The macroeconomic overview of India continues to show weakness by registering GDP rate of 4.5% in April-June 2013 which was the slowest quarterly growth rate in the last 4 years. Rising inflation, volatile equity markets and depreciation of rupee further intensified the economic risk in Indian markets. As well, upcoming elections in 2014 further raises question marks for the future of Indian economy and its recovery. All these factors leads to adoption of more conservative approach by businesses and resulted in overall demand softening in commercial real estate markets. According to the 3Q 2013 research report, relocation and consolidation were the primary demand generators for commercial office space. The six major cities - Mumbai, NCR, Bengaluru, Chennai, Kolkata and Pune recorded an overall absorption of around 6.2 million sq. ft. which is approximately 20% lesser than the last quarter absorption of around 8 million sq. ft.
Project completions were rather weak this quarter totalling to approximately 3.1 million sq. ft. of grade A office space across all markets. More than 60% of this supply was added in cities like Bangalore and NOIDA. A few new projects were launched during 3Q totalling approximately to over 5 million sq. ft. of office space mainly in NOIDA, Bangalore and Delhi and are expected to be delivered within 2015-2017 period. Overall, rental rates remained stagnant throughout all markets with exception of few micro market in Kolkata and Gurgaon which saw downward pressure on rentals in the range of 1 to 7% QoQ.
As the economic environment in India is expected to remain uncertain due to overall global economic conditions and upcoming elections in 2014. Office tenants will continue to relocate to consolidate office space by postponing their expansion plans and rather adopting a wait-and-watch strategy for the rest of 2013 and mid 2014 until the market regains momentum. In view of the above, we anticipate moderate leasing demand across the cities in upcoming quarters. Limited supply will keep the rentals stable as developers deferring completion of their projects and refrained from adding more speculative supply in the market.
2. 3Q 2013 | OFFICE
Research & forecast report
SYDNEY CENTRAL BUSINESS DISTRICT
research & forecast Report
India office market
MACRO ECONOMIC OVERVIEW
ECONOMIC INDICATORS
• India’s GDP growth rate was 4.5% in AprilJune 2013. This is the slowest growth rate in
the last 4 years.
12.0%
4.50%
4.00%
INFLATION (WPI)1
8.07%
6.46%
PLR2
9.75% - 10.50%
9.70% - 10.25%
DEPOSIT RATE3
8.00% - 9.25%
7.50% - 9.00%
• Slowing economic growth, rising inflation,
depreciating rupee and volatile equity markets
further intensified the economic risk in Indian
markets. Concerned with the increasing
inflation, the Reserve Bank of India increased
the repo and reverse repo rate by 25 basispoints.
Apr -Jun13
Oct - Dec 12
Jan - Mar 13
Apr - Jun 12
Jun - Sep 12
Jan - Mar 12
Jul - Sep 11
Oct - Dec 11
Apr - Jun 11
Jan - Mar 11
Jul - Sep 10
Oct - Dec 10
Apr - Jun 10
Jan - Mar 10
Jul - Sep 09
Oct - Dec 09
Apr - Jun 09
Jan - Mar 09
8,000
6,000
4,000
2,000
0
2012-13
CRR
10,000
Apr-July 2013
6.50%
2011-12
7.00%
14,000
12,000
2010-11
REVERSE REPO RATE
FDI in Real Estate
16,000
2009-10
7.50%
• The rupee slumped during the quarter and
touched a record low of 68.85 per US Dollar,
however, in the subsequent weeks the rupee
recovered and currently, hovering between
INR 62-63 per US dollar. This volatility in the
exchange rated caused a major concern to
foreign investors and Indian importers.
2008-09
8.00%
0.0%
2007-08
REPO RATE
2.0%
2006-07
Sep-13
6.0%
4.0%
2005-06
Sep-12
8.0%
INR Crore
ECONOMIC BAROMETER
10.0%
In Percentage
• Headline inflation, based on the wholesale
price index was recorded at 6.46% for the
month of September 2013 as compared to
6.10% for August 2013.
Gross Domestic Product at Factor Cost
BSE Sensex & Realty Index
SILVER
63,188
48,475
-23.28%
EQUITY (BSE
SENSEX)
18,542
19.742
6.47%
REALTY INDEX
1,735
1,292
-25.79%
Note : All values in the above tables are as on 15th of September
2012 and 2013
1
Wholesale Price Index
2
SBI Prime Lending Rate
3
SBI interest rate < INR 1 crore Term Deposits for ≤1 Year
www.colliers.com
BSE Sensex
* Rebase to 100
29-Sep-13
19- Sep-13
9- Sep-13
30-Aug-13
Realty Index
Exchange Rates
COLLIERS VIEW : The economic environment
in India is expected to remain uncertain due to
overall global economic conditions and
upcoming elections in 2014. We anticipate
moderate leasing demand across the cities in
next coming quarters. Inspite of moderate
demand, rental values are expected to remain
stable due to limited supply as developers
deferring completion of their projects and
refrained from adding more speculative supply
in the market.
