 -7% -11%

East Kolkata 70 - 80 -6% -6%

Sector-5 48 - 50 0% -7%

New Town, Rajarhat 34 - 38 -1% -1%

CBD

(Par

k St

,Cam

ac S

t,AJC

Bo

se R

oad)

Bally

gung

e Ci

rcul

ar

Road

East

Kol

kata

Sect

or-5

PBD

(New

To

wn,

Ra

jarh

at)0

5,000

10,000

15,000

20,000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

20 2,000

0 0

40 4,000

60 6,000

80 8,000

100 10,000

120 12,000forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.



IT Godrej Simocco Phase 2 Godrej Genesis 1,000,000 Sector 5, Saltlake 2013

Primac Tower Pasari Group 40,000 Sector 5, Saltlake 2014

Window Technology Window Technology 20,000 Sector 5, Saltlake 2013



Acclaris Ambuja Eco Space 10,000 New Town Lease

Ericsson Ambuja Eco Space 9,000 New Town Lease

IfK BPO BIPL 20,000 Sector 5, Saltlake Lease

Jacobs Infinity Lagoon 70,000 Sector 5, Saltlake Lease

KPMG Godrej Water Side 20,000 Sector 5, Saltlake Lease

PWC South City Pinacle 46,000 Sector 5, Saltlake Lease






KOLKATA

3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value


1Q20

08

1Q20

09

1Q20

10

1Q20

13

1Q20

14f

1Q20

15f

1Q20

12

1Q20

11

KOlKATA

Kolkata’s office market remained sluggish due •to the overall negative economic scenario. The city recorded absorption of approximately 0.2 million sq ft. The micro- markets that remained most active were the Sector 5, Salt Lake and New Town.

This quarter, various small commercial •office projects were completed, including “APJ Tower” by APJ Group at Ruby, “Arihant Benchmark” by Arihant Group at Topsia, “Credent Tower” by Credent Group at Salt Lake, “Neighbourhood Tower” by Neighbourhood Group at Ballygunje Circular Road and “Lemon Eco” by Lemon Group at New Town. Together, all of these projects contributed more than 0.1 million sq ft of Grade A commercial office space to the city’s total inventory.

A few projects were launched during the •quarter, including “Arora Water front” by Arora Group, “Primac Tower” by Pasari Group and “Window Technology” by Window Technologies Ltd. Together, these projects will contribute more than 0.5 million sq ft of Grade A commercial office space to the city’s total inventory by 1Q 2017.

Rental values declined in the range of 1 - 7% •QoQ in almost every micro-market, other than the CBD and Sector 5; where they remained stable.

COLLIERS VIEW : In the coming quarter, overall office leasing is expected to remain moderate. Due to the prevailing high vacancy levels in the peripheral micro-markets, such as Sector 5 Salt Lake and Rajarhat, rentals are expected to remain under pressure.




puNE

Steady occupier demand from the IT/ITeS •sector kept Pune’s office market steady during 3Q 2013. The city witnessed absorption of approximately 0.85 million sq ft, which is about 15% less than the 1 million sq ft absorbed in both the previous quarters. An increasing trend of relocations and consolidations was seen in the market and resulted in a few large transactions (60,000 - 300,000 sq ft) in some micro-markets, such as Yerwada and Hadapsar.

As no major projects were completed during •the quarter, the city’s vacancy rate declined marginally. The city has approximately 5.1 million sq ft of Grade A commercial office space available for fit-out. Most of this space is concentrated in certain micro-markets, such as Kharadi, Hinjewadi, Nagar Road, Kalyani Nagar and Baner.

Developers continued to refrain from adding •more speculative supply to the market. Only two small projects that totalled 140,000 sq ft of Grade A office space were launched during the quarter – “Pride Gateway” by Pride Purple Group and “Raikar” by Chaitanya Group. Both projects are located at Baner.

Rents and capital values remained unchanged •across every micro-market during the surveyed quarter.

