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Office
Property Market Overview
INDIA
QUARTERLY UPDATE | OCTOBER | 2013

Accelerating success.
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
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%
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%
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%
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%
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%
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%
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%
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%
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
INDIA | 3Q 2013 | OFFICE
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482 offices in 62 countries on 6 continents
United States: 140	
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For national offices services related queries please contact:

$2.0 billion in annual revenue

George Mckay, South Asia Director		
Office & Integrated Services			
George.mckay@colliers.com			
Tel: +91 22 4050 4553			

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Vikas Kalia, National Director
Office Services
Vikas.kalia@colliers.com
Tel: +91 124 456 7531

Over 13,500 + professionals

Mumbai 	 : 	Vaibhav Kumar, Office Director
		 Vaibhav.kumar@colliers.com
		 IndiaBulls Finance Centre, 1701-A, 17th Floor, Tower 3, Elphinstone Mills,
Senapati Bapat Marg, Mumbai- 400 013.
		 Tel : +91 22 4050 4527, fax : +91 22 2351 4272
Delhi NCR	 :	 Ajay Rakheja, Office Director
		 Ajay.rakheja@colliers.com

AUTHORS
Amit Oberoi MRICS
National Director, Valuation & Advisory; Research
Email: Amit.oberoi@colliers.com
Surabhi Arora MRICS
Associate Director, Research
Email: Surabhi.arora@colliers.com

New Delhi : 	 tatesman House, 4th Floor, Barakhamba Road, Connaught Place,
S
		 New Delhi, India - 110001
		 Tel : +91 11 3044 6423, fax : +91 11 3044 6500
Gurgaon	 :	 Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon,
		 India - 122002
		 Tel : +91 124 456 7500, fax : +91 124 456 7502
Bengaluru	 : 	Goutam Chakraborthy, Office Director
		 Goutam.chakraborthy@colliers.com
		 Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru,
		 India - 560 042
		 Tel : +91 80 4079 5500, fax : +91 80 4112 3131

Sachin Sharma
Assistant Manager, Research
Email: Sachin.sharma@colliers.com
Heliana Mano
Assistant Manager,Valuation & Advisory
Email: Heliana.mano@colliers.com
For general queries and feedback :
India.Research@colliers.com
Tel: +91 124 456 7580

Pune 	
: 	Suresh Castellino, Office Director
		 Suresh.castellino@colliers.com
		 Hotel Le Meridian, 101, R.B.M. Road, Pune, India - 411 001
		 Tel : +91 20 4120 6438, fax : +91 20 4120 6434
Chennai 	 : 	Kaushik Reddy, Office Director
		 Kaushik.reddy@colliers.com
		 Heavitree Complex, Unit 1C, 1st floor, 23, Spurtank Road, Chetpet, Chennai,
		 India - 600 031
		 Tel : +91 44 2836 1064, fax : +91 44 2836 1377
Kolkata 	 : 	Soumya Mukherjee , Office Director
		 Soumya.mukherjee@colliers.com
		 Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1,
		 Block EP & GP,	 Salt Lake Sector V, Kolkata - 700 091 West Bengal, India
		 Tel : +91 33 2357 6501, fax : +91 33 2357 6502

This report and other research materials may be found on
our website at www.colliers.com/India. Questions related
to information herein should be directed to the Research
Department at the number indicated above. This document
has been prepared by Colliers International for advertising
and general information only. Colliers International makes
no guarantees, representations or warranties of any kind,
expressed or implied, regarding the information including,
but not limited to, warranties of content, accuracy and
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own inquiries as to the accuracy of the information.
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damages arising there from.
© Copyright 2012 - 2013 All Rights Reserved.

Recent Reports :
India office

India reSIDENTIAL

GLOBAL RETAIL

BENGALURU
RESIDENTIAL MARKET

GLOBAL INDUSTRIAL

iNDIA bUDGET

REAL ESTATE

BENGALURU RESIDENTIAL MARKET
HEAT’S UP

Global | Retail | 2013
HIGHLIGHTS

O

Tourists and
Brands Flock to
High Streets
> Slower economic growth in China did not make a lasting dent on
tourist spending in Hong Kong. Retail sales have rebounded from
the lows of Q3 2012. The latest figures from the Hong Kong Tourism
Board show that Hong Kong received a total of 12.5 million inbound
visitors during the three-month period ending May 2013, an 11.8%
year-over-year increase. Nine million of those visitors were from
Mainland China.

