residential investment advisory report - dec 2015

RESIDENTIAL INVESTMENT ADVISORY

2 16

• Will the 2012 recommendations still hold strong in today’s

economic scenario?

• Is the performance on track of the previously selected

destinations?

• What are the new recommendations in the 2016 edition?

• Which destinations will outperform over the next 5 years?

Current Real Estate Scenario

30

35

40

45

2012 2013 2014 2015 E

mn

sq

ft

New Completion Absorption

Office market sees a remarkable recovery in last 2 years;

Absorption to touch a record 40 mn sq.ft. this year

New Completion

Absorption

14%

16%

18%

20%

22%

2012 2013 2014 2015 E

Vacancy expected to touch a new low by end of the current

year

Residential market under tremendous

pressure since last couple of years

100,000

200,000

300,000

400,000

500,000

2012 2013 2014 2015E

Un

its

Launches Absorption

Launches

Absorption

Demand expected to touch a new low in 2015

Demand slowdown resulted in a poor price

performance over the last 3 years

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2012 2013 2014 2015E

Pri

ce g

row

th

Review of 2012 edition

13 top investment

destinations identified across

Mumbai, NCR, Bengaluru,

Pune, Chennai

First published in 2012

Targeted at Investors

A scientific approach to the analysis

INDIA

POPULATION Top 100 Cities

Top 6 Cities

Zones

BUSINESS

ACTIVITY

Destinations

INFRASTRUCTURE

DEVELOPMENT

EMPLOYMENT SOCIAL & PHYSICAL

INFRASTRUCTURE

Framework built on

‘top-down approach’ in

the selection of the most

promising cities and

the zones within them

Selection of the top investment

destinations done using the

‘bottom-up approach’

