mumbai real estate outlook report h1 2015

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  1. 1. MUMBAI RESIDENTIAL JANUARY TO JUNE 2015
  2. 2. RESIDENTIAL MARKET IN DOLDRUMS Did freebies and easy financing schemes prop up demand? Will developers cope up? Is property price correction in Mumbai imminent?
  3. 3. INVESTORS AND END-USERS CONCERNED; DEVELOPERS RESPOND, PRICE GROWTH SLOWS
  4. 4. 57,007 52,222 35,512 26,833 18,887 41,377 32,717 31,210 36,505 28,446 - 10,000 20,000 30,000 40,000 50,000 60,000 No.ofunits Launches Absorption NEW LAUNCHES DROP BY 47% Y-O-Y; DEMAND BY 9% H1 2015 - THE WORST HALF YEARLY PERIOD POST GLOBAL FINANCIAL CRISIS
  5. 5. 6,818 7,085 7,382 7,796 7,994 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 No.ofunits Wt. Avg. Price (RHS) PRICES STAGNANT
  6. 6. PERIPHERAL WESTERN SUBURBS Dadar, Lower Parel, Mahalakshmi, Worli, Prabhadevi CENTRAL MUMBAI Sion, Chembur, Wadala, Kurla, Ghatkopar, Vikhroli, Bhandup, Mulund CENTRAL SUBURBS Vashi, Nerul, Belapur Kharghar, Airoli, Panvel, Ulwe, Sanpada NAVI MUMBAI Kalyan, Kalwa, Dombivili, Ambernath, Bhiwandi, Mumbra, Karjat PERIPHERAL CENTRAL SUBURBSVasai, Virar, Boisar, Palghar, Bhayandar, Nalasopara Malabar Hill, Napean Sea Road, Walkeshwar, Altamount Road, Colaba SOUTH MUMBAI Ghodbunder Road, Pokhran Road, Majiwada, Khopat, Panchpakhadi THANE Bandra, Andheri, Goregaon, Kandivali, Borivali, Santa Cruz, Vile Parle WESTERN SUBURBS 40% 127% 1% (6%) 33% 51% 7% 20% 97% 30% (3%) (20%) 8% (7%) (32%) (20%) H2 2014 H1 2015 Proposed International Airport HOWEVER, CENTRAL SUBURBS AND CENTRAL MUMBAI HAVE SEEN SUBSTANTIAL GROWTH Y-O-Y
  7. 7. DEVELOPERS FORAYING INTO LOCATIONS BEYOND THANE FOR AFFORDABLE HOUSING
  8. 8. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 20 mn Central Mumbai Central Suburbs Navi Mumbai Peripheral Central Suburbs Peripheral Western Suburbs South Mumbai Thane Western Suburbs 59% OF NEW LAUNCHES BELOW INR 2.5 MN IN KALWA, KALYAN, DOMBIVALI, AMBARNATH INR
  9. 9. CENTRAL SUBURBS TAKES LEAD IN LAUNCHES IN THE LAST 6 MONTHS
  10. 10. MULUND, KANJURMARG, CHEMBUR SEE BIG LAUNCHES; CONTRIBUTES 28% OF NEW LAUNCHES IN JAN JUN 2015 3% 15% 13% 26% 19% 0% 10% 15% 0% 20% 25% 36% 2% 0% 5% 12% 0% 28% 12% 23% 10% 0% 13% 14% 0% 5% 10% 15% 20% 25% 30% 35% 40% Central Mumbai Central Suburbs Navi Mumbai Peripheral Central Suburbs Peripheral Western Suburbs South Mumbai Thane Western Suburbs H1 2014 H2 2014 H1 2015 892 5,152 5,194 5,240 4,445 2,224 6,630 9,129 4,325 9,780 6,641 1,935 560 3,694 2,486 1,390 5,400 2,686 3,133
