ncr real estate report h1 2016 presentation
TRANSCRIPT
KNIGHTFRANK.CO.IN
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NATIONAL CAPITAL REGION
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NCR RESIDENTIAL
MARKET BITES THE
BULLET
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HALF-YEARLY TREND OF WEIGHTED AVERAGE PRICE
Finally the cookie crumbles –
Developers give in to price resistance
2,760 2,780
2,999
3,370
3,720
3,970
4,195
4,330 4,400 4,444
4,511 4,578
4,346
2,600
2,800
3,000
3,200
3,400
3,600
3,800
4,000
4,200
4,400
4,600
H1 2
010
H2 2
010
H1 2
011
H2 2
011
H1 2
012
H2 2
012
H1 2
013
H2 2
013
H1 2
014
H2 2
014
H1 2
015
H2 2
015
H1 2
016
Prices correct
for the first time
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Buyers still in a wait and watch mode despite price fall
53
,46
2
53
,55
4
34
,19
9
45
,27
6
28
,00
0
25
,000
23
,09
2
-
10,000
20,000
30,000
40,000
50,000
60,000
H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
No
. o
f u
nit
s Early trends for a
new normal?
HALF-YEARLY TREND OF SALES
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79,9
60
67,6
76
42,5
42
62,4
18
34,5
77
29,4
58
17,4
62
5,000
15,000
25,000
35,000
45,000
55,000
65,000
75,000
85,000
H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
No
of
un
its
78%drop from the peak
41%
Developers feel the heat –
New launches hit a historic low
HALF-YEARLY TREND OF NEW LAUNCHES
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79,960
67,676
42,542
62,418
34,577
29,458
17,462
53,462 53,554
34,199
45,276
28,000 25,000 23,092
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
No o
f units
Launches Absorption
NCR reaches a demand supply cross
over - Sales finally exceed supply
TREND OF NEW LAUNCHES AND SALES
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79
0
1,0
23
12
,52
3
19
,48
1
11,2
29
22
,62
9
-
1,2
74
9,3
13
6,9
80
12
,41
2
12
,56
3
-
2,1
97
15
,70
7
26
,49
2
12
,02
6
5,9
95
28
2
10
1
8,4
46
12
,879
8,1
20
4,7
49
54
3
25
4
3,6
20
5,2
40
15
,13
8
4,6
64
- - 34
3
7,6
90
7,2
19
2,2
10
-
5,000
10,000
15,000
20,000
25,000
30,000
Delhi Faridabad Ghaziabad Greater Noida Gurgaon Noida
No
of
un
its
MICRO-MARKET SHARE OF NEW LAUNCHES
Greater Noida bucks the trend for
new launches
H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
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0% 0%
78%
100%
44%
0%0%
20%
40%
60%
80%
100%
120%
Delhi Faridabad Ghaziabad Greater Noida Gurgaon Noida
*No new launches in Delhi and Faridabad
Affordability guides supply
LAUNCHES BELOW 50 LAKH TICKET SIZE DURING H1 2016
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63
7
1,5
95
5,9
94
17
,05
9
12
,82
1 15
,448
45
1,4
42
8,1
36
4,6
53
9,9
71
9,9
52
69
1,8
68
9,7
96
18
,37
3
8,6
77
6,4
94
18
7
43
9
5,6
63
12
,113
5,3
56
4,2
43
16
6
39
6
5,0
64
10
,84
6
4,7
74
3,7
53
36
5
33
6
2,6
35
10
,89
4
6,5
30
2,3
32
-
3,000
6,000
9,000
12,000
15,000
18,000
21,000
Delhi Faridabad Ghaziabad Greater Noida Gurgaon Noida
No
of
un
its
Greater Noida and Gurgaon save
the day for NCR in sales
MICRO- MARKET SHARE OF SALES
H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
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KEY TAKEAWAYS
PRICES FINALLY
GIVE INTO
MUSTER SALES
REACHES A
DEMAND
SUPPLY CROSS
OVER - SALES
FINALLY
EXCEED SUPPLY
LEANEST
HALF FOR
NEW
LAUNCHES
BY CASH
STRAPPED
DEVELOPERS
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INDIA OFFICE MARKET
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OFFICE DEMAND
CONTINUES TO
OUTSTRIP SUPPLY
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TREND OF NEW COMPLETIONS AND TRANSACTIONS
Transaction increased by 12% YoY in H1
2016, led by Hyderabad and Mumbai
