mumbai real estate report h1 2016 presentation
TRANSCRIPT
JANUARY TO JUNE 2016
MUMBAI
RESIDENTIAL & OFFICE
RESIDENTIAL
ON A NEW GROWTH PATH
THE BROAD PICTURE
Y-O-Y launches and sales head north
67,9
48
57,0
07
35,5
12
18,8
87
24,4
50
44,6
09
41,3
77
31,2
10
28,4
46
34,9
71
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
Launches Sales
23%
29%
HALF YEARLY TREND IN LAUNCHES AND SALES
No
of
un
its
Growth story gains strength in h1 2016
65,6
88
49,0
22
67,9
48
53,6
67
57,0
07
52,2
22
35,5
12
26,8
33
18,8
87
20,7
76
24
,45
0
54,2
45
41,9
81
44
,60
9
41,3
69
41,3
77
32,7
17
31,2
10
36,5
05
28,4
46
34,1
35
34,9
71
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016
Nu
mb
er
of
un
its
Launches Sales
LAUNCHES AND SALES SINCE 2011
The reality check; where do we stand
today?
SALES
• 13%lower than the
5 half yearly
average
• 36%lower than the
peak in H1 2011
• 23%higher than H1
2015
LAUNCHES
• 50%lower than the
5 half yearly
average
• 64% lower than the
peak in H1 2012
• 29%higher than H1
2015
The helping hand; stagnating house prices
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
Rs./s
q f
t
HALF YEARLY PRICE TREND
Transactions follow sentiments
FICCI-KNIGHT FRANK REAL SENTIMENT INDEX OF Q1 2016 HAD
PREDICTED THIS REVIVAL; FALLING SENTIMENTS MOVE UP
AFTER SIX CONSECUTIVE QUARTERS
71
6664
62
5958
67
45
50
55
60
65
70
75
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
FUTURE SCORE
The enabling factors for turnaround
1 Real Estate Regulatory
Authority a reality2
New Draft Development
Plan 2034 released
3 Robust office demand 4 Enhanced infrastructure
5 Right sizing of property
Growth story to continue
In 2016, we forecast a
16%growth in sales over 2015
THE FINER DETAILS
Mid and budget segments lead the way
MICRO-MARKET SALES
2728
4554
8716
5904
2074
3671
4067
5821
9459
7136
3056
4722
49%
28%
9%
21%
47%
29%
0%
10%
20%
30%
40%
50%
60%
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Central Suburbs
Navi Mumbai Peripheral Central Suburbs
Peripheral Western Suburbs
Thane Western Suburbs
Gro
wth
pe
r c
en
t
No
of
un
its
HI 2015 HI 2016 Growth %
Premium segment yet to pick up
PREMIUM MICRO-MARKET SALES
674
125
51
3
19
7
-
100
200
300
400
500
600
700
800
Central Mumbai South Mumbai
No
of
un
its
HI 2015 HI 2016
-24%
Unsold inventory heads south
113
,19
1
13
1,6
27
16
2,0
07
18
9,9
35
21
3,7
42
19
4,5
10
17
0,6
30
-
50,000
100,000
150,000
200,000
250,000
H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
No
of
un
its
-20%
UNSOLD INVENTORY TREND
KEY TAKEAWAYS
MID AND
BUDGET
SEGMENTS
LEAD THE WAY;
PREMIUM
MARKETS YET
TO PICK UP
GROWTH
STORY TO
FURTHER GAIN
STRENGTH IN
H2 2016; SALES
IN 2016 TO BE
16 PER CENT
MORE THAN
2015
UNSOLD
INVENTORY
WENT DOWN
BY 20%
DURING THE
LAST 2
YEARS
OFFICE
RENEWED CONFIDENCE
Demand fuels project completions
5.9
3.8
2.9
2.3
4.9
3.4
3.8
2.5
2.5
3.8
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
Mn
sq
ft
New completions Absorption
51%
115%
HALF-YEARLY TREND OF NEW COMPLETIONS AND TRANSACTIONS
Transactions
Y-O-Y
Transactions
up by 51% in
H1 2016;
highest since
H1 2013
Y-O-Y
Completions
up by 115%in H1 2016;
highest since
H1 2012
Reality check in H1 2016
IT/ITeS and manufacturing: the major
growth drivers
429
410
670
1,0
20
837
788
895
1,2
88
95% 92%
34%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
200
400
600
800
1,000
1,200
1,400
Manufacturing IT/ITES BFSI Consulting, Media, etc
sq
ft(‘000)
H1 2015 H1 2016 Change (RHS)
SECTOR WISE TRANSACTIONS
SBD West and Central Mumbai lead the way
BUSINESS DISTRICT WISE TRANSACTIONS
0.4
8
0.4
4
0.5
2
0.8
7
0.0
5 0.1
8
0.5
3
0.5
1
0.7
8
1.3
2
0.0
9
0.5
7
11% 16%
50% 52%
93%
228%
0%
50%
100%
150%
200%
250%
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
SBD Central BKC & Off-BKC PBD SBD West CBD & Off-CBD Central Mumbai
Mn
sq
ft
H1 2015 H1 2016 Change (RHS)
Dearth of supply in BKC & off BKC and Central
Mumbai pushes growth drivers to peripheral and
suburban markets
PROJECT COMPLETIONS BY BUSINESS DISTRICT
- -
0.4 0.5 0.5
0.8
- - 0.1
1.9
1.0
2.0
0.0
0.5
1.0
1.5
2.0
2.5
BKC & Off-BKC
CBD & Off-CBD
Central Mumbai
PBD SBD Central SBD West
Mn
sq
ft
Project Completions
H1 2015 H1 2016
282% 137%
85%
Single digit vacancy in prime office markets
OVERALL
VACANCY
DROPS TO
20%IN H1 2016
FROM
22%IN H1 2015
SINGLE DIGIT
VACANCY IN
CENTRAL
MUMBAI (2%)
AND BKC (5%) -
EXPECTED
SUPPLY KEEPS
RENTALS IN
CHECK
VACANCY IN
EXCESS OF
20%IN SBD WEST
AND PBD
THE ROAD AHEAD
IN 2016, WE EXPECT NEW COMPLETIONS
TO GO UP BY 97% AND TRANSACTIONS
TO MOVE UP BY 24%, OVER 2015
KEY TAKEAWAYS
ACTION
LARGELY IN
PERIPHERAL
MARKETS
VACANCY
IN SINGLE
DIGITS IN
CENTRAL
MUMBAI
AND BKC
SHORTAGE OF
QUALITY
SPACE A
CHALLENGE
FOR BFSI AND
CONSULTING
SECTOR
RENTALS IN
CHECK EVEN
IN CENTRAL
MUMBAI AND
BKC IN
ANTICIPATION
OF SUPPLY IN
SHORT TERM
SINCE GFC, 2016 POISED TO BE
THE BEST YEAR
FOR MMR OFFICE MARKET
Residential
on the road
to recovery Officepoised to have its best year
IN A NUTSHELL
