final forum mall draft 29.10.10

8/12/2019 Final Forum Mall Draft 29.10.10

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Market Research &

Feasibility Study forRetail Mall at

Kolkata


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Market Survey & Demand Assessment Study

Nov 2010

TABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY ................................................................................................................................................. 5

BACKGROUND ............................................................................................................................................................................ 5OBJECTIVE ................................................................................................................................................................................. 5SCOPE OF THE REPORT ............................................................................................................................................................... 5APPROACH &METHODOLOGY ...................................................................................................................................................... 5

MARKETANALYSIS &DEVELOPMENT OPTIONS .............................................................................................................................. 52.0 CITY OVERVIEW ............................................................................................................................................................ 6

2.1 INTRODUCTION ............................................................................................................................................................... 62.2 DEMOGRAPHICS ............................................................................................................................................................. 62.3 ECONOMIC INDICATORS ................................................................................................................................................... 7

2.3.1 GDP overview ...................................................................................................................................................... 72.3.2 Income overview .................................................................................................................................................. 8

2.4 ECONOMIC BASE AND DRIVERS FOR THE CITY ................................................................................................................... 82.5 EXISTING &UPCOMING INFRASTRUCTURE ....................................................................................................................... 12

2.5.1 Existing Infrastructure ........................................................................................................................................ 122.5.2 Upcoming Infrastructure Initiatives ..................................................................................................................... 14

3.0 KOLKATA REAL ESTATE OVERVIEW ....................................................................................................................... 15

3.1 RETAIL......................................................................................................................................................................... 153.1.1 Existing Stock .................................................................................................................................................... 153.1.2 Existing Scenario & Future outlook .................................................................................................................... 17

3.2 EXISTING &POTENTIAL GROWTH CORRIDORS ................................................................................................................. 18

4.0 SITE AND LOCATION ANALYSIS ............................................................................................................................... 20

4.1.1 Location map ..................................................................................................................................................... 204.1.2 Distance chart .................................................................................................................................................... 204.1.3 Accessibility & Neighborhood ........... ............ ........... ............. ............ ............. ............. ........... ............ ............. .... 204.1.4 SWOT analysis .................................................................................................................................................. 214.1.5 Initial Development Proposition .......................................................................................................................... 21

5.0 MICRO MARKET OVERVIEW ...................................................................................................................................... 22

5.1 INTRODUCTION TO MICRO MARKET ................................................................................................................................. 225.2 KEY DEVELOPMENTS ALONG EMBYPASS ....................................................................................................................... 225.3 RETAIL......................................................................................................................................................................... 23

6.0 PROJECT ANALYSIS ................................................................................................................................................... 246.1 DEMANDASSESSMENT .................................................................................................................................................. 24

7.0 FINANCIAL ANALYSIS ................................................................................................................................................ 25

7.1 ASSUMPTIONS .............................................................................................................................................................. 257.1.1 Area Assumptions ........... ............ ............. ............ ............ ............ ............ .............. ........... ............ ............. ........ 257.1.2 Project Development key dates ......................................................................................................................... 257.1.3 Project Structure Assumptions ........................................................................................................................... 257.1.4 Construction cost ............................................................................................................................................... 267.1.5 Other cost assumptions ..................................................................................................................................... 267.1.6 Land development cost ...................................................................................................................................... 267.1.7 Revenue assumptions........................................................................................................................................ 267.1.8 Phasing assumptions ......................................................................................................................................... 267.1.9 Project Returns .................................................................................................................................................. 267.1.10 Project Balance Sheet.......................................................................................................................................... 1

7.1.11 Project P&L .......................................................................................................................................................... 17.1.12 Project Cash Flows .............................................................................................................................................. 27.1.13 Project Cost ......................................................................................................................................................... 1

8.0 CONCLUSION / RECOMMENDATION ........................................................................................................................... 1

CAVEATS AND LIMITATION ..................................................................................................................................................... 2

ANNEXURE 3 SITE PHOTOGRAPHS ..................................................................................................................................... 4


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Index of Tables

Table 1: List of Abbreviations ............ ............. ........... ............ ............. ............. ............ ........... ............. ............. ............ ............ .... 4Table 2: List of Measurements ........... ............. ............. ............ ........... ............. ............. ............ ........... ............. ............. ............ .. 4Table 3: Projected Population Density in KMA in persons per sq. km.: Census 2001 ................................................................. 7Table 4: Economic indicators of Kolkata as on 2001-02 .............................................................................................................. 7Table 5: Key Industries .............................................................................................................................................................. 11Table 6: Existing Infrastructure .................................................................................................................................................. 12

Table 7: Upcoming Infrastructure Initiatives ............................................................................................................................... 14Table 8: Existing malls in Kolkata .............................................................................................................................................. 16Table 9: Upcoming Retail developments in Kolkata ............ ........... ............. ............ ............. ........... ............. ............ ............. .... 17Table 10: Retail rentals in Kolkata ............................................................................................................................................. 17Table 11: Distance chart ............................................................................................................................................................ 20Table 12: Location overview ...................................................................................................................................................... 21Table 13: SWOT analysis of property ........................................................................................................................................ 21Table 14: Initial Development Proposition ........... ............. ............ ........... .............. ............ ............. ........... ............ ............. ........ 21Table 15: Existing and Upcoming Malls in EM Bypass .............................................................................................................. 23Table 16: Demand Assessment Table for Retail space ............................................................................................................. 24Table 17: Construction cost assumptions .................................................................................................................................. 25Table 18: Land development cost assumptions ........... ............ ........... ............. ............. ............. ............ ........... ............. ............ 25Table 19: Land development cost assumptions ........... ............ ............. ........... ............. ............. ............ ........... ............. ............ 25Table 20: Construction cost assumptions .................................................................................................................................. 26Table 21: Other cost assumptions ............................................................................................................................................. 26Table 22: Land development cost assumptions ......................................................................................................................... 26

Table 23: Revenue assumptions ............................................................................................................................................... 26Table 24: Phasing assumptions ................................................................................................................................................. 26Table 25: Project Returns .......................................................................................................................................................... 27Table 26:Projected Balance Sheet .............................................................................................................................................. 1Table 27: Projected Profit & Loss ................................................................................................................................................ 2Table 28: Projected Cash Flows .................................................................................................................................................. 3Table 29: Project cost summary .................................................................................................................................................. 1Table 30: Detailed Cost Phasing ................................................................................................................................................. 5