Across Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad
17.1
19.5
15.8
18.7
19.0
17.9
20.7
17.9
23.2
20.0
-
5.0
10.0
15.0
20.0
25.0
H1 2014 H2 2014 H1 2015 H2 2015 H1 2016
mn
sq
ft
New Completion Transactions
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INDUSTRY-WISE SHARE IN TRANSACTIONS
Strong performance by IT/ITeS
36%
11%15%
38%
46%
13%
18%
23%
44%
11%
16%
29%
0%
10%
20%
30%
40%
50%
IT/ITeS BFSI (Including support service)
Manufacturing Other services
H1 2015 H2 2015 H1 2016
17.9
mn sq ft
23.2
mn sq ft
20
mn sq ft
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VACANCY LEVELS REACH
A RECORD 8-YEAR LOW
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VACANCY TREND
Vacancy levels fall to 14% in H1 2016 from their
2012 peak of 20%
16%
20%
14%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
2008 2009 2010 2011 2012 2013 2014 2015 H1 2016
Across Mumbai, NCR, Pune, Bengaluru, Chennai, Hyderabad
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RENTAL TREND
NCR and Pune lead in terms of rental
growth at 14% YoY
117
62
50 50 50
40
117
70
55 57 52
43
-
20
40
60
80
100
120
140
Mumbai NCR Bengaluru Pune Chennai Hyderabad
Rs/s
q f
t/m
on
th
H1 2015 H1 2016
14% GROWTH
14% GROWTH
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KEY TAKEWAYS
INCREASE IN
TRANSACTION
LED BY
HYDERABAD AND
MUMBAI
VACANCY LEVELS
REACH A RECORD
8-YEAR LOW -
PUNE AND
BENGALURU IN
SINGLE DIGIT
RENTALS IN
PUNE AND NCR
INCREASED BY
14%
E-COMMERCE
TRANSACTIONS
DECLINED BY
78%
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NCR OFFICE
TRANSACTIONS
HOLD STEADY
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4.4
6.3
3.6 3.5
4.0
5.5
2.8
3.4
3.9
3.4 3.4 3.53.7
3.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
Mn
sq
ft
New completions Transactions
50% drop YoY
66%
21%
13%
Micromarket share of new completions
Noida Extension Noida Gurgaon
New completions at an all time low in NCR
TREND OF NEW COMPLETIONS AND TRANSACTIONS
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3.7 mn sq ft
3.5 mn sq ft
3% 2%
76%
12%5%
2%2% 0%
62%
23%
12%
0%0%
10%
20%
30%
40%
50%
60%
70%
80%
CBD - Delhi Faridabad Gurgaon Noida SBD - Delhi Greater Noida
% s
hare
H1 2015 H1 2016
MARKET SHARE OF TRANSACTIONS
SBD-Delhi and Noida register a two fold
jump in transacted space
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4%
54%
19%
23%
11%
37%
9%
44%
8%
30%
14%
48%
5%
30%
22%
43%
13%
17%
29%
41%
0%
10%
20%
30%
40%
50%
60%
BFSI * IT/ITeS Manufacturing Other services sector
% s
hare
H1 2014 H2 2014 H1 2015 H2 2015 H1 2016
68% drop in
transacted space
3.5 mn
sq ft
4.1mn
sq ft
3.7mn
sq ft
3.7mn
sq ft
3.5mn
sq ft
Make in India
makes its impact
IT/ITeS losing ground; Make in India
kicks in
SHARE OF SECTOR AL SPLIT OF TRANSACTIONS
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Overall vacancy holds steady but reaches
single digits in key locations
TREND OF VACANCY
20%
22%21% 21% 21%
20%21%
22%21%
5%
7%
9%
11%
13%
15%
17%
19%
21%
23%
H1 2
012
H2 2
012
H1 2
013
H2 2
013
H1 2
014
H2 2
014
H1 2
015
H2 2
015
H1 2
016
Vacan
cy
(RH
S)
DLF Cyber
city, Golf Course
Road, MG Road,
7%
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53 5352
53
56
58
62
64
70
50
52
54
56
58
60
62
64
66
68
70
72
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016
`sq
ft/
mo
nth
14%YoY growth
35% growth
Rentals look up due to lack of
quality office space in key locations
WEIGHTED AVERAGE PRICE RENTALS
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KEY TAKEAWAYS
OFFICE
TRANSACTION
HOLDS
STEADY IN H1
2016
UPWARD
PRESSURE
ON RENTALS
DUE TO
LACK OF
QUALITY
SUPPLY
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