> Combined with the arrival of international brands such as Apple,
Zara, and Topshop, in addition to luxury brands expanding their
presence, the Australian CBD is once again a popular shopping
destination. Pitt Street Mall in Sydney was ranked the 8th most
expensive in Colliers’ High Street survey.

> Demand for flagship space in London continues to exceed supply,

OFFICE
PROPERTY MARKET OVERVIEW
INDIA
QUARTERLY UPDATE | JUlY | 2013

Residential Property
Market Overview
INDIA

QUARTERLY UPDATE | AUGUST | 2013

driven largely from international retailers seeking a share of the
spoils. This is leading to some notable rental growth in the West End’s
core locations, with Regent Street witnessing double digit annual
rental growth.

> São Paulo and Rio de Janeiro remain leaders in shopping quality
and diversity, achieving the most expensive rents and the focus of
growth for luxury brands. Brazil’s High Street rents are the most
costly in Latin America. São Paulo’s luxury shopping street Rua
Oscar Freire saw a 15% growth in asking rents over the previous
year. Rua Garcia D´Avila in Rio de Janeiro saw rents grow by 6.7%.

Top Ten Global Retail Rents USD/SqFt/Year
$3,052

New York, NY, Fifth Avenue

$2,087

Hong Kong, Queen’s Road Central

$1,994

Hong Kong, Canton Rd, Tsim Sha Tsui

$1,325

New York, NY, Madison Avenue

$1,223

London, Old Bond Street

$1,114

Hong Kong, Causeway Bay

$930

Zurich, Bahnhofstrasse

$871

Sydney, Pitt Street Mall

$836

Milan, Via Monte Napoleone

$834

Paris, Champs Élysées

All Rents in USD
* Exchange Rate as of March 31, 2013

> Most U.S. high street rents grew over last year. In New York, Fifth
Avenue rents grew by 11 percent. At $3,052 per square foot, Fifth
Avenue rents are the most expensive in the world. On Las Vegas
Boulevard, asking rents grew by 25 percent. Philadelphia’s Walnut
Street showed the biggest gains in the U.S., with 33.8 percent growth.

Accelerating success.

Accelerating success.

This book is printed on 100% Recyclable paper

ver the last two
decades, Bengaluru has
cemented its position
as the leading IT/ITeS.
destination amongst
top Indian cities. In 2012, Bengaluru
commanded a 30% market-share
of all of the commercial (office) real
estate absorbed across the top seven
cities (Delhi NCR, Mumbai, Pune,
Chennai, Hyderabad and Kolkata).
Bengaluru’s commercial absorption
share was greater than Mumbai and
Delhi NCR. The increase in jobs has
been the primary growth-driver
for residential real estate. The city’s
population is expected to exceed 12
million by 2020, as compared to 8.5
million in 2011.
Now of course the city
is experiencing a surge in
investors buying real estate.
In spite of increasing prices,
the city still is comparatively
affordable compared to other
major cities such as Mumbai
and Delhi. With its higher rental
yields and favourable currency
exchange rates, Bengaluru is
emerging as one of the most
promising markets in the country
for Residential investment.
Moreover, the professional
approach of developers is
also providing much needed
comfort to investors as well
as end users. Considering the
demand potential, it is not only
Bengaluru-based developers that
are investing, but many national
level developers are also entering
in this market.
The government is also
actively participating in the

58

THE INTERNATIONAL INDIAN July - August 2013

Colliers Picks:
“The latest Colliers International research unvails top
investment destination in Bengaluru (Bangalore)”

Colliers International India Research

PUNE RESIDENTIAL MARKET

Global | Industrial | Midyear 2013
HIGHLIGHTS

Trade Flows
Bolster Industrial
Demand in Asia
and the Americas
> Despite anemic U.S. job growth, demand for North American industrial
warehouse space and modern distribution centers remains strong.
In Q1 2013, the North American vacancy rate declined for the eighth
straight quarter, down 20 basis points to 8.20%. Canada’s vacancy rate
stands at 4.13%.

