13 insights for india real estate in 2013

Monthly Real Estate Monitor – January 2013

13 Insights for India Real Estate in 2013 The year 2012 closed with a few notes of positivity as the inflation was below the Reserve Bank of India’s (RBI’s) projected levels and the Index of Industrial Production (IIP) growth increased in the last two months of the year, giving new hopes for 2013. Overall, 2012 remained inactive, affecting all the major sectors in real estate. Office space absorption remained lower compared with 2011. Meanwhile, retail faced challenges of quality supply, affecting the overall absorption. The residential demand improved; however, developers continued to struggle with unsold inventories. With the expected moderation in inflation and strengthening policies, we have gathered few interesting insights for 2013 from real estate experts.

1. Economy – As per RBI, the policies will focus towards growth in 2013, although risks of inflation will continue to remain. Interest rates are expected to witness a downward correction of 100 to 150 bps in 2013.The softening of interest rates is expected to reduce the home loan rates, in turn increasing the buying of real estate assets. Increasing urbanisation and consumption despite the slowdown in GDP growth will be the key drivers of the economy in 2013.

2. Policies – The recent policy initiatives are expected to improve the investment climate and business environment, and they are likely to benefit the real estate sector in 2013. Few policies to look at in 2013 are: the Real Estate Regulation Bill, likely to be tabled in the upcoming winter session of the parliament; the real estate investment trusts (REITs) or real estate mutual funds (REMFs), expected to get launched in 2013; and the Land Acquisition and Rehabilitation and Resettlement Bill, likely to be tabled in the upcoming budget session in 2013.

3. Infrastructure – The infrastructure sector achieved a substantial FDI of USD 2.8 billion, accounting for a notable 7.7% of the total FDI inflow in FY 2012. In the year 2013, the relaxation of FDI policies in multi-brand retail is expected to surge the investment in back-end infrastructure development such as logistics. Moreover, an FDI of up to 100% is also permitted under the automatic route in built-up infrastructure and is likely to surge the development of the city and the regional level infrastructure in 2013.

4. Office Real Estate – Office space absorption in 2013 is likely to remain equal to that in 2012. Supply correction will lead to fewer options for occupiers, and steady absorption will decrease vacancy levels. Competition for space in prime buildings in prime locations is expected to increase in 2013, and these spaces will start earning a premium. Rents are expected to increase from 2H13 onwards as fewer new projects are being launched, and vacant spaces are steadily filling up. Decisions on occupying special economic zone (SEZ) spaces will be taken by occupiers who are sure of taking a position in India as they have to go live by March 2014 to avail the benefits.

5. Retail Real Estate – The relaxation in FDI policies in multi-brand retail interestingly has surged aggressive growth amongst Indian retailers to take the first-mover advantage. This is expected to drive the demand in 2013. However, as supply of retail malls remains a challenge, retailers are likely to opt for built–to–suit (BTS) options or high-street properties. As most developers are focusing on residential developments, the supply of malls will reduce in the major cities over the year. In 2013, retailers will be cautious and take more time to execute agreements as they will do a detailed analysis before closing transactions. Retailers will commit to space only if they see approvals in place and the construction of the space in progress.

6. Residential Real Estate – REITs in India allowing investments in rental housing is a new trend worth watching. The framework and details of REITs, once formulated, are likely to drive the investor demand across the prime cities in India in 2013. Another interesting trend observed in the last two years was that the stock in the range of INR 2,000–3,000 per sq ft was fast sold out. In 2013, this range is likely to shift to INR 3,000–5,000 per sq ft with the increase in inflation and construction costs.

7. Industrial Real Estate – Sale-cum-leaseback of exiting industrial assets by existing companies is likely to increase in 2013. MNCs testing the waters in India are likely to focus on BTS industrial properties. Warehousing companies are now preparing for the goods and services taxes (GST) and are slowly moving from go-downs to distribution centres. The growing trend in e-retailing and

Pulse •Research Dynamics•2012

FDI in multi-brand retail is expected to surge the demand for warehousing spaces in 2013.

8. Education and Health Care – There are aggressive growth plans in K-12 and skill-space educational institutions in 2013, particularly in the non-metro cities of India, where there are large opportunities. In the health care segment, hospital chains, along with day care centres, are expected to expand aggressively in 2013. Both these segments are expected to attract private equity investment in 2013.

