The knowledge report india office property market overview 1 q 2012

Office PrOPerty Market Overview iNDia

QUarterLy UPDate | aPriL | 2012

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MACRO ECONOMIC OVERVIEW

During 4Q 2011 GDP grew at 6.9 percent in •real terms suggesting a moderation in growth in comparison to preceding two quarters. The finance minister presented India’s Union Budget 2012 -13 this quarter projecting a GDP growth rate of 7.6% for 2012-13.

The headline inflation figure moderated from •8.3 percent in December 2011 to 6.6 and 6.95% in January and February 2012, respectively. Keeping in view the moderation in inflation rate the Reserve Bank of India (RBI) has softened monetary policy for the first time since one and a half year . This has been done by reducing CRR (Cash Reserve Ratio) by 50 basis points in January and a further reduction of 75 basis point in March 2012. The current CRR rate is 4.75%.

The Budget remained silent on most of the •major real estate related issues. It did however mentioned that efforts are on to arrive at a political consensus on the issue of allowing 51% Foreign Direct Investment (FDI) in multi-brand retailing.

The Budget aims to provide impetus to •affordable housing by providing various incentives to both developers and end users. For example the external Commercial Borrowings (ECB) is allowed for low cost affordable housing projects which would help developers to raise debt at lower cost.

From an end user perspective, the budget •provides few incentives including, Service tax exemption for construction service related to residential dwelling and low cost mass housing up to an area of 60 sq mtr under the scheme of affordable housing. The existing scheme of interest subvention of 1% for housing loans up to INRs 15 lakh (where the cost of the house does not exceed INR 25 lakhs), was extended by one more year.

ECONOMIC BAROMETER

RETuRN ON AlTERNATIVE INVEsTMENTs

RESEARCh & FoRECAST REPoRTsYDNEY CENTRAl BusINEss DIsTRICT

INDIA oFFICE MARKETREsEARCh & fORECAsT REpORT

Mar-11 Mar-12

REPo RATE 6.50% 8.50%

REVERSE REPo RATE 5.50% 7.50%

CRR 6.00% 4.75%

INFLATIoN 9.68% 6.89%

PRIME LENDING RATE

8.25% - 9.50% 10.00% - 10.75%

DEPoSIT RATE (>1 YEAR)

7.75% - 9.50% 8.50% - 9.25%

FoREIGN ExChANGE INR - USD

45.02 50.39

INR- EURo 59.12 65.89

Mar-11 Mar-12 YoY %

Change

GoLD 20,730 27,300 31.69%

SILVER 52,450 56,014 6.80%

EQUITY (BSE

SENSEx) 18167.64 17,675.85 -2.71%

REALTY INDEx 2053.69 1821.35 -11.31%

Source: Colliers International India Research

ECONOMIC INDICATORs

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

INR

Cror

e

2005

- 0

6

2006

- 0

7

2007

- 0

8

2008

- 0

9

2009

- 1

0

2010

- 1

1

April

- J

an 2

012

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

- De

c 11

Jul -

Sep

11

Apr

- Ju

n 11

Jan

- M

ar 1

1

Gross Domestic product at factor cost

fDI in Real Estate

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0.0%

1.0%

2.0%

3.0%

US$

Note: As of 1st August 2011

Euro

1Q 2012 | THE KNOWLEDGE

70

80

90

110

100

150

140

130

120

160

14-M

ar-1

2

7-Fe

b-12

2-Ja

n-12

23-M

ar-1

2

16-F

eb-1

2

1-Ap

r-12

25-F

eb-1

2

11-J

an-1

2

20-J

an-1

2

29-J

an-1

2

5-M

ar-1

2

BsE sensex & Realty Index

Exchange Rates

BSE Sensex

Note: As of 1st August 2011

Realty Index* Rebase to 100

* Rebase to 100

75

80

85

95

90

105

100

110

14-M

ar-1

2

7-Fe

b-12

2-Ja

n-12

23-M

ar-1

2

16-F

eb-1

2

11-J

an-1

2

1-Ap

r-12

20-J

an-1

2

29-J

an-1

2

25-F

eb-1

2

5-M

ar-1

2

1Q 2012 GRADE ‘A’ AND GRADE ’B’ RENTAl VAluEs

pRIME OffICE spACE RENTAl TREND

CBD

Andh

eri E

ast

BKC

Low

er P

arel

Mal

ad

Navi

Mum

bai

Pow

ai

Wor

li/Pr

abhd

evi

Gore

gaon

/ J

VLR

Kalin

a

Than

e /

LBS

Andh

eri E

ast (

IT)

Low

er P

arel

(IT)

Mal

ad (I

T)

Navi

Mum

bai (

IT)

Pow

ai (I

T)

Gore

gaon

/ J

VLR

(IT)

Than

e /

LBS

(IT)