SOCIAL AND

PHYSICAL

INFRASTRUCTURE

FACILITIES

CONNECTIVITY

WITH IMPORTANT

LOCATIONS

LAND

AVAILABILITY

LIFESTYLE

CHANGES

PLANNED

DEVELOPMENT

Top investment destination

This approach has been modeled

based on our field visits to each of

the residential markets and our

market assessment

A scientific approach to the analysis

What we recommended

in 2012 for the

5 year period

NCR

MUMBAI PUNE

BENGALURU

CHENNAI

Medavakkam 103% Pallikaranai 93%

Noida Extension 111% Dwarka Expressway 108%

Ulwe145% Wadala 133%

Chembur 125%

Hebbal 94% KR Puram 91%

Hinjewadi100% Tathawade 98% Ravet 97% Wakad 91%

2012 Actual 4,000 per sq ft


Price Growth Actual 50%




Mumbai - headwinds of delay in infrastructure projects

restricted price growth

3 year city

Price Growth 22%




Chembur

2015 6,000 / sq.ft

2012 4,000 / sq.ft

Price Growth 50%

Annual Average 14%

Price Growth 17% Annual Average 5%

Wadala

Ulwe




3 year

Price Growth 23%




K R Puram

Bengaluru – Hebbal surges ahead on better infrastructure

while traffic bottlenecks drag KR Puram down

Hebbal

3 year

Price Growth 18%



Price Growth Actual 6% 2012 Actual 4,900 per sq ft



Noida Extension

Dwarka Expressway

NCR – Infrastructure delays and environment concerns

prove biggest hurdles against price growth

3 year

Price Growth 17%










Ravet

Tathawade

Wakad Hinjewadi

Pune – Emerging areas and huge supplies arrested price growth




• We anticipate that PRICE GROWTH in

residential properties will be considerably

MUTED compared to the previous 5 years

• It will NO LONGER BE A SPECULATIVE

INVESTMENT and will have to compete with

other investment avenues, such as equities,

commercial office space and commodities

• We strongly believe that any investment in real estate based

on SOUND RESEARCH CAN SELDOM GO WRONG, and

there are ample opportunities to earn healthy returns even

today

Going forward

Edition 2016

MUMBAI

Increase in office space and new infrastructure

developments to drive Mumbai’s residential market

300,000+ new jobs

estimated in 5 years

2015: 118 mn sq ft

2020E: 152 mn sqft `210-300 /sq.ft./month

IT/ ITeS

Manufacturing

BFSI

Other Services

21%

22%

27%

30%

14% 16%

10% 8%

SBD

CENTRAL

Metro Rail

Suburban Rail Extension

Coastal Road

Navi Mumbai Airport

Trans Harbour Link

Infrastructure Office Space

CBD &

OFF CBD

CENTRAL

MUMBAI

BKC & OFF BKC

SBD

WEST

% of office space

in 2015

% of office space

in 2020E

Employment

PBD

19% 24%

SBD

CENTRAL

14% 16%

10% 8%

13% 10%

SBD

CENTRAL

14% 16%

Thane and Navi Mumbai to

witness maximum office

development by 2020

170,000 new jobs

estimated

Under construction Navi

Mumbai Metro Rail

Infrastructure

Infrastructure upliftment

only hope of survival for

the comatose city

New government promising

speedy execution of key

infrastructure projects

Peripheral locations getting

better connectivity through a

host of transport projects

that are on the anvil Under construction Navi

Mumbai Metro Rail

Infrastructure

1

2

3

3

3

4 5

1

2

3

4

Coastal Road

Monorail

Metro Rail

Suburban Rail

Madh Marve Bridge

5 Trans Harbour Link

Navi Mumbai Airport

6

6

6

7

7

Under construction Navi

Mumbai Metro Rail

1

2

3

3

3

4

Rising Residential

Localities

Madh-Marve in the

Western suburbs

Majiwada Kasaravadavali

belt in Thane

Ulwe in Navi Mumbai

5

6

6

7 1

2

3

4

Coastal Road

Monorail

Metro Rail

Suburban Rail

Madh Marve Bridge

5 Trans Harbour Link

Navi Mumbai Airport

6

7

Selected

Destination

Coastal Road

Madh Marve Bridge

Scope of luxury

lifestyle projects

Madh-Marve, the rising prince of suburbs

2015 INR/sq.ft. 2020E INR/sq.ft. Price Growth

Min Max Average Min Max Average 2015-20 E Average Annual

Lokhandwala 20,000 26,000 23,000 26,800 34,800 30,800 34% 6%

Madh-Marve 12,000 15,000 13,500 23,300 29,000 26,200 94% 14.2%

2015 2016E 2017E 2018E 2019E 2020E

41%

15%

23,000

13,500

26,200

30,800

INR

/sq

ft

Lokhandwala

Madh-Marve

Price Movement: Madh-Marve

Selected Location

Benchmark Location

TOP DESTINATION: MAJIWADA-KASARVADAVLI

Selected

Destination

Incremental

5 mn office space

62,000 new jobs

estimated

Kasarvadavali

Metro Rail

Majiwada-Kasaravadvali - Ghodbunder Road finally gets its due



Eastern Express

Highway Thane 10,000 14,000 12,000 11,800 16,500 14,200 18% 3.3%

Majiwada -

Kasaravadavali 7,000 9,000 8,000 11,100 14,300 12,700 59% 9.7%

2015 2016E 2017E 2018E 2019E 2020E

33%

10% 12,000

8,000

12,700

14,200

INR

/sq

ft

Eastern Express Highway

Thane

Majiwada - Kasaravadavali

Price Movement – Majiwada Kasaravadavali

Selected Location

Benchmark Location

Selected

Destination Incremental

9 mn office space

109,000 new jobs

estimated

Seawoods Uran

Suburban Rail

Navi Mumbai

International Airport

Ulwe continues to march ahead



Seawoods 10,000 13,000 11,500 11,800 15,400 13,500 18% 3.3%

Ulwe 5,500 6,500 6,000 9,300 11,000 10,200 70% 11.2%

2015 2016E 2017E 2018E 2019E 2020E

48%

25% 11,500

6,000

10,200

13,500

INR

/sq

ft

Seawoods

Ulwe

Price Movement – Ulwe

Selected Location

Benchmark Location

Key Takeaways

Upcoming Versova–Madh sea bridge

Planned Coastal Road

Lifestyle comparable to Juhu

Job creation in Thane and Navi Mumbai

Upcoming Kasarvadavali – Wadala metro rail

Incremental employment in Navi Mumbai and

Thane

Upcoming Seawoods–Uran suburban train

network

Navi Mumbai International Airport

Emergence of a new business hub: Majiwada–Kasarvadavali

Madh-Marve, a sleepy resort location to turn into a buzzing residential hub

Ulwe : A renewed push as a Smart City

NATIONAL CAPITAL

REGION

Gurgaon and Noida leads as employment hubs in NCR

New Delhi

Ghaziabad

Faridabad

Gurgaon

Noida 70 mn sq.ft.