Index of FiguresFigure 1:Kolkata ........................................................................................................................................................................... 6Figure 2: Growth in Working Population ............ ............. ........... ............ ............. ............. ............ ............ ............ ............. .......... 7Figure 3: Sector-wise GDP contribution of Kolkata ...................................................................................................................... 8Figure 4: Infrastructure Map ........... ............. ............ ............. ........... ............ .............. ............ ........... ............. ............. ............ .... 13Figure 5: Kolkata Metro Expansion Map .................................................................................................................................... 13Figure 6: Operational and Upcoming Malls in Kolkata ............................................................................................................... 15Figure 7: Map depicting the retail spread in Kolkata .................................................................................................................. 16Figure 8: retail mall rental trend ................................................................................................................................................. 18Figure 9: CBD and Growth Corridors ............ ........... ............ ............. ............ ............. ............ ............ ............ .............. ........... .. 19Figure 10: Location Map ............................................................................................................................................................ 20Figure 11: Real Estate Developments along EM Bypass........................................................................................................... 23


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List of Abbreviations & Measurements

Abbreviations

Approx. Approximately

BHK Bedroom Hall Kitchen

BUA Built Up Area

SBUA Super Built Up Area

CBD Central Business District

FAR Floor Area Ratio

FSI Floor Space Index

Ft. Feet

Govt. Government

INR Indian Rupee

Km Kilometer

M Meter

RCC Reinforced Cement Concrete

Sq. ft Square Feet

Sq. m Square Meter

Table 1: List of Abbreviations

Measurements

1 Acre 43560 Square Feet

1 Hectare 2.471 Acres

1 Square Meter 10.764 Square Feet

1 Square Yard 9 Square Feet

Table 2: List of Measurements


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1.0 EXECUTIVE SUMMARY

Background

Cushman & Wakefield (C&W) has been appointed by Forum Malls Pvt Ltd to undertake Retail Demand

assessment & feasibility study for setting up of Retail Mall on their property located adjacent to Science City

on EM Bypass.

Objective

The objective of this exercise is to:

To evolve a development strategy for the subject land parcel with value maximization objective

Scope of the Report

The scope of the Report is as under:

Assess the Kolkata real estate market and analyze demand for the retail development.

Arrive at optimum phasing and implementation strategy.

Assess financial viability of the proposed retail development.

Approach & Methodology

A physical inspection of the subject site & market survey was carried out in the site location. Assessment of

real estate trends in and around EM Bypass micro market was mainly based on interaction with local industry

players and leveraging on C&W services knowledge base and networks. Secondary research covered the

review of existing reports and studies including publications by government agencies; publications by

research firms for statistical data; & publications by various industry associations.C&W also conducted a

review of the dynamics of the Kolkata real estate micro-market in terms of the overall growth direction,

existing and proposed development hubs, and the infrastructure initiatives in the region to establish thedevelopment framework for the subject property. Further, a detailed research exercise of the real estate

market in Kolkata and perception studies were conducted to establish the project viability, project positioning,

pricing and phasing strategy for the development based on market and financial considerations.

Market Analysis & Development Options

The subject micro-market, EM Bypass has been analyzed as relevant for various development components

to understand the existing and proposed development patterns for various real estate components.

As a result of the detailed analyses, we are of the opinion that:

The subject site is suitable for development large format destination mall. This segment has been witnessing

demand, which is expected to continue in the long term. We have considered market dynamics of the

surrounding micro markets; considering the demand expected to be generated by the subsistent residential

population in forthcoming years, and given the size & nature of the development and various other factors

such as location, accessibility, we are of the opinion that large format retail development on the subject land

parcel is viable. This has been done in order to assess the market prospects for the proposed development.

The study evaluates the subject property on various parameters such as location dynamics, competitiveness

and demand prospects to ascertain/ assess the sustainability of the proposed development.


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2.0 CITY OVERVIEW

2.1 Introduction

Kolkata the capital of West Bengal is the main business, commercial and financial hub of eastern India and

the northeastern states. The city is situated in the Eastern part of India on the bank of river Ganges and is the

worlds 8th largest urban agglomeration. A city with one foot in its 300 year old heritage and a richly mixed

culture, and the other forward to grab the best of today, Kolkata tends to be a city that delights with stunning

glimpses into a rich culture, history, with amazing oasis of natural beauty in the heart of the city.

Figure 1:Kolkata

2.2 Demographics

As per Census 2001, the Kolkata Metropolitan Area (KMA) houses a population of 14,720,000. Of this,nearly 4.7 million people reside within the Kolkata Municipal Area (KMC). The urban agglomeration Kolkata

Metropolitan Area is 1851 sq. km. in size whereas the Municipal Area within this region is about 185 sq. km1.

By 2025, the population in KMA is expected to be approximately 22 million. The present density of urban

population of Kolkata is 24,760 persons / sq. km.

The following table provides a perspective of Kolkatas existing and emerging demographics as stipulated in

the Vision 2025 document:

Area/District 1961 1971 1981 1991 2001 2011 2021

KolkataMunicipal Area(KMC)

16,740 18,813 20,891 22,273 23,149 25,257 26,620

Hooghly 1,937 2,487 3,170 3,993 4,734 5,394 6,169

Howrah 4,234 4,591 5,805 7,429 8,604 9,606 11,056

Nadia 505 685 1,279 1,783 2,256 2,682 3,228

1 KMA (Kolkata Metropolitan Area) refers to the overall administrative area under KMDA (Kolkata Metropolitan Development Authority) which

includes the core city within the KMC (Kolkata Municipal Corporation) and surrounding urban sprawl (outgrowth areas defined by the planningauthority).


