India Real Estate

COMMERCIAL BRIEFING For the latest news, views and analysis of the commercial property market, visit RESEARCH knightfrankblog.com/commercial-briefing/ RESEARCH Dr. Samantak Das Chief Economist and National Director, Research [email protected] RESIDENTIAL AGENCY Mudassir Zaidi INDIA REAL ESTATE - RESIDENTIAL AND OFFICE JULY - DECEMBER 2015 - RESIDENTIAL AND OFFICE JULY INDIA REAL ESTATE National Director, Residential [email protected] OFFICE AGENCY INDIA REAL ESTATE Viral Desai National Director, Ofce Agency [email protected] RESIDENTIAL AND OFFICE CAPITAL MARKETS Rajeev Bairathi JULY - DECEMBER 2015 Executive Director, Capital Markets [email protected] ADVISORY Saurabh Mehrotra National Director, Advisory [email protected] CITIES Mumbai (Corporate Ofﬁce) Shishir Baijal Chairman & Managing Director [email protected] Ahmedabad Balbirsingh Khalsa, National Director [email protected] Bengaluru Satish BN, Executive Director-South [email protected] Chennai Kanchana Krishnan, Director [email protected] Hyderabad Vasudevan Iyer, Director [email protected] NCR Rajeev Bairathi, Executive Director-North [email protected] Pune Shantanu Mazumder, Director Knight Frank India research provides development and strategic advisory to a wide range of [email protected] clients worldwide. We regularly produce detailed and informative research reports which provide valuable insights on the real estate market. Our strength lies in analysing existing trends and predicting future trends in the real estate sector from the data collected through market surveys and interactions with real estate agents, developers, funds and other stakeholders. RECENT MARKET-LEADING RESEARCH PUBLICATIONS © Knight Frank India Pvt.Ltd THE This report is published for general information only and WEALTH REPORT not to be relied upon in anyway. Although high standards The global perspective on prime property and investment 2016 have been used in the preparation of the information analysis, views and projections presented in the report, no responsibility or liability whatsoever can be accepted by Knight Frank for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report this material does not necessarily represent the view of Knight Frank in relation to 10th Edition particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior GLOBAL CITIES RESIDENTIAL THE WEALTH THINK INIDIA. written approval of Knight Frank to the form and content 2016 REPORT INVESTMENT ADVISORY REPORT 2016 THINK RETAIL. 2016 within which it appears. REPORT 2016 Knight Frank Research Reports are available at KnightFrank.com/Research CIN No. – U74140MH1995PTC093179 AHMEDABAD | BENGALURU | CHENNAI | HYDERABAD | KOLKATA | MUMBAI | NCR | PUNE INDIA REAL ESTATE RESEARCH CONTENT 04 INDIA 12 AHMEDABAD 21 BENGALURU 41 CHENNAI 59 HYDERABAD 76 KOLKATA 88 MUMBAI 105 NCR 124 PUNE 2 3 INDIA REAL ESTATE RESEARCH RESIDENTIAL MARKET RESIDENTIAL MARKET LAUNCHES, ABSORPTION AND PRICE TRENDS 2015 ended with the FIGURE 1 HALF-YEARLY LAUNCHES AND ABSORPTION TRENDS (TOP EIGHT CITIES) lowest number of new LAUNCHES ABSORPTION launches and sales volumes across the top Hetal Bachkaniwala 180,000 Vice President - Research eight cities of India since 2010. While the sales 160,000 s volume during the year was similar to that in 2014, 140,000 new launches fell sharply, INDIA Number of unit by 22% 120,000 100,000 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 E Source: Knight Frank Research Note: The top eight cities are Mumbai, NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad • 2015 ended with the lowest was followed by NCR and Mumbai number of new launches and sales at 24% and 23%, respectively. volumes across the top eight cities • However, cities such as Pune, of India since 2010. While the sales Hyderabad and Ahmedabad have volume during the year was similar bucked the trend with a growth of to that in 2014, new launches fell 9%, 11% and 50%, respectively, sharply, by 22%. in H2 2015 compared to H2 2014. • However, H2 2015 witnessed a The sharp rise in Ahmedabad’s marginal recovery in both launches new launches could be attributed and absorption as compared to H1 to the low base in H2 2014, when 2015. The festive season seems to new launches had come to a have aided the market in gradually complete standstill on the back of recovering from one of the worst poor demand. periods in the Indian residential • Going forward, Mumbai and NCR market. will continue to witness fewer new • New launches and the sales launches in H1 2016. However, volume have recovered from their new launches in Bengaluru are low of 113,500 units and 121,050 projected to jump by more than units, respectively, in H1 2015 to 21%, as the steady sales volume 