INR

Per

Sq ft

Per

Mon

th

0

50

100

150

200

250

300

2Q20

08

1Q20

08

INR

per

Sq ft

per

Mon

th

INR

per

Sq ft

per

Mon

th

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

4Q20

10

1Q20

12

4Q20

11

3Q20

11

2Q20

11

1Q20

11

3Q20

10

70

20

120

170

220

270

320

370

420

CBD

Lower Parel Navi Mumbai

KalinaGoregaon/ JVLR

Andheri East Malad

Powai

BKC

Worli /Prabhadevi

Thane / LBS

2Q20

08

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

2Q20

12F

4Q20

12F

1Q20

13F

3Q20

12F

1Q20

12

4Q20

09

1Q20

08

1Q20

10

2Q20

10

3Q20

10

Grade A Grade B

COllIERs INTERNATIONAl | p. 3

MARKET TRANsACTIONsCLIENT BUILDING NAME AREA

(SQ. FT.)LoCATIoN TRANSACTIoN TYPE

Altisource Vishwaroop IT Park 137,000 Vashi Lease

ANZ Bank Boomerang 6,000 Andheri Lease

Liberty Insurance Peninsula Business Park 30,000 Lower Parel Lease

L’oreal Marathon Futurex 71,000 Lower Parel Lease

Naaptol.com Sigma IT Park 32,000 Navi Mumbai Lease

Star Union Dai-ichi Life Insurance Vishwaroop IT Park 67,000 Vashi Lease

MuMBAI

In Mumbai, approximately 10 million sq ft of •grade ‘A’ office space was available for lease in 1Q 2012. out of the total available supply around 64% was IT/ITeS office space mostly concentrated in the Lower Parel and Thane micro-markets.

Project launched during this quarter was •“Equinox Business Park-Tower IV” by Equinox Realty & Infrastructure Private Limited. The project has a gross leasable area of approximately 0.5 million sq ft and is located off BKC. Another mixed use project “Island City Centre” was also launched by Wadia Group’s real estate venture Bombay Realty spreading over 45 acres of land at Dadar.

Following the previous quarter trend •construction activities remained slow, no new grade ‘A’ office space was added to the city’s total inventory this quarter.

occupier demand remained steady in almost •all of the micro markets and few large space commercial leases were signed during the quarter. Rental values for grade ‘A’ office space remained stable across Mumbai baring Nariman Point, the CBD of Mumbai, as occupiers are gradually shifting towards newly developed areas like Lower Parel, Bandra Kurla Complex (BKC) and Andheri due to better accessibility and state of an art infrastructure.

Looking ahead demand is likely to be remained •moderate, however due to limited supply rentals are expected to remain stable.

As part of the State Government’s plan to •make Wadala a business hub in lines of the BKC; MMRDA has invited consultants to prepare a detailed development plan for approximately 110 hectares of land.

AVAIlABlE supplY IN pRIME AREAs

Andheri East 24%

CBD 1%

Thane / LBS 21%

Navi Mumbai 6%Goregoan / JVLR 8%

Powai 5%

Worli / Prabhadevi 1%

Malad 5%

Lower Parel 20%

BKC 8%

CITY OffICE BAROMETER

4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE

THE KNOWLEDGE | 1Q 2012 | Office | MUMbai

GRADE ‘A’ AVERAGE RENTAl VAluE

MUMBAI

0

35

70

140

105

210

245

175


Kalina 1%

Forecast

Grade A Grade B

Nehru Place Saket

Netaji Subhash

Jasola Cannaughtplace

p. 4 | COllIERs INTERNATIONAl






hitachi Eros Corporate Tower 3,000 Nehru Place Lease

Mizuho Bank DLF Capitol Point 16,000 C.P. Lease

Pragati Equity Advisors Southern Park 1,500 Saket Lease

Snap Deal Southern Park 22,000 okhla-III Lease

DElhI

More than 1 million sq ft of grade ‘A’ office •space was available for lease in Delhi in 1Q 2012. Most of this available supply was concentrated in Jasola and Saket.

No new supply was added to the city’s grade •‘A’ inventory. Similarly, no new grade ‘A’ office projects was launched during this quarter.

Absorption remained relatively subdued as •only a few small office spaces leases were signed in locations such as Connaught Place, Saket and Nehru Place. This can primarily be attributed to the shift in demand from the CBD and SBD to areas in as Gurgaon and NoIDA on account of better quality office and lower real estate cost.

Rental values witnessed marginal pressure •across the micro markets and a decrease in the range of 1 to 4% was observed for grade ‘A’ office space.

In mid term rentals are expected to remained •under pressure on account of lesser demand.

To encourage development of non polluting •small and medium scale industries in the city Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) is planning to set up a multi level manufacturing hub in Rani Khera in north west Delhi with an estimated cost of INR 3100 crore. The work on another knowledge based industrial park in Baprola has already started.

In an another infrastructure related intiative •the Delhi Development Authority(DDA) has planned to develop three Urban Extension Roads (UERs). These link roads will facilitate smooth travelling between two States — Delhi and haryana — Dwarka-Palam Vihar, Najafgarh-Dhansa and Nelson Mandela Road-MG Road.


Connaught Place 2%

Nehru Place 10%

Saket 29%

Jasola 59%


4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE

THE KNOWLEDGE | 1Q 2012 | Office | DeLhi


2Q20

08

3Q20

08

0

50

100

150

200

250

300

350

400

Conn

augh

t Pl

ace

Nehr

u Pl

ace

Jaso

la

INR

per

Sq F

t per

Mon

th

Sake

t

Neta

ji Su

bhas

h

0

50

100

150

200

250

300

350

400

450

1Q20

10

INR

per

Sq ft

per

Mon

th

0

35

70

105

140

175

210

245

280

INR

per

Sq ft

per

Mon

th

DELhI

2Q20

08

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

3Q20

12F

4Q20

12F

1Q20

13F

2Q20

12F

1Q20

12

4Q20

09

1Q20

10

2Q20

10

3Q20

10 1Q20

08

4Q20

08

2Q20

09

3Q20

09

2Q20

10

1Q20

09

4Q20

09

3Q20

10

4Q20

11

1Q20

12

3Q20

11

2Q20

11

4Q20

10

Forecast


MG

Road

Golf

Cour

se R

oad

/Ext

/So

hna

Road

Nh8/

Udy

og V

ihar

Man

esar

Inst

itutio

nal S

ecto

rs /

Sush

ant L

ok

Sohn

a Ro

ad

DLF

Cybe

r Ci

ty

Nh8/

Udy

og V

ihar

Man

esar

0

20

40

60

80

100

120

140

Grade A Grade B

MG RoadGolf Course Road/Ext /Sohna Road

Nh8/Udyog Vihar (IT)Institutional Sectors /Sushant Lok

Nh8/Udyog Vihar

DLF Cyber City (IT)Golf Course Road/Ext /Sohna Road (IT)Manesar

Manesar (IT)