9. Investment sentiments – Debt capital is likely to increase in 2013. Banks are expected to be more flexible in lending. Most of the realty funds are close to their exit periods as they were invested around 2006–2007. Therefore, the exit of real estate funds is expected to increase in 2013. Meanwhile, interest on income-producing assets by institutional investors is likely to increase over the year. However, the availability of such assets will continue to remain a challenge. Assets will witness a softening of yield rates amidst increased liquidity.

10. Delhi – Most of the absorption in Delhi NCR is likely to focus around Gurgaon and Noida, with the exception of Delhi International Airport Limited (DIAL) and few select stand-alone Grade A projects of Delhi. As the demand supply gap of quality office space is expected to increase because of the supply constraints in select precincts of Delhi NCR, rents are expected to increase in certain micromarkets by 2H13. Developers will focus on delivery of the products.

11. Mumbai – Office absorption and residential demand will continue to increase in Mumbai. The trend of completion of high-quality new office projects pushing up Grade A office vacancy levels and providing tenants with greater bargaining power will reduce in 2013. With banks drastically reducing lending activities over the last two years, resulting in debt remaining a constraint, not much of new commercial supply (except spill over from 2012) is expected to be completed in 2013 and 2014. Residential launches are expected to increase; however, price drop is unlikely to happen over the year. Amidst constrained supply of quality retail malls, rental gap between Grade A malls and Grade B malls will further widen in the year.

12. Bangalore – In terms of office space, Outer Ring Road will continue to be the sought-after destination in 2013. For residential real estate, North Bangalore is expected to continue to remain as the best performing region in the city with strong infrastructure development, increased demand and price appreciation in 2013.

Meanwhile, Whitefield will continue to retain its sheen for both office and residential real estate because of affordability, proximity to key work places and good social infrastructure.

13. Other Cities – Chennai, which witnessed a historical high number of residential launches in 2012, is likely to slow down in 2013. This trend is also expected in Pune. Meanwhile, Kolkata and Hyderabad are likely to witness increased launches. Prices of residential units are likely to increase in all the cities because of the increased construction costs. Ahmedabad, Bhubaneswar Kochi and Coimbatore are other cities in India that are likely to witness immense development activities in 2013.

Figure 1: Financial Indicators

Grade A Capital ValueOffice Retail Residential

Delhi NCR

Mumbai

Bangalore

Chennai

Pune

Hyderabad

Kolkata

Rental Value

Deal of the Month DLF Global Hospitality Limited (DGHL) sells

Silverlink Resorts for a valuation of USD 300

million (INR 16.37 billion) to Amanresorts Group.

What’s New!! The Reserve Bank of India

allowed real estate developers and housing finance companies

to raise up to USD 1 billion through external commercial

borrowings (ECBs) in the current fiscal year to promote low-cost

housing projects.

Green Wall A 500-acre solar farm by Raasi Green Earth Energy Pvt Ltd for generation of 100 MW of solar photovoltaic power is planned to come up in Paramakudi in Ramanathapuram District,

Tamil Nadu.

Erratum: Pulse – Monthly Real Estate Monitor November 2012: Transaction of ‘the Consulate of Spain leasing space in Express Towers at Nariman Point’, Mumbai was incorrectly mentioned as a completed transaction. We deeply regret the error.


Bangalore Bangalore witnessed moderate leasing activity in December. The vacancy levels continued to remain low on the back of stable demand and restricted supply. The major transactions included Accenture

leasing space in Pritech Park SEZ Phase II on Sarjapur Outer Ring Road, Cypress renting space at Bagmane Tech Park in Sir C.V. Raman Nagar, and L’Oreal taking space in Global Research Triangle at Whitefield. Four new projects were operational during the month. Whilst rents remained stable across all the submarkets because of the balanced demand and controlled supply, capital values slightly appreciated across the submarkets

Bangalore’s retail market witnessed an improvement in demand, with Marks & Spencer leasing space along Inner Ring Road, KFC renting space in Jayanagar, and Arvind Mills taking space in

Yelahanka. Vacancy levels of the city slightly declined compared to the previous month because of improved leasing activity. Rents and capital values all remained stable in each one of the city’s submarkets.

Bangalore residential market witnessed improved sales on the back of rising demand in December compared with the previous two months. New launches increased during the month. The major

projects launched included Woodland Heights by DLF, New Heaven by TATA Housing and Royale Gardens by Prestige Group. Rents rose marginally in December because of the influx of people and the shortage of ready-to-occupy apartments. Capital values marginally increased across all submarkets, with appreciation in the price of projects that are nearing completion.

