bengaluru real estate report h2 2016 presentation
TRANSCRIPT
H1 2016, a recap
- A recovery predictedINDIA
REAL ESTATEJULY – DECEMBER 2016
BENGALURU
BENGALURUREAL ESTATE
H1 recap
LAUNCHES RECUPERATED, SALES STRENGTHENED BY 18% YoY IN H1 2016
We predicted 4% growth in launches and 5% de-growth in sales for H2
2016, but the usually resilient Bengaluru suffers a setback as
launches & sales tumble in H2 2016
New launches plunge by 45%; Sales decline by 27%
Half yearly trend in launches and sales
H2 2011 H2 2012 H2 2013 H2 2014 H2 2015 H2 2016 -
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
29,
509
37,
236
36,
145
32,
589
24,
190
13,
395
LAUNCHES
-45%
H2 2011 H2 2012 H2 2013 H2 2014 H2 2015 H2 2016 -
5,000
10,000
15,000
20,000
25,000
30,000
22,
271
27,
757
25,
522
28,
445
27,
849
20,
309
SALES
-27%
Drastic fall in H2 2016 has pulled the annual numbers to below 2015 performance
New launches dip by 17%; Sales witness a relatively restrained decline of 7%
Yearly trend in launches and sales
2010 2011 2012 2013 2014 2015 20160
10000
20000
30000
40000
50000
60000
70000
80000
3443
8 6326
1
6777
3
7830
0
6813
4
4559
0
3767
6
No.
of u
nits
2010 2011 2012 2013 2014 2015 20160
10000
20000
30000
40000
50000
60000
2831
8 4194
4
5069
2
5736
6
5570
1
5008
3
4652
9
No.
of u
nits
LAUNCHES
-17%
-7%
SALES
Overall, the city witnessed a fall in new launches
South accounts for almost half of the launches and North also sees growth
Micro-market wise half yearly share of launches
Central East North South West0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0%
26% 25%
38%
11%
0%
18%
31%
47%
4%
H2 2015 H2 2016
While demand slackens in the city, South leads
the share in sales
Affordable supply, employment hubs and the upcoming metro drive the demand in South
Central East North South West0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0%
26% 25%
39%
10%
0%
27%
18%
47%
8%
H2 2015 H2 2016
Zone-wise split of sales during H2 2016
QTS on a gradual incline;2.3 years to offload the unsold inventory
Bengaluru market health – Quarters to sell and unsold inventory
Jun-1
4
Aug-14
Oct-14
Dec-14
Feb-15
Apr-15
Jun-1
5
Aug-15
Oct-15
Dec-15
Feb-16
Apr-16
Jun-1
6
Aug-16
Oct-16
Dec-16
2.0
4.0
6.0
8.0
10.0
7.0 7.17.9 7.9 8.0 7.9 7.9
8.4 8.48.9
9.3
QTS
Unsold inventory at 121,248 units
Demonetisation – Short term challenges
Bengaluru hit hard - New launches plunge by 65% in Q4 2016 YoY; Sales decline by 45%
Quarterly trend of new launches and sales
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 20160
5000
10000
15000
20000
25000
22875
12670
20563.5
12025.5
14438.5
6961.5
9818
1558314374.5
9906.57940.88
5454.05
1406213194
14817.513627.5
11750.510483.5
13910.3513045 13403.0812817.0813134
7174.75
Launches Sales
No.
of u
nits
Demonetisation impact in Q4
Average # units sold in Q4 2014 & Q4 2015 13,336
# Units sold in Q4 2016 7,175
46% fall in sales
Notional REVENUE LOSS to real estate industry
INR 4,800 cr
State government notional LOSS ON STAMP DUTY
INR 250 cr
Key takeawaysLaunches go downhill, sales weaken YoY in H2 2016
Affordable prices attracting buyers in its peripheral markets such as Electronics City & Kammasandra in South and Mandur in East
Demonetization brings residential market to a standstill
Uncertainty likely to continue for the next quarter
Reduction in home loan interest rates, RERA, GST and ‘possible’ tax benefits in the upcoming budget likely to bring in a ‘feel good factor’
among buyers
Office market
BENGALURU OFFICE MARKET SEES STEADY
PERFORMANCE IN H2 2016
H2 2016 witnesses transactions at four-year high; new completions see a dip
Half yearly transactions & new completion
H2 2012 H2 2013 H2 2014 H2 2015 H2 2016 0.0
1.0
2.0
3.0
4.0
5.0
6.0
3.3
5.5
4.5 4.5
3.53.4
4.94.4
5.0 5.3
NEW COMPLETION TRANSACTIONS
Mn.
sq.ft
Vacancy on a steady decline with ORR at 2-4% & Whitefield at 8-10%;
Transactions consistent and new completions restrained
Half yearly vacancy rate
H2 2013 H2 2014 H2 2015 H2 2016 0%
2%
4%
6%
8%
10%
12%
14%
16%
14%
10%8%
6%
Rentals gain momentum owing to space crunch
H2 2013 H2 2014 H2 2015 H2 2016 -
10.0
20.0
30.0
40.0
50.0
60.0
70.0
47.5 48.5 51.5 57.8 2% 6%
12%
Half yearly weighted average rental trend
IT/ITeS sector continues to hold the fort in H2 2016
IT/ITeS leads with big ticket transactions Sector wise transactions
IT/ITeS BFSI Manufacturing Other Service Sectors0%
10%
20%
30%
40%
50%
60%
70%
80%70%
4%10%
16%
62%
9%4%
25%
H2 2015 H2 2016
ORR struggles on account of space crunch, high rentals & traffic congestion;
Whitefield office market gainMicromarket-wise transactions
CBD & Off CBD
SBD ORR PBD East PBD South PBD North PBD West0%
5%
10%
15%
20%
25%
30%
35%
6%
14%
33%
6%
31%
10%
1%
8%
18%
29%32%
5%8%
0%
H2 2015 H2 2016
Key takeaways
H2 2016 witnesses transactions at four-year high
New completions dip, leading to rise in rentals in key markets
ORR struggling due to space crunch and high rentals; Whitefield office market gains in H2 2016
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