4Q20

11





Bausch & Lomb First India Place 16,000 M.G. Road Lease

DhR holdings Plot 121 20,700 Udyog Vihar Lease

Expedia DLF Building No 5C 50,000 DLF Cyber City Lease

Google Signature Tower-II 175,000 Sector 15 Lease

Ingersoll Rand DLF Building No 5A 49,000 DLF Cyber City Lease

Rio Tinto DLF Building No 5A 40,600 DLF Cyber City Lease

GuRGAON

More than 7 million sq ft of grade À’ office •space supply was available for fit-out in 1Q 2012. Most of this available supply was concentrated in Udyog Vihar and along National highway 8 up to Manesar.

Several projects were launched during 1Q •2012 including “one horizon Centre” by hines India at Golf Course Road and “Athena” by Brahma-Bestech at Nh-8. Both of these project are expected to be completed by the first half of 2015 and will add around 1.2 million sq ft of grade À’ office space to the city’s total inventory.

No major grade À’ project/phase of the •project was completed in this quarter.

Absorption remained optimistic and a number •of large format leases were signed during the quarter including a few pre-commitment leases in under- construction buildings. The investor market also remained active during the quarter and a few deals were concluded such as the BPTP buyout of 49% of the Merrill Lynch stake in the grade À’ office project `C“Crest”. M3M bought a 28-acre land parcel from DLF located at sector 70A.

Rental values for grade À’ properties •increased in the range of 2 to 6% in almost all the major micro-markets barring Udyog Vihar / Nh-8 and DLF Cyber City where rental values remained stable.

In near future rentals are expected to remain •stable for both IT/ITES and commercial office space.

In 1Q 2012 the state government approved •infrastructure projects valued at INR1,394 crore for strengthening of roads, water supply and sewage systems in newly developing sectors 77 to 114.


Institutional Sectors /Sushant Lok

16%

DLF Cyber City 8%

MG Road 5%

Manesar 35%

Nh8/ UdyogVihar 36%


4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE

THE KNOWLEDGE | 1Q 2012 | Office | GUrGaON

GRADE ‘A’ AVERAGE RENTAl VAluE pRIME OffICE spACE RENTAl TREND

INR

per

sq ft

per

mon

thIN

R pe

r sq

ft p

er m

onth

180

20

40

60

80

100

120

140

160

2Q20

08

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

3Q20

10

4Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

1Q20

12

2Q20

12F

3Q20

12F

4Q20

12F

1Q20

13F

INR

per

Sq ft

per

Mon

th

0

20

30

10

40

50

70

90

110

60

80

120

100

GURGAoN

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

4Q20

10

1Q20

11

2Q20

11

3Q20

11

1Q20

12

3Q20

10

2Q20

08

3Q20

08

Forecast

Grade A Grade B






Barclays shared services Individual Building 25,000 Sector 62 Lease

halcrow B-1D 52,000 Sector 10 Lease

hewitt 3C’s Building Tower-A 100,000 Sector 127 Lease

oracle 3C’s Building Tower-B 170,000 Sector 127 Lease

NOIDA

More than 5 million sq ft of office space supply •was available for fit out in NoIDA this quarter. More than 85% of this available office space was in the form of IT/ITeS. Grade ‘A’ IT/ITeS office space was concentrated in sector 16A, 62 and sectors 125 to 143 along the NoIDA Express-way, while IT/ITeS office space available in industrial sectors was primarily grade ‘B’ office space.

Projects launched during this quarter were •“Jaypee Chambers” by Jaypee Group in Sector 129, “Wave City Centre” by Wave Group and “Logix City Centre” by Logix Group both located at sector 32. All of these projects together are expected to contribute around 2.1 million sq ft of grade ‘A’ office space to the city’s total inventory by the end of 2015.

In 1Q 2012 construction activities slowed •down due to state elections, thus no projects/ phases of the project were completed during the quarter.

A few large office space leases were •concluded during the quarter. Demand was largely driven by the IT/ITeS sector.

In one of the private equity exit, Kotak Realty •Fund has sold its stake back to promoters in 3C company’s information technology park project in NoIDA.

The rental values for non IT office space •remained stable because of limited supply however, rental values for IT/ITeS office space witnessed marginal pressure on account of large available supply. Similar rental trends can be anticipated in near future.