80
75
70
65
60
55
50
USD
29-Sep-13
-7.05%
19-Sep-13
29,675
9-Sep-13
31,925
30-Aug-13
Gold
20-Aug-13
Change
50
20-Aug-13
YoY %
10-Aug-13
Sep-13
70
60
10-Aug-13
Sep-12
90
80
31-Jul-13
Return on Alternative Investments
110
100
31-Jul-13
84.17
21-Jul-13
71.30
21-Jul-13
INR- Euro
11-Jul-13
63.30
11-Jul-13
54.31
130
120
1-Jul-13
INR - USD
• In 3Q 2013, relocation and consolidation were
the primary demand generators for commercial
office space. Overall demand for leasing
commercial real estate softened due to the
conservative expansion plans of most
companies. The six major cities i.e. Mumbai,
NCR, Bengaluru, Chennai, Kolkata and Pune
recorded an overall absorption of around 6.2
million sq ft which is approximately 20%
lesser than the last quarter absorption of
around 8 million sq ft.
1-Jul-13
Exchange RATE
Euro
Source: Colliers International India Research
3. INDIA | 3Q 2013 | OFFICE
MUMBAI
AVAILABLE Supply in Prime Areas
• The Mumbai commercial market remained
sluggish during 3Q 2013. Except for few large
deals (75,000 - 150,000 sq ft), demand in
the primary market remained moderate. The
market recorded absorption of approximately
0.65 million sq ft of Grade A office space,
which is comparatively less than the last two
quarter’s absorption of 1.8 and 1.5 million sq
ft.
• Vacancy levels remain stable due to moderate
demand and limited addition of new supply in
the market. About 8 million sq ft of commercial
Grade A space was available for fit-out, which
is approximately 2% less than in the last
quarter.
0%
-3%
90 - 125
0%
0%
225 - 320
0%
1%
140 - 180
0%
-3%
Malad
80 - 90
0%
0%
Navi Mumbai
55 - 75
0%
0%
Powai
100 - 120
0%
0%
Worli/ Prabhdevi
175 - 225
0%
0%
80 - 110
0%
0%
Kalina
Goregaon/ JVLR
175 - 210
0%
0%
Thane / LBS
50 - 100
0%
• Demand and supply equilibrium had kept the
overall price levels in check, and rental and
capital values remained stable during the
surveyed quarter.
• COLLIERS VIEW : A number of corporate
are looking for consolidation and relocation
options in order to optimise their real estate
costs. Overall rental values are expected
to remain stable except for SBD where
a marginal increase can be witnessed in
premium projects due to limited supply.
0%
Thane / LBS
Kalina
Goregaon /
JVLR
Powai
Worli/
Prabhdevi
Navi Mumbai
Malad
BKC
250
30,000
Forecast
25,000
200
20,000
150
15,000
100
10,000
50
5,000
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
KEY MARKET TRANSACTIONS
CLIENT
Building Name
CGG Veritas
Reliable Tech Park
18,000
DHFL
TCG Financial Center
30,000
BKC
Lease
HSBC
India Bulls Finance Center
72,000
Lower Parel
Lease
AREA (Sq. Ft.)
LOCATION
TRANSCATION TYPE
Navi Mumbai
Lease
PVR Pictures India
Lotus Corporate Park
12,000
Jogeshwari
Lease
Rabo Bank
Peninsula Business Park
30,000
Lower Parel
Lease
Sandwell
Nitco Business Park
20,000
Thane
Lease
KEY UNDER CONSTRUCTION PROJECTS
BUILDING NAME
Developer
Fulcrum
Hiranandani Group
342,000
Green Span
BK Birla Group
320,000
Lower Parel
2013
Zillion
Kanakia Spaces
525,000
Kurla
2014
AREA (Sq. Ft.)
LOCATION
Expected Completion
Andheri East
2014
Source: Colliers International India Research
Colliers International |
p. 3
Capital Values -INR Per Sq.ft.
225 - 260
AVERAGE RENTAL AND CAPITAL VALUE TREND
1Q2015F
Lower Parel
YoY
1Q2014F
BKC
QoQ
1Q2013
Andheri East
% Change
0
1Q2012
CBD
Rental
Values
5,000
1Q2011
Capital Value
15,000
10,000
Lower Parel
Rental Value
25,000
20,000
1Q2010
Construction
Micro Market
30,000
1Q2009
Absorption
Grade a Capital Values
35,000
CBD
Vacancy
Andheri East
24%
BKC
15%
Andheri East
4Q 2013F
CBD
1%
Lower Parel
20%
Rental Values -INR Per Sq.ft. Per Month
3Q 2013
Thane / LBS
21%
1Q2008
CITY OFFICE BAROMETER
Malad
6%
Capital Values -INR Per Sq.ft.
MumBAI
• The third quarter saw no major new
completions of Grade A commercial office
projects except “Sahar Business Center” by
The Continental Group at Andheri, measuring
about 0.1 million sq ft. Projects launched
during this quarter include, “Fulcrum” by
Hiranandani Developers at Andheri (East)
having more than 0.3 million sq ft of Grade A
commercial office space. The project is likely
to be completed by 2Q 2014.
