M A R K E T B E AT MUMBAI Residential Q3 2020 Pent-up developer projects push the total quarterly units launched in Q3 Mumbai witnessed a recovery in quarterly new residential launches in Q3 with the government relaxing lockdown restrictions, regulatory approvals coming through and developers commencing construction activities. A total of 4,791 units were launched during the quarter, which is nearly four times higher on a q-o-q basis. Q-O-Q GROWTH IN NEW However on a y-o-y basis, launches were down by 64%, indicating that a more sustained recovery is still a few quarters away. Extended Eastern Suburbs, Eastern 4x LAUNCHES IN Q3 2020 Suburbs and Thane submarkets accounted for nearly 90% of the total launches with Runwal Group, Dosti Realty, Lodha Group and Dotom Realty being the major developers who announced new projects in the quarter. However, most of these projects were largely in the form of new phases/towers launched in existing SHARE OF MID SEGMENT IN housing complexes, which were in high demand and had limited availability. A number of projects, which were held back in the previous quarter due to delayed 65% Q3 2020 LAUNCHES approvals were launched in Q3, thereby improving the aggregate launch figures. Despite the pickup in launch activity, most developers across submarkets continued to focus on clearing their unsold inventories. While construction activity gained some pace post lockdown, labour shortages at project sites, supply chain disruptions and issues surrounding availability of construction material remained key challenges. This is likely to delay possession of new homes by nearly 3-6 SHARE OF EXTENDED SUBURBS months. However, we expect the upcoming festive season to give a big boost to new launches in Q4 of 2020. 42% IN LAUNCHES (Q3 2020) Going ahead, demand is expected to pick up some steam as developers make concerted efforts to attract homebuyers through various incentives. The low home loan rates and attractive payment schemes are also playing a big role in bringing buyers back to the market. Mid-segment continues to account for a major share of new launches With a 65% share, the mid segment led the new residential launches in Q3 followed by the affordable segment, which accounted for 34%. All residential segments MARKET INDICATORS OVERALL Q3 2020 witnessed higher new launches during the quarter with the affordable segment witnessing the maximum q-o-q growth followed by the mid-segment. New launches in the affordable segment projects were concentrated in the extended eastern suburbs, whereas mid segment projects were largely in Thane and Eastern Suburbs. Only one project comprising 51 units was launched in the high-end segment in western suburbs during the quarter. We expect developers to continue preferring 12-Months Y-O-Y mid-end segment launches in the western and eastern suburbs as well as Thane submarkets in the near future, whereas affordable sector launches are likely to Change Forecast remain concentrated in extended suburbs and Navi Mumbai. Lockdown relaxations drove improved sales activity during the quarter, as potential home buyers started going for site visits for physical inspections in order to get New Launches an overall in-person home experience and arrive at a home purchase decision. The mid-segment ready to move-in homes in Western Suburbs, Eastern Suburbs and Thane submarkets continued to attract home buyers during the quarter. The government of Maharashtra has reduced the stamp duty on property registrations from 5% to 2% upto 31st December 2020 and to 3% between 1st January 2021 to 31st March 2021 and this is expected to improve sales momentum over the next Units Sold few quarters. Capital values across sub-markets continue to witness downward pressure Average Capital Rental values in the premium residential segment continued to witness a 5-10% correction in prime locations like Bandra West, Worli, Lower Parel, Prabhadevi and Values (INR/sf) in South Mumbai localities during the quarter. However, rental values in the mid and affordable segments remained range bound. Like rental values, average quoted capital values across residential locations and price segments have seen a 3-5% correction, though the base price range continues to remain stable. We expect average capital values for ongoing projects primarily in the luxury and high-end segments to witness similar reductions in the medium term. Moreover, developers