Commercial Sectors (Sec 18) 2%

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

86%

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

(Grade B) 12%


4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE

THE KNOWLEDGE | 1Q 2012 | Office | NOiDa

1Q20

09

INR

Per

SqFt

Per

Mon

th

0

20

40

60

80

100

120

140

0

10

20

30

40

60

70

50

80

100

90

2Q20

09

3Q20

09

4Q20

09

1Q20

10

Inst

itutio

nal S

ecto

rs(S

ec 1

6A,6

2 ,12

5-14

2) (I

T)

Indu

stria

l Sec

tors

(S

ec 1-

9,57

-60

,63

-65

)

Com

mer

cial

Sec

tors

(Sec

18)

INR

Per

SqFt

Per

Mon

th

Inst

itutio

nal

Sect

ors

(Sec

.16A,

62,

125-

142

)

2Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

1Q20

12

4Q20

10

3Q20

10

Institutional Sectors (IT)

Institutional Sectors (Non IT)Commercial Sectors

Industrial Sector


1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

3Q20

12F

4Q20

12F

1Q20

12

2Q20

12F

4Q20

10

3Q20

10

INR

per

Sq ft

per

Mon

th

0

10

20

40

30

50

80

60

70

NoIDA


1Q20

13F

Forecast

1Q 2012 GRADE ‘A’ IT AND NON IT RENTAl VAluEs

CBD

INR

per

sq ft

per

mon

th

Guin

dy (

SBD)

Amba

ttur

oM

R (IT

Cor

ridor

)

GST

road

0

10

20

30

40

50

60

70

80

IT NoN IT




Bank of New York Mellon DLF IT Park 50,000 Manapakkam Lease

Barclays DLF IT Park 63,000 Manapakkam Lease

Cambridge Technologies Agnitio Park 60,000 Kandhanchavady Lease

Emerson Ascendas 18,000 Taramani Lease

Mindtree Ramanujam IT Park 100,000 Taramani Lease

Shriram Value Servies Individual Building 18,000 Mylapore Sale

ChENNAI

over 13 million sq ft of grade ‘A’ office space •supply was available for lease in 1Q 2012. More than 90% of this stock was IT/ITeS office space primarily located at oMR and Ambattur while non IT office space was mostly available in the CBD area, Vadapalani and Velachery.

No new grade “A” commercial projects were •completed this quarter in Chennai.

Project launched during this quarter included •“ASV Chandilya” admeasuring approximately 0.04 million sq ft by ASV Constructions. The project is located at Thoraipakkam and estimates to be completed by 2Q 2013.

Demand was primarily concentrated in Guindy, •Ambattur and oMR as companies were preferring these micro markets for relocation and expansion considering accessibility and state-of-an-art facilities. The market seems to be well segmented such as KPo’s and BPo’s preferring looking spaces at cheaper rentals and ready to go at the far away end of oMR while other corporate were ready to pay higher rentals and preferring initial stretch of oMR, Guindy and Ambattur.

Rental values in 1Q 2012 remained stable •across all micro markets. Absorption was comparatively lesser as the occupiers remained cautious on the backdrop of the current economic scenario. In near future rentals are likely to remain stable on account of the limited supply scheduled for completion in 2012.

Under the “Mega City” programme the Chennai •Corporation has laid out 360 integrated roads at an estimated cost of INR 800 crore, covering an area of 176 km. The state government had allotted INR 333 crore last year for the same.


CBD 14%

Guindy (SBD) 5%

Velachery 1%Vadapalini 1%

GST Rd 3%

oMR (IT Corridor) 51%

Ambattur 24%


4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE

THE KNOWLEDGE | 1Q 2012 | Office | cheNNai


4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

1Q20

12

4Q20

11

3Q20

11

2Q20

11

1Q20

11

4Q20

10

3Q20

10

2Q20

08

1Q20

08

INR

per

sq ft

per

mon

th

90

20

30

40

50

60

70

80

3Q20

08

Ambattur GST road

oMR (IT Corridor)

Guindy (SBD)CBD


2Q20

08

1Q20

08

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

1Q20

13F

4Q20

12F

3Q20

12F

2Q20

12F

1Q20

12

4Q20

10

3Q20

10

INR

per

Sq ft

per

Mon

th

0

5

15

25

10

20

30

35

45

55

40

60

50

ChENNAI


Forecast


4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE





Atos origin India Gopalan Millennium Tower 125,000 Whitefield Lease

Ericsson Umyia Business Bay 22,500 outer Ring Road Lease

Intersil RMZ Centinnial 17,000 Whitefield Lease

Just dial Embassy Star 10,962 Vasanth Nagar Lease

Meru Networks Salarpuria Adonis 35,133 old Madras Road Lease

Tejas Networks JP IT Park 90,000 Electronic City Lease

BENGAluRu (BANGAlORE)

Approximately 9 million sq ft of grade ‘A’ •supply was available for lease during 1Q 2012. Micro markets such as the EPIP Zone, Whitefield, outer Ring Road and the CBD account for about 88% of this total available supply.

New supply of commercial grade ‘A’ office •space for 1Q 2012 accounts for approximately 0.60 million sq ft. Projects/ phases of the projects contributing to this new supply were “Mantri Commercio” developed by Mantri Group at outer Ring Road (oRR) and “Equinox Tech Park - North Block” by Essar Group at Electronic City.

During 1Q 2012, a number of new projects •were launched in peripheral business area in Bengaluru, including “Prestige Tech Park III” by Prestige Group in outer Ring Road (oRR), “RMZ Galleria” and “RMZ Latitude” by RMZ Corp at Yelahankha and Bellary Road, respectively, “Golden Supreme Tech Park” and “Maruthi Concord” by local developers in Electronic City. Further, Bagmane Group also launched a new tower in its Special Economic zone (SEZ) “World Trade Centre 4” located at oRR. All these Projects altogether will add approximately 2.5 million sq ft of grade ‘A’ office space to the city’s total inventory by the end of 2013.

occupier demand was relatively less during •the quarter as compared to previous 2-3 quarters, primarily due to cautious occupier’s sentiments. In terms of absorption micro markets such as CBD, Whitefield and EPIP zone remained active due to lesser availability of grade ‘A’ office space in other preferred areas such as outer Ring Road.

Average rental values for grade ‘A’ office space •remain stable quarter on quarter across all of the micro markets.