COLLIERS VIEW : Overall leasing is expected to remain upbeat during the next quarter. However, the majority of this demand is expected to come from corporate looking to optimise costs through consolidation and relocation in peripheral locales because of the lower rents and quality space that is available there. Under these circumstances, we expect rents to remain stagnant across the micro-markets in the coming quarters.

Bavdhan 1%

Kalyani Nagar 10%

Senapati Bapat Road 3%

Aundh 2%

Baner 10%

Bund Garden 6%

Airport road/ pune station 1%

Hinjewadi 24%

Nagar Road 14%

Kharadi 25%

Hadapsar/fursungi 4%




% Change

QoQ YoYBaner 45 - 55 0% 11%

Bund Garden 50 - 60 0% -8%

Airport Rd. /Pune station 42 - 60 0% -3%

Aundh 45 - 60 0% 24%

Senapati Bapat 55 - 85 0% 7%

Bavdhan 35 - 45 0% 7%

Kalyani Nagar 45 - 60 0% 0%

Nagar Rd. 40 - 60 0% 18%

Hinjewadi 30 - 45 0% 7%

Hadapsar/fursungi 30 - 50 0% -6%

Kharadi 32 - 65 0% 8%

Bund

Gar

den

Airp

ort r

oad/

pune

sta

tion

Aund

h

Sena

pati

Bapa

t Roa

d

Bavd

han

Kaly

ani N

agar

Naga

r Ro

ad

Hin

jew

adi

Had

apsa

r/fu

rsun

gi

Khar

adi

Bane

r

0

2,000

4,000

6,000

8,000

10,000

12,000

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.

20

10 1,000

0 0

30 3,000

2,000

40

5,000

4,000

70

60

50

6,000

80 8,000

7,000

forecast

Rent

al V

alue

s -IN

R Pe

r Sq

.ft. P

er M

onth

Capi

tal V

alue

s -IN

R Pe

r Sq

.ft.



Business Bay Tower D Panchshil 800,000 Yerwada 2013

Cummins BTS Panchshil Realty 1,2000,000 Balewadi 2014

Nyati Corporate Nyati Group 350,000 Yerwada 2014



Barclays EON 100,000 Kharadi Lease

Cummins Cummins IOC 700,000 Balewadi Lease

Deutsche Bank Biz Bay 300,000 Yerwada Lease

Principle Pentagon 560,000 Hadapsar Lease

The Event Panchshil Tech Park 42,000 Yerwada Lease

ZS Associates Pentagon 560,000 Hadapsar Lease






PUNE


3Q 2013 4Q 2013f

Vacancy

Absorption

Construction

Rental Value

Capital Value

1Q20

08

1Q20

09

1Q20

10

1Q20

13

1Q20

15f

1Q20

14f

1Q20

12

1Q20

11

MumbaiThe major business locations in Mumbai are the CBD (Nariman Point, fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandra Kurla Complex (BKC) and Andheri Kurla stretch. Powai, Malad and Vashi are the preferred IT/ITES destinations, while Airoli at Navi Mumbai and Lal Bahadur Shastri Marg are emerging as new office and IT/ITES submarkets.

DelhiThe commercial areas in New Delhi metropolitan area can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola and Saket .

GurgaonThe prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also emerging as the city’s new office destination.

NOIDANOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and 125-142, industrial sectors include sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector.

ChennaiPrime office properties in Chennai are located in four principal sub-markets: the CBD, the IT Corridor, the SBD and the PBD. The SBD comprises Guindy, Manapakkam, Velachery and other areas. The PBD primarily includes Ambattur and GST Road, while the IT Corridor is the Old Mahaballipuram Road (OMR) in south Chennai.

Bengaluru (Bangalore)Prime office properties in Bengaluru can be divided into three principal sub-market— CBD, the SBD consisting of Banerghatta Road & Outer Ring Road (ORR) and PBD including Hosur Road, EPIP Zone, Electronic City and Whilefield.

PuneThe prime office sub-markets of Pune include Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp (CBD), while the Off CBD includes Aundh, Airport Road and Kalyani Nagar, among other locations. The eastern corridor, along with Nagar Road and Kharadi, have emerged as a preferred location for financial and IT/ITES companies.