Navi Mumbai
2%
Worli / Goregoan /
Prabhadevi JVLR Kalina
4% 2%
Powai 1%
4%
4. INDIA | 3Q 2013 | OFFICE
DELHI
AVAILABLE Supply in Prime Areas
Connaught place
2%
• he Delhi commercial office market continued
T
to see sluggish occupier demand in 3Q 2013.
Only a few mid-sized deals were concluded in
Connaught Place, Jasola and Saket, resulting
in 0.15 million sq ft of Grade A office space
absorption during the quarter.
YoY
Connaught Place
231 - 475
0%
-7%
Nehru Place
150 - 250
0%
8%
Saket
140 - 190
0%
3%
Jasola
100 - 125
0%
9%
65 - 75
0%
0%
Netaji Subhash
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
• Rental values for Grade A office space remained
unchanged during the quarter. Capital values
remained stable, as the city witnessed almost
no strata-title sales in secondary markets due
to increased circle rates.
COLLIERS VIEW : Amid economic
uncertainties, occupiers are likely to remain
cautious, thus demand is expected to remain
moderate in the coming quarter. Rental and
capital values are expected to remain stable
with an upward bias due to limited supply of
Grade A office space in Delhi.
Netaji Subhash
Saket
AVERAGE RENTAL AND CAPITAL VALUE TREND
300
40,000
Forecast
35,000
250
30,000
200
25,000
150
20,000
15,000
100
10,000
50
5,000
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
KEY MARKET TRANSACTIONS
CLIENT
Building Name
AREA (Sq. Ft.)
LOCATION
TRANSCATION TYPE
Kensar
Rasvilas
1,500
Saket
Lease
Oriflame
Corporate One
50,000
Jasola
Lease
Raheja Developer
Rectangle One
10,000
Saket
Lease
Samsung Data
M6 Plaza
21,500
Jasola
Lease
Yes Bank
TDI
8,500
Jasola
Lease
KEY UNDER CONSTRUCTION PROJECTS
BUILDING NAME
Developer
NBCC Plaza
NBCC Ltd.
350,000
NBCC Commercial Complexes
NBCC Ltd.
1,300,000
Parsvnath 27
Parsvnath Ltd.
AREA (Sq. Ft.)
150,000
LOCATION
Expected Completion
Okhla
2014
Kidwai Nagar
2016
K.G. Marg
2016
Source: Colliers International India Research
p. 4
| Colliers International
Capital Values -INR Per Sq.ft.
QoQ
1Q2015F
% Change
1Q2014F
Rental
Values
1Q2013
Micro Market
Jasola
Capital Value
0
1Q2012
Rental Value
10,000
1Q2011
Construction
20,000
Connaught Place
• Due to supply - demand equilibrium, the
city witnessed stable vacancy levels QoQ.
Approximately, 1.7 million sq ft of Grade A
commercial office space was available for
fit-out primarily concentrated in Saket and
Jasola.
30,000
1Q2010
Absorption
40,000
Nehru Place
Vacancy
50,000
1Q2009
4Q 2013F
Grade a Capital Values
60, 000
1Q2008
3Q 2013
Saket
29%
Capital Values -INR Per Sq.ft.
CITY OFFICE BAROMETER
Jasola
59%
Rental Values -INR Per Sq.ft. Per Month
delhi
• There were no major new completions in
Delhi in 3Q 2013. However, a commercial
project was launched by Parsvanath Ltd in
KG Marg in the CBD, called “Parsvnath 27”.
Infrastructure Leasing & Financial Services
Limited (ILFS) also announced a commercial
development at East Kidwai Nagar under the
“National Buildings Construction Corporation
Ltd. (NBCC) Redevelopment Scheme”. These
projects together will add more than 1.4 million
sq ft of Grade A commercial office supply to
the city’s total inventory by the end of 2016.
Nehru Place
10%
5. INDIA | 3Q 2013 | OFFICE
GURGAON
AVAILABLE Supply in Prime Areas
• Gurgaon observed persistent occupier
demand during 3Q 2013. The city’s overall
absorption was approximately 1.6 million sq
ft which is double that of the last quarter.
However, this increase in absorption was
primarily attributed to the 0.8 million sq ft
of office space leased by “Aon Hewitt” in the
Unitech Infospace SEZ.
-2%
-2%
Golf Course Rd
85 - 140
0%
13%
50 - 65
-4%
-9%
Institutional Sect.
(18,32,44)
Golf Course Rd
Ext./Sohna Rd
48 - 65
-2%
-10%
NH8
97 - 125
0%
13%
Manesar
45 - 50
0%
-17%
Cyber City
75 - 78
2%
2%
Udyog Vihar
& Industrial
Sectors
45 - 65
0%
10%
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
• Despite consistent demand, the rental values
witnessed downward pressure in the IT/ITeS
driven micro-markets such as Golf Course
Road and Sohna Road, and rents declined 2 5% QoQ. Rents for non-IT/ITeS office space
remained stable due to limited availability.
COLLIERS VIEW : Demand will be primarily
driven by corporate looking for large facilities
to consolidate their business operations.
Considering the large vacant stock and costconscious occupiers, rental values for IT/
ITeS office space will remain stable with a
downward bias. However, rental values in
commercial office space may see marginal
appreciation.