Due to limited supply in the market, rentals are •expected to increase marginally in mid term.


CBD 8%

outer Ring Road 15%

Bannerghatta Road 3%Electronic City 4%

EPIP Zone/ Whitefield 65% hosur Rd 5%


THE KNOWLEDGE | 1Q 2012 | Office | beNGaLUrU

1Q20

08

2Q20

08INR

Per

SqFt

Per

Mon

th

0

10

20

30

40

50

60

70

80

90

100

3Q20

08

4Q20

08

1Q20

09

3Q20

09

1Q20

10

2Q20

09

4Q20

09

2Q20

10

3Q20

10

1Q20

11

2Q20

11

1Q20

12

4Q20

11

3Q20

11

4Q20

10

0

10

20

30

40

50

60

70

80

90

out

er R

ing

Road

Grade A Grade B

Elec

troni

c Ci

ty(IT

)

Bann

ergh

atta

Roa

d

EPIP

Zon

e/

Whi

tefie

ld

hos

ur R

oad

INR

Per

SqFt

Per

Mon

th

CBD

CBD

Electronic City

outer Ring RoadEPIP Zone / Whitefield

hosur Road

Bannerghatta Road


INR

per

Sq ft

per

Mon

th

15

20

25

30

50

40

45

35

BENGALURU

2Q20

08

1Q20

08

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

3Q20

12F

1Q20

13F

4Q20

12F

2Q20

12F

1Q20

12

4Q20

10

3Q20

10


Forecast



CBD

(Par

k St

, Cam

ac

St,A

JC B

ose

Rd)IN

R pe

r sq

ft p

er m

onth

Sect

or-5

(IT

)

Sect

or-5

PBD

(New

To

wn,

Raj

arha

t

Bally

gung

e -C

ircul

ar R

D

PBD

New

Tow

n,

Raja

rhat

(IT)

East

Kol

kata

0

20

40

60

80

100

120

140

Grade A Grade B




Bajaj Allianz Mani Square 9,000 Sector 5 Lease

Dhanalaxmi Bank Chitrakut building 2,000 AJC Bose Road Lease

Magma Finance Eco Space 17,000 New Town Lease

Rax omega Infinity Think Tank 4,500 Sector 5 Lease

Recon Infinity Benchmark 30,000 Sector 5 Lease

Sardha Group Crystal Globsyn 33,000 Sector 5 Lease

KOlKATA

In 1Q 2012, approximately 0.08 million sq ft •has been added to grade ‘A’ office space supply in the PBD area. The project / phases of the project which contributed to this new supply was “Rishi Tech Park” developed by Nathvar Tracon Pvt. Ltd. located at New Town.

A number of commercial projects were •launched during the quarter including “Ideal Unique Centre” by Ideal Group at EM Bypass, “Woodburn Central” by Belani Projects at Elgin Road, “DN 21” by Midwest holding Private Ltd (Chatterjee Group) and “Pentagon” by Team Tarus both at Sector 5. All of these projects will together contribute approximately 2 million sq ft of grade A office space to the city’s inventory by the end of 2014.

Absorption remained subdued during the •quarter and only few small commercial leases were signed during the quarter. Rental values for grade ‘A’ office space in 1Q 2012 remained stable across all of the major micro markets due to ample stock availability in major commercial hubs such as Rajarhat, New Town and Sector 5.

Going forward rentals are expected to be •under pressure due to prevailing uncertainties in land policies and lesser demand.

In a major decision the state government of •West Bengal has ruled out SEZ status for Infosys. The decision was taken to protect the rights of farmers and farm land by not relaxing the urban ceiling laws for Special Economic Zones (SEZs).

The Airports Authority of India (AAI) is •planning to develop commercial space in the vicinity of Kolkata airport. The authority has identified approximately 45 acres of land for commercial development. The project would be developed by floating a public tender and funded through public-private partnership.

NEW supplY IN pRIME AREAs

PBD (New Town, Rajarhat)

100%


4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE

THE KNOWLEDGE | 1Q 2012 | Office | kOLkata

1Q20

08

1Q20

09

2Q20

08

2Q20

09

3Q20

08

3Q20

09

4Q20

08

4Q20

09

1Q20

10

2Q20

10

4Q20

10

3Q20

11

1Q20

12

4Q20

11

2Q20

11

1Q20

11

3Q20

10

INR

per

sq ft

per

mon

th

20

40

60

80

100

120

140

160

Sector 5

East Kolkatta

Ballygunge Circular Rd

PBD (New Town, Rajarhat

CBD (Park St,Camac St,AJC Bose Rd)


INR

per

Sq ft

per

Mon

th 40

50

70

90

60

80

0

10

20

30

KoLKATA

1Q20

08

2Q20

08

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

2Q20

10

1Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

1Q20

12

2Q20

12F

3Q20

12F

4Q20

12F

1Q20

13F

4Q20

10

3Q20

10


Forecast


1Q 2012 GRADE ‘A’ IT AND NON IT RENTAl VAluEs



Amdocs Magarpatta SEZ 88,000 hadapsar Lease

Bekaert Amar Paradigm 40,000 Baner Lease

CCRT Pride Kumar Senate 1,700 S B Road Lease

DVS Tara Icon 1,700 Wakdewadi Lease

ExL Magapatta SEZ 88,000 hadapsar Lease

hCL Maragatta SEZ 44,000 hadapsar Lease

puNE

In 1Q 2012 more than 9.7 million sq ft of •grade ‘A’ office space was available for fit-out in Pune. Most of this supply was located in hinjewadi, Kharadi, hadapsar, Fursungi and Nagar Road.

