india report in november 2016
TRANSCRIPT
Colliers Quarterly Q3 2016
BENGALURU | RESIDENTIAL
02 November 2016
Steady demand amidst cautious buyer sentiment Divya Grover | Senior Manager | Bengaluru
Despite momentary civil unrest and the municipal corporation’s drive to regularise construction, we are hopeful that the mid-end segment should continue to drive sales as the festive season approaches with developers offering various freebies and attractive payment plans amidst a soft home loan interest rates environment.
Forecast at a glance
Demand
Should improve as builders are
introducing lucrative deals to lure fence
sitters
Supply
Oversupply situation in the primary
market to continue in the upcoming
quarter
Capital Values
Should rationalize across micro
markets barring far off northern
peripherals which may see slight
appreciation
Rental Rate
Likely to hold steady across micro
markets
New project launches plunge
During Q3 2016, Bengaluru noted nearly 4,300 new unit launches, totalling to about 21,800 new units YTD. The city witnessed about 63% QOQ decrease in new launches. This dip in the new launches was primarily attributed to the momentary civil unrest over Kaveri water issue between the state of Karnataka and Tamil Nadu. Also, many projects could not initiate construction and remained in the pre-launch stage due to delays in getting necessary approvals from government departments in the wake of Bruhat Bengaluru Mahanagar Palike‘s (BBMP) recent city wide initiative to tackle the encroachment of storm water drains (rajkaluves) and the lake beds.
With end user affordablity being the prime criteria, almost 96% new unit launches were restricted to the mid-end segment barring the launch of a high-end apartment complex in the residential neighbourhood of J.P. Nagar. Of the total new units launched, Hope Farm Junction (25%), Whitefield (20%) and Hennur Road (15%) emerged as the top three locations garnering maximum launches. Other peripheral locations such as Banashankari 6th stage, Kanakpura Road and Bannerghatta Road together accounted for rest of the share.
Market Trends
Micro Markets Capital Values (INR Per Sq Ft)
QOQ% Change
YOY% Change
Central 21,000-31,000 4% 8%
Cooke Town 7,700-15,000 6% 6%
Jayanagar 8,700-10,700 2% 2%
Sadashivanagar 9,200-15,200 2% 2%
Airport Road 8,800-11,200 3% 11%
Indiranagar 8,200-13,000 1% 6%
Bannerghatta Road
4,700-8,700 -1% 3%
Kormangala 6,800-10,700 -3% 3%
Whitefield 4,400-8,700 -3% 3%
Yelahanka 4,200-10,200 3% -4%
Source: Colliers International India Research Note: Above values represent indicative selling price for premium properties in secondary market
Copyright © 2016 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
For more information:
Sumit Jain National Director Residential Services [email protected]
Aakanksha Anand Senior Manager Residential Services [email protected]
Authors:
Surabhi Arora Senior Associate Director Research [email protected]
Divya Grover Senior Manager Research [email protected]
Average Capital Value Trends
INR per sq ft
Source: Colliers International India Research Note: Dotted lines in the chart above represent forecasted values
Average Rental Values
INR per sq ft per month
Source: Colliers International India Research
The festive season has triggered a slew of soft launches in the market and developers were offering freebies such as gold coins, lucky draw for car, no pre EMI for first two years (as part of 20:80 schemes) and buyback plans to gain traction among prospective buyers. Demand remained concentrated in locations near employment hubs for mid-segment products ranging in the price bracket of INR 60 lakhs – 65 lakhs.
Capital values appreciated in the range of 1 to 6% across micro markets barring a few locations such as Whitefield and Bannerghatta Road, which witnessed slight correction in prices. In the coming quarter, we expect, capital values to remain stable due to continuous addition of new supply in the market.
The city continued to witness completion of new projects in Northern and north-western suburbs of Hennur Main Road and Rajaji Nagar along with southern favourites such as Bannerghatta Road and Electronic City Phase-I. The completion of new projects kept the rents stable across micro markets. Completion of a few office IT park provided an impetus to the rental market in the Sarjapur Main Road belt.