Manesar (IT)
National Highway 8
(IT)
Udyog Vihar & Industrial Sectors (IT)
Manesar
Golf Course
Road Ext./Sohna
Road (IT)
120
12,000
Forecast
100
10,000
80
8,000
60
6,000
40
4,000
20
2,000
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
KEY MARKET TRANSACTION
CLIENT
Building Name
AREA (Sq. Ft.)
800,000
LOCATION
TRANSCATION TYPE
Aon Hewitt
Unitech Infospace
Sohna Road
Lease
CB&I
DLF Infinity Towers
94,450
DLF Cyber City
Lease
Fluor Daniel
DLF Building No. 10B
70,000
DLF Cyber City
Lease
GSK
One Horizon Centre
68,400
Golf Course Road
Lease
Michelin
Orchid Business Park
73,400
Sohna Road
Lease
LOCATION
Expected Completion
Sector 63A
2016
KEY UNDER CONSTRUCTION PROJECTS
BUILDING NAME
Developer
Paras Square
Paras Group
250,000
Spaze Arrow
Spaze Group
300,000
Sector 78
2016
Spaze Forum
Spaze Group
250,000
Sector 70
2016
AREA (Sq. Ft.)
Source: Colliers International India Research
Colliers International |
p. 5
Capital Values -INR Per Sq.ft.
95 - 140
1Q2015F
MG Rd
AVERAGE RENTAL AND CAPITAL VALUE TREND
1Q2014
YoY
1Q2013
QoQ
Udyog Vihar &
Industrial Sectors
% Change
1Q2012
Rental
Values
National Highway 8
Micro Market
0
• Vacancy in Grade A office space has increased
marginally; approximately 15.6 million sq ft
of Grade A commercial office space was
available for fit-out in 3Q 2013.
1Q2011
Capital Value
5,000
Golf Course Road
Ext./Sohna Road
Rental Value
10,000
Institutional Sectors
(Sec44, 32, 18)
Construction
15,000
1Q2010
Absorption
20,000
1Q2009
Vacancy
Institutional Sectors
(Sec44, 32, 18)
3%
Grade a Capital Values
MG Road
4Q 2013F
MG Road
5%
DLF Cyber City Golf Course Road
4%
4%
25,000
Golf Course Road
• Projects launched during 3Q 2013 include
“Paras Square” by Paras Group at Sector 63A;
“Spaze Arrow” and “Spaze Forum”, both
by Spaze Group located in Sectors 78 and
70, respectively. These projects together will
contribute more than 0.8 million of Grade A
commercial office space to the city’s inventory
by the end of 2016.
Golf Course Road
Ext./Sohna Road
36%
1Q2008
3Q 2013
• The city witnessed completion of 0.5 million
sq ft of Grade A office space. Projects
contributing this supply were “BPTP Centra
One” developed by BPTP Ltd at Sector 61
and “Splendor Trade Tower” developed by
Splendor Group at Sector 65.
Capital Values -INR Per Sq.ft.
CITY OFFICE BAROMETER
Manesar
26%
Rental Values -INR Per Sq.ft. Per Month
Gurgaon
Udyog Vihar &
Industrial Sectors
4%
National Highway 8
18%
6. INDIA | 3Q 2013 | OFFICE
nOIDA
AVAILABLE Supply in Prime Areas
• Demand in NOIDA office market decreased
marginally in the third consecutive quarter.
The city witnessed absorption of approximately
0.4 million sq ft primarily from IT/ITeS sector
followed by banking and financial services
sector.
QoQ
YoY
0%
3%
Institutional
Sectors (Non IT)
50 - 90
Institutional
Sectors (IT)
30 - 75
0%
6%
Comercial
Sectors
90 - 110
0%
3%
Industrial
Sector
18 -45
0%
13%
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
• Rental and capital values remained stable
across all the micro markets barring few
premium projects which recorded marginal
increase in capital values.
COLLIERS VIEW : Looking ahead, corporate
occupiers are expected to largely remain
cost cautious and incline towards deferring
expansion plans due to uncertain economic
sentiments. However, leasing will remain
moderate due to demand for consolidation
and relocation. Rentals are expected to remain
stable with downward bias due to large supply
availability.
Industrial
Sectors
Commercial
Sectors
AVERAGE RENTAL AND CAPITAL VALUE TREND
80
10,000
Forecast
70
8,000
60
50
6,000
40
4,000
30
20
2,000
10
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
KEY MARKET TRANSACTIONS
CLIENT
Building Name
Alpha Media
MMR Towers
80,000
80,000
AREA (Sq. Ft.)
LOCATION
TRANSCATION TYPE
Sector 126
Lease
Sector 142
Lease
Sector 9
Lease
HCL
Advant IT Park
Honnex
NCPL Web Tower
Pearson VUE
SB Tower
9,400
Sector 16A
Lease
Standard & Poor
Stellar IT Park
2,000
Sector 62
Lease
LOCATION
Expected Completion
5,300
KEY UNDER CONSTRUCTION PROJECTS
BUILDING NAME
Developer
Amigo Cyber Park
Amigo
AREA (Sq. Ft.)