Approximately 1 million of SEZ space was •added in the existing SEZ projects in Pune. more than 60% of this space was swiftly absorbed as spaces were pre-committed by the existing tenants. In addition to Pune commercial grade ‘A’ office space witnessed an infusion of approximately 0.12 million sq ft new supply during the quarter. Project/phases of project contributing to this new supply was “Blue Chip” developed by K Raheja at hinjewadi.

Rental values for grade ‘A’ office space •increased in the range of 2 to 5% specifically in SEZs in almost all of the micro markets. A few markets such as Viman Nagar and Kharadi also witnessed demand for outright purchases.

Going forward rentals are expected to remain •stable on account of large available supply, baring eastern corridor where the rental may witnessed an increase of 7 to 10% in next 2-3 quarters.

This quarter the ready reckoner rate has been •increased in the range of 10 to 30% across Pune. This will help in the improvement of transparency in real estate transaction in the long term.

An overhead bridge connecting Wakdewadi •(central Corridor) to Nagar Road/Yerwada (Eastern corridor), road connecting Chakan, Bhosari and Dighii another road connecting between Baner Road and Pimple Nilkah to Pimple Saudagar became operational. This will give an impetus to the real estate activities in the nearby areas.

supplY IN pRIME AREAs

Kalyani Nagar 4%

Nagar Road 12%

Aundh 3%

Bund Garden 2%

Airport road/pune station 6%

Bavdhan 4%

Baner 5%

Kharadi 23%

hinjewadi 28%

hadapsar/Fursungi 12%

Senapati Bapat Road 1%


4Q 2011 1Q 2012

VACANCY

ABsORpTION

CONsTRuCTION

RENTAl VAluE

THE KNOWLEDGE | 1Q 2012 | Office | PUNe

1Q20

08

2Q20

08

INR

Per

SqFt

Per

Mon

th

20

30

40

50

60

70

80

90

100

110

120

130

3Q20

08

4Q20

08

1Q20

09

3Q20

09

1Q20

10

2Q20

09

4Q20

09

2Q20

10

4Q20

10

2Q20

11

1Q20

12

4Q20

11

3Q20

11

1Q20

11

3Q20

10


0

10

20

30

40

50

60

70

90

80

Khar

adi

Kaly

ani N

agar

Naga

r Ro

ad

Bavd

han

had

apsa

r/Fu

rsun

gi

hin

jew

adi

Sena

pati

Bapa

t Roa

d

Aund

h

Airp

ort r

oad/

pune

sta

tion

Bund

Gar

denIN

R Pe

r Sq

Ft P

er M

onth

Bane

r

Bavdhan Airport road/pune station

Baner

KhardiNagar Road

hinjewadi / hadapsar/FursungiKalyani Nagar

Bund Garden

Aundh

Senapati Bapat Rd


INR

per

Sq ft

per

Mon

th

0

10

30

20

40

70

60

50

PUNE

2Q20

08

1Q20

08

3Q20

08

4Q20

08

1Q20

09

2Q20

09

3Q20

09

4Q20

09

1Q20

10

2Q20

10

1Q20

11

2Q20

11

3Q20

11

4Q20

11

1Q20

12

3Q20

12F

2Q20

12F

4Q20

12F

1Q20

13F

4Q20

10

3Q20

10

IT Non IT


Forecast

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, Senapati Bapat Road & Camp (SBD), while the PBD includes Aundh, Bund Garden, 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


THE KNOWLEDGE | 1Q 2012 | 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.

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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

Mumbai : Prabhu Raghavendra, office Director [email protected] 31/A, 3rd floor, Film Center, 68, Tardeo Road, Mumbai, India - 400 034. Tel : +91 22 4050 4500, 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 4360 7500 - 23, fax : +91 11 2335 6624

Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 437 5807, fax : +91 124 437 5806

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 Extn : 206 , fax +91 33 2357 6502

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THE KNOWLEDGE | 1Q 2012


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.

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Residential Property Market OverviewINDIA

QUARTERLY UPDATE | FEBRUARY | 2012

ASIA PACIFICINDUSTRIAL MARKET OVERVIEW


December 2011

HIGHLIGHTSGLOBAL INDUSTRIAL

WWW.COLLIERS.COM

SECOND HALF 2011 | INDUSTRIAL

JAMES COOK Director of Research | USA

Global Industrial Trend ForecastGrowing global trade will steady demand for quality warehouse space in many regions.Industrial vacancy rates will further drop in most markets. Some markets, U.S. and Australia among them, will experience a lack of new supply in the face of growing demand.Prime warehouse rents will climb in most Asia Pacific markets, remain stable in EMEA and LATAM, and continue to strengthen in North American markets.

Citing deteriorating financial conditions and dimming growth prospect, the International Monetary Fund’s (IMF) revised its September 2011 World Economic Outlook growth projections downward in January 2012. However, the IMF still forecasts that global trade volume will rise by 3.8 percent in 2012 and 5.4 percent in 2013; as global trade rises, so too will demand for warehouse space.

While warehouse rents have stabilized in most EMEA and Latin American markets, prime warehouse rents quoted in local currencies increased in the majority of Asia Pacific and North American markets in 2011 over the previous year. We expect this trend to continue, with prime warehouse rents climbing in most Asia Pacific and North American markets in the next year.

Latin American Rents Poised to Stabilize In Latin America, prime warehouse rental rates took a fall. In 71.4 percent of the markets we track, year-end rents decreased in 2011 from a year earlier. However, we expect warehouse rents in Latin America to stabilize in the coming year.