Colliers View
We expect the next quarter to bring the much needed
vitality back in Bengaluru’s residential sector as sales
should revive in the upcoming festival season. There is a
sizeable pipeline of new projects that are likely to get
launched in the coming quarters. Projects launched in
proximity to employment hubs at right price points
should continue to attract buyers. However, delay in
reaching consensus over the implementation of Real
Estate (Regulation and Development) Act, 2016 in
Karnataka and objections raised by the Governor may
inevitably affect buyers sentiments negatively in short-
term.
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
32,000Q
3 2
010
Q3 2
011
Q3 2
012
Q3 2
013
Q3 2
014
Q3 2
015
Q3 2
016
Q3 2
017F
Q3 2
018F
Central Cooke TownJayanagar SadashivanagarAirport Road IndiranagarBannerghatta Road KoramangalaWhitefield Yelahanka
0
10
20
30
40
50
60
70
80
Centr
al
Cooke T
ow
n
Jayanagar
Sa
dashiv
ana
gar
Airp
ort
Road
Indiranagar
Ba
nnerg
hatta R
oad
Ko
ram
an
gala
Whitefie
ld
Ye
lah
anka
Bengaluru (Bangalore)Average Rental Trend for Grade A Properties
Supply, Absorption & Vacancy Trends
Note: Above table represents indicative transactions concluded during Q3 2016
*Note: 1 US$= INR 66.60 (US Dollar rate as on 30/9/2016)
Above table represents rental range of Grade A IT/ITeS buildings only
Note: Above graph represent rental trends of Grade A IT/ITeS buildings only
Note: Above graph represents both Non IT and IT Grade A properties
Market Transactions
Client Building NameArea
(sq ft)Location
Transaction
Type
ABB GlobalBhoruka Tech
Park500,000 Whitefield Lease
Infosys Bhartiya City 200,000Thanisandra
RoadLease
GoogleConstellation
Business Park150,000 Outer Ring Road Lease
MisysConstellation
Business Park150,000 Outer Ring Road Lease
CoWrksRMZ Ecoworld
– 6A150,000 Outer Ring Road Lease
Grade A Rental Values
Micro Markets INR $US Percentage Change
Per sq ft/Month Q-o-Q Y-o-Y
CBD 90 – 150 1.4 - 2.3 0% 9%
Outer Ring Road
(Sarjapur-Marathahalli)75 – 85 1.1 - 1.3 3% 28%
Outer Ring Road
(K.R. Puram – Hebbal)65 – 75 1.0 - 1.1 0% 15%
Bannerghatta Road 55 – 68 0.8 - 1.0 0% 3%
Hosur Road 25 – 40 0.4 - 0.6 0% 0%
EPIP Zone/ Whitefield 35 – 40 0.5 - 0.6 7% 17%
Electronic City 30 – 38 0.5 - 0.6 6% 6%
Accelerating Success
Copyright © 2016 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.