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North 24Parganas

2,964 4,256 5,687 7,415 9,385 10,742 12,498

South 24Parganas

1,008 1,465 1,821 2,430 3,201 3,590 4,191

KolkataMetropolitanArea (KMA)

3,817 4,651 5,666 6,826 7,950 8,914 10,045

Table 3: Projected Population Density in KMA in persons per sq. km.: Census 2001

At present, the average literacy rate in Kolkata is 81.31%. The Age Sex Ratio in Kolkata is currently 956

females per 1000 males. The annual growth rate of population for Kolkata is estimated to be approximately

4%. In order to meet the demands of the growing city population, the Kolkata Metropolitan Development

Authority has proposed a few satellite townships around the city. These large developments shall act as

counter-magnets and help in effectively reducing the burden on the core areas of the city.

The working age population of the state is set to increase by 17 million by 2016, thereby leading to further

urbanization.

Figure 2: Growth in Working Population

2.3 Economic Indicators

2.3.1 GDP overview

Kolkata is a major economic centre of India. It is one among the fastest growing cities in the world.Following are the key economic indicators for the city:

Area/Item Primary Secondary Tertiary Total

West Bengal ( Net State DomesticProduct in US Mn $ )

7,766.55 7,310.76 14,802.16 29,879.47

KMA ( District Domestic Product in US Mn$ )

50.14 2,362.18 5,586.96 7,999.28

KMAs share in West Bengal (%) 0.65 33.95 33.70 _

Distribution of SDP in KMA by Sector (%) 0.63 29.53 69.84 100

Table 4: Economic indicators of Kolkata as on 2001-02

0

5

10

15

20

25

30

2006 2011 2016

Working Age Population in million

EnteringWorkforce


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The figure represents sector-wise

contribution of Kolkatas GDP to the

total GDP of West Bengal. Kolkata

has a major share of contribution in

the Secondary and Tertiary sectorGDP of West Bengal.

As of 2001-02, Secondary and

Tertiary sector contributed about

30% and 70% respectively to the

states GDP. Under The Tertiary

sector, the service sector, chiefly IT&ITeS, Real estate, Business Services had a major contribution of nearly

45% to the total GDP of Kolkata3.

2.3.2 Income overview

The Annual Survey of Industries data show that 1990-91 onwards there has been a significant increase in

the quantum of Productive Capital base of KMA-districts, registering a growth of about 35.5 percent per

annum in the KMA-districts, as against a much lower rate of growth of 19.7 percent per annum for the state

as a whole. KMA-districts accounted for an investment of Rs.5591 crores in the large and medium industry

projects implemented between 1991 and 2002. This constituted 25 percent of total investment of Rs.22,101

crores in West Bengal during the same period. On the contrary, the labour-output ratios have experienced a

declining trend during the last decade in both the state as well as in KMA-districts. This could be explained

by increasing adoption of capital-intensive or labour-saving technologies in manufacturing processes.

2.4 Economic Base and Drivers for the City

Trade & Industry in Kolkata has played a significant role in developing the economic scenario of West

Bengal. The prominent industrial sectors in Kolkata are Information Technology, Real Estates, Electronics,

Apparel and Plastic products. Information Technology is the most developing industry in Kolkata that

accounts for a major portion to the overall trade in West Bengal. Some of the other significant industries in

Kolkata include construction, chemicals, cosmetics & jewellery, furniture, sports goods, tourism, rubber,

media and advertising.

Kolkata is also base to several industrial units with produce ranging from jute to electronics. Some of the

renowned Indian companies headquartered in Kolkata include Bata India, ITC Limited, Coal India Limited,

Birla Corporation, Bengal Peerless, National Insurance Company, Orient fans, Exide, Berger Paints and Tata

Tea.

2Source: Statistical Abstract, BAE&S GoWB,: data as of 2001-02

3www.indiastat.com

Figure 3: Sector-wise GDP contribution of Kolkata2

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

Primary Secondary Tertiary

GDP West Bengal GDP Kolkata


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Stagnation in the major traditional industries in KMA like jute, engineering, cotton and chemicals had been

caused by a number of factors including the ownership structure of industries, the national policy of freight

equalization for iron and steel, promotion of similar industries in other parts of the country to achieve regional

balance etc. However, the knowledge based IT and ITES industries have witnessed year on year higher

growth in terms of both annual turnover and exports. The magnitude of software exports from Kolkata rising

from Rs. 3.5 billion in 1999-2000 to Rs.12 billion during 2002-03 and further to Rs.16 billion in 2003-04, have

clearly reinstated the fact that IT&ITeS industry is the economic spine of Kolkata.

WEBEL is the facilitator for development of Information Technology (IT) and IT Enabled Services (ITES) in

the state, besides being the nodal agency for development of electronic industries. Principally located in Salt

Lake (chiefly in Sector V area), Rajarhat and to some extent in areas around EM Bypass currently, there are

approximately 250 IT companies in Kolkata employing over 75,000 IT professionals.

IT/ITES


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Industry Overview

The IT sector in Kolkata had grown at a CAGR of 88% between 1996-97 and 2002-03.During 2001-2005, it has witnessed 70% growth against the national average of 37%.The IT/ITeS Sector witnessed an export turnover of Rs 35 billion in 2006-07. Even duringthe recent global slowdown, the IT/ITeS growth in Kolkata is currently at 12% in the year2008-09, which is still higher than the national average.

Kolkata had an advantage of lower commercial lease rentals/ capital rates, availability of

large talent pool, lower attrition rates, adequate support infrastructure, adequate socialinfrastructure, affordable housing, which has been the major attraction for IT playerslooking for expansion plans with cheaper overhead costs.

MNCs like Pricewaterhouse Coopers, IBM, TCS, Cognizant, Wipro, Skytech, Lexmark,AIG and HSBC including Indian corporate houses like ITC Infotech and Reliance areoperational in the city. Some other IT companies in Kolkata include Acumen SoftTechnologies, Ambujex Technologies (P) Ltd, Alliant Technologies Private Limited, AptSoftware Avenues Pvt Ltd, Bright Soft Solutions, Calinnovations, ChaiONE, Digital carePvt. Ltd, Kris Systems Pvt Ltd, MaxMobility PVT LTD, Ontrack Systems Limited, Re-LifeDigital Solution Pvt Ltd and Webel Technology Limited.

Some of the prominent IT campuses in Kolkata are the Wipro SEZ, the DLF IT Park atRajarhat, Infinity Benchmark, Godrej Waterside, the Technopolis building, RMZ Ecospacemostly concentrated in Rajarhat & Salt Lake Sector V.