13 mn sq.ft.

23 mn sq.ft.

2-3 mn sq.ft.

30 mn sq.ft.

8-9 mn sq.ft.

Office Space

Airport Proximity

Concentrated Office Space

Current Upcoming

IT / ITeS Industrial

Maximum infrastructure developments in and around Gurgaon

Incremental

6 mn office space

60,000 new jobs

estimated

16 lane expressway

Extension of Rapid

Metro

Golf Course Extension – Luxury destination of future

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjBgazmntnJAhXHBo4KHeCuDHAQjRwIBw&url=http://www.clker.com/clipart-26900.html&bvm=bv.109910813,d.c2E&psig=AFQjCNGGrK2dvyQuWCXg2ukcM7OAr8NWwA&ust=1450109974036238

Price movement in GC extension

2015 2020E

Price growth Discount (Prices in `/sq ft) (Prices in `/sq ft)

Min Max Avg. Min Max Avg. 2015–

2020 CAGR 2015 2020E

Golf Course (benchmark

location) 12,500 14,800 13,600 14,800 17,600 16,200 19% 3.50%

6,800 9,800 8,300 9,700 13,900 11800 42% 7.20% 39% 27% Golf Course Extension (top

destination)

2015 2016 2017 2018 2019 2020

GC Extension Golf Course Road

39%

27% 13,600

16,200

8,300

11,800



Golf Course 12,500 14,800 13,600 14,800 17,600 16,200 19% 3.50%

Golf Course

Extension 6,800 9,800 8,300 9,700 13,900 11,800 42% 7.20%

2015 2016E 2017E 2018E 2019E 2020E

39%

27% 13,600

8,300

11,800

16,200

INR

/sq

ft

Golf Course

Golf Course Extension

Price Movement in Golf Course Extension

Selected Location

Benchmark Location

Benchmark Destination

Incremental

3 mn office space

30,000 new jobs

estimated

Completion of

Dwarka Expressway

Connection with

Southern Peripheral

Road

New Gurgaon – Cleansing of legal mess and fresh infra

push re-invigorates the destination



Sohna Road 8,100 10,900 9,500 10,100 13,600 11,800 24% 4.40%

New Gurgaon 3,900 5,500 4,700 5,700 8,100 6,900 47% 7.9%

2015 2016E 2017E 2018E 2019E 2020E

51%

42% 9,500

4,700

6,900

11,800

INR

/sq

ft

Sohna Road

New Gurgaon

Price Movement in New Gurgaon

Selected Location

Benchmark Location

Key Takeaways

Golf Course extension a desirable

location for investment

Physical & Social Infrastructure

Enhanced connectivity

Strong supply of incremental office

space

Better connectivity to well established

commercial corridors of Sohna Road,

DLF Cyber City and Golf Course

Extension

New Gurgaon, a relatively

affordable location fast turning

into a preferred residential zone

BENGALURU

Metro connectivity and upcoming office hubs in North to drive

Benguluru’s residential market

Metro Rail

Outer Ring Road

Peripheral Ring Road

INFRASTRUCTURE EMPLOYMENT

IT / ITeS and

eCommerce continue

to drive employment

in Bengaluru

North and East Bengaluru gaining

importance as residential zones 58%

42%

Sector break up of office space

IT/ITeS Non-IT/ITeS

North and East upcoming office markets

Locations – Whitefield, ORR in East

Hebbal, Nagawara & Yelahanka in North

South Electronic city losing importance

West not much presence of IT/ITeS sector

Thanisandra

Panathur

Incremental

7 mn office space

80,000 new jobs

estimated

Metro Rail

Peripheral Ring

Road

Selected

Destination

Thanisandra – a balanced eco-system on the back of recent social infra development and existing physical infra