No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
For Office Services contact
Joe Verghese
Managing Director | India
Prestige Garnet, Level 2, Unit No. 201/202 36 Ulsoor Road |
Bangalore - 560042 | India
For research related information contact
Surabhi Arora
Senior Associate Director | Research
Tel – 0124-4567580
Rental Insight
Q3 2016
India | Office
Nov 18, 2016
Goutam Chakraborty
Senior Director | Office Services
INR per sq ft per month
0
20
40
60
80
100
2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Forecast
0%
5%
10%
15%
20%
25%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Absorption (In Mn sqft) New Supply (In Mn sqft)
Vacancy (In %)
Forecast
Delhi-NCRAverage Rental Trend for Grade A Properties
Supply, Absorption & Vacancy Trends
Note: Above table represents indicative transactions concluded during Q3 2016
*Connaught Place, **Sector 18, ***Sector 16A, 62, 125-142, ***Sector 124, 57-60, 63-75
Note: 1 US$= INR 66.60 (US Dollar rate as on 30/9/2016)
Above table represents rental range of Grade A non IT/ITeS building only
Note: Above graph represent rental trends of Grade A non IT/ITeS buildings only
Note: Above graph represents Grade A IT/ITeS and non IT/ITeS properties
Market Transactions
Client Building NameArea
(sq ft)Location
Transaction
Type
Adidas Individual building 150,000 Gurgaon Lease
NEC Brookfield Tower 120,000 Noida Lease
G4S DLF Silokhera 100,000 Gurgaon Lease
Sony Individual building 100,000 Delhi Lease
Guardian
Life
Infospace
(Brookfield)80,000 Gurgaon Lease
Grade A Rental Values
Micro Markets INR $US Percentage Change
Per sq ft/Month Q-o-Q Y-o-Y
CBD* 160 - 430 2.4 – 6.5 -6% -6%
Nehru Place 165 - 225 2.5 - 3.4 -5% -7%
Saket 120 - 180 1.8 – 2.7 -9% -14%
Jasola 85 - 125 1.3 - 1.9 -5% -5%
MG Road 110 - 140 1.7 - 2.1 0% -2%
DLF Cyber City (IT) 100 - 110 1.5 - 1.7 0% 6%
Golf Course Rd 95 - 175 1.4 – 2.6 0% 13%
Institutional Sectors
(Sector 44,32,18)60 - 90 0.9 - 1.4 0% -3%
Golf Course Road Ext/
Sohna Road60 - 75 0.9 - 1.1 0% 0%
National Highway 8 50 - 130 0.8 - 2.0 0% 0%
Udyog Vihar 30 - 45 0.5 - 0.7 0% 10%
Commercial Sector** 70 - 110 1.0 - 1.6 0% -10%
Institutional (Non IT)*** 80 - 100 1.2 - 1.5 0% 6%
Institutional (IT)*** 40 - 55 0.6 - 0.8 0% -14%
Industrial (IT)**** 35 - 55 0.5 - 0.8 0% 0%
Copyright © 2016 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.
No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
For Office Services contact
Vaibhav Mahurkar
Director | Office Services
Technopolis Building, 1st Floor, DLF Golf Course Road
Sector 54 | Gurgaon - 122002 | India
For research related information contact
Surabhi Arora
Senior Associate Director | Research
Tel – 0124-4567580
Rental Insight
Q3 2016
India | OfficeNov 18, 2016
0
40
80
120
160
200
240
2012 2013 2014 2015 2016F 2017F 2018F 2019F
Delhi Gurgaon NOIDA
Forecast
0%
5%
10%
15%
20%
25%
30%
35%
0
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015 2016 F 2017 F 2018 F 2019 F
Absorption (In Mn sqft) - - New Supply (In Mn sqft) - - Vacancy (In %) - -
Forecast
HyderabadAverage Rental Trend for Grade A Properties
Supply, Absorption & Vacancy Trends
Note: Above table represents indicative transactions concluded during Q3 2016
Note: 1 US$= INR 66.60 (US Dollar rate as on 30/9/2016)
Above table represents rental range of Grade A non IT/ITeS buildings only
Note: Above graph represent rental trends of Grade A non IT/ITeS buildings only
Note: Above graph represents Grade A IT/ITeS and non IT/ITeS properties
Market Transactions
Client Building NameArea
(sq ft)Location
Transaction
Type
GoogleMeenakshi
Technova581,000 Gachibowli Lease
CognizantAvance Business
Hub500,000 HITEC City Lease
Capgemini Divyasree Orion 165,000 Raidurg Lease
Wells Fargo Divyasree Orion 125,000 Raidurg Lease
Agility
LogisticsNavyuga Vizva 52,000 Gachibowli Lease
Grade A Rental Values
Micro Markets INR $US Percentage Change
Per sq ft/Month Q-o-Q Y-o-Y
CBD 45 – 50 0.7 - 0.8 0% -5%
Off CBD 45 – 50 0.7 - 0.8 0% -17%
SBD 53 – 58 0.8 - 0.9 6% 31%
PBD 25 - 30 0.4 - 0.5 0% 0%
Copyright © 2016 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.