GovernmentInitiatives

The West Bengal Government had earmarked IT Industry as the priority sector forIndustrial Development in the State. A number of initiatives have been taken by thegovernment to attract IT companies in the state, viz.: Setting up of a dedicated IT department within the ministry in year 2000, Empowering agencies like WEBEL in facilitating the IT sector in Sector V, Salt Lake, Bringing IT within the ambit of Public Utility Services, Procurement and facilitating in land acquisition, Providing land at cross subsidy, Creating requisite physical infrastructure for the IT Industry.

Heavy-engineering

Industry Overview

Casting, forging, metallic articles, machinery, generators, transformers, electric motors, shipsand vessels and related accessories, railway wagons and coaches and accessories havebeen the dominant traditional industries in KMA in terms of contributing substantially to statedomestic product and also providing considerable employment.

More than 3 lakh persons are employed in this industry in the state. The metal-based foundryindustry and a large number of small engineering units in Howrah have been among theoldest heritage industries of India. This industry manufactures a wide range of products,serves the requirement of automobile industries, railways, agriculture, mining, various partsand components of jute, cotton, cement, rolling mills etc., and is highly labour intensive innature.

This industry has been passing through severe crisis due to a number of reasons, importantamong them being decentralization of procurement by Indian Railways, shortage of inputs likecoal, lack of technological up gradation and diversification and freight equalization policy of

the Government of India. Although the number of units is seen to be rising in recent years,there is a need for modernization of this industry to render itself more competitive.

Construction


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Industry Overview

Construction Industry constitutes the second major activity after manufacture and engineering.The SDP generated in this sector in KMA-districts registered an annual average rate of growthof around 6.3 percent in the present decade (2001 onwards). A major part of the constructionactivities in KMA is accounted for by real estate and infrastructure development activities.Real estate activities have witnessed a significant jump in recent years within KMA, registeringan annual growth of 9.5 percent in the same decade.

Chemicals and Small Scale Industries

Industry Overview

West Bengal has been among the leaders in production of Chemicals, Drugs &Pharmaceuticals. The recent increasing popularity of herbal drugs has provided a greatopportunity for drugs & pharmaceuticals industry in the State and also in KMA. The recentlyestablished Haldia Petrochemicals Complex 120 kilometres away from KMA has opened upopportunity for both chemical and drugs & pharmaceuticals industries within KMA.

The growth of registered Small Scale Industry (SSI) units has been significant in KMA, thetotal number of registered SSI units in KMA being approximately 6000 employing roughly

33,000 people. The major small-scale units in KMA are metal-based engineering, leather,chemicals and food based industries. However, most of these industries have been plaguedby problems like inadequate supply of raw materials, absence of application of moderntechnology and lack of institutional financing facility.

Table 5: Key Industries


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2.5 Existing & Upcoming Infrastructure

2.5.1 Existing Infrastructure

Infrastructure Description

Airport

Kolkatas airport provides both domestic and international connectivity and is located in thenorth of Kolkata City in Dum Dum. Kolkata is currently serviced by 14 international, 8 domesticairlines and 5 Cargo Airlines. The number of domestic & international passengers in 2006-07was around 6 million.

Calcutta Airport has been ranked as the 7th spot much ahead of Hyderabad InternationalAirport (10th Spot), Chennai International Airport (14th Spot) and New Delhi Indira GandhiInternational Airport (25th spot) in an official statistics regarding the "Top 25 fastest growingairports 2007" worldwide with a 28.2% increase in the passenger traffic, according to the WorldAirport Traffic 2007 report released by the Airports Council International.

Roads

Kolkata has a road space at just 6% of the total city area as against the standard 20% in well-planned cities like Delhi. The major road developments in KMA are:

Belghoria Expressway Kona Expressway

Acharya Jagadish Chandra Bose Road Eastern Metropolitan Bypass VIP Road Rajarhat Arterial Road Diamond Harbour Road Basanti Highway National Highway 2 National Highway 6 National Highway 117 National Highway 34 National Highway 35 National Highway 41

The Rabindra Setu, the Vivekananda Setu, the Dakshineshwar Bridge and the SecondVivekananda Bridge, are the vital parts of linkages over the river Hooghly that create betteraccessibility to the entire KMA and its periphery.

Two recent significant developments are the SVTB (Second Vivekananda Tollway Bridge) andthe Garia Metro Extension (operational by 2009) both of which have made a significant impacton traffic mobilization by improving connectivity and reducing travel-time.

Railways

Kolkata has two major long distance railway stations at Howrah Station and Sealdah. Howrahstation connects to rest of India and Sealdah station to north of Bengal and northeastern part ofthe country. It also has The Suburban Railway connecting to the suburbs surrounding the city ofKolkata.

The Kolkata Metro is the underground rail network in Kolkata, India. It is run by the IndianRailways and is the first underground built in India with service starting in 1984. The line beginsat Dum Dum in the north and continues south through Park Street, Esplanade in the heart ofthe city till the southern end in Kavi Nazrul.

Port

The Port of Kolkata is a riverine port in the city of Kolkata, India. It is the oldest operating port inIndia, having originally been constructed by the British East India Company. The Port has two

distinct dock systems - Kolkata Docks at Kolkata and a deep-water dock at Haldia DockComplex, Haldia.

Table 6: Existing Infrastructure


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Fi

Figure 5: Kol

gure 4: Infrastructure Map

ata Metro Expansion Map


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2.5.2 Upcoming Infrastructure Initiatives

Projects Description

New MetropolitanHighways

Several new highways have been proposed in KMA, some major projects are mentioned belowwith the running length in kilometres:

Dum-Dum Barrackpore Expressway

- Madhyamgram to Belghoria: 6.0 km

Eastern Expressway- NH 34 to Taki: 8.0 km- Taki to B N Dey Road: 22.5 km- B N Dey Road to Baruipur and NH 34 to Barrackpore-Kalyani Road: 30.1 km

Southern Expressway- Baraipur to Diamond Harbor Road: 15.5 km- Diamond Harbour Road to Budge Budge to Bauria to NH 6: 22.7 km- Bridge over / tunnel under Hooghly

Serampur-Barrackpore-Barasat Expressway- Connecting NH 2 and Eastern Expressway: 22.5 km

Western Riverfront Expressway- Andul Road to Bauria Connector: 14.0 km

Metro Rail Project

The proposed East-West Metro Corridor will run 13 km from Salt Lake to Howrahstation and is set to be operational by 2012.