KolkataThe major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge circular Rd, East Kolkata), East Kolkata and PBD (New Town & Rajarhat). The area around Park Street, Camac Street and AJC Bose road houses number of high-rises commercial buildings such as Chatterjee International Centre, Tata Centre, Everest House and Industry House among others.

OffICE suBMARKETs



CITY BAROMETER

Increasing as compared to previous quarter

Decreasing as compared to previous quarter

Remained stable from previous quarter


Colliers International (India) provides property services to property Investors and Occupiers. We deliver customised service solutions utilising local and global knowledge in partnership with our clients via our property Investment and Occupier service lines. These service lines include - Office Services, facility Management, Project Management, Residential Services, Investment Services and Valuation & Advisory Services.

www.colliers.com/india

for national offices services related queries please contact:

George Mckay, South Asia Director Vikas Kalia, National DirectorOffice & Integrated Services Office [email protected] [email protected]: +91 22 4050 4553 Tel: +91 124 456 7531

INDIA OffICE INDIA RESIDENTIAL GLOBAL RETAIL BENGALURU RESIDENTIAL MARKET

GLOBAL INDUSTRIAL INDIA BUDGET PUNE RESIDENTIAL MARKET

Mumbai : Vaibhav Kumar, Office Director [email protected] IndiaBulls finance Centre, 1701-A, 17th floor, Tower 3, Elphinstone Mills, Senapati Bapat Marg, Mumbai- 400 013. Tel : +91 22 4050 4527, fax : +91 22 2351 4272

Delhi NCR : Ajay Rakheja, Office Director [email protected]

New Delhi : Statesman House, 4th floor, Barakhamba Road, Connaught Place, New Delhi, India - 110001 Tel : +91 11 3044 6423, fax : +91 11 3044 6500

Gurgaon : Technopolis Building, 1st floor, DLf Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 456 7500, fax : +91 124 456 7502

Bengaluru : Goutam Chakraborthy, Office Director [email protected] Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru, India - 560 042 Tel : +91 80 4079 5500, fax : +91 80 4112 3131

Pune : Suresh Castellino, Office Director [email protected] Hotel Le Meridian, 101, R.B.M. Road, Pune, India - 411 001 Tel : +91 20 4120 6438, fax : +91 20 4120 6434

Chennai : Kaushik Reddy, Office Director [email protected] Heavitree Complex, Unit 1C, 1st floor, 23, Spurtank Road, Chetpet, Chennai, India - 600 031 Tel : +91 44 2836 1064, fax : +91 44 2836 1377

Kolkata : Soumya Mukherjee , Office Director [email protected] Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1, Block EP & GP, Salt Lake Sector V, Kolkata - 700 091 West Bengal, India Tel : +91 33 2357 6501, fax : +91 33 2357 6502

Recent Reports :

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AUTHORS

Amit Oberoi MRICSNational Director, Valuation & Advisory; ResearchEmail: [email protected]

Surabhi Arora MRICSAssociate Director, ResearchEmail: [email protected]

Sachin SharmaAssistant Manager, ResearchEmail: [email protected]

Heliana ManoAssistant Manager,Valuation & Advisory Email: [email protected]

for general queries and feedback :[email protected] Tel: +91 124 456 7580

This report and other research materials may be found on our website at www.colliers.com/India. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from.

© Copyright 2012 - 2013 All Rights Reserved.

482 offices in 62 countries on 6 continents

United States: 140 Canada: 42 Latin America: 20 Asia Pacific: 195EMEA: 85

$2.0 billion in annual revenue 1.1 billion square feet under management

Over 13,500 + professionals


INDIA

QUARTERLY UPDATE | AUGUST | 2013

Residential Property Market Overview

Tourists and Brands Flock to High Streets> Slower economic growth in China did not make a lasting dent on

tourist spending in Hong Kong. Retail sales have rebounded from the lows of Q3 2012. The latest figures from the Hong Kong Tourism Board show that Hong Kong received a total of 12.5 million inbound visitors during the three-month period ending May 2013, an 11.8% year-over-year increase. Nine million of those visitors were from Mainland China.