No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
For Office Services contact
Hari Prakash
Senior General Manager | Office Services
Level 7, Maximus Towers, Building 2A
Mindspace Complex, Hi-Tech City | Hyderabad – 500081 | India
For research related information contact
Surabhi Arora
Senior Associate Director | Research
Tel – 0124-4567580
Rental Insight
Q3 2016
India | OfficeNov 18, 2016
INR per sq ft per month
0
10
20
30
40
50
60
70
80
2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Forecast
0%
5%
10%
15%
20%
25%
0.0
2.0
4.0
6.0
8.0
10.0
2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Absorption (In Mn sqft) New Supply (In Mn sqft) Vacancy (In %)
Forecast
KolkataAverage Rental Trend for Grade A Properties
Supply, Absorption & Vacancy Trends
Note: Above table represents indicative transactions concluded during Q3 2016
*Park Street, Camac Street, Chowranghee Road, AJC Bose Road
**EM Bypass, Topsia, Ruby
***Salt Lake, New Town, Rajarhat
Note: 1 US$= INR 66.60 (US Dollar rate as on 30/9/2016)
Above table represents rental range of Grade A non IT/ITeS building only Note: Above graph represent rental trends of Grade A non IT/ITeS buildings only
Note: Above graph represents Grade A IT/ITeS and non IT/ITeS properties
Market Transactions
Client Building NameArea
(sq ft)Location
Transaction
Type
GE Alstom Millenium City 21,165 Sector V Lease
UberInfinium
Digispace15,595 Sector V Lease
YSGSrijan
Corporate Park10,000 Sector V Lease
ITC Kanak Building
Annexure7,000 CBD Lease
CiplaSrijan
Corporate Park6,500 Sector V Lease
Grade A Rental Values
Micro Markets INR $US Percentage Change
Per sq ft/Month Q-o-Q Y-o-Y
CBD* 85 - 115 1.3 - 1.7 0% 0%
SBD** 60 - 70 0.9 - 1.1 0% -7%
Sector V 40 - 45 0.6 - 0.7 0% -3%
PBD*** 34 - 35 0.5 - 0.5 0% 0%
Copyright © 2016 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.
No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
For Office Services contact
Swapan Dutta
Sr. Associate Director | Office Services
Infinity Business Centre, Infinity Benchmark Room No 13 | Level 18,
Plot G - 1, Block EP & GP, Salt Lake Sector V | Kolkata – 700091 | India
For research related information contact
Surabhi Arora
Senior Associate Director | Research
Tel – 0124-4567580
Rental Insight
Q3 2016
India | Office
Nov 18, 2016
INR per sq ft per month
0%
5%
10%
15%
20%
25%
30%
35%
40%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2010 2011 2012 2013 2014 2015 2016 F2017 F2018 F2019 F
New Supply (In Mln sqft) Absorption (In Mln sqft)
Vacancy (In %)
Forecast
0
20
40
60
80
100
2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Forecast
MumbaiAverage Rental Trend for Grade A Properties
Supply, Absorption & Vacancy Trends
Note: Above table represents indicative transactions concluded during Q3 2016
Note: 1 US$= INR 66.60 (US Dollar rate as on 30/9/2016)
Above table represents rental range of Grade A non IT/ITeS buildings only
Note: Above graph represent rental trends of Grade A Non IT/ITeS buildings only
Note: Above graph represents both Non IT/ITeS and IT/ITeS Grade A properties
Market Transactions
ClientBuilding
Name
Area
(sq ft)Location
Transaction
Type
UBS Gigaplex 130,000 Airoli Lease
Teva
Pharmaceutical
Industries
Commerz II 125,000 Goregaon Lease
Tata
CommunicationsCrescenzo 100,000 BKC Lease
DanherPhoenix
Marketcity75,000 Kurla West Lease
Springboard91Akruti Trade
Center46,000
Andheri
EastLease
Grade A Rental Values
Micro Markets INR $ US Percentage Change
Per sq ft/Month Q-o-Q Y-o-Y
CBD 200 - 250 3 - 3.8 0% 0%
Andheri East 90 - 130 1.4 – 2.0 0% 0%
BKC 225 - 320 3.4 - 4.8 0% 0%
Lower Parel 145 - 190 2.2 - 2.9 0% 0%
Malad 80 - 100 1.2 - 1.5 0% 0%
Navi Mumbai 70 - 100 1.2 - 1.5 0% 0%
Powai 120 - 130 1.8 – 2.0 0% 0%
Worli/Prabhadevi 180 - 210 2.7 - 3.2 0% 0%
Goregaon / JVLR 120 - 140 1.8 - 2.1 0% 24%
Kalina 150 - 220 2.3 - 3.3 0% 6%
Thane 70 - 90 1.2 - 1.4 19% 19%
LBS 130 - 150 2.0 - 2.3 0% -
Copyright © 2016 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.