The 12 stations on the route will be Howrah, Mahakaran, Central, Bowbazar, Sealdah,Phoolbagan, Salt Lake stadium, Bengal Chemical, City Centre, Central Park,Karunamoyee and Sector V.

The route will intersect the existing North-South Metro Corridor at Central Station.

Bridges/ Flyovers

KMDA along with international fund houses like JBIC (Japan Bank of International Co-operation) has proposed construction of several flyovers/ bridges at critical junctions someof which have been shown below:

Over crossing of Jessore Road and Dum Dum Road (2007-2012)

Salt Lake Bypass across J K Saha Bridge (2007-2012)

Along Anwar Shah Road across Raja Subodh Mallick Road (2007-2012)

Esplanade RA Kidwai Road

- Across Park Street (2012 onwards)

- Across Loudon Street (2012 onwards)

- Across Camac Street (2012 onwards)

Elevated Ring Road Corridor around Kolkata with entry and exit ramps

- Across Strand Bank Road-Strand Road-Diamond Harbor Road-Alipore-Prince Anwar Shah Road-EM Bypass-VIP Road-Circular Canal-Bagabazar(2012 onwards)

Elevated Road from Park Circus to Parama Island (2012 onwards)

Patipukur Underpass on Jessore Road (2012 onwards)

EM Bypass to VIP Road (2012 onwards)

Vivekananda Road Flyover Phase I : Howrah to CR Avenue crossing (2012 onwards)

Vivekananda Road Flyover Phase II : CR Avenue crossing to Airport (2012 onwards)

Table 7: Upcoming Infrastructure Initiatives


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Market Survey & Demand Assessm

3.0 KOLKATA REAL ESTATE

3.1 Retail

Kolkata retail market is envisaged t

and construction. Kolkata enjoys a v

for the services industry.

Traditionally, the organized retail ac(CBD) and off-CBD areas. This incl

Shakespeare Sarani, New Market a

vicinity of CBD. However, a major

periphery of the city in the suburbs

areas.

3.1.1 Existing Stock

Kolkata consumer retail market si

only 2-4 % of above. Not only is

causal factor for high absorption

Organized retail (including malls

2007 versus 0.7 Mn Sq.ft. in 200

of shopping malls.

4Source: Cushman & Wakefield Research

ent Study

OVERVIEW

witness 20 new shopping malls currently in variou

ast pool of educated young population, which mak

Figure 6: Operational and

tivity in Kolkata has been concentrated in the Cenluded markets and high streets areas like Park S

d Elgin Road. The city presently hosts 9 malls, 6 of

proportion of the proposed supply is targeted t

f Rajarhat New Town, VIP road, along the EM byp

ize is INR 13.139 billion4. Out of this, the organized

there a high demand for retail, but also limited pre

nd low vacancy levels in retail space to about 5%-7

and high streets) supply recorded upsurge since 2

). This addition in retail space has mainly been thr

s stages of planning

s it an ideal location

pcoming Malls in Kolkata

ral Business Districtreet, Camac Street,

which are within the

owards the Eastern

ass and surrounding

sector comprises of

sent supply, a major

% percent.

05 (2.3 Mn Sq.ft. in

ough the emergence


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At present, the organized retail

which essentially covers the or

department stores, out of which l

Operational Malls Location

Forum - I Elgin Road

City Centre - I Salt Lake

Metropolis EM Bypass

Gariahat Shopping Mall Ballyguange Stn.

Homeland Chowringee

E Mall GC Avenue

South City Mall PA Shah Road

Mani Square EM Bypass

City Centre - II Rajarhat

ent Study

arket in Kolkata accounts for over 4 Mn Sq.ft. of

ganized retail in high streets, shopping malls an

asable area in Retail Mall in 2.95 Mn Sq.ft.

Developer Size

Rahul & Co 200,000

Bengal Ambuja 300,000

CMGL 175,000

Toplight Commercials 100,000

Merlin Group 100,000

Hooghly Mills 84,000

South City Group 1,000,000

Mani Group 600,000

Bengal Ambuja 400,000

Table

Figure 7: Map depicting t

gross leasable area,

d large stand-alone

OperationalMilestone

2003

2004

2005

2006

2007

2007

2008

2008

2009

: Existing malls in Kolkata

he retail spread in Kolkata


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3.1.2 Existing Scenario & Future outlook

Kolkata witnessed no fresh mall supply in Q3 2009. A number of projects are slated to be completed in

Q4 of 2010. The retail sector in Kolkata is witnessing significant growth, the scale of the Kolkatas retail

revolution can be gauged by the fact that the organized retail mall space is expected to grow to

approximately 5.54 Mn Sq.ft. by the year 2013.

UpcomingRetail

Development

Developer Location/ Micromarket

Type DevelopmentArea (Million

sq.ft.)

Expectedcompletion

Forum Courtyard Forum Projects Elgin RoadNew extension of

existing Forum mall40000 Q2 2010

Lake Mall Space Group Lake Market Mall 250000 Q4 2010

La-Vida Nangalia GroupSalt Lake, nearKarunamayee

Mall 90000 Q4 2010

Diamond Plaza Diamond Group Jessore Road Mall 350000 Q4 2010

Down Town Nangalia Group Salt Lake (nearAMRI Hospital &stadium)

Mall 120000 Q2 2011

Acropolis Merlin GroupRB Connector(besides Siemens)

Mall 300000 Q4 2011

Avani RiversideMall

Avani GroupForesore Road,Howrah

Mall 491000 Q4 2011

Spencer'sGalleria

CESCProperties (RPGGroup)

Syed Amir AliAvenue

Mall 700000 Q4 2012

Forum-II Forum Projects EM Bypass Mall 12,00,000 Q4 2013

Downtown

Bengal UnitechUniversalInfrastructure PvtLtd

New Town,Rajarhat (ActionArea III)

Shopping complex 200000 Q4 2013

Table 9: Upcoming Retail developments in Kolkata

In the past two years a significant number of mall projects sought conversion to commercial or residential

development, consequently supply has declined. Retailers showed less preference for upcoming mall

projects in peripheral locations like Rajarhat due to uncertainty with regard to the malls' launch and lack of

immediate catchments. In 2010 Leasing activities have picked up considerably however it is mostly

restricted to the established malls. Rentals across various malls have stabilized in 2010.