> Thanks in part to a recent drop in exports to the United States, Mexico
Office Absorption in Million sq ft among major 7 cities in India

PUNE RESIDENTIAL
MARKET
REAL ESTATE

COLLIERS INTERNATIONAL INDIA RESEARCH

has seen slowing economic growth. In Q1 2013, several Mexico City
industrial warehouses were vacated, slightly increasing the vacancy
rate to 3.49%.

LUXURIOUS YET AFFORDABLE
Global Top 10 Industrial Warehouse Rents*
LONDON (HEATHROW)

21.95

HONG KONG

21.83

SINGAPORE

21.02

TOKYO

20.61
20.04

OSLO

16.20

GENEVA
PARIS

14.70
14.70

HELSINKI
MINSK

13.23

SYDNEY

13.23

P

une is a classic example
of the real estate market
where commercial
activities lead the
residential development
in the city. Pune has a large
manufacturing base, with many
manufacturing as well as automobile
companies having large plants. In
last one decade the city has also
emerged as a prominent IT/ITeS
destination. Residential demand
in the city is mostly from the large
population of working professionals
and the older generation retired
from the mid-management cadre
from Mumbai who find this place
attractive due to affordability, peace
and proximity to Mumbai. The

the market now appears to have stabilized into a more rational mode of
sustained growth. São Paulo has seen positive net absorption, in spite
of the final tally in 2012 showing a 23% decrease over the previous year.

Kharadi & Wagholi in East, Baner,
Hinjewadi, Wakad & Pashan, Kothrud,
Bavdhan & Wajre in west and Undri &
Kondhwa in the South.

city also attracts students who are
compelled by the city’s offering of
quality education.
A large share of the upcoming
premium residential space in
Pune is in the form of township
developments, the majority of which
is concentrated in and around the
IT and industrial hubs. In the past,

the city has seen considerable
appreciation in property values.
The government is also actively
participating in the economic
growth of the city by undertaking
various infrastructure projects such
as Pune Metro, Bus Rapid Transit
(BRT) and High Capacity Bus Route.

Factors Driving Growth
reflects in demand for houses

11.1%

· Gradual shift in the
demographic profile with more

been since 2011. Rents grew by 11.41% year-over-year as of the end of
Q1 2013. Shanghai’s industrial sector remained stable, with average
asking rents for ground floor premises of high quality facilities in both
the logistics and workshop sectors unchanged.

service professionals with higher
income range

LEGEND

EMEA

· Falling Rupee making NRI

APAC

> In Hong Kong, high quality warehouse buildings are nearly fully

investments more lucrative

3.9%

occupied. Those users seeking to expand or rationalize their real estate
costs have had to consider the option of split operations in lower
quality buildings.
however we expect industrial activity to improve, thanks to recent
government actions. These include the government-proposed National
Investment and Manufacturing Zones and the newly approved 51%
foreign direct investment in multi-brand retail trading.

commercial developments are most
attractive. Pune witnesses multidirectional growth of residential
projects in various locations such
as Pimpri, Chinchwad, Chakan &
Talegaon in North Viman Nagar

Upcoming Infrastructure Driving City’s Growth

· Rising per capita income

12.5%

> Demand for Beijing’s logistics properties remained as strong as it has

> Indian economic growth remained sluggish through the end of 2012,

For investment purpose, the new
residential developments located
in peripheral areas alongside the

6-Month Change in Rent**

> While occupier demand for industrial property in Brazil remains strong,
Favorable exchange rate (INR/USD) 1 $ = INR 56.45

Markets to witness residential real
estate growth

Colliers’s Pick: “The areas that will witness
maximum uptake would be those having
commercial or industrial activities such as
Hinjewadi, Magarpatta, Viman Nagar, Kharadi,
Wagholi, Chakan, Pimpri, Bavdhan, Warje &
Talegaon”.