Office Rents Capital Value

Key Precincts INR per sq ft per

month INR per sq ft Outer Ring Road (North) 48 – 55 5,500 – 6,500 Old Airport Road 60 – 65 6,000 – 7,000 Outer Ring Road (Eastern) 46 – 52 4,700 – 6,000 Old Madras Road 30 – 34 3,000 – 3,500 Electronic City 26 – 28 2,500 – 3,000

Retail Rents Capital Value


month INR per sq ft Koramangala 80 – 150 9,000 – 16,000 Indiranagar 90 – 180 12,000 – 18,000 New BEL Road 50 – 80 6,000 – 10,000 Commercial Street 175 – 250 16,000 – 20,000 Jayanagar 80 – 120 7,000 – 15,000

Residential Rents Capital Value

Key Precincts

INR per month for a 1,000 sq ft 2BHK apartment INR per sq ft

Old Madras Road 12,000–16,000 5,000 – 6,000 Indiranagar 18,000–20,000 10,000 – 20,000 Bellary Road 10,000–14,000 3,000 – 7,000 Hosur Road 10,000–14,000 3,000 – 5,500 Whitefield 13,000–16,000 3,000 – 7,000 Tumkur Road 7,000–11,000 3,000 – 5,000 Kanakapura Road 8,000–12,000 3,000 – 5,500 Mysore Road 8,000–10,000 2,800 – 3,500

INFRASTRUCTURE ONGOING >> The state government released INR 16.63 billion to Bruhat Bangalore Mahanagara Palike (BBMP) for several infrastructure projects. Around INR 6 billion of the budget will be spent on five signal-free corridors. In addition: INR 2 billion will be used for the development of seven roads, nine multi-storeyed parking complex, nine solid waste management projects and five grade separators; INR 1.4 billion will be allotted for the development and asphalting of 86 roads; INR 0.6 billion will be assigned for the widening of 13 roads in newly added areas; and INR 0.5 billion will be spent for the rejuvenation of 50 lakes.


Chennai

The city of Chennai witnessed moderate leasing activity in office space during the month of December, resulting in decline in the rental growth of office properties in comparison to 2011. Occupancy

in the city improved as there were no new completions of projects during the month. The notable transactions over the month included RR Donnelley leasing space at Prestige Polygon in CBD, Scope International renting space in Saligramam in SBD and Sutherland taking space on GST Road in the suburbs. In addition, DLF IT Park saw a decrease in vacancy, with Groupon, Global English and Truven Health leasing spaces. Rent and capital value remained stable over the month.

In December, Chennai retail sector witnessed the soft launch of Ten Square Mall in Koyambedu after months of subdued activity. The high streets of Chennai continued to be the preferred location, with

LG opening a three-storey showroom in Thoraipakkam OMR. In addition, restaurants and fast food chains experienced ‘mushroom growth’, catering to the demands of an increasing migrant population. As a result, the high-street rentals improved, with mall rentals being stable.

Chennai’s residential market experienced a huge increase of new launches during December compared with last month. The major projects launched during the month included Starwood

Towers by Navin Housing in Medavakkam, Ayna by Landmark in Virugambakkam, Crystal Park by Artha Property near Navalur OMR and Sindur Eternity by Maruti Builders in Egmore. In addition, Antony Associates launched an affordable project, Le Nid, near Urappakkam. With steady consumer demand for residential units, the rents and capital values increased across most of the submarkets during the month, regardless of raising inventories.



month INR per sq ft Mount Road 60–90 9,000–15,000 RK Salai 70–100 10,000–15,000 Pre-toll OMR 35–62 5,000–6,500 Post-toll OMR 25–35 3,500–5,000 Guindy 40–55 6,000–8,500 Ambattur 25–35 3,250–4,500

Retail Rents

(High Streets) Capital Value


month INR per sq ft T. Nagar 120–180 12,000–15,000 Nungambakkam 130–150 13,000–16,000 Velachery 80–100 10,000–12,000 Pre-toll OMR 50–70 8,000–11,000 Anna Nagar 110–140 11,000–13,000 LB Road (Adyar) 110–130 10,500–12,500


Key Precincts

INR per month for a 1,000 sq ft

two-BHK apartment INR per sq ft

Adyar 20,000–30,000 10,000–16,500 Medavakkam 7,000–14,000 3,600–5,000 Tambaram 6,000–12,000 3,500–4,500 Anna Nagar 15,000–25,000 9,000–14,000 Porur 5,000–10,000 3,600–5,200 Sholinganallur 9,000–12,000 4,000–5,200

INFRASTRUCTURE ONGOING >> The city’s parking problem would be solved with the multilevel car parking at T. Nagar getting closer to reality. The state government has also approved multilevel car parking in apartments as solution to the parking problem from a new perspective.