Prime High Street Rentals Prime Mall Rentals

Locations Rent in INR/ Sq.ft./month Locations Rent in INR/ Sq.ft./month5

Park Street 245 South Kolkata 290

Camac Street 268 Salt Lake 400

Elgin Road 190 Rajarhat 130

Theatre Road 175 Elgin Road 450

Table 10: Retail rentals in Kolkata

5Rentals mentioned are for ground floor premises on carpet area.


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Nov 2010

The city's malls witnessed major correction in the rentals since 2008; it has stabilized since December

2009. Kolkata is likely to witness an uptrend in the rental values across both the malls and main streets in

2011. Malls with affordable rentals and established catchments are likely to see interest from retailers.

Value retail and discount segments will continue to command a significant share of the market pie; seeing

increased interest from retailers to enter the segment.

Figure 8: retail mall rental trend

The high streets also witnessed exits of significant retailers from prominent locations. This is mainly

attributable to the unjustifiably high price points in respect to sales. Locations with established catchments

in South Kolkata and adjoining areas registered some activity in terms of both leasing as well as retailers'

interest.

3.2 Existing & Potential Growth Corridors

It has been observed over the last 3-4 years from the citys development pattern that the overall growth in

commercial, residential and retail sectors is shifting to the eastern corridors from central business districts of

the city. Kolkata Metropolitan Area is dotted with several existing and upcoming Commercial Micro-Markets,

the significant ones being CBD (Park Street, AJC Bose Road), South-Central Kolkata, Salt Lake and New

town Rajarhat. Developments at EM Bypass (near the Eastern Kolkata Township) also indicate an emerging

Sub-CBD in the years to come with a number of businesses relocating from the old CBD to these areas.

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

RentinINR/Sft/month

Mall Rental Trend

South Kolkata

Salt Lake

Rajarhat

Elgin Road


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Nov 2010

Figure 9: CBD and Growth Corridors

Kolkata Metropolitan Area has emerging growth corridors other than the established micro-markets that

have witnessed sufficient development in the recent past. Of all the growth corridors of Kolkata, Rajarhat

is among the most prominent emerging commercial micro-markets with a strong presence of global and

national level IT players as the major occupants of the available and upcoming commercial spaces. It not

only enjoys nearness to the Airport but also moderate connectivity with the other important regions of

Kolkata, as well.

Growth Corridors

Kona ExpresswayUluberia - Haldia NH6 Growth

CorridorVIP (Nazrul Islam Avenue)

Corridor

EM Bypass Corridor

Budge Trunk RoadCorridor Batanagar (Maheshtala)

CIT Road - Kankurgachi -Ultadanga Corridor

Baruipur TownshipArea

Baishnabghata - PatuliTownship Area Sector V, Salt Lake

Dankuni - Uttarpara NH2 Growth Corridor BRADA Corridor


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4.0 SITE AND LOCATION AN

4.1.1 Location map

4.1.2 Distance chart

The distance of the subject prope

Loc

Salt Lake Sector V

Garia

Airport/Dumdum

CBD of Kolkata

4.1.3 Accessibility & Neighborho

Accessibility

Road

Rail

Air

Road width

Neighborhood Profile

ent Study

LYSIS

rty from prominent locations has been listed below:

ation Dista

T

d

Details

Approached by EM Bypass

Nearest Railway station is the Garia Statikilometres by road

EM Bypass leads to the Netaji Subhash

25 m

Upcoming Residential, Hospitality and C

Figure 10: Location Map

ce (In Km)

8

12

12.5

5

ble 11: Distance chart

on roughly 2-3

ose Airport

mmercial projects


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Nov 2010

Primary CatchmentSalt Lake, Kankurgachi, New Town Dumdum, Lower Stretch ofEM Bypass (Kasba, Garia, Topsia, Gariahat, Jadavpur)

Average Rental/Sale Value (INR/Sq ft)Retail Rentals: 100 per month

Prominent developments in the vicinitySilver Spring, Science City, ITC Sonar Hotel, Trade FairGrounds, China Town

Table 12: Location overview

4.1.4 SWOT analysis

Strengths Weaknesses

Good access to CBD, Airport Availability of transport infrastructure Located in one of the prominent growth

corridors of the city Availability of good road frontage Abundant greenery (PC Chandra Park) in

site vicinity

Traffic congestion near Science City,due to undergoing Flyover project.

Opportunities Threats

Increased retail space off-take in prominentlocations.

Low vacancy of 5% in operational Malls, Potential to create large format destination

mall.

Supply of other retail development invicinity may offer competition

Table 13: SWOT analysis of property

4.1.5 Initial Development Proposition

To be provided based on an initial assessment of the site location

Development Proposition Details

Retail To act as a major retail destination for the city

Table 14: Initial Development Proposition


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Nov 2010

5.0 MICRO MARKET OVERVIEW

5.1 Introduction to Micro Market

The Eastern Metropolitan Bypass is a major road connecting the northern corridor to the southern corridorof the city. Beginning from the northern hub of Ultadanga to Garia in the south, the road covers a distanceof 21 km along the eastern fringe of the city. It is one of the significant roads (four-lane wide) of themetropolis and is an emerging economic growth corridor. There is a proposal to extend the road to theFalta Export Processing Zone (FEPZ) at Falta on the Hooghly River, further 60 kilometers below Kasba.