São Paulo saw a 12.4 percent drop in warehouse rents in local currency, due to increased supply. However, with absorption set to outpace supply,

we expect overall warehouse rents in the São Paulo region to rise by as much as four percent in the coming year.

Mexico City saw a three percent decrease in its industrial vacancy rate in the second half of 2011, down to 4.8 percent. Mexico was more negatively affected by the recession than most countries in North America, and its economic future is largely tied to that of its key trading partner, the United States. But with U.S. growth on the upswing, Mexico too is poised to grow at a modest rate and we expect that vacancies could make further drops in the country.

Steady Demand in North America Since peaking in 2010, growth in the manufacturing and distribution industry has kept the U.S. vacancy rate dropping in a mostly regular fashion. Vacancy dropped to 9.72 percent in Q4 2011. With construction proceeding at low levels, we expect vacancies to continue to drop at a measured rate into 2013.

Toronto, Canada’s biggest industrial market, saw 13.7 million square feet of industrial space absorbed in 2011, and the city’s prime warehouse rents grew by 7.1 percent in the second half of 2011.

Dropping Vacancies in Most Asian MarketsAsia Pacific saw dropping vacancies in nearly every market. Prime warehouse rents grew in more than half of the markets, and observers in more than half of those markets expect that warehouse rents will continue to climb over the next six months.

Australian industrial has been especially strong in most major markets. Retail purchases, made more attractive by the relatively strong Australian dollar, have pushed up demand for large warehouse space in several port markets. While there is growing demand for large modern warehouse

Global Warehouse Demand Shows Consistent Growth

GLOBAL INDUSTRIAL CAPITALIZATION RATES (Prime Yield/Percent)

MARKET (Select Markets) REGION

DEC 2011

DEC 2010

Hong Kong Asia Pacific �.�� .�� Singapore Asia Pacific �.�� .�� London (Heathrow) EMEA �.�� .�� Tokyo Asia Pacific �.�� .�� Los Angeles – Inland Empire, CA NA �.�� .��

Chicago, IL NA �.�� .�� Paris EMEA �.�� .�� Munich EMEA �.�� .�� Vancouver, BC NA �.�� .�� Marseilles EMEA �.�� .�� New Jersey – Northern NA �.�� .�� Dallas-Ft. Worth, TX NA �.�� .�� Shanghai Asia Pacific �.�� .�� Seoul Asia Pacific �.�� .�� Madrid EMEA �.�� .�� Sydney Asia Pacific �.�� .�� Mexico City LATAM �.�� .�� Prague EMEA �.�� .�� Athens EMEA �.�� .�� Bucharest EMEA ��.�� .��

GLOBAL TOP TEN INDUSTRIAL WAREHOUSE RENTS

MARKET REGION

RENT (USD/

PSF/Year)6-MONTH CHANGE*

Tokyo Asia Pacific ��.�� -�.�%London (Heathrow) EMEA ��.�� .�%Hong Kong Asia Pacific ��.�� .�%Singapore Asia Pacific ��.�� .�%Zurich EMEA ��.�� .�%Oslo EMEA ��.�� .�%Moscow EMEA ��.�� .�%Geneva EMEA ��.�� -�.�%São Paulo LATAM ��.�� -��.�%Helsinki EMEA ��.�� .�%Marseilles EMEA ��.�� .�%Paris EMEA ��.�� .�%

*Local currency

Continued on page 8

HIGHLIGHTSGLOBAL OFFICE

WWW.COLLIERS.COM

SECOND HALF 2011 | OFFICE

JAMES COOK Director of Research | USA

Global Office Trend ForecastGlobal office vacancies will continue their decline, due to steady demand and low levels of new construction in North America and Europe. The “flight to quality” trend will continue in many major markets, with occupiers trading up to higher-quality space or a better location as their leases expire.The European sovereign debt crisis will likely push the Eurozone into a mild recession in early 2012. This contraction will be felt most profoundly in a handful of commercial property markets within the most troubled nations.

Economic prospects in the Eurozone have slightly reduced overall positive global expectations for market performance in 2012. We expect continuing modest demand for office space, with most cities seeing a drop in vacancy rates. But global averages do not speak to the nuances of individual markets, and—while we expect positive absorption due to business growth and expansion in the United States, China and Australia—some Eurozone countries may see negative absorption and increased vacancy as the region enters a mild recession.

Global Office Demand Growth Slow and Steady

GLOBAL CAPITALIZATION RATES /PRIME YIELDS: 10 LOWEST CITIES

MARKET (Ranked byDec 2011)

DEC 2011

JUNE 2011

DEC 2010

Taipei �.�� .�� .�� Hong Kong �.�� .�� .�� Vienna �.�� .�� .�� London – West End �.�� .�� .�� Zurich �.�� .�� .�� Singapore �.�� .�� .�� Geneva �.�� .�� .�� Beijing �.�� .�� .��Paris �.�� .�� .��Munich �.�� .�� .��Tokyo �.�� .�� .��

GLOBAL OFFICE OCCUPANCY COSTS:TOP 10 CITIES

MARKET (Ranked byDec 2011)

DEC 2011

JUNE 2011

DEC 2010

Hong Kong ��.�� .�� .�� London – West End ��.�� .�� .�� Paris ��.�� .�� .�� Rio de Janeiro ��.�� .�� .�� Moscow ��.�� .�� .�� London – City ��.�� .�� .�� Perth ��.�� .�� .�� Singapore ��.�� .�� .�� Geneva ��.�� .�� .�� São Paulo ��.�� .�� .��

CBD CAP RATE (%)

Latin America Boasts the Tightest Office MarketsSome of the world’s lowest office vacancy rates are found in Latin American cities. Santiago, Chile; Rio de Janeiro, Brazil; São Paulo, Brazil; and Lima, Peru all have vacancy rates below three percent, resulting in a market that strongly favors landlords, prompts new construction and might squeeze some tenants that desire to expand. For the most part, we expect the strength of these markets to persist. While decreases in European demand for its commodities will likely hurt Latin America, this will be tempered by continued demand from China. In São Paolo, heightened demand has spurred the highest rates of new development in the region, which will eventually put downward pressure on asking rents.

