MarketScope Hyderabad Office Market

A quarterly review of market activity by Trammell Crow Meghraj Year End 2005

Cyberabad continues to dominate as a destination Market Makers

Prime office locations in the city are Raj Bhavan Road, Begumpet, Banjara Hills and Jubilee Hills whereas IT and ITES/BPOs are concentrated in the Hitech city (Cyberabad) area in the western part of the city. ƒ Integro leased 50,000 sq. ft. of stand alone building at White fields, Cyberabad extends over 51.70 square kilometres covering 17 villages. The Kondapur, Cyberabad. campuses of software giants such as Infosys, Microsoft, Wipro and Dell are also located in Cyberabad area. The robust infrastructure development and government ƒ 24/7 leased 80,000 sq. ft. at Fortune initiatives have attracted many IT & ITES companies. 9, Raj Bhavan Road.

The Hi-Tech city is the hub of this development and the last quarter saw several large ƒ Birla Soft leased 61,00 sq. ft. of sized transactions. stand alone building at Hitech City, Cyberabad.

SUPPLY VACANCY ƒ TCS leased 110,000 sq. ft. at E-Park, Suburbs dominate Still low Hitech city, Cyberabad.

New supply in CBD is less as The vacancy rate in the city has ƒ Disha Technologies leased 25,000 compared to the Hi-tech city area. come down with no major new sq. ft. on Road No.1, Banjara Hills. developments. Several IT parks are in the planning ƒ Iffco Tokyo General insurance stage and it is expected that by Q2 With steady absorption by IT and leased 2,500 sq. ft. at SD Road, 2007, there will be a supply of ITES companies, the vacancy rate Secunderabad. approximately 1.8 million sq. ft. of IT in the Cyberabad remained low. space. ƒ Mars Telecom leased 15,000 sq. ft. at White House, Begumpet.

ƒ Dr. Reddy’s leased 17,000 sq. ft. at DEMAND CAPITAL AND RENTAL VALUES White House, Begumpet. Continues to be up Stable in the suburbs ƒ Princeton Informatics leased 2,500

Demand for IT parks is mostly in Hi- Capital values in prime areas within the sq. ft. of stand alone building at Hi- tech city and Gachibowli area. city are quoted in the range of USD tech city, Madhapur. 60.41- 68.77 per sq. ft. ƒ HTMT leased 17,000 sq. ft. at Vista With the buoyant trend in the IT/ITES industry and with the expansion plans Commercial properties within the city Towers, Rajbhavan Road. of several IT companies, this demand witnessed slight increase in the rentals is expected to continue. due to limited fresh supply. The rental rates in the Cyberabad remained Demand for office space in the CBD stable due to competing developments. areas of the city are generated from Banking, Finance, Insurance and Base rentals in prime office areas like Telecom sectors. Somajiguda, Banjara Hill, Begumpet are in the range USD 6.97- 7.62 per Lack of larger and Grade A sq. ft. per annum. Base rentals in the developments with ample parking is secondary areas such as Himayath one of the reasons for lesser activity in Nagar, Ameerpet are in the range of the city as compared to the peripheral USD 4.65- 5.30 per sq. ft. per annum. areas.

Year End 2005 MarketScope Hyderabad Office Market

Tot al Vacancy Net Absorption thousand sq. ft. Net absorption Vacancy and Rental Rates Average Asking Rent s Four quarter average 800 14 . 0 % $7.4 700 12 . 0 % $7.4 600 10 . 0 % 500 $7.3 400 8.0% $7.3 300 6.0% $7.2 200 4.0% 100 $7.2 0 2.0% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 0.0% $7.1 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05

Hyderabad Statistical Summary

Net Net Average Total Under New Total Absorption Absorption Asking Rent Inventory Construction Deliveries Vacancy 4th Quarter 2005 USD Submarket CBD -1 Himayathnagar, 200,000 55,000 70,000 12% 10,000 - $5.30 Abids, Basheerabagh

CBD-2 SD Road, SP Road, 410,000 170,000 86,000 10% 12,000 - $7.57 Secunderabad CBD-3 Begumpet, Rajbhavan Road, Banjara 1,042,000 417,000 510,000 14% 14,000 - $7.62 Hills, Jubilee Hills Cyberabad Madhapur, 850,000 75,000 700,000 5% 250,000 1,200,000 $9.11 Gachibowli, Kondapur

Total 2,502,000 717,000 1,366,000 4% 286,000 1,200,000 $7.34

This report includes single and multi-tenant, class A and B office properties, excluding medical office facilities, 100% owner occupied and those properties owned and occupied by govt. agency. The numbers are indicative and gathered from primary and secondary sources.

About Trammell Crow Meghraj

Trammell Crow Meghraj is an equity partnership between TRAMMELL CROW COMPANY, one of the largest diversified commercial real estate services companies in the world with MEGHRAJ GROUP, a Trammel Crow Meghraj Property Consultants Private Limited private financial services company (UK), with diverse business interests and Sundown Developments (Formerly Chesterton Meghraj Property Consultants Pvt. Ltd) Limited, a real estate investment company from the UK. Established in 1995 as Chesterton Meghraj, Office No. 103, Imperial Plaza, the company provides full service property consultancy specializing in research, consultancy, agency, 6-3-883/A/1 Somajiguda, project management and property/facilities management and employs over 475 people across seven Hyderabad - 500082 offices throughout India namely Mumbai, Delhi, Chennai, Bangalore, Hyderabad, Kolkata and Pune. Tel: +91 40 55837070 Fax: +91 40 55837873

e-mail: [email protected] Website: www.trammellcrowmeghraj.com

Copyright © 2005 Trammell Crow Meghraj. All rights reserved. No part of this work may be reproduced or distributed to third parties without written permission of the copyright owner. The information contained in this report was gathered by Trammell Crow Meghraj from property representatives and other sources believed to be reliable. Trammell Crow Meghraj, however, makes no representation concerning the accuracy or completeness of such information and expressly disclaims any responsibility for any inaccuracy contained herein.