across submarkets are providing a range of price incentives such as zero stamp duty, cash discounts, zero floor rise, no PLC charges, zero maintenance cost, 10:90 subvention scheme etc. to attract homebuyers in the upcoming festive season. SIGNIFICANT PROJECT LAUNCHED IN Q3 2020 BUILDING LOCATION DEVELOPER UNITS LAUNCHED RATE**(INR/SF) Dosti West County – Phase 4 Thane Dosti Realty 1,022 14,250 The Runwal Garden – Phase 3 Dombivali Runwal Group 935 9,000 Lodha Codename Golden Sunrise Dombivali Lodha Group 909 9,300 M A R K E T B E AT MUMBAI Residential Q3 2020 RENTAL VALUES AS OF Q3 2020* CAPITAL VALUES AS OF Q3 2020* AVERAGE AVERAGE QUOTED QoQ CHANGE YoY CHANGE SHORT TERM QoQ CHANGE YoY CHANGE SHORT TERM SUBMARKET QUOTED RENT SUBMARKET CAPITAL VALUES (%) (%) OUTLOOK (%) (%) OUTLOOK (INR/MONTH) (INR/SF) High-end segment High-end segment South 60,000 – 570,000 -5.0% -18.6% South 40,000 – 78,000 -2.5% -2.4% South Central 60,000 – 460,000 -6.1% -16.4% South Central 22,000 – 68,500 -2.1% -3.2% Eastern Suburbs 25,000 – 350,000 -2.8% -12.5% Eastern Suburbs 12,000 – 37,500 -1.3% 3.8% Western Suburbs – Prime 50,000 – 750,000 -6.3% -6.3% Western Suburbs – Prime 24,000 – 60,000 -3.2% -3.4% Mid segment Mid segment Eastern Suburbs 18,000 – 70,000 0% 0% Eastern Suburbs 10,000 – 23,000 0.0% -6.3% Western Suburbs 20,000 – 80,000 0% 0% Western Suburbs 9,000 – 25,000 0.0% -5.8% Thane 14,000 – 28,000 0% 0% Thane 7,000 – 13,000 0.0% -8.6% Navi Mumbai 10,000 – 50,000 0% 0% Navi Mumbai 5,000 – 14,000 0.0% -10.0% SIGNIFICANT PROJECT COMPLETED IN Q3 2020 BUILDING LOCATION DEVELOPER NO. OF UNITS UNIT SIZE (SF) Regency Anantam Dombivali Regency Group 1,288 527 - 778 Rohan Sharma Sunteck City Avenue I Goregaon East Sunteck Realty 465 773 - 965 Director, Research Services +91 124 4695555 /[email protected] Ajmera Treon Wadala Ajmera Group 252 919 – 2,172 Kapil Kanala SIGNIFICANT PROJECTS UNDER CONSTRUCTION – TO BE COMPLETED IN NEXT 12 MONTHS Senior Associate Director, Research Services BUILDING LOCATION DEVELOPER UNITS LAUNCHED EXPECTED COMPLETION +91 40 40405555 /[email protected] Sunteck City Avenue II Goregaon West Sunteck Realty 240 Q4 2020 cushmanwakefield.com Ajmera Treon Wadala Ajmera Group 380 Q4 2020 Kalpataru Radiance Goregaon West Kalpataru Group 320 Q1 2021 Data collated from primary and secondary resources. Estimations are subject to change A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION * Rental and capital values have been depicted only for key submarkets and are based on saleable area. Cushman & Wakefield (NYSE: CWK) is a leading global real estate ** Quoted capital value of new launches is on carpet area based on agreement values which includes, Base Rate, Car Parking Charges, Internal Development Charges, etc. services firm that delivers exceptional value for real estate occupiers The above values for high-end segment are for units typically of 1,200-3,000 sf and owners. Cushman & Wakefield is among the largest real estate The above values for mid segment are for units typically of 800-1,400 sf services firms with approximately 53,000 employees in 400 offices and Affordable housing has been defined as units with a carpet area of 60 sq.mt in metros / 90 sq.mt in non-metros and value up to INR 45 lakhs 60 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit KEY TO SUBMARKETS Mid Segment www.cushmanwakefield.com or follow @CushWake on Twitter. High-end Segment Eastern Suburbs: Sion, Wadala, Kurla, Chembur, Ghatkopar, Vikhroli, Powai, Chandivali, South: Colaba, Cuffe Parade, Nariman Point, Churchgate, Altamount Road, Carmichael Kanjurmarg, Bhandup, Mulund ©2020 Cushman & Wakefield. All rights reserved. The information contained within Road, Malabar Hill, Napeansea Road, Breach Candy, Pedder Road, Tardeo Western Suburbs: Andheri, Jogeshwari, Goregaon, JVLR, Malad, Kandivali, Borivali, Dahisar this report is gathered from multiple sources believed to be reliable. The information South Central: Worli, Prabhadevi, Lower Parel / Parel, Dadar, Matunga Thane: Thane, Ghodbunder Road may contain errors or omissions and is presented without any warranty or Eastern Suburbs: Wadala, Sion, Kurla, Chembur, Ghatkopar, Vikhroli, Powai, Chandivali Navi Mumbai: Airoli, Ghansoli, Rabale, Koparkhairane, Vashi, Turbhe, Sanpada, Nerul, Belapur, representations as to its accuracy. Western Suburbs - Prime: Bandra, Khar, Santacruz, Juhu Kharghar, Panvel.