Price Movement - Thanisandra



RMV 2nd

Stage 5200 10,200 7,700 6650 12,750 9,700 25% 4.7%

Thanisandra 3,800 5,800 4,800 5,900 9,000 7,450 55% 9.2%

2015 2016E 2017E 2018E 2019E 2020E

38%

23% 7,700

4,800

7,450

9,700

INR

/sq

ft

RMV 2nd Stage

Thanisandra

Selected Location

Benchmark Location

Selected

Destination

Incremental

8 mn office space

90,000 new jobs

estimated

Metro Rail

Peripheral Ring

Road

Panathur-Varthur - strategic location catering to the two key employment hubs



Whitefield 4,500 9,500 7,000 5,850 12,350 9,100 30% 5.4%

Panathur

Varthur 3,300 5,400 4,350 5,300 8,700 7,000 61% 10.0%

Price Movement – Panathur Varthur

2015 2016E 2017E 2018E 2019E 2020E

38%

23% 7,000

4,350

7,000

9,100

INR

/sq

ft

Whitefield

Panathur Varthur

Selected Location

Benchmark Location

Thanisandra gets an edge over

other locations

Key Takeaways

Access to employment hubs

Physical & Social Infrastructure

Proximity to employment hubs in

Whitefield and ORR

Metro rail connectivity at

Kundanhalli

Access to Peripheral Ring Road

Panathur-Varthur belt comes up as

a prime location in the East

HYDERABAD

West

52 mn sq.ft.

Current Upcoming

10 mn sq.ft.

CBD East

7 mn sq.ft.

0.8 mn sq.ft.

3 mn sq.ft.

1.5 mn sq.ft.

80% of incremental office space coming up in the West

West - Gachibowli, Kokapet,

Mandinaguda, Nanakramguda,

HITEC City, Kondapur, Manikonda,

Kukatpally, Raidurg

CBD - Banjara Hills, Jubilee

Hills, Begumpet, Ameerpet,

Punjagutta, RajBhavan road,

Somajiguda East – Uppal,

Poncharam

Suburban Railway

Upcoming Metro Rail

Upcoming metro to make the West more accessible to Central and

East Hyderabad

Top investment destinations

Incremental

10 mn office space

125,000 new jobs

estimated

Direct connection to

ORR by Radial

Road 5

Piped water supply

to come by 2016

Puppalguda-Narsingi cluster to evolve along the lines of Manikonda

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjHoMWqodnJAhUHHI4KHdtkAs8QjRwIBw&url=http://www.flaticon.com/free-icon/pipe-losing-water_8927&bvm=bv.109910813,d.c2E&psig=AFQjCNF_6Kgxcn7C97U6mTHMJDamWcruoQ&ust=1450110637332861

Price Movement in Puppalguda Narsingi Cluster

2015 2016E 2017E 2018E 2019E 2020E

40%

33% 4,800

2,900

4,100

6,100

INR

/sq

ft

Kondapur

Puppalguda Narsingi Cluster



Kondapur 3,800 5,800 4,800 4,850 7,350 6,100 27% 4.9%

Puppalguda

– Narsingi

Cluster

2,600 3,200 2,900 3,700 4,500 4,100 41% 7.2 %

Selected Location

Benchmark Location

Key Takeaways

Puppalguda-Narsingi cluster to

see a lifestyle shift

• Proximity to the employment

hubs of HITEC City, Kondapur,

Kothaguda and Gachibowli

• The most affordable residential

location within a 20 minute

commute from HITEC City

Hadapsar

Kharadi

Nagar Road

Wakad

Current: 25 U/C: 3

Current: 12 U/C: 1

Current: 6 Proposed: 1.5

Current: 7 U/C: 0

Current: 1.5 Proposed: 1

BRTS & Metro rail to bring the city closer

Hadapsar

Kharadi

Nagar Road

Wakad

Current: 25 U/C: 3

Current: 12 U/C: 1


Current: 7 U/C: 0


Hinjewadi Wakad

Hadapsar

Kharadi

Nagar Road

25 mn sq.ft.

3 mn sq.ft.

1.5 mn sq.ft.

1 mn sq.ft.

6 mn sq.ft.

1 mn sq.ft.

12 mn sq.ft.

1 mn sq.ft.