A number of connecting roads link the bypass to major micro-markets in Kolkata, the most significantamong them being the Park Circus connector connecting Park Circus to EM Bypass and the Rash BehariConnector connecting Gariahat to EM Bypass. EM Bypass is connected by various ancillary roads thatconnect to the CBD regions of Kolkata. These are:

The Park Circus Connector that meets EM Bypass at the junction of the 5-star ITC Sonar BanglaHotel & Science City

The Rash Behari Connector meets EM Bypass at the Ruby Hospital Eastern Metropolitan Bypass Link Road connecting Garia and Patuli township Santoshpur Avenue connecting Santoshpur and Jadavpur Anwar Shah Road Connector connecting Dhakuria and Lake Gardens Maniktala connector connecting Maniktala market

EM Bypass is a major link of Kolkata which is not only the gateway to the IT hub of the city at Sector V,Salt Lake, and the emerging planned township of Rajarhat while approaching from south, but also thecorridor that leads eventually to the Airport via Rajarhat on the one hand, while connecting to Ultadanga,one of the major traffic interchange junctions of Kolkata on the other.

The site is located at the Eastern Metropolitan Bypass Extension connecting Garia and is expected tocapitalise on the positive impacts spurred off by the Garia Metro Station, which is due to open shortly.

5.2 Key Developments along EM Bypass

5-star hotels like the Hyatt Regency and the ITC Sonar Bangla

Institutional developments such as West Bengal National University of Juridical Sciences, Govt. Collegeof Engineering and Leather Technology and Satyajit Ray Film & Television Institute

Recreational developments like Salt Lake Stadium, Swabhumi, Science City

Institutional Health Care developments like the Ruby Hospital, Rabindranath Tagore International Instituteof Cardiac Sciences, Peerless Hospital and B.K.Roy Research Centre, Apollo Gleneagles Hospital

Educational Institutes like the Calcutta International School

Premium Residential Complexes like Silver Spring, Avishikta, Greenwood Nook, Kolkata Greens,Udayan, and Hiland Park

ITC Sonar Bangla Hotel II is expected to come up in the same site of ITC Sonar Bangla Hotel which isenvisaged as a 500 room, 27 floored structure with two basements

A 3.7-km road skirting the Bypass is being planned as a four-lane road which will branch off the Bypass atthe Chowbhaga crossing, near the intersection of the Prince Anwar Shah connector and the Bypass, andextend up to Basanti Road. The project will be developed on a public-private partnership by the KolkataMunicipal Corporation, Kolkata Metropolitan Development Authority and some private parties, includingthe Heritage and Shrachi groups.


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5.3 Retail

EM Bypass is an established residfringes of the corridor. On account odifferent along different stretches of t

Some of the significant retail projects

Name of the Mall/ RetailProject

Locati

Metropolis EM BySilver Arcade EM BySpencers Retail EM ByMani Square EM ByMetro Cash & Carry EM By

The following diagram represents thBypass:

ent Study

ntial corridor with several commercial propertiesf the sizeable length of EM Bypass, the real estate corridor.

in Kolkata are in EM Bypass, the details of which ar

n DeveloperSize

(sq.ft.)

pass CMGL 175,000pass Sanjeevani Group 70,000pass Bengal Peerless 38,000pass Mani Group 600,000pass Metro Group 100,000

Table 15: Existing and Upc

spatial distribution of real estate projects along

Figure 11: Real Estate Devel

lying alongside thee characteristics are

e given below:

perationalMilestone

20052006200620082008

ming Malls in EM Bypass

astern Metropolitan

pments along EM Bypass


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Nov 2010

6.0 PROJECT ANALYSIS

6.1 Demand Assessment

The proposed project being situated on the lucrative growth corridor of EM Bypass large format retaildevelopment may be explored. We have considered the fact that the site is well connected to a largecatchment area beginning from Dumdum to Garia via Salt Lake and New Town. Further it is a short drivingdistance from CBD. The location is already an urban getaway with Science City, PC Chandra Greens andTrade Fair grounds in the vicinity of the project site. The area is also emerging as a high end residentiallocation.

Parameters

Primary Catchment(Salt Lake, Dumdum,

New Town,Kankurgachi Topsia)

Secondary Catchment(Lower EM Bypass,

Garia, Kasba)

Distance (km) from micro-market 2.0 - 6.0 8 - 12.5

Time (min) from micro-market 5.0 - 15.0 20.0 - 30.0

Area in sq.km. 35 100

Population density (persons per sq.km.) 16,600 22,700

Demand for Retail

1) Population Led Demand

Average Household Size in Kolkata 4.5

No of H/H in Primary Catchment 129,114

No of H/H in Secondary Catchment403,556

Shoppers, Spend and Visits

Percentage of H/H in Primary Catchment in consumer category for organized retail 80%

Percentage of H/H in Secondary Catchment in consumer category for organized retail 70%

Average No. of Shoppers per family 2

Average Spend Per visit per person (Primary Catchment) 1,079 Rs

Average Spend Per visit per person (Secondary Catchments) 763 Rs

Average No of visits per month (Primary Catchment) 2

Average No of visits per month (Secondary Catchments) 1

Expected Revenues

From Primary Residential Catchment 5015 Mn Rs/annum

From Secondary Residential Catchments 4804 Mn Rs/annum

Total Expected Revenue per annum 9820 Mn Rs/annum

Max Chargeable Total Rental (12.5% of Revenues) 1,227 Mn Rs/annum

Max Chargeable Average Rental 100 (Rs./sq.ft/p.a.)

Total Mall Demand in Micro-market (size)1,022,865 Sq.ft.

Competition in other retail developments (size) NA Sq.ft.

Probable Mall Size in Subject Property 1,022,865 Sq.ft.

Table 16: Demand Assessment Table for Retail space


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Nov 2010

7.0 FINANCIAL ANALYSIS

7.1 Assumptions

As per information provided by client, FAR of 2.5 has been assumed for calculating Built-up-Areaexcluding car parking. Construction costs for the project have been assumed as per market benchmarksand thumb rule assumptions, considering the nature of the development components proposed.

7.1.1 Area Assumptions

Table 17: Construction cost assumptions

No assumptions have been made for power, water and other regular costs as these have been treated asa pass-through to the end user, since the charges for these facilities would be recovered by client fromthe users at actual.