> Combined with the arrival of international brands such as Apple, Zara, and Topshop, in addition to luxury brands expanding their presence, the Australian CBD is once again a popular shopping destination. Pitt Street Mall in Sydney was ranked the 8th most expensive in Colliers’ High Street survey.

> Demand for flagship space in London continues to exceed supply, driven largely from international retailers seeking a share of the spoils. This is leading to some notable rental growth in the West End’s core locations, with Regent Street witnessing double digit annual rental growth.

> São Paulo and Rio de Janeiro remain leaders in shopping quality and diversity, achieving the most expensive rents and the focus of growth for luxury brands. Brazil’s High Street rents are the most costly in Latin America. São Paulo’s luxury shopping street Rua Oscar Freire saw a 15% growth in asking rents over the previous year. Rua Garcia D´Avila in Rio de Janeiro saw rents grow by 6.7%.

> Most U.S. high street rents grew over last year. In New York, Fifth Avenue rents grew by 11 percent. At $3,052 per square foot, Fifth Avenue rents are the most expensive in the world. On Las Vegas Boulevard, asking rents grew by 25 percent. Philadelphia’s Walnut Street showed the biggest gains in the U.S., with 33.8 percent growth.

Global | Retail | 2013HIGHLIGHTS

All Rents in USD* Exchange Rate as of March 31, 2013

$836 Milan, Via Monte Napoleone

$871 Sydney, Pitt Street Mall

$930 Zurich, Bahnhofstrasse

$1,114 Hong Kong, Causeway Bay

$1,994 Hong Kong, Canton Rd, Tsim Sha Tsui

$2,087 Hong Kong, Queen’s Road Central

$3,052 New York, NY, Fifth Avenue

$834 Paris, Champs Élysées

$1,325 New York, NY, Madison Avenue

$1,223 London, Old Bond Street

Top Ten Global Retail Rents - USD/SqFt/Year

THE INTERNATIONAL INDIAN July - August 201358

BENGALURU RESIDENTIAL MARKETHEAT’S UP

REAL ESTATECOLLIERS INTERNATIONAL INDIA RESEARCH

Over the last two decades, Bengaluru has cemented its position as the leading IT/ITeS. destination amongst

top Indian cities. In 2012, Bengaluru commanded a 30% market-share of all of the commercial (office) real estate absorbed across the top seven cities (Delhi NCR, Mumbai, Pune, Chennai, Hyderabad and Kolkata). Bengaluru’s commercial absorption share was greater than Mumbai and Delhi NCR. The increase in jobs has been the primary growth-driver for residential real estate. The city’s population is expected to exceed 12 million by 2020, as compared to 8.5 million in 2011.

Now of course the city is experiencing a surge in investors buying real estate. In spite of increasing prices, the city still is comparatively affordable compared to other major cities such as Mumbai and Delhi. With its higher rental yields and favourable currency exchange rates, Bengaluru is emerging as one of the most promising markets in the country for Residential investment. Moreover, the professional approach of developers is also providing much needed comfort to investors as well as end users. Considering the demand potential, it is not only Bengaluru-based developers that are investing, but many national level developers are also entering in this market.

The government is also actively participating in the

Colliers Picks:“The latest Colliers International research unvails top investment destination in Bengaluru (Bangalore)”

Office Absorption in Million sq ft among major 7 cities in India

Favorable exchange rate (INR/USD) 1 $ = INR 56.45

Trade Flows Bolster Industrial Demand in Asia and the Americas> Despite anemic U.S. job growth, demand for North American industrial

warehouse space and modern distribution centers remains strong. In Q1 2013, the North American vacancy rate declined for the eighth straight quarter, down 20 basis points to 8.20%. Canada’s vacancy rate stands at 4.13%.

> Thanks in part to a recent drop in exports to the United States, Mexico has seen slowing economic growth. In Q1 2013, several Mexico City industrial warehouses were vacated, slightly increasing the vacancy rate to 3.49%.