7 mn sq.ft.

East & West dominate Pune real estate market

Hadapsar

Kharadi

Nagar Road

Wakad

Current: 25 U/C: 3

Current: 12 U/C: 1


Current: 7 U/C: 0


West Pune – High demand, low price growth

Viman Nagar 10,000

Selected

Destination Selected

Destination

12,000 new jobs

estimated by 2018

BRTS

Pune Metro

Vishrantwadi & New Airport Road - to get a rapid upliftment of

stature, à la Kalyani Nagar

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjBgazmntnJAhXHBo4KHeCuDHAQjRwIBw&url=http://www.clker.com/clipart-26900.html&bvm=bv.109910813,d.c2E&psig=AFQjCNGGrK2dvyQuWCXg2ukcM7OAr8NWwA&ust=1450109974036238

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwj64c2doNnJAhULV44KHTkZAlMQjRwIBw&url=https://www.windowssearch-exp.com/images/search?q=Bus+Icon&FORM=RESTAB&psig=AFQjCNE4rSNQZ-YVTJB6L8_zPn5QcdB8oQ&ust=1450110368914258



Kalyani

Nagar 9,000 14,000 11,500 11,250 17,500 14,500 26% 4.7%

Vishrantwadi 5,600 6,800 6,200 8,800 10,600 9,700 56% 9.4%

New Airport

Road 6,500 8,000 7,250 10,500 13,000 11,800 63% 10.2%

Price Movement in Vishrantwadi & New Airport Road

Selected Location

Benchmark Location

2015 2016E 2017E 2018E 2019E 2020E

46%

34% 11,500

6,200

9,700

14,500

INR

/sq

ft

Kalyani Nagar

Vishrantwadi

Price Movement in Vishrantwadi & New Airport Road

2015 2016E 2017E 2018E 2019E 2020E

37%

19% 11,500

7,250

11,800

14,500

INR

/sq

ft

Kalyani Nagar

New Airport Road Selected Location

Benchmark Location

Vishrantwadi and New Airport

Road emerge as the best

investment destinations

Key Takeaways

Access to employment hubs of Yerwada,

Airport Road, Kalyani Nagar and Viman

Nagar

Upcoming BRT system

Planned metro rail

Summing up

NCR

MUMBAI

PUNE

BENGALURU

CHENNAI

Rankings of 11

selected destinations

HYDERABAD

Madh Marve 94% Ulwe 70%

Majiwada 59%

Golf Course

Extension 42%

New

Gurgaon 47%

Puppalguda –

Narsingi 41%

Guindy

Alandur 45% Panathur-

Varthur 61% Thanisandra 55%

New Airport Road 63%

1

56% Vishrantwadi

2

3

4

5

6

7

8

9

10

11

% Price Growth over 5 years

City Average Price INR/sq.ft. Price Growth

2015 2020E 2015-20 CAGR

Madh Marve Mumbai 13,500 26,200 94% 14.2%

Ulwe Mumbai 6,000 10,200 70% 11.2%

New Airport Road, Viman

Nagar Pune 7,250 11,800 63% 10.2%

Panathur Bengaluru 4,350 7,000 61% 10.0%

Majiwada–Kasarvadavali Mumbai 8,000 12,700 59% 9.7%

Vishrantwadi Pune 6,200 9,700 56% 9.4%

Thanisandra Bengaluru 4,800 7,450 55% 9.2%

New Gurgaon (Sectors 81-95) NCR 4,700 6,900 47% 8.0%

Guindy - Alandur cluster Chennai 7,500 10,900 45% 7.8%

Golf Course Extension NCR 8,300 11,800 42% 7.3%

Puppalguda-Narsingi Hyderabad 2,900 4,100 41% 7.2%

• Madh–Marve identified as the top destination, with an expected

price appreciation of 94%

• Ulwe remains as one of the top destinations with a 70% price

appreciation by 2020

• Pune moves up the rank, with New Airport Road in Viman

Nagar coming 3rd with a price appreciation of 63%

• NCR locations come down the list

• Hyderabad makes its entry with the Puppalaguda– Narsingi

cluster emerging as one of the destinations

Key Takeaways

RESIDENTIAL INVESTMENT ADVISORY

2 16