Delhi Delhi office market saw improved demand in December, with increase in pre-commitment of spaces. Vacancy levels increased as companies consolidated their operations in larger spaces and

vacated their existing spaces. FLSmidth leasing space in National Highway 8 (NH 8), Salt renting space in Golf Course Road and Samsung taking space in Noida City were some of the key transactions committed during December. Veritas Corporate Suites commenced operations during December in Gurgaon with moderate occupancy. Rents and capital values remained stable across all submarkets.

The demand for retail spaces in Delhi increased during the month of December, decreasing the vacancy levels. Some of the key transactions in December included Bahi leasing space in Golf

Course Road and Mc Donald’s renting space in Eros Metromall in Dwarka. MSX Central Market in Greater Noida and Europark in Ghaziabad were the two malls that commenced their operations in December. Rents and capital value both remained stable in all submarkets.

Delhi residential market continued to observe healthy demand from consumers in December, like in previous months. NH 8, NH 24 and Dwarka Expressway had come up as emerging locations in

the city. The new launches over the month included the Skycourt in Gurgaon by DLF, Vesta at Privvy, The Address by Spaze in Gurgaon and Elite’s Arena by Unnati Fortune in Noida. Whilst the rents remained stable, the capital values increased across submarkets on the back of stable demand during December.



month INR per sq ft Barakhamba Road 170-400 26,000-33,000 Jasola 110-170 16,000-21,000 DLF Cybercity 67-72 NA MG Road 114-130 16,000-18,500 Golf Course Road 85-95 12,000-15,000 Sohna Road 45-55 6,500-8,000

Retail Rents Capital Value


month INR per sq ft South Delhi 180-240 21,000-30,000 West and North Delhi 140-220 14,000-23,000 Gurgaon-MG Road 150-280 15,000-20,000 Rest of Gurgaon 60-100 8,000-14,000 Noida 130-220 14,000-25,000 Ghaziabad 90-150 10,500-16,000


Key Precincts

INR per month for a 1,000 sq ft

2BHK apartment INR per sq ft Golf Course Road 22,000-32,000 12,000-16,000 Sohna Road 15,000-20,000 5,800-7,500 Golf Course Extension Road 16,000-22,000 7,500-9,500 NH 8 14,000-19,000 3,900-5,500

Dwarka Expressway NA ( No

operational stock) 5,000-6,000 Noida- Greater Noida Expressway 12,000-14,000 4,000-5,500 Noida City 12,000-14,500 4,500-6,000 Indirapuram 10,000-12,000 4,000-4,800 NH 24 7,000-9,000 2,400-3,200

INFRASTRUCTURE ONGOING >> Several builders were granted permission by the Mining Department to dig soil along Noida Extension. The Mining Department made some good recovery with the permission.

>> In addition to three toll plazas on the Delhi-Gurgaon Expressway, ‘touch-and-go’ smart cards have now been made available at another sale point near Ambience Mall. So far, Delhi-Gurgaon Super Connectivity Ltd (DGSCL) had already distributed around 3,500 cards to commuters.


Hyderabad Office demand improved in December. However, the supply constraint of special economic zone (SEZ) spaces continued to remain in the city. Interestingly, Gachibowli witnessed an improved pre-leasing

activity over the month as Amazon expanded into Jayabheri Orange Towers. Vacancy increased in Hyderabad Information Technology Engineering Consultancy (HITEC) City submarkets as few companies consolidated their operations. However, pre-leasing remained strong in HITEC City as Oracle pre-leased space in Salarpuria Cyber Park. Other major leases in December were UHG pre-leasing space in Phoenix Infocity Avance SEZ in HITEC City and Questdial renting space at Ashoka Raghupati Chambers in Begumpet CBD. KRC Mindspace Building 20 (SEZ) in HITEC City started operations in December. This building was fully occupied, with Cognizant Technology Solutions as its major tenant. Rents and capital values remained stable over the month.