PARIS

2.2%

· High commercial absorption

HELSINKI
GENEVA

indicates sustained demand

TOKYO

growth

HONG KONG

MIN

SK

OSL

O

SIN

SYD

GAP
ORE

NEY

LONDON
- (HEATHROW)

Source: Maharashtra Economic Survey, RBI, Colliers International India Research

* December 2013 Rent (USD/PSF/YR)
** Local currency

56

THE INTERNATIONAL INDIAN

THE INTERNATIONAL INDIAN

57

Accelerating success.
Accelerating success.

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India office property market overview october 2013

  • 1. Office Property Market Overview INDIA QUARTERLY UPDATE | OCTOBER | 2013 Accelerating success.
  • 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
  • 12. INDIA | 3Q 2013 | OFFICE Colliers International (India) provides property services to property Investors and Occupiers. We deliver customised service solutions utilising local and global knowledge in partnership with our clients via our property Investment and Occupier service lines. These service lines include - Office Services, Facility Management, Project Management, Residential Services, Investment Services and Valuation & Advisory Services. www.colliers.com/india 482 offices in 62 countries on 6 continents United States: 140 Canada: 42 Latin America: 20 Asia Pacific: 195 EMEA: 85 For national offices services related queries please contact: $2.0 billion in annual revenue George Mckay, South Asia Director Office & Integrated Services George.mckay@colliers.com Tel: +91 22 4050 4553 1.1 billion square feet under management Vikas Kalia, National Director Office Services Vikas.kalia@colliers.com Tel: +91 124 456 7531 Over 13,500 + professionals Mumbai : Vaibhav Kumar, Office Director Vaibhav.kumar@colliers.com IndiaBulls Finance Centre, 1701-A, 17th Floor, Tower 3, Elphinstone Mills, Senapati Bapat Marg, Mumbai- 400 013. Tel : +91 22 4050 4527, fax : +91 22 2351 4272 Delhi NCR : Ajay Rakheja, Office Director Ajay.rakheja@colliers.com AUTHORS Amit Oberoi MRICS National Director, Valuation & Advisory; Research Email: Amit.oberoi@colliers.com Surabhi Arora MRICS Associate Director, Research Email: Surabhi.arora@colliers.com New Delhi : tatesman House, 4th Floor, Barakhamba Road, Connaught Place, S New Delhi, India - 110001 Tel : +91 11 3044 6423, fax : +91 11 3044 6500 Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 456 7500, fax : +91 124 456 7502 Bengaluru : Goutam Chakraborthy, Office Director Goutam.chakraborthy@colliers.com Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru, India - 560 042 Tel : +91 80 4079 5500, fax : +91 80 4112 3131 Sachin Sharma Assistant Manager, Research Email: Sachin.sharma@colliers.com Heliana Mano Assistant Manager,Valuation & Advisory Email: Heliana.mano@colliers.com For general queries and feedback : India.Research@colliers.com Tel: +91 124 456 7580 Pune : Suresh Castellino, Office Director Suresh.castellino@colliers.com Hotel Le Meridian, 101, R.B.M. Road, Pune, India - 411 001 Tel : +91 20 4120 6438, fax : +91 20 4120 6434 Chennai : Kaushik Reddy, Office Director Kaushik.reddy@colliers.com Heavitree Complex, Unit 1C, 1st floor, 23, Spurtank Road, Chetpet, Chennai, India - 600 031 Tel : +91 44 2836 1064, fax : +91 44 2836 1377 Kolkata : Soumya Mukherjee , Office Director Soumya.mukherjee@colliers.com Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1, Block EP & GP, Salt Lake Sector V, Kolkata - 700 091 West Bengal, India Tel : +91 33 2357 6501, fax : +91 33 2357 6502 This report and other research materials may be found on our website at www.colliers.com/India. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. © Copyright 2012 - 2013 All Rights Reserved. Recent Reports : India office India reSIDENTIAL GLOBAL RETAIL BENGALURU RESIDENTIAL MARKET GLOBAL INDUSTRIAL iNDIA bUDGET REAL ESTATE BENGALURU RESIDENTIAL MARKET HEAT’S UP Global | Retail | 2013 HIGHLIGHTS O Tourists and Brands Flock to High Streets > Slower economic growth in China did not make a lasting dent on tourist spending in Hong Kong. Retail sales have rebounded from the lows of Q3 2012. The latest figures from the Hong Kong Tourism Board show that Hong Kong received a total of 12.5 million inbound visitors during the three-month