7.1.2 Project Development key dates

Project Key Dates

Start date 01-Jan-11

Construction starts after approval of Development Plan 6 Months

Contruction period (+Lead time) 42 Months

Certification/Approval for Occupancy/Usage 0 Months

Operation/Occupancy starts on 01-Jan-15

Financial year ending (of occupancy/lease) 31-Mar-15Table 18: Land development cost assumptions

7.1.3 Project Structure Assumptions

Structure

Equity Return Expectation Rate 20%

Debt Rate 12%

Equity Percentage 35%

Debt Percentage 65%

Developer Profit Margin

Discounting Rate 12.46%Table 19: Land development cost assumptions

Component Area

Built-up Area 775,368

Car Parking 513,681

Total Construction Area 1,289,049

Total Leasable Area 775,368


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Nov 2010

7.1.4 Construction cost6

Table 20: Construction cost assumptions

7.1.5 Other cost assumptions

Other Costs Percentage (%)

Architects & Consultants' Fee (%-age of Construction Cost) 2.4

Admin & Pre-Operative Expenses (%-age of Construction Cost) 5.6

Advertising & Marketing Cost (%-age of Construction Cost) 1.5

Miscellaneous & Contingencies (%-age of Construction Cost) 11

Total 20.50

Table 21: Other cost assumptions

7.1.6 Land development cost

The infrastructure development like roads, power and water supply is already available inside notifiedarea of ML Dalmiya SEZ. Therefore land development cost for the project has been assumed to beminimal.

Cost component on Built up Area INR in Rs/ Sq.ft.

Infrastructure cost 20

Land cost 78.89

Table 22: Land development cost assumptions

7.1.7 Revenue assumptions

Table 23: Revenue assumptions

7.1.8 Phasing assumptions

Development Phasing 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14

Retail Mall 42.00% 21.00% 20.00% 17.00%

Lease Phasing 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18

Retail Mall 85.00% 90.00% 90.00% 95.00%

Table 24: Phasing assumptions

7.1.9 Project Returns

Based on the above assumptions, following are the arrived returns for the project:

6Construction Cost implies bare shell cost without fittings and furnishings and does not include soft costs like overhead charges, consulting

fees, etc.

Development Component Cost on BUA (INR/Sq.ft.)Escalation

(per annum)

Retail Mall 3220 3%

Car Parking 350 3%

Development ComponentRental (INR/Sq.ft.) on saleable/

leasable area

Escalation

(per annum)

CapitalizationRate

Retail Mall 107 per month 5% 10.5%


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Nov 2010

7.1.13 Project Cost

Description of Items Rate INR Per Sq Ft. Project Cost (INR Million)

Land Cost: 118

Civil Works: 1516 1175Piling 229.70 1,782

Sub Structure 490.03 3,801

Superstructure 612.54 4,751

Brickwork/ Plaster 84.22 653

Waterproofing 38.28 297

Anti Termite 15.31 119

Boundary Wall including Roads 45.94 356

14,366.00

Finishes 620 481

Door 61.25 475

Interior 145.48 1,128

Flooring 153.14 1,188Elevation 214.39 1,663

Landscaping 45.94 356

5,260.00

Utility & Services 1084 840

Lift & Escaltors 218.98 1,698

Electric 336.90 2,613

Firefighting 61.25 475

Plumbing & Sanitary 91.88 713

A C Plant 313.93 2,435

Building Automation 61.25 475

Total Hard Cost 3220 2804

Table 29: Project cost summary


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Nov 2010

PromotersContribution 255 254 174 136 158 228 97 200 253 264 275 221 243 406 291

Term Loan fromBanks 434 432 297 232 269 388 165 340 430 449 467 376 413 690 495 Grand Total

689 686 471 368 428 617 262 540 682 714 742 598 657 1,096 787


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Nov 2010

8.0 CONCLUSION / RECOMMENDATION

In the last two years a number of intended retail development projects have been postponed or converted to

commercial real estate, thereby bringing down vacanacy levels in existings malls to about 5%. A 15-20%

correction in rental values has increased the investment attractiveness for tenant. The economic upturn in 2010

has positively impacted the real estate sector. The retail demand outlook for the next 2-3 yaers is positive.

Based on the analysis of the market dynamics and location, the following recommendations are suggested:

Positioning : The general catchments of the micro market have presence of commercial, residential and

hotels, catering to the demand for HIG and MIG. The subject micro market is situated close to existing

retail and commercial corridor Park Street, Topsia and Kasba. Thus have the opportunity to provide

quality retail space at relatively lower rates to the occupiers.

Size : Based upon our Demand Estimation, total BUA recommended for retail is 775,000 sq ft at the

subject land parcel. For the retail development, ratio of anchor to vanilla has been recommended to be

around 40% to 60% in the overall tenant mix. The project should provide value added services to tenants.

This will assist in targeting demand from different segments and spread the risk over a larger demand

base.

Rentals and ARR : Considering the price point of other similar retail developments in Kolkata and

adjoining High Streets weighted average rentals for the project in current scenario is estimated to be INR

107/ sq ft for retail

Conclusion

The above detailed demand and financial analysis concludes that the project is financially viable and will be able

to meet the financial obligations. Based on the financial analysis the estimated Project IRR is 20.7 %.


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Nov 2010

bona-fide belief. No responsibility is assumed for technical information furnished by the third party

organizations and this is bona-fidely believed to be reliable.

5. No investigation of the title of the assets has been made and owners' claims to the assets is

assumed to be valid. No considerations have given to liens or encumbrances, which may be against

the assets. Therefore, no responsibility is assumed for matters of a legal nature.

6. The Client including its agents, affiliates and employees, must not use, reproduce or divulge to any

third party any information it receives from C&WI for any purpose without prior consent from C&WI

and should take all reasonable precautions to protect such information from any sort of disclosure.

The information or data, whether oral or in written form (including any negotiations, discussion,

information or data) forwarded by C&WI to the Client may comprise confidential information and the

Client undertakes to keep such information strictly confidential at all times.


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ANNEXURE 3 SITE PHOTOGRAPHS

Photographs

Science City and Trade Fair Grounds areopposite to the subject site

The subject site is adjoining PCChandra Greens, located on serviceroad abutting EM Bypass

Subject Property Photograph

ITC Sonar Bangla, a star hotel propertyis located adjacent to the site

Land Mark hotel a 3 star hotel is alsoadjacent to the site.

Silver Spring Residential Complex andSpring club is the vicinity of the subject

site

final forum mall draft 29.10.10

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