Demand continued to focus on the high streets of Hyderabad, with retailers such as Neeru's and Nissan leasing space on Road 36 Jubilee Hills, and Karachi Bakery taking space in Madhapur. Fashion boutique

stores also leased spaces in prime high streets of the city, with Shantanu & Nikhil leasing space on Road 36 Jubilee Hills in December, after designers such as Ritu Kumar, Tarun Tahiliani and Sabyasachi started their fashion boutique stores in Hyderabad. Vacancy in malls remained stable, whilst high streets continued to see fast absorption. Rents and capital values remained stable over the month.

Hyderabad continued to witness increased launches of residential projects in December amidst improved sales of residential units. The key launch in the month was Aparna CyberZon in Nallagandla

by Aparna Constructions. Aparna Cyber Zon was of good interest amongst buyers in the prelaunch stage itself. In addition, there was launch of Neclace Pride by Salarpuria Sattva Group on Kavadiguda Main Road. Some of them were Jyothi Vistas, Jyothi Lotus and Jyothi Anri. NSL Sindhu by NSL Homes was launched on the Medchal Highway. Meanwhile, Isola was launched by Giridhari

Constructions in Bandlaguda, APPA Junction in December. Rents remained stable, whilst capital values increased marginally as new residential projects were getting launched at a price higher than the market average price over the month.



month INR per sq ft Begumpet 45–55 4,500–6,500

Banjara Hills 50–60 4,500–7,500 Hitec City 34–42 4,000–5,200

Gachibowli 34–38 4,000–5,000 Uppal 25–35 3,000–4,000

Shamshabad 20–25 3,000–4,000 Retail Rents Capital Value


month INR per sq ft Banjara Hills 100–130 10,000–13,000 Jubilee Hills 110–140 11,000–14,000

Secunderabad 80–100 8,000–10,000 Hitec City 100–130 10,000–13,000 Kukatpally 100–120 10,000–12,000

Dilshuknagar 100–120 10,000–12,000 Residential Rents Capital Value

Key Precincts

INR per month for a 1,000 sq ft 2BHK

apartment INR per sq ft Banjara Hills 15,000–20,000 5,500–10,000 Begumpet 12,000–16,000 3,700–5,000 Kondapur 12,000–16,000 2,800–4,500 Tellapur 8,000–12,000 2,800–3,500

Kukatpally 7,000–10,000 3,500–3,800 Miyapur 5,000–6,000 2,200–3,500

INFRASTRUCTURE ONGOING >> The first girder and the launcher of the Hyderabad Metro Rail Project commissioned on Corridor 3 between Uppal and Habsiguda in end of November


Kolkata Kolkata’s office market witnessed increased leasing activity in December. The vacancy decreased over all submarkets with the increase in demand. The major transactions included Bajaj Finance leasing

space in Infinity Benchmark, SRL Diagnostic (Religare) renting space in Srijan Tech Park, and JP Morgan taking space in Camac Square. The month of December also saw a number of pre-commitments, including Accenture leasing space in Unitech Infospace Phase 3B in Rajarhat. Three new projects, including Ecospace 4B and Newtown Square in Rajarhat, were operational during the month. Rents and capital values remained stable in the submarkets, with marginal increase in selected precincts.

The month of December saw a good leasing activity as retailers expanded on the back of continued steady consumer demand for the retail market of Kolkata. The key transactions in December included

Raghavendra Rathor Store leasing space on Camac Street in the CBD, Standard Chartered Bank renting space on Gurusaday Road, and Veromoda taking space in Forum Courtyard Mall at Elgin Road. Because of the increase in leasing activity and absence of new completion, the vacancy levels decreased. Rents increased significantly on the back of this continued demand over the month in most of Kolkata’s submarkets, with capital value remaining stable.