period ending May 2013, an 11.8% year-over-year increase. Nine million of those visitors were from Mainland China. > Combined with the arrival of international brands such as Apple, Zara, and Topshop, in addition to luxury brands expanding their presence, the Australian CBD is once again a popular shopping destination. Pitt Street Mall in Sydney was ranked the 8th most expensive in Colliers’ High Street survey. > Demand for flagship space in London continues to exceed supply, OFFICE PROPERTY MARKET OVERVIEW INDIA QUARTERLY UPDATE | JUlY | 2013 Residential Property Market Overview INDIA QUARTERLY UPDATE | AUGUST | 2013 driven largely from international retailers seeking a share of the spoils. This is leading to some notable rental growth in the West End’s core locations, with Regent Street witnessing double digit annual rental growth. > São Paulo and Rio de Janeiro remain leaders in shopping quality and diversity, achieving the most expensive rents and the focus of growth for luxury brands. Brazil’s High Street rents are the most costly in Latin America. São Paulo’s luxury shopping street Rua Oscar Freire saw a 15% growth in asking rents over the previous year. Rua Garcia D´Avila in Rio de Janeiro saw rents grow by 6.7%. Top Ten Global Retail Rents USD/SqFt/Year $3,052 New York, NY, Fifth Avenue $2,087 Hong Kong, Queen’s Road Central $1,994 Hong Kong, Canton Rd, Tsim Sha Tsui $1,325 New York, NY, Madison Avenue $1,223 London, Old Bond Street $1,114 Hong Kong, Causeway Bay $930 Zurich, Bahnhofstrasse $871 Sydney, Pitt Street Mall $836 Milan, Via Monte Napoleone $834 Paris, Champs Élysées All Rents in USD * Exchange Rate as of March 31, 2013 > Most U.S. high street rents grew over last year. In New York, Fifth Avenue rents grew by 11 percent. At $3,052 per square foot, Fifth Avenue rents are the most expensive in the world. On Las Vegas Boulevard, asking rents grew by 25 percent. Philadelphia’s Walnut Street showed the biggest gains in the U.S., with 33.8 percent growth. Accelerating success. Accelerating success. This book is printed on 100% Recyclable paper ver the last two decades, Bengaluru has cemented its position as the leading IT/ITeS. destination amongst top Indian cities. In 2012, Bengaluru commanded a 30% market-share of all of the commercial (office) real estate absorbed across the top seven cities (Delhi NCR, Mumbai, Pune, Chennai, Hyderabad and Kolkata). Bengaluru’s commercial absorption share was greater than Mumbai and Delhi NCR. The increase in jobs has been the primary growth-driver for residential real estate. The city’s population is expected to exceed 12 million by 2020, as compared to 8.5 million in 2011. Now of course the city is experiencing a surge in investors buying real estate. In spite of increasing prices, the city still is comparatively affordable compared to other major cities such as Mumbai and Delhi. With its higher rental yields and favourable currency exchange rates, Bengaluru is emerging as one of the most promising markets in the country for Residential investment. Moreover, the professional approach of developers is also providing much needed comfort to investors as well as end users. Considering the demand potential, it is not only Bengaluru-based developers that are investing, but many national level developers are also entering in this market. The government is also actively participating in the 58 THE INTERNATIONAL INDIAN July - August 2013 Colliers Picks: “The latest Colliers International research unvails top investment destination in Bengaluru (Bangalore)” Colliers International India Research PUNE RESIDENTIAL MARKET Global | Industrial | Midyear 2013 HIGHLIGHTS Trade Flows Bolster Industrial Demand in Asia and the Americas > Despite anemic U.S. job growth, demand for North American industrial warehouse space and modern distribution centers remains strong. In Q1 2013, the North American vacancy rate declined for the eighth straight quarter, down 20 basis points to 8.20%. Canada’s vacancy rate stands at 4.13%. > Thanks in part to a recent drop in exports to the United States, Mexico Office Absorption in Million sq ft among major 7 cities in India PUNE RESIDENTIAL