  11. 11. NO NEW LAUNCHES IN PREMIUM MARKET WITH HOMES MORE THAN INR 5 CRORE
  12. 12. 1,532 1,583 1,140 121 1,355 877 540 650 795 30,012 31,182 32,197 32,469 33,025 25,000 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000 35,000 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 INR/sqft No.ofunits Launches Absorption Wt. Avg. Price (RHS) SUPPLY IN PREMIUM MARKET CONTRACTS FASTER THAN DEMAND
  13. 13. IT WILL TAKE AROUND 3.5 YEARS TO OFFLOAD UNSOLD INVENTORY IN PREMIUM MARKETS; MMR TO TAKE 3 YEARS
  14. 14. - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 No.ofQuartersSALES IN PREMIUM MARKETS IN TANDEM WITH CITY SALES PREMIUM MARKETS MMR
  15. 15. SOUTH MUMBAI CONTINUES TO SUFFER; 5 YEARS TO OFFLOAD CURRENT INVENTORY 7 10 13 16 19 8 11 14 17 20 23 AgeofInventoryinquarters QTS CENTRAL MUMBAI SOUTH MUMBAI CENTRAL SUBURBS WESTERN SUBURBS PERIPHERAL WESTERN SUBURBS NAVI MUMBAI PERIPHERAL CENTRAL SUBURBS THANE
  16. 16. CONSUMER INTEREST TO REMAIN TEPID IN H2 2015
  17. 17. OUTLOOK FOR THE NEXT 6 MONTHS LAUNCHES (UNITS) SALES (UNITS) WEIGHTED AVERAGE PRICE (INR/SQ FT) H2 2014 26,833 36,505 7,796 H1 2015 18,887 28,446 7,994 H2 2015 E 20,776 34,135 7,994
  18. 18. HOW DOES MUMBAI STAND COMPARED TO OTHER CITIES
  19. 19. LAUNCHES- ALL MAJOR CITIES H1 2015 BENGALURU 21,400 MUMBAI 18,887 PUNE 12,762 NCR 11,360 CHENNAI 9,102 KOLKATA 8,372 AHMEDABAD 8,062 HYDERABAD 5,457 H1 2014 BENGALURU 35,545 MUMBAI 35,512 NCR 35,500 PUNE 16,883 CHENNAI 11,377 AHMEDABAD 9,021 KOLKATA 8,444 HYDERABAD 7,899 INCLUDING MUMBAI WITNESS DRASTIC FALL
  20. 20. SALES H1 2015 MUMBAI 28,446 BENGALURU 22,234 PUNE 15,524 NCR 14,250 CHENNAI 9,091 AHMEDABAD 7,751 HYDERABAD 7,123 KOLKATA 5,883 H1 2014 H2 2014 MUMBAI 31,210 36,505 NCR 28,500 12,075 BENGALURU 27,256 28,445 PUNE 14,719 20,150 CHENNAI 10,315 10,643 AHMEDABAD 10,472 8,019 HYDERABAD 7,282 7,829 KOLKATA 6,390 6,245 - SIMILAR TREND IN SALES
  21. 21. HEALTH OF MUMBAI RESIDENTIAL MARKET A BIG CHALLENGE 5 7 9 11 13 15 5 7 9 11 13 15 17 19 Ageofunsoldinventoryinquarters QTS MUMBAI PUNE AHMEDABAD HYDERABAD KOLKATA NCR BENGALURU CHENNAI
  22. 22. MUMBAI OFFICE MARKET JANUARY TO JUNE 2015
  23. 23. OFFICE MARKET SLOW AND STEADY