Kolkata residential market witnessed increased sales in residential projects. The vacancy increased with the launch of many new projects, including: Altius by a joint venture between Empress Group,

Space Group and Prudent Infrarealty on Christopher Road in Park Circus; Astitva by MCK Primarc in Kankurgachi; and Orchard County by Oswal Group on BT Road. Rents and capital value continued to rise in every submarket with improved sales.



month INR per sq ft Park Street 120 – 150 12,000 – 16,000 Topsia 70 – 80 8,000 –10,000 Salt Lake 40 – 50 4,000 – 5,000 Rajarhat 32 – 35 3,000 – 3,500 Retail Rents Capital Value


month INR per sq ft Elgin Road 190 – 260 16,000 – 22,000 Park Street (high street) 200 – 275 15,000 – 20,000 Prince Anwar Shah Road 110 – 140 10,000 – 13,000 Salt Lake 70 – 100 7,000 – 10,000 Residential Rents Capital Value

Key Precincts

INR per month for a 1,000 sq ft 2BHK apartment INR per sq ft

Alipore 42,000 – 50,000 10,000 – 18,000 PA Shah Road 20,000 – 30,000 5,000 – 12,000 EM Bypass 15,000 – 24,000 3,400 – 8,000 Lake Town 13,000 – 19,000 3,400 – 6,500 Behala 10,000 –15,000 3,200 – 5,200 Howrah 6,000 – 9,500 2,200 – 3,800

INFRASTRUCTURE ONGOING >> The Eco-Tourism Park in New Town Action Area II started its operation in December. This park, once fully completed, will cover an area of 480 acres and include a 104-acre water body with an island. The upcoming business district of New Town-Rajarhat is located to the east of the site. The Eco-Tourism Park will consist of broadly three types of spaces, including: ecological zones such as wetlands, grasslands and urban forests; theme gardens and recreational open spaces; and urban leisure, educational and functional spaces such as galleries for flora and birds, crafts bazaars, plants and farmers markets, food courts, amphitheatres and plazas.


Mumbai The leasing activity decreased marginally in December because of the subdued demand for office space over the past months in Mumbai. The vacancy increased as the Towers A and B of Naman

Midtown in Lower Parel of Central SBD, and Hubtown Solaris in Andheri East of North SBD became operational with moderate occupancy during December. However, the Naman Midtown project became operational with good occupancy levels. The key transactions during the month included Travelex leasing space in Malad, Kone Elevators renting space in Andheri, and Carrier taking space in Kurla. Rents remained stable during the month, except for several precincts, such as Goregaon, Malad and Thane, where rents inched up marginally. Whilst Andheri, Goregaon and Wagle Estate witnessed incremental change in the month of December, the capital value remained stable in the submarkets.

High streets continued to witness improved demand in December, with demand for the malls remaining stable. Vacancy remained stable in the malls. The key leases in December included Café Coffee Day

leasing space in Kandivali, Pizza Express renting space in Bandra Kurla Complex, and Kazo taking space in Kurla. Kaul Heritage City Mall, located on Vasai Road, became operational, with the multiplex being the major occupier in the mall. Whilst rents increased marginally in select prime precincts of Mumbai such as Lower Parel and Ghatkopar, capital values witnessed marginal appreciation in prime submarkets of Mumbai.

The Mumbai residential market witnessed an improvement in sales, primarily in selected projects with a potential for appreciation in the near term and an attractive pricing at a prelaunch stage. There were

again a good number of residential projects launched during the month of December. The new launches included Runwal Group’s Runwal Elina and Runwal Serene, located in Andheri and Chembur, respectively; Rajesh Lifespaces’ Raj Infinia, located in Malad; Kollage, located in Andheri, a joint venture between Zire Realty and Rushi Group; Lily White, located on Jogeshwari-Vikhroli Link Road;

and Amal Group’s Aspen Garden, located in Goregaon. Rents remained unchanged during December, with the exception of Lower Parel, where the rents increased marginally. The capital values moved up marginally in select precincts of Mumbai, with selected developers adopting the strategy of pricing on the carpet areas.



month INR per sq ft Lower Parel 150–180 19,000–23,000 BKC 250–350 25,000–35,000 Andheri 100–150 9,000–15,000 Goregaon-Malad 80–100 8,000–10,000 Wagle Estate 45–60 5,000–6,000 Thane-Belapur Road 40–55 5,000–6,000

Retail Rents

(mall space) Capital Value


month INR per sq ft Lower Parel 250–350 22,000–32,000 Malad 160–250 12,000–20,000 Ghatkopar 140–220 10,000–18,000

Mulund 120–200 10,000–16,000

Thane 100–160 8,000–14,000 Navi Mumbai 70–150 7,000–12,000 Residential Rents Capital Value

Key Precincts INR per month for a

1,000 sq ft 2BHK apartment

INR per sq ft

Lower Parel 87,000–95,000 23,000–34,000

Wadala 40,000–55,000 14,500–18,000

Andheri 35,000–50,000 11,000–21,000 Ghatkopar 35,000–45,000 9,500–14,000 Ghodbunder Road 12,000–20,000 5,500–8,500