Select Asia Pacific Markets See Big Vacancy DropsThe global trend in dropping vacancy rates should be evi-dent in Asia and continue through 2012. Markets that saw a drop in vacancy in the second half of 2011 outnumbered by a two-to-one margin those where vacancy increased.

Of the world’s most populous markets, those with the most significant declines in six-month vacancy rates were nearly all in the Asia Pacific region. Chengdu, propelled by its strong manufacturing sector, saw its vacancy rate drop by 7.8 percent in the period, and Shanghai saw a 3.2 percent drop in vacancy.

Two other large Asian markets saw vacancy rates drop by 1.5 percent or more: Jakarta, which has also seen sustained growth in CBD rental rates and renewed global investor interest; and Singapore, where occupancies are expected to stabilize.

Marquee Markets See Rent DeclineWhile Hong Kong, London’s West End and Paris command the top three highest asking rents for Class A office space,

each has shown apparent decline in rents between June and December of 2011, when quoted in U.S. dollars. Substantial declines, in fact: led by a $10.87 USD drop in Parisian Class A rents.

But how significant are these figures? The change in London and Paris rents is due to the strengthening dollar relative to the euro and pound sterling. In local currency, prime rents in these markets are holding ground. Although smaller, the decline in Hong Kong of $7.56 USD ($5.10 HKD) per square foot may be a more important indicator of things to come, as demand from the banking and financial sector continue to weaken.

EMEA and Asia Pacific Lead Global ConstructionA significant percentage of the office space under construction is in Europe, the Middle East and Africa (EMEA), and much of that is occurring in Moscow and Dubai. While both of these markets should expect strong economic growth in 2012, the fact that Dubai—with a vacancy rate of 50 percent—is constructing at such a pace leads us to expect that supply will continue to outpace demand in that market.

The other two top markets for office construction are in the Asia Pacific region. Guangzhou—China’s leading commercial port city—and Tokyo have 19.6 and 15.6 million square feet under construction respectively. Asian economic growth rates will remain strong in the coming months, with China and India leading the pack. Rents are on the rise in most cities in the region. However, dropping rents in Seoul and Hong Kong are a potential indicator of global economic uncertainty. In Tokyo, where new supply has been increasing for the past three years, we expect construction to peak and begin to decline in the coming year.

CLASS A / NET RENT (USD/SQ FT)

www.colliers.com/india

Budget Highlights | Real Estate

Finance Minister Pranab Mukherjee started his budget speech 2012-13 in the backdrop of challenging macroeconomic scenario. The finance minister projects the economy to grow by 7.6% in the next fiscal up from 6.9% in 2011-12. He mentioned that due to adverse global economic sentiments there has been a slowdown in the Indian Economy but the fact is India still remains among the front runners in the economic growth in any cross country comparison. The budget aims at faster, sustainable and more inclusive growth across sectors emphasizing on five focus areas including revival of domestic consumption, rapid revival of high growth in private investment, removal of supply bottlenecks, addressing malnutrition in 200 high burden districts and expedite improvement in delivery system, governance and transparency.

From a real estate perspective, the budget remained silent on most of the major issues including status of STPIs (Software Technology Parks of India), Real Estate Regulatory Bill, Land Bill etc. however, it mentioned that efforts are on to arrive at a political consensus on the issue of allowing 51% Foreign Direct Investment (FDI) in multi-brand retail.

THE KEY HIGHLIGHTS OF THE BUDGET WHICH MAY IMPACT REAL ESTATE SECTOR ARE AS FOLLOWS:

- External Commercial Borrowings (ECB) for low cost affordable housing projects. Impact: Real estate companies developing large affordable housing projects with large fund requirements will benefit the most from the easing of external commercial borrowing (ECB) norms as interest rate charged is lower in case of external borrowings in comparison to rates charged by domestic institutions.

- Increase in provision under Rural Housing Fund to INR 4,000 crore from the existing INR 3,000 crore.Impact: It will provide housing finance to targeted groups in rural areas at competitive rates.

- Extension of the existing scheme of interest subvention of 1% on housing loans up to INR 15 lakh where the cost of the house does not exceed INR 25 lakh for another year. Impact: This will boost the affordable housing segment by providing cheaper loan to the end users.

MARKET REACTION TO BUDGET

Q1 2012 | RESEARCH

Source: www.bseindia.com | Mar 16, 2012

Company Change (%)BSE SENSEX -1.19Realty Index -1.26Anant Raj Inds -6.04D B Realty -2.02DLF 0.15Godrej Properties -2.82HDIL -5.21Hubtown Ltd. -4.13Indiabulls Real Estate -1.95Mahindra Lifespaces -0.72Orbit Corp. -3.37Parsvnath Developers -4.04Peninsula Land -3.18Phoenix Mills -2.65Sobha Developers 3.04Sunteck Realty -1.13Unitech -1.68

UNION BUDGET 2012 -13

A SNEAK PREVIEW

P. 1 | COLLIERS INTERNATIONAL

OFFICE PROPERTY MARKET OVERVIEW INDIA

QUARTERLY UPDATE | JANUARY | 2012