MARKET REAL ESTATE COLLIERS INTERNATIONAL INDIA RESEARCH has seen slowing economic growth. In Q1 2013, several Mexico City industrial warehouses were vacated, slightly increasing the vacancy rate to 3.49%. LUXURIOUS YET AFFORDABLE Global Top 10 Industrial Warehouse Rents* LONDON (HEATHROW) 21.95 HONG KONG 21.83 SINGAPORE 21.02 TOKYO 20.61 20.04 OSLO 16.20 GENEVA PARIS 14.70 14.70 HELSINKI MINSK 13.23 SYDNEY 13.23 P une is a classic example of the real estate market where commercial activities lead the residential development in the city. Pune has a large manufacturing base, with many manufacturing as well as automobile companies having large plants. In last one decade the city has also emerged as a prominent IT/ITeS destination. Residential demand in the city is mostly from the large population of working professionals and the older generation retired from the mid-management cadre from Mumbai who find this place attractive due to affordability, peace and proximity to Mumbai. The the market now appears to have stabilized into a more rational mode of sustained growth. São Paulo has seen positive net absorption, in spite of the final tally in 2012 showing a 23% decrease over the previous year. Kharadi & Wagholi in East, Baner, Hinjewadi, Wakad & Pashan, Kothrud, Bavdhan & Wajre in west and Undri & Kondhwa in the South. city also attracts students who are compelled by the city’s offering of quality education. A large share of the upcoming premium residential space in Pune is in the form of township developments, the majority of which is concentrated in and around the IT and industrial hubs. In the past, the city has seen considerable appreciation in property values. The government is also actively participating in the economic growth of the city by undertaking various infrastructure projects such as Pune Metro, Bus Rapid Transit (BRT) and High Capacity Bus Route. Factors Driving Growth reflects in demand for houses 11.1% · Gradual shift in the demographic profile with more been since 2011. Rents grew by 11.41% year-over-year as of the end of Q1 2013. Shanghai’s industrial sector remained stable, with average asking rents for ground floor premises of high quality facilities in both the logistics and workshop sectors unchanged. service professionals with higher income range LEGEND EMEA · Falling Rupee making NRI APAC > In Hong Kong, high quality warehouse buildings are nearly fully investments more lucrative 3.9% occupied. Those users seeking to expand or rationalize their real estate costs have had to consider the option of split operations in lower quality buildings. however we expect industrial activity to improve, thanks to recent government actions. These include the government-proposed National Investment and Manufacturing Zones and the newly approved 51% foreign direct investment in multi-brand retail trading. commercial developments are most attractive. Pune witnesses multidirectional growth of residential projects in various locations such as Pimpri, Chinchwad, Chakan & Talegaon in North Viman Nagar Upcoming Infrastructure Driving City’s Growth · Rising per capita income 12.5% > Demand for Beijing’s logistics properties remained as strong as it has > Indian economic growth remained sluggish through the end of 2012, For investment purpose, the new residential developments located in peripheral areas alongside the 6-Month Change in Rent** > While occupier demand for industrial property in Brazil remains strong, Favorable exchange rate (INR/USD) 1 $ = INR 56.45 Markets to witness residential real estate growth Colliers’s Pick: “The areas that will witness maximum uptake would be those having commercial or industrial activities such as Hinjewadi, Magarpatta, Viman Nagar, Kharadi, Wagholi, Chakan, Pimpri, Bavdhan, Warje & Talegaon”. PARIS 2.2% · High commercial absorption HELSINKI GENEVA indicates sustained demand TOKYO growth HONG KONG MIN SK OSL O SIN SYD GAP ORE NEY LONDON - (HEATHROW) Source: Maharashtra Economic Survey, RBI, Colliers International India Research * December 2013 Rent (USD/PSF/YR) ** Local currency 56 THE INTERNATIONAL INDIAN THE INTERNATIONAL INDIAN 57 Accelerating success. Accelerating success.