126,860 units and 140,210 units, has encouraged developers to respectively, in H2 2015. push new projects in the coming months. • Bengaluru witnessed the sharpest drop in new launches, at 26% in H2 2015, compared to the same period in the preceding year. This 4 5 INDIA REAL ESTATE RESEARCH the ticket size of `10 mn. The witnessing better traction than all leaves the mid-segment as the only CITY-WISE SPLIT OF RESIDENTIAL LAUNCHES corresponding figures for NCR the other segments since the last feasible option. and Bengaluru are 8% and 20%, two years. The primary reason • In terms of affordability, the FIGURE 2 respectively. for this trend is that homebuyers Ahmedabad and Kolkata markets HALF-YEARLY NEW LAUNCHES (TOP EIGHT CITIES) are averse to buying in peripheral • The maximum number of are leading, as the total new H1 2015 H2 2015 H1 2016 E locations despite the availability new launches in H2 2015 was launches in H2 2015 below the of affordable housing, as poor 40,000 witnessed in the mid-segment, ticket size of `2.5 mn in these access to employment hubs and with a ticket size of `2.5 – 7.5 cities stand at 45% and 33%, 35,000 underdeveloped infrastructure mn. This segment has been respectively. render them unattractive. This 30,000 25,000 FIGURE 4 TICKET-SIZE SPLIT OF LAUNCHED UNITS IN H2 2015 20,000 <`2.5 MN `2.5-5 MN `5-7.5 MN `7.5-10 MN `10--20 MN >`20 MN 15,000 Number of units 100% 10,000 90% 80% 5,000 70% 0 MUMBAI NCR BENGALURU PUNE CHENNAI HYDERABAD KOLKATA AHMEDABAD 60% 50% Source: Knight Frank Research 40% 30% CITY-WISE SPLIT OF RESIDENTIAL SALES 20% 10% FIGURE 3 0 HALF-YEARLY ABSORPTION (TOP EIGHT CITIES) MUMBAI NCR BENGALURU PUNE CHENNAI HYDERABAD KOLKATA AHMEDABAD H1 2015 H2 2015 H1 2016 E Source: Knight Frank Research 40,000 35,000 30,000 PREMIUM RESIDENTIAL MARKET LAUNCHES AND ABSORPTION TRENDS s 25,000 • The premium segment had taken 20,000 FIGURE 5 a hard hit in sales volume in 2014 15,000 HALF-YEARLY LAUNCHES AND ABSORPTION TRENDS IN and H1 2015. This led to the Number of unit PREMIUM MARKETS (TOP EIGHT CITIES) developer community taking a 10,000 cautious stand before launching LAUNCHES ABSORPTION 5,000 new projects in this segment. New 5,000 launches in H2 2015 fell drastically, 0 by 33% compared to the same MUMBAI NCR BENGALURU PUNE CHENNAI HYDERABAD KOLKATA AHMEDABAD period in the preceding year. Source: Knight Frank Research 4,000 • In contrast to the sharp fall in new launches, the sales volume • The sales volume in H2 2015 in 2015. The unprecedented floods the sales volume in Bengaluru is remained steady in H2 2015. most of the cities has shown a in the city during the second half estimated to grow by 28% in H1 3,000 The steady growth in cities positive trend, with NCR and of the year impacted homebuyer 2016, it is projected to grow by such as Hyderabad, Kolkata Number of units Kolkata growing at the fastest sentiments adversely, thereby 42% in Kolkata during the same and Ahmedabad has helped in pace. While NCR witnessed a 15% resulting in lower sales. period. 2,000 maintaining the sales momentum jump in sales, Kolkata saw it grow in the premium segment. • Going forward, other than • Mumbai continues to remain the by 29%. Bengaluru and Kolkata, the cities most unaffordable market in India, 0 • Chennai recorded the sharpest fall will continue to observe a tepid with more than 26% of the new H1 2014 H2 2014 H1 2015 H2 2015 in the sales volume, at 15% in H2 growth in the sales volume. While launches in H2 2015 being above Source: Knight Frank Research 6 7 INDIA REAL ESTATE RESEARCH UNSOLD INVENTORY LEVELS (TOP EIGHT CITIES) OFFICE MARKET FIGURE 6 RELATIVE HEALTH OF THE RESIDENTIAL MARKETS (TOP EIGHT CITIES) OFFICE MARKET STOCK, NEW COMPLETIONS, ABSORPTION AND VACANCY TRENDS (TOP SIX CITIES) 20 Based on the sales • Absorption surpassed new momentum of the FIGURE 1 completions for the second NEW COMPLETIONS, ABSORPTION AND VACANCY LEVEL (TOP SIX CITIES) preceding eight quarters, HYDERABAD straight year across the top six NEW COMPLETIONS ABSORPTION VACANCY (RHS) it will take around 11 s 15 cities of India, pushing vacancy MUMBAI levels to an eight-year low. quarters to exhaust the NCR Vacancy levels reached 15.6% in 25 20% H2 2015, significantly lower from current unsold inventory CHENNAI the peak of 21% in 2012. 20 AHMEDABAD available in the top eight 10 18% • While 41.1 mn sq ft of space was of inventory in quarter PUNE cities of India absorbed in 2015, only 34.5 mn . 15 Age BEGALURU KOLKATA sq ft of new supply came online. 16% The trend is similar to what was mn sq.ft 10 5 observed in 2014, when 38.3 510 15 20 mn sq ft of space was absorbed 14% against a supply of 34.9 mn sq ft.

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