250,000
NOIDA Expressway
2013
Oxygen SEZ Tower F
3C Group
250,000
NOIDA Expressway
2013
NOIDA One
KLJ Group
600,000
Sector 62
2016
Source: Colliers International India Research
p. 6
| Colliers International
Capital Values -INR Per Sq.ft.
% Change
1Q2015F
Rental
Values
1Q2014
Micro Market
0
1Q2013
Capital Value
3,000
1Q2012
Rental Value
6,000
Institutional
Sectors (IT)
Construction
9,000
1Q2011
• Grade “A” & “B” office space vacancy rate
remained unchanged in 3Q 2013. About 8.6
million sq ft of Grade A & B office space
was available for fit-out primarily located in
Institutional Sectors 16A, 62 and Sectors 125
to 143 along with NOIDA Expressway.
Absorption
12,000
Institutional
Sectors (Non IT)
Vacancy
Grade A Capital Values
15,000
1Q2010
4Q 2013F
Commercial Sectors (Sec
18) (Grade B)
0.2%
1Q2009
3Q 2013
Commercial Sectors
(Sec 18) (Grade B)
10.6%
Capital Values -INR Per Sq.ft.
CITY OFFICE BAROMETER
Industrial Sectors
(Sec. 1-9, 57-60, 63-65)
(Grade B)
1.0%
Rental Values -INR Per Sq.ft. Per Month
noida
• Developers abstained from adding more
speculative supply in the market and no new
office project was launched during this quarter.
However, a few projects located in sector 62
were completed this quarter including “Okaya
Blue” by Okaya Group “Jagran IT Park” by
Dainik Jagran Group and “Highway Tower
by Sun Ramified Solutions Pvt. Ltd. & Capital
Broadcasting Company Pvt. Ltd. All of these
projects contributed around 1.2 million sq ft of
grade A office space.
Institutional Sectors
(Sec.16A, 62, 125-142
90.5%
7. INDIA | 3Q 2013 | OFFICE
CHENNAI
AVAILABLE Supply in Prime Areas
• The Chennai commercial market witnessed
increased demand this quarter. The overall
absorption of Grade A office space was
approximately 1.68 million sq ft compared
to 1.67 and 1.02 million sq ft in the previous
two quarters. This increase in absorption is
attributed to the few large floor size deals
registered in the SEZ (Special Economic
Zone) in Manapakkam and Taramani.
QoQ
YoY
65 - 85
0%
0%
Guindy (SBD)
50 - 60
0%
4%
Ambattur
25 - 30
0%
0%
OMR (IT
Corridor)
25 - 40
0%
0%
GST road
35 - 40
0%
0%
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
OMR (IT
Corridor)
Ambattur
60
• Despite increased demand, rental and capital
values for Grade A office space remained
stable across all micro-markets due to
persistent large vacancy levels.
COLLIERS VIEW : Despite a revival in overall
occupier demand, rental values are expected
to remain stable in view of large accumulated
vacant stock. Vacancy levels are expected
to dip marginally due to limited prime office
supply in the pipeline in next three months.
Rental Values -INR Per Sq.ft. Per Month
CBD
AVERAGE RENTAL AND CAPITAL VALUE TREND
8,000
Forecast
7,000
50
6,000
40
5,000
30
4,000
3,000
20
2,000
10
1,000
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
KEY MARKET TRANSACTIONS
CLIENT
Building Name
Amazon
S P Infocity
Bank of New York Mellon
DLF SEZ
E&Y
DLF SEZ
Fidelity
Ramanujam IT SEZ
270,000
Kotak Mahindra Bank
TVH Agnitio
L & T Infotech
DLF SEZ
AREA (Sq. Ft.)
LOCATION
TRANSCATION TYPE
Perungudi
Lease
70,000
Manapakkam
Lease
73,000
Manapakkam
Lease
Taramani
Lease
60,000
Perungudi
Lease
189,000
Manapakkam
Lease
645,000
KEY UNDER CONSTRUCTION PROJECTS
PROJECT NAME
Developer
Chennai One (BPO Park) Phase 2
ETL
AREA (Sq. Ft.)
1,100,000
LOCATION
OMR
Expected Completion
2013
Ramanujan IT City Little Wood Tower Block D
Tata Realty & Infrastructure
1,340,000
Taramani
2013
SP InfoCity
Shapoorji Pallonji Group
1,200,000
OMR
2013
Source: Colliers International India Research
Colliers International |
p. 7
Capital Values -INR Per Sq.ft.
% Change
1Q 2015F
Rental
Values
1Q 2014
Micro Market
0
1Q 2013
Capital Value
2,000
1Q 2012
Rental Value
4,000
Guindy (SBD)
Construction
• During the surveyed quarter, overall vacancy
levels remained stable, except for Taramani
and Perungudi, which witnessed a marginal
increase due to the addition of new supply in
the previous quarter. More than 13.5 million
sq ft of Grade A commercial office space
was available for fit-out. About 65% of this
available supply was concentrated in OMR IT
and Ambattur.