  24. 24. DEMAND HOLDS, PROJECT COMPLETIONS DELAYED 3.8 3.8 2.9 6.4 2.3 3.8 2.4 2.5 4.8 2.5 - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 mnsqft New completions Absorption ALL NUMBERS IN MN SQ FT
  25. 25. MARGINAL DECREASE IN VACANCY; DEARTH OF LARGE SIZED QUALITY OFFICE SPACE 99 103 106 112 114 77 79 82 87 89 22.3% 22.8% 22.5% 22.6% 21.9% 15.0% 18.0% 21.0% 24.0% 0 20 40 60 80 100 120 mnsqft Stock Occupied Stock Vacancy (RHS) ALL NUMBERS IN MN SQ FT
  26. 26. VACANCY CUFFE PARADE NARIMAN POINT WORLI LOWER PAREL DADAR VASHI GHANSOLI AIROLI BELAPUR VIKHROLI KURLA BHANDUP ANDHERI GOREGAON MALAD BALLARD ESTATE THANE POWAI BKC KALINA CBD & OFF-CBD PBD SBD WEST CENTRAL MUMBAI BKC & OFF BKC Proposed International Airport 9% 17% 10% 33% 17% 26% SBD CENTRAL VACANCY ACROSS BUSINESS DISTRICTS OVERALL 22%
  27. 27. DIVERSIFIED OCCUPIER BASE; BANKING & FINANCIAL SERVICES AN ANCHOR
  28. 28. MEDIA, CONSULTING, E-COMMERCE INCREASED THEIR TALLY 15% 12% 48% 25% 40% 26% 10% 24% 26% 16% 17% 40% 0% 10% 20% 30% 40% 50% 60% BFSI IT/ITES Manufacturing Other services H1 2014 H2 2014 H1 2015 0.37 1.94 0.67 0.31 1.23 0.41 1.21 0.46 0.43 0.64 1.18 1.02 ALL NUMBERS IN MN SQ FT
  29. 29. COMPETITIVE RENTS, IMPROVED EAST-WEST CONNECTIVITY GIVE AN EDGE TO POWAI, VIKHROLI, ANDHERI, GOREGAON
  30. 30. 14% 2% 14% 31% 11% 27% 17% 2% 7% 21% 19% 34% 0% 5% 10% 15% 20% 25% 30% 35% 40% BKC & Off-BKC CBD & Off-CBD Central Mumbai PBD SBD Central SBD West H1 2014 H1 2015 SBD CENTRAL AND SBD WEST TOGETHER ACCOUNT FOR HALF THE MARKET0.36 0.44 0.05 0.05 0.36 0.18 0.78 0.52 0.28 0.48 0.69 0.87
  31. 31. MUMBAI TO RETAIN ITS DIVERSIFIED OCCUPIER BASE; NEW IT POLICY UNLIKELY TO BE A GAME CHANGER
  32. 32. OUTLOOK FOR THE NEXT 6 MONTHS NEW COMPLETIONS (MN SQ FT) ABSORPTION (MN SQ FT) VACANCY WEIGHTED AVERAGE RENT (INR/SQ FT/MONTH) H2 2014 6.4 4.8 22.6% 118 H2 2015E 4.3 5.2 20.4% 123 GROWTH (32%) 8% 4%
  33. 33. HOW DOES MUMBAI STAND COMPARED TO OTHER CITIES
  34. 34. VACANCY LEVELS HIGHEST IN THE COUNTRY 22% 21% 8% 15% 18% 16% 0% 5% 10% 15% 20% 25% - 1 2 3 4 5 6 7 Mumbai NCR Bengaluru Pune Chennai Hyderabad mnsqft New completions Absorption Vacancy (RHS) H1 2015
  35. 35. KEY TAKEAWAYS RESIDENTIAL MUMBAI RECORDS THE WORST HALF YEARLY PERIOD POST THE GLOBAL FINANCIAL CRISIS OFFICE MUMBAI VACANCY HIGHEST IN INDIA ALTHOUGH OCCUPIERS UNABLE TO FIND THEIR PREFERRED SPACES DUE TO LIMITED SUPPLY
  36. 36. MUMBAI REAL ESTATE JANUARY TO JUNE 2015