Kharghar 12,000–20,000 4,800–7,500

INFRASTRUCTURE ONGOING >> The Mumbai Metropolitan Development Authority (MMRDA) is planning to inaugurate the Eastern Freeway in 2013. It is also planning to extend the Eastern Freeway to Nariman Point through a tunnel for better connectivity between the eastern and western corridors. The Nariman Point-Borivali coastal road is also under advanced stages of planning. The Maharashtra State Road Development Corporation (MSRDC) has already planned to extend the sea link to Versova. There are also plans to connect the Nariman Point-Borivali coastal road to Borivali and Vasai through cable-stayed bridges.


Pune

The office market in Pune witnessed an increase in leasing activity in December, decreasing the vacancy levels marginally. The key transactions during the month included Affinity Express leasing

space in Eon special economic zone (SEZ) in Kharadi, Augnum Technologies renting space in Pentagon Tower at Hadapsar and Sales Build taking space in Commerzone at Yerwada. SBD was the main destination for leasing activities during December. The month also saw a number of pre-commitments. Rents and capital values remained stable.

With only a few major transactions concluded in December, Pune retail activity in the malls remained subdued. The key transactions in December included Karnik and Malabar Gold leasing space in

Market City in Viman Nagar. Season’s Mall in Hadapsar would be ready in the market in the next three–five months. Rents and capital values remained stable over the month.

The Pune residential market witnessed stable demand during December. The major residential projects launched in the month included Montvert’s Vesta Valley Town, SKYi Developers’ Songbirds in

Pirangut and Dreams Group’s Dreams Avani in Manjri. The new launches in December marginally increased the capital value in selected sub-markets.



month INR per sq ft Hinjewadi 32–40 4,000–5,000 Hadapsar 40–50 5,000–6,000 Bund Garden Road 60–70 6,500–7,500 Viman Nagar 50–60 6,000–7,000 S.B. Road 55–75 6,500–7,500 Koregaon Park 60–70 6,500–7,500

Retail Rents

(High Streets) Capital Value


month INR per sq ft MG Road 100–150 10,000–15,000 Bund Garden Road 90–130 9,000–13,000 F.C. Road 100–150 10,000–15,000 J.M. Road 100–150 10,000–15,000 D.P. Road 90–130 9,000–11,000 S.B. Road 80–130 8,000–11,000


Key Precincts

INR per month for a 1,000 sq ft two-BHK apartment INR per sq ft

Wakad 10,000–12,000 3,800–4,800 Kharadi 11,000–15,000 4,500–5,300 Hadapsar 12,000–16,000 4,500–5,500 Hinjewadi 9,000–11,000 3,500–4,300 Kondhwa 9,000–12,000 3,500–4,500 Pimpri-Chinchwad 8,000–12,000 3,500–4,200

INFRASTRUCTURE ONGOING >> The Maharashtra government approved a metro rail project in Pune. A special purpose vehicle, the Pune Metro Rail Corporation (PMRC) had been set up, and the Pune Municipal Corporation (PMC) will be the nodal agency. The entire project will be developed in phases and is anticipated to be completed within five years.

About Jones Lang LaSalle Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47 billion of assets under management. Jones Lang LaSalle has over 50 years of experience in Asia Pacific, with over 22,200 employees operating in 81 offices in 15 countries across the region. The firm was named the Best Property Consultancy in Asia Pacific at ‘The Asia Pacific Property Awards 2011 in association with Bloomberg Television’. For further information, please visit our website, www.ap.joneslanglasalle.com About Jones Lang LaSalle India Jones Lang LaSalle is India’s premier and largest professional services firm specializing in real estate. With an extensive geographic footprint across eleven cities (Ahmedabad, Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and a staff strength of over 5400, the firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, analytics, consultancy, transactions, project and development services, integrated facility management, property and asset management, sustainability, Industrial, capital markets, residential, hotels, health care, senior living, education and retail advisory. For further information, please visit www.joneslanglasalle.co.in For more information about our research Ashutosh Limaye Head, Research and REIS [email protected] +91 98211 07054 Trivita Roy Assistant Vice President, Research [email protected] +91 40 4040 9100 Research Dynamics 2012 Pulse reports from Jones Lang LaSalle are frequent updates on real estate market dynamics.

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13 insights for india real estate in 2013

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