6,000
1Q 2011
Absorption
8,000
1Q 2010
Vacancy
Grade a Capital Values
10,000
CBD
4Q 2013F
Guindy (SBD)
7%
1Q 2009
3Q 2013
CBD
14%
Ambattur
24%
1Q 2008
CITY OFFICE BAROMETER
GST Rd
3%
Velachery
1%
Vadapalani
0%
Capital Values -INR Per Sq.ft.
chennai
• New project completions this quarter include
“Centre Point 2” at Guindy and “Padmavati”
at Nungambakkam. These projects together
add approximately 0.2 million sq ft of Grade A
office supply to the city’s inventory. Projects
launched this quarter were “Rajkamal
Suites” at Nungambakkam and “Srikanth” at
Ekkaduthangal measuring 0.1 million sq ft.
OMR (IT Corridor)
50%
8. INDIA | 3Q 2013 | OFFICE
BENGALURU (BANGALORE)
AVAILABLE Supply in Prime Areas
Bannerghatta Road
3%
• The Bengaluru commercial market witnessed
weakening demand this quarter. The
absorption of Grade A commercial office
space was approximately 1 million sq ft, which
is significantly less than the previous two
quarter’s absorption of 2.9 and 2.7 million sq
ft. This decline in absorption is primarily due
to circumscribed demand from the IT/ITeS
occupiers during the quarter.
YoY
80 - 100
0%
0%
Hosur Rd.
20 - 40
0%
0%
EPIP Zone/
Whitefield
24 - 33
0%
4%
Electronic City
23 - 32
0%
0%
Bannerghatta Rd.
50 - 60
0%
4%
Outer Ring Rd.
50 - 60
0%
1%
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
• The vacancy rate increased marginally and
approximately 11.5 million sq ft of Grade A
commercial office space was available for fitout.
• Both rental and capital values were remained
largely stable across the micro-markets owing
to large vacant stock and cautious demand.
COLLIERS VIEW : The fourth quarter is
expected to witness a moderate level of
absorption as decision-making is expected to
remain slow by corporations due to economic
and political uncertainties. Considering the
large available stock and cautious occupier
demand, the price levels are likely to remain
steady with marginal downward bias.
Outer Ring
Road
Bannerghatta
Road
Electronic
City
AVERAGE RENTAL AND CAPITAL VALUE TREND
60
9,000
Forecast
50
7,500
40
6,000
30
4,500
20
3,000
10
1,500
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
KEY MARKET TRANSACTIONS
CLIENT
Building Name
Accenture
Prestige Technopolis
250,000
Adobe
Prestige Platina Tech Park
Genpact
Pritech Park
AREA (Sq. Ft.)
LOCATION
TRANSCATION TYPE
HMT Layout
Lease
250,000
Outer Ring Road
Lease
120,000
Outer Ring Road
Lease
Global Edge
Global Village
40,000
Mysore Road
Lease
Happiest Mind
Suhas Tech Park
70,000
Electronic City
Lease
Qualcomm
Prestige Tech Park
60,000
Outer Ring Road
Lease
KEY UNDER CONSTRUCTION PROJECTS
BUILDING NAME
Developer
Brigade Summit - Annexe
Brigade Group
AREA (Sq. Ft.)
550,000
Gopalan Axis - SEZ
Gopalan Group
536,000
Prestige Platina Tech Park
Prestige Group
1,000,000
LOCATION
Expected Completion
Whitefield
2015
Whitefield
2014
Outer Ring Road
2015
Source: Colliers International India Research
p. 8
| Colliers International
Capital Values -INR Per Sq.ft.
QoQ
1Q2015F
% Change
1Q2014F
CBD
Rental
Values
1Q2013F
Micro Market
1Q2012
Capital Value
0
EPIP Zone/
Whitefield
Rental Value
5,000
1Q2011
Construction
Hosur Road
Absorption
10,000
1Q2010
• Projects launched during this quarter include,
“Brigade Summit - Annexe” by Brigade Group
and “Gopalan Axis – SEZ”, both located
at Whitefield. The projects are expected to
be completed by the end of 2015 and will
contribute around 1 million sq ft of Grade A
office space in the city.
15,000
CBD
Vacancy
Grade a Capital Values
20,000
1Q2009
4Q 2013F
EPIP Zone/ Whitefield
44%
1Q2008
3Q 2013
Hosur Road
5%
Capital Values -INR Per Sq.ft.
CITY OFFICE BAROMETER
CBD
6%
Rental Values -INR Per Sq.ft. Per Month
bengaluru
• The third quarter saw completion of
approximately 1 million sq ft of Grade A
commercial office space. Projects completed
this quarter include; “Mind Comp Tech Park”
by Sattva Group at Whitefield; “Pritech –
STPI” by Primal Group; and “Embassy Tech
Square - Omega Block” by Embassy Group,
both at Outer Ring Road (ORR).
Outer Ring Road
30%
Electronic City
12%
9. INDIA | 3Q 2013 | OFFICE
KOLKATA
NEW Supply in Prime Areas
• olkata’s office market remained sluggish due
K
to the overall negative economic scenario.
The city recorded absorption of approximately
0.2 million sq ft. The micro- markets that
remained most active were the Sector 5, Salt
Lake and New Town.
