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INSITE REPORT

January - March 2018

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Methodology FOREW0RD The Insite Report by 99acres.com captures the quarterly capital trends and the annual rental analysis of residential apartments in key The first quarter of 2018 countersigned a revival in market real estate markets – Delhi sentiment and enquiries, amid a modest impact on overall sales NCR, Mumbai Metropolitan volume across metros. Supply in the ready residential segment Region (MMR), Bangalore, outstripped demand, particularly in case of luxury and ultra- Pune, Chennai, Hyderabad, luxury units. The under-construction market, too, narrated a Kolkata and Ahmedabad. In similar tale putting a downward pressure on average weighted order to assess the prevailing capital ‘asks’. With new launches down by around 40 percent, sentiment, the report delves YoY, any improvement in property prices is now dependent on the deep into demand and absorption of excess housing stock, which ranges between 15 and supply of properties across 48 months for different metros. Additionally, the increasing cost varied budget segments and of compliance resulting from stringent rules and adherences may occupancy stages. While push the real estate prices up, especially for new launches. Resale demand is a function of segment, however, may not witness any substantial change in ‘ask’ queries received, supply is rates due to the inherent competition characteristic to the segment. based on property listings posted on 99acres.com in On a micro-level, Hyderabad, Pune and Bangalore exhibited Jan-Mar 2018. resilience and showed signs of revival more prominently than other metros. Low inventory levels and fast-paced commercial expansion serve as demand and sales catalysts for these markets. Mumbai and Delhi NCR maintained status quo w.r.t. prices and sales velocity despite multiple infrastructural overhauls ranging Impact of Union Budget 06 North, West and Central 10 from metro rail project to new airports and redevelopment drives. Contents Bangalore Any noteworthy improvement in the realty ambience of these Impact of Union Budget 2018-19 on the Key highlights - North, West & Central cities now relies on an effective RERA implementation. Plausibly, Indian real estate market Bangalore’s capital and rental market RERA-compliant projects might command a premium over