No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
For Office Services contact
George McKay
South Asia Director | Office Services
Indiabulls Finance Centre, 17th Floor, Unit No. 1701, Tower 3
Senapati Bapat Marg, Elphinstone (W) | Mumbai - 400013 | India
For research related information contact
Surabhi Arora
Senior Associate Director | Research
Tel: 0124-4567580
Rental Insight
Q3 2016
India | OfficeNov 18, 2016
INR per sq ft per month
0
50
100
150
200
250
300
2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Forecast
0%
5%
10%
15%
20%
25%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Absorption (In Mn sqft) New Supply (In Mn sqft)
Vacancy (In %)
Forecast
Ravi Ahuja
Executive Director | Office Services
PuneAverage Rental Trend for Grade A Properties
Supply, Absorption & Vacancy Trends
Note: Above table represents indicative transactions concluded during Q3 2016
Note: 1 US$= INR 66.6 (US Dollar rate as on 30/9/2016)
Above table represents rental range of Grade A non IT-ITeS building only
Note: Above graph represent rental trends of Grade A IT-ITeS buildings only
Note: Above graph represents Grade A IT-ITeS and non IT-ITeS properties
Market Transactions
Client Building NameArea
(sq ft)Location
Transaction
Type
ZS
Associates
World Trade
Centre – C240,000 Kharadi Lease
AmdocsMagarpatta
Tower 388,000 Hadapsar Lease
L&TBlue Ridge
Tower- 869,000
Hinjewadi-
1Lease
Nitor
Infotech
Embassy
Congo50,000
Hinjewadi-
2Lease
Schlumberg
er
Commerzone
B443,000 Yerwada Lease
Grade A Rental Values
Micro Markets INR $US Percentage Change
Per sq ft/Month Q-o-Q Y-o-Y
Baner 50 - 60 0.8 - 0.9 0% 7%
Bund Garden 53 - 67 0.8 - 1.0 0% 4%
Airport Rd/Pune
Station56 - 87 0.8 - 1.3 0% 6%
Aundh 50 - 64 0.8 - 1.0 0% 9%
Senapati Bapat Rd 65 - 110 1.0 - 1.7 0% 17%
Bavdhan 39 - 50 0.6 - 0.8 0% 11%
Kalyani Nagar 52 - 65 0.8 - 1.0 0% 9%
Nagar Road 52 - 65 0.8 - 1.0 0% 11%
Hinjewadi 42 - 55 0.6 - 0.8 0% 10%
Hadapsar/Fursungi 55 - 72 0.8 - 1.1 0% 21%
Kharadi 48 - 90 0.7 - 1.4 0% 20%
Copyright © 2016 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.
No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
For Office Services contact
George McKay
South Asia Director | Office & Integrated Services
5th Floor, Suyog Platinum, Naylor Road, Off Mangaldas Road Pune 411 001 |
Maharashtra | India
For research related information contact
Surabhi Arora
Senior Associate Director | Research
Tel – 0124-4567580
Rental Insight
Q3 2016
India | OfficeNov 18, 2016
Rishav Vij
Sr. Associate Director | Office Services
0%
5%
10%
15%
20%
25%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Absorption (In Mn sqft) New Supply (In Mn sqft)
Vacancy (In %)
Forecast
0
10
20
30
40
50
60
70
80
90
100
2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F
Forecast
INR per sq ft per month