YoY
100 - 125
-6%
-6%
90 - 105
-7%
-11%
East Kolkata
70 - 80
-6%
-6%
Sector-5
48 - 50
0%
-7%
New Town,
Rajarhat
34 - 38
-1%
-1%
CBD
Ballygunge
Circular Rd.
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
• Rental values declined in the range of 1 - 7%
QoQ in almost every micro-market, other than
the CBD and Sector 5; where they remained
stable.
COLLIERS VIEW : In the coming quarter,
overall office leasing is expected to remain
moderate. Due to the prevailing high vacancy
levels in the peripheral micro-markets, such
as Sector 5 Salt Lake and Rajarhat, rentals
are expected to remain under pressure.
PBD (New
Town,
Rajarhat)
Sector-5
East Kolkata
AVERAGE RENTAL AND CAPITAL VALUE TREND
120
12,000
Forecast
100
10,000
80
8,000
60
6,000
40
4,000
20
2,000
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
KEY MARKET TRANSACTIONS
CLIENT
Building Name
Acclaris
Ambuja Eco Space
Ericsson
Ambuja Eco Space
IFK BPO
BIPL
AREA (Sq. Ft.)
10,000
9,000
20,000
LOCATION
TRANSCATION TYPE
New Town
Lease
New Town
Lease
Sector 5, Saltlake
Lease
Jacobs
Infinity Lagoon
70,000
Sector 5, Saltlake
Lease
KPMG
Godrej Water Side
20,000
Sector 5, Saltlake
Lease
PWC
South City Pinacle
46,000
Sector 5, Saltlake
Lease
KEY UNDER CONSTRUCTION PROJECTS
BUILDING NAME
Developer
IT Godrej Simocco Phase 2
Godrej Genesis
AREA (Sq. Ft.)
1,000,000
LOCATION
Expected Completion
Sector 5, Saltlake
2013
Primac Tower
Pasari Group
40,000
Sector 5, Saltlake
2014
Window Technology
Window Technology
20,000
Sector 5, Saltlake
2013
Source: Colliers International India Research
Colliers International |
p. 9
Capital Values -INR Per Sq.ft.
QoQ
1Q2015F
% Change
1Q2014F
Rental
Values
1Q2013
Micro Market
1Q2012
Capital Value
0
1Q2011
Rental Value
5,000
Ballygunge
Circular
Road
Construction
10,000
1Q2010
Absorption
• A few projects were launched during the
quarter, including “Arora Water Front” by
Arora Group, “Primac Tower” by Pasari
Group and “Window Technology” by Window
Technologies Ltd. Together, these projects
will contribute more than 0.5 million sq ft of
Grade A commercial office space to the city’s
total inventory by 1Q 2017.
CBD (Park
St,Camac St,AJC
Bose Road)
Vacancy
15,000
1Q2009
4Q 2013F
1Q2008
3Q 2013
Grade a Capital Values
20,000
Capital Values -INR Per Sq.ft.
CITY OFFICE BAROMETER
Sector-5
52%
Rental Values -INR Per Sq.ft. Per Month
Kolkata
• This quarter, various small commercial
office projects were completed, including
“APJ Tower” by APJ Group at Ruby, “Arihant
Benchmark” by Arihant Group at Topsia,
“Credent Tower” by Credent Group at Salt Lake,
“Neighbourhood Tower” by Neighbourhood
Group at Ballygunje Circular Road and “Lemon
Eco” by Lemon Group at New Town. Together,
all of these projects contributed more than 0.1
million sq ft of Grade A commercial office
space to the city’s total inventory.
East Kolkata
48%
10. INDIA | 3Q 2013 | OFFICE
PUNE
AVAILABLE Supply in Prime Areas
Kharadi
25%
• Steady occupier demand from the IT/ITeS
sector kept Pune’s office market steady during
3Q 2013. The city witnessed absorption of
approximately 0.85 million sq ft, which is about
15% less than the 1 million sq ft absorbed in
both the previous quarters. An increasing
trend of relocations and consolidations was
seen in the market and resulted in a few
large transactions (60,000 - 300,000 sq ft)
in some micro-markets, such as Yerwada and
Hadapsar.
0%
11%
Bund Garden
50 - 60
0%
-8%
Airport Rd. /
Pune station
42 - 60
0%
-3%
Aundh
45 - 60
0%
24%
Senapati Bapat
55 - 85
0%
7%
Bavdhan
35 - 45
0%
7%
Kalyani Nagar
45 - 60
0%
0%
Nagar Rd.
40 - 60
0%
18%
Hinjewadi
30 - 45
0%
7%
Hadapsar/
Fursungi
30 - 50
0%
-6%
Kharadi
32 - 65
0%
8%
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
• Rents and capital values remained unchanged
across every micro-market during the
surveyed quarter.
COLLIERS VIEW : Overall leasing is expected
to remain upbeat during the next quarter.
However, the majority of this demand is
expected to come from corporate looking to
optimise costs through consolidation and
relocation in peripheral locales because of the
lower rents and quality space that is available
there. Under these circumstances, we expect
rents to remain stagnant across the micromarkets in the coming quarters.
