mumbai - india real estate outlook report
TRANSCRIPT
Mumbai July – Dec 2014
Residential July – Dec 2014
Launches plummet by 43% to a five-year low
RESIDENTIAL
Mumbai residential market launches, absorption and price trend
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
-
10,000
20,000
30,000
40,000
50,000
60,000
INR
/Sq
.ft.
No
. o
f u
nit
s
Launches Absorption Wt. Avg. Price (RHS)
10% rise in price
Y-O-Y in 2014
49% fall in H2 2014 vs. H2 2013
H2 2013 – 52,222 units
H2 2014 – 26,833 units
12% rise in H2 2014 vs. H2 2013
H2 2013 – 32,717 units
H2 2014 – 36,505 units
RESIDENTIAL
Residential Market in MMR in Year 2014
Sales
volume
fell
by
9%
67,715 units sold vs
74,094 units in 2013
New
launches
dropped
by
43%
62,345 units launched vs.
109,229 units in 2013
Areas like Kalyan and Dombivali accounted for the
largest number of launches during Jul – Dec 2014
RESIDENTIAL
2%
4%
17%
33%
27%
1%
3%
13%
3%
15% 13%
26%
19%
0%
10%
15%
0%
20%
25%
36%
2% 0%
5%
12%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Central Mumbai Central Suburbs Navi Mumbai PeripheralCentral Suburbs
PeripheralWesternSuburbs
South Mumbai Thane WesternSuburbs
H2 2013 H1 2014 H2 2014
Micro-market split of launches
1,0
45
un
its
8
92
un
its
0 u
nit
s
2,3
36
un
its
5,1
52
un
its
5,2
40
un
its
9,1
29 u
nit
s
4,4
45
un
its
6,6
30
un
its
17
,06
9 u
nit
s
9,1
29
un
its
9,7
80
un
its
14
,02
5 u
nit
s
6,6
41
un
its
560 u
nit
s
28
4 u
nit
s
15
8 u
nit
s
10
0 u
nit
s
1,7
74
un
its
3,6
94
un
its
1,3
90
un
its
65
60
un
its
54
00
un
its
31
33
un
its
Consumer interest continues to be high across the
peripheral markets of MMR
RESIDENTIAL
2% 4%
19%
38%
22%
0%
6%
10%
1%
7%
15%
35%
24%
1%
7%
11%
2%
8%
17%
32%
21%
0%
7%
12%
0%
5%
10%
15%
20%
25%
30%
35%
40%
CentralMumbai
CentralSuburbs
Navi Mumbai PeripheralCentralSuburbs
PeripheralWesternSuburbs
South Mumbai Thane WesternSuburbs
H2 2013 H1 2014 H2 2014
Micro-market split of sales
32,717 31,210 36,505
56
9 u
nit
s
34
1 u
nit
s
79
5 u
nit
s
1,3
49
un
its
2,0
96
un
its
3,0
68
un
its
6,1
61
un
its
4,6
73
un
its
6,2
18
un
its
12
31
6 u
nit
s
10
93
3 u
nit
s
11
55
5 u
nit
s
71
33
un
its
73
46
un
its
76
63
un
its
12
1 u
nit
s
18
4 u
nit
s
14
5 u
nit
s
18
14
un
its
22
25
un
its
27
33
un
its
32
54
un
its
34
12
un
its
4330 u
nit
s
Reduction in launches has led to a drop in inventory
overhang across MMR
RESIDENTIAL
-
2
4
6
8
10
12
14
Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
No
. o
f Q
uart
ers
Kalyan, Dombivali, Navi Mumbai are the best
performers with a 2.5 year inventory
RESIDENTIAL
5
8
11
14
17
20
5 8 11 14 17 20 23
Ag
e o
f In
ven
tory
QTS
Central Mumbai
Central Suburbs
Navi Mumbai
Peripheral Central Suburbs
Peripheral Western Suburbs
South Mumbai
Thane
Western Suburbs
South Mumbai
Peripheral Central
Suburbs
Navi Mumbai
Peripheral
Western Suburbs
Central Suburbs
Central Mumbai
Thane Western SUburbs
Micro-market-wise QTS vs age of inventory Total Unsold Units
204,070 as on December 2014
Major infrastructure completion in 2014 has improved
fortunes of some residential localities
RESIDENTIAL
Location Micro-market Price range in H2 2014 (`/sq ft) 12-month change 6-month change
Lower Parel Central Mumbai 24,000–36,000 2% 1%
Worli Central Mumbai 31,000–55,000 -6% 9%
Ghatkopar Central Suburbs 12,000–21,000 19% 0%
Mulund Central Suburbs 10,000–14,000 -3% 2%
Powai Central Suburbs 13,000–20,000 6% -3%
Panvel Navi Mumbai 4,500–6,500 -1% -5%
Kharghar Navi Mumbai 6,500–9,500 -1% -6%
Vashi Navi Mumbai 10,000–15,000 2% 1%
Badlapur Peripheral Central Suburbs 2,800–3,500 4% 2%
Dombivali Peripheral Central Suburbs 4,500–6,000 2% 0%
Mira Road Peripheral Western Suburbs 5,500–7,500 3% 2%
Virar Peripheral Western Suburbs 4,500–5,500 6% 3%
Tardeo South Mumbai 40,000–60,000 5% 0%
Ghodbunder Road Thane 6,000–10,000 4% 1%
Naupada Thane 13,000–18,000 4% 0%
Andheri Western Suburbs 14,000–21,000 9% 8%
Bandra(W) Western Suburbs 40,000–60,000 3% 2%
Borivali Western Suburbs 11,000–15,000 5% 5%
Dahisar Western Suburbs 8,000–10,000 6% 2%
Goregaon Western Suburbs 13,000–15,000 6% 4%
Concluding Remarks
With launches declining 43% to a five-year low, the year 2014 proved
to be dismal
City Realtors breathe easy as unsold inventory begin to drop
Notwithstanding the slowdown in sales, the weighted average prices
in the MMR inched up 10%
RESIDENTIAL
Going forward
RESIDENTIAL
After a tumultuous year, Mumbai on the path to improvement
In H1 2015, absorption is projected to improve by 25%, to 38,936
units, and launches, to decline marginally by 3%, to 34,289 units
compared to H1 2014
Even as demand will improve going forward, the magnitude of price
growth will be low - H1 2015 will witness price growth of 4%
July – Dec 2014
Office
MMR office space absorption at a 3 year high – 18%
stronger than 2013
OFFICE
Mumbai office space stock and vacancy levels
89 95 99 103 106
112 117
70 73 77 79 82 87 91
20.9%
23.2%
22.3%
22.8%
22.5% 22.6% 22.7%
19.5%
20.0%
20.5%
21.0%
21.5%
22.0%
22.5%
23.0%
23.5%
0
20
40
60
80
100
120
140
mn
sq
ft
Stock Occupied Stock Vacancy (RHS)
Absorption to improve by 60% over the next
6 months
OFFICE
5.9 6.0
3.8 3.8
2.9
6.4
5.3
3.4
2.6
3.8
2.4 2.5
4.8
4.0
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
mn
sq
ft
New completions Absorption
New completion and absorption
BFSI makes a remarkable comeback; contributes 40%
of the MMR absorption
y
OFFICE
13%
25%
40%
22%
15% 12%
48%
25%
40%
26%
10%
24%
0%
10%
20%
30%
40%
50%
60%
BFSI IT/ITES Manufacturing Other services
H2 2013 H1 2014 H2 2014
Sector-wise absorption split
Thane and Navi Mumbai consolidated its lead by 32%
during Jul – Dec 2014
y
OFFICE
13%
3%
12%
28%
11%
33%
12%
3%
20%
32%
9%
24%
0%
5%
10%
15%
20%
25%
30%
35%
BKC & Off-BKC CBD & Off-CBD Central Mumbai PBD SBD Central SBD West
H2 2013 H2 2014
Business District-wise absorption split 3
10
,62
1 s
q.f
t.
59
8,4
85
sq
.ft.
71
,40
0 s
q.f
t.
135,7
59 s
q.f
t.
28
4,0
00
sq
.ft.
97
9,0
13
sq
.ft.
68
5,1
22
sq
.ft.
1,5
29
,64
4 s
q.f
t. 2
69
,50
0 s
q.f
t.
41
7,5
59
sq
.ft.
78
4,6
68
sq
.ft.
1,1
55
,05
1 s
q.f
t.
With business outlook improving for driver industries,
rentals to shoot up even further
OFFICE
y
50
60
70
80
90
100
110
120
130
140
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015E
INR
/sq
ft/
mo
nth
Weighted average rental movement
Concluding Remarks
• Office absorption at a 3-year high - Areas such as Lower Parel and BKC lead
among premium markets
• With ICICI, Reliance Capital and Deutsche Bank taking up space, BFSI is back
in the running
• Weighted average rental has moved up by 4% at the end of 2014; vacancy
stayed at 22.6% vis-à-vis 22.8% in 2013
Going Forward
With the business outlook improving for driver industries of the MMR office
market, demand and consequently, rents, will improve further
Absorption in H1 2015 to improve by 60% to 4 mn sq ft, and project
completions by 85% to 5.3 mn sq ft compared to H1 2014
By H1 2015, the weighted average rent will be `122/sq ft/month, up by 9%
compared to H1 2014
The receding supply pipeline in Central Mumbai and the controlled supply
environment in BKC translated into an increase in rent in these markets
