mumbai real estate report h2 2016 presentation
TRANSCRIPT
H1 2016, a recap
- A recovery predictedINDIA
REAL ESTATEJULY – DECEMBER 2016
MUMBAI
MUMBAIREAL ESTATE
H1 residential market recap
H1 2016 RAISED HOPES
23% and 29% increase in sales and launches in H1 2016
Half yearly trend in launches and sales
H1 2013 H1 2014 H1 2015 H1 2016 -
10,000
20,000
30,000
40,000
50,000
60,000 57,007
35,512
18,887 24,450
41,377
31,210 28,446
34,971
Launches Sales
No
of u
nits
29%
23%
…But H2 2016 suffers a setback
H2 2016 launches and sales skid by 53% and 26% YoY respectively
Half yearly trend in launches and sales
H2 2013 H2 2014 H2 2015 H2 2016 -
10,000
20,000
30,000
40,000
50,000
60,000
52,
222
26,
833
20,
776
9,7
40
32,
717
36,
505
34,
135
25,
403
Launches Sales
No
of u
nits
-53%
-26%
No pick up in premium marketsMicro-market trend in launches
Central Mumbai
Central Suburbs
Navi Mumbai
Peripheral Central Suburbs
Peripheral Western Suburbs
South Mumbai
Thane Western Suburbs
-
1,000
2,000
3,000
4,000
5,000
6,000
H2 2015 H2 2016
No
of u
nits
-74%
-72% -68%
-28%
-54%
-100%
-37%-78%
YoY change
Markets like Thane, Mulund, Vikhroli, Badlapur, Karjat less hit
Micro-market trend in sales
- 2,000 4,000 6,000 8,000
10,000 12,000
H2 2015 H2 2016
No
fo u
nits
YoY change
-41%-20%
-26%
-13%
-37%
-20%-37%
-54%
Weakest annual performance in the last seven years
2010 2011 2012 2013 2014 2015 2016 -
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
138
,613
114
,710
121
,615
109
,229
62,
345
39,
663
34,
190
108
,680
96,
226
85,
978
74,
094
67,
715
62,
581
60,
374
Launches Sales
No
of u
nits
Yearly trend in launches and sales
44%
75%
QTS has increased despite reduction in unsold inventory from 1,60,000 to 1,54,000
QTS trend
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
12.5
11.5 11.7
12.1
11.5 11.1
10.4 10.2
9.5
10.1
No.
of Q
uart
ers
Impact of Demonetisation
Demonetisation - A huge dent Launches at 16% and sales at 39% of Q4 2014
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
-
5,000
10,000
15,000
20,000
25,000
15,512
20,000
10,733
16,100
11,110
7,777 9,326
11,450 13,849
10,601
7,123
2,617
14,210
17,000
14,602
21,903
16,733
11,713
16,953 17,182 18,807
16,164 16,786
8,617
Launches Sales
No o
f uni
ts
Quarterly trend of new launches and sales
Q4 revenue loss for both State exchequer and industry
Average # units sold in Q4 2014 & Q4 2015 19,543
# Units sold in Q4 2016 8,617
56% fall in sales
Notional REVENUE LOSS to real estate industry
INR 9,100 cr
State government notional LOSS ON STAMP DUTY
INR 460 cr
Key takeawaysMMR residential sales at its worst in the last 7 years
Sales in Thane and Central Suburbs relatively resilient - down by 20% in H2 2016 compared to 26% for the city
Demonetization brings residential market to a standstill
Uncertainty likely to continue for the next quarter
Reduction in home loan interest rates, RERA, GST and ‘possible’ tax benefits in the upcoming budget likely to bring in a ‘feel good factor’
among buyers
Office market
MUMBAI OFFICE MARKET SEES A MARGINAL SLIDE IN 2016
Transactions dipped by 6% - putting brakes on the growth momentum of last three years
Yearly transactions & new completion
2010 2011 2012 2013 2014 2015 2016 -
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
12.4
14.5
12.0
7.6 9.2
5.8 5.9
9.6 8.0
6.0 6.2 7.3 7.5 7.1
New completion Transactions
Mn
sq ft
In H2 2016, new completions were lower by 73%; Transactions dipped by 34% primarily
on account of base effectHalf yearly trend of new completions and transactions
H2 2012 H2 2013 H2 2014 H2 2015 H2 2016 -
1.0
2.0
3.0
4.0
5.0
6.0
7.0 6.0
3.8
6.4
3.5
1.0
2.6 2.4
4.8 5.0
3.3
New completions Transactions
Mn
sq ft
34%
73%
Vacancy on a steady decline; BKC and Central Mumbai see high occupier
interest with vacancy level less than 2%Half yearly trend of vacancy
H2 2013 H2 2014 H2 2015 H2 201617.0%
18.0%
19.0%
20.0%
21.0%
22.0%
23.0%
24.0%22.8% 22.6%
21.6%
19.6%
Rentals jump by 16% as majority of transactions happened in costlier business districts
Half yearly weighted average rental trend of MMR
H2 2013 H2 2014 H2 2015 H2 2016 95
100
105
110
115
120
125
114
118
104
121
INR
/sq
ft/m
th
BFSI and manufacturing sectors lead the office demand in H2 2016
BFSI and manufacturing sectors takes up large office spaces in PBD and SBD West
Sector wise transactions
BFSI IT/ITES Manufacturing Other services0%5%
10%15%20%25%30%35%40%45%50%
15%
46%
22%17%
31%
16%
33%
20%
H2 2015 H2 20165.0 mn sq ft 3.3 mn sq ft
Central Mumbai and BKC face supply shortage; office demand moves north
Micro-market wise transactions
BKC & Off-BKC CBD & Off-CBD Central Mumbai PBD SBD Central SBD West0%
10%
20%
30%
40%
50%
60%
16%
2%7%
53%
7%
14%11% 9%
6%
24% 23%27%
H2 2015 H2 20165.0 mn sq ft 3.3 mn sq ft
Key takeaways
Vacancy level has come down -Lower Parel and BKC in single digit
For 2016, dip in transactions put brakes on the growth momentum of last three years
BFSI and Manufacturing led the office transaction in H2 2016
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