> While occupier demand for industrial property in Brazil remains strong, the market now appears to have stabilized into a more rational mode of sustained growth. São Paulo has seen positive net absorption, in spite of the final tally in 2012 showing a 23% decrease over the previous year.

> Demand for Beijing’s logistics properties remained as strong as it has been since 2011. Rents grew by 11.41% year-over-year as of the end of Q1 2013. Shanghai’s industrial sector remained stable, with average asking rents for ground floor premises of high quality facilities in both the logistics and workshop sectors unchanged.

> In Hong Kong, high quality warehouse buildings are nearly fully occupied. Those users seeking to expand or rationalize their real estate costs have had to consider the option of split operations in lower quality buildings.

> Indian economic growth remained sluggish through the end of 2012, however we expect industrial activity to improve, thanks to recent government actions. These include the government-proposed National Investment and Manufacturing Zones and the newly approved 51% foreign direct investment in multi-brand retail trading.

Global | Industrial | Midyear 2013HIGHLIGHTS

* December 2013 Rent (USD/PSF/YR)** Local currency

Global Top 10 Industrial Warehouse Rents*

6-Month Change in Rent**

LONDON (HEATHROW)

HONG KONG

SINGAPORE

TOKYO

OSLO

GENEVA

PARIS

HELSINKI

MINSK

SYDNEY

21.95

21.83

21.02

20.61

20.04

16.20

14.70

14.70

13.23

13.23

MINSK

OSLOSINGAPORE

SYDNEY

11.1%

3.9%

2.2%

12.5%

PARIS

HELSINKI

GENEVA

TOKYO

HONG KONG

LONDON - (HEATHROW)

LEGEND

EMEA

APAC

THE INTERNATIONAL INDIAN THE INTERNATIONAL INDIAN 5756

REAL ESTATEColliers International India Research

PUNE RESIDENTIAL MARKET LUXURIOUS YET AFFORDABLE

Factors Driving Growth· Rising per capita income

reflects in demand for houses

· Gradual shift in the

demographic profile with more

service professionals with higher

income range

· Falling Rupee making NRI

investments more lucrative

· High commercial absorption

indicates sustained demand

growth

Source: Maharashtra Economic Survey, RBI, Colliers International India Research

Pune is a classic example of the real estate market where commercial activities lead the residential development

in the city. Pune has a large manufacturing base, with many manufacturing as well as automobile companies having large plants. In last one decade the city has also emerged as a prominent IT/ITeS destination. Residential demand in the city is mostly from the large population of working professionals and the older generation retired from the mid-management cadre from Mumbai who find this place attractive due to affordability, peace and proximity to Mumbai. The

Colliers’s Pick: “The areas that will witness maximum uptake would be those having commercial or industrial activities such as Hinjewadi, Magarpatta, Viman Nagar, Kharadi, Wagholi, Chakan, Pimpri, Bavdhan, Warje & Talegaon”.

city also attracts students who are compelled by the city’s offering of quality education.

A large share of the upcoming premium residential space in Pune is in the form of township developments, the majority of which is concentrated in and around the IT and industrial hubs. In the past,

the city has seen considerable appreciation in property values. The government is also actively participating in the economic growth of the city by undertaking various infrastructure projects such as Pune Metro, Bus Rapid Transit (BRT) and High Capacity Bus Route.

Markets to witness residential real estate growth

For investment purpose, the new residential developments located in peripheral areas alongside the

commercial developments are most attractive. Pune witnesses multi-directional growth of residential projects in various locations such as Pimpri, Chinchwad, Chakan & Talegaon in North Viman Nagar

Kharadi & Wagholi in East, Baner, Hinjewadi, Wakad & Pashan, Kothrud, Bavdhan & Wajre in west and Undri & Kondhwa in the South.

Upcoming Infrastructure Driving City’s Growth

OFFICE PROPERTY MARKET OVERVIEW INDIA

QUARTERLY UPDATE | JUlY | 2013