Kharadi
Hinjewadi
Hadapsar/
Fursungi
Nagar Road
Bavdhan
Kalyani Nagar
Aundh
80
8,000
Forecast
70
7,000
60
6,000
50
5,000
40
4,000
30
3,000
20
2,000
10
1,000
0
0
Note:
Available Supply: Total Grade A office space being marketed for sale or lease in
surveyed quarter.
Grade A Rental/Capital Values: Indicative asking price for Grade A office space.
Prime Office Average Rental Trends: Average market rental values for Grade A
properties.
KEY MARKET TRANSAcTIONS
CLIENT
Building Name
Barclays
EON
AREA (Sq. Ft.)
100,000
LOCATION
Kharadi
TRANSCATION TYPE
Lease
Cummins
Cummins IOC
700,000
Balewadi
Lease
Deutsche Bank
Biz Bay
300,000
Yerwada
Lease
Principle
Pentagon
560,000
Hadapsar
Lease
The Event
Panchshil Tech Park
42,000
Yerwada
Lease
ZS Associates
Pentagon
560,000
Hadapsar
Lease
LOCATION
Expected Completion
KEY UNDER CONSTRUCTION PROJECTS
BUILDING NAME
Developer
Business Bay Tower D
Panchshil
Cummins BTS
Panchshil Realty
Nyati Corporate
Nyati Group
AREA (Sq. Ft.)
800,000
Yerwada
2013
1,2000,000
Balewadi
2014
350,000
Yerwada
2014
Source: Colliers International India Research
p. 10
| Colliers International
Capital Values -INR Per Sq.ft.
45 - 55
AVERAGE RENTAL AND CAPITAL VALUE TREND
1Q2015F
Baner
0
1Q2014F
YoY
2,000
1Q2013
% Change
QoQ
4,000
1Q2012
Rental
Values
6,000
1Q2011
Micro Market
• Developers continued to refrain from adding
more speculative supply to the market. Only
two small projects that totalled 140,000 sq ft
of Grade A office space were launched during
the quarter – “Pride Gateway” by Pride Purple
Group and “Raikar” by Chaitanya Group. Both
projects are located at Baner.
8,000
Senapati
Bapat Road
Capital Value
10,000
Airport road/
pune station
Rental Value
Grade a Capital Values
1Q2010
Construction
Kalyani Nagar
10%
12,000
1Q2009
Absorption
Nagar Road
14%
Baner
Vacancy
2%
Senapati Bapat Road
3%
Bavdhan
1%
Bund Garden
4Q 2013F
Bund Garden
6%
Airport road/ pune station
1%
Aundh
1Q2008
3Q 2013
Hinjewadi
24%
Capital Values -INR Per Sq.ft.
CITY OFFICE BAROMETER
Baner
10%
Rental Values -INR Per Sq.ft. Per Month
pune
• As no major projects were completed during
the quarter, the city’s vacancy rate declined
marginally. The city has approximately 5.1
million sq ft of Grade A commercial office
space available for fit-out. Most of this space
is concentrated in certain micro-markets,
such as Kharadi, Hinjewadi, Nagar Road,
Kalyani Nagar and Baner.
Hadapsar/Fursungi
4%
11. INDIA | 3Q 2013 | OFFICE
OFFICE SUBMARKETS
Mumbai
The major business locations in Mumbai are the CBD (Nariman Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandra
Kurla Complex (BKC) and Andheri Kurla stretch. Powai, Malad and Vashi are the preferred IT/ITES destinations, while Airoli at Navi Mumbai and Lal
Bahadur Shastri Marg are emerging as new office and IT/ITES submarkets.
Delhi
The commercial areas in New Delhi metropolitan area can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place,
Netaji Subhash Place, Jasola and Saket .
Gurgaon
The prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also
emerging as the city’s new office destination.
NOIDA
NOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and
125-142, industrial sectors include sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector.
Chennai
Prime office properties in Chennai are located in four principal sub-markets: the CBD, the IT Corridor, the SBD and the PBD. The SBD comprises Guindy,
Manapakkam, Velachery and other areas. The PBD primarily includes Ambattur and GST Road, while the IT Corridor is the Old Mahaballipuram Road
(OMR) in south Chennai.
Bengaluru (Bangalore)
Prime office properties in Bengaluru can be divided into three principal sub-market— CBD, the SBD consisting of Banerghatta Road & Outer Ring Road
(ORR) and PBD including Hosur Road, EPIP Zone, Electronic City and Whilefield.
Pune
The prime office sub-markets of Pune include Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp (CBD), while the Off CBD includes
Aundh, Airport Road and Kalyani Nagar, among other locations. The eastern corridor, along with Nagar Road and Kharadi, have emerged as a preferred
location for financial and IT/ITES companies.
Kolkata
The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge circular Rd, East
Kolkata), East Kolkata and PBD (New Town & Rajarhat). The area around Park Street, Camac Street and AJC Bose road houses number of high-rises
commercial buildings such as Chatterjee International Centre, Tata Centre, Everest House and Industry House among others.
City Barometer
Increasing as compared to previous quarter
Decreasing as compared to previous quarter
Remained stable from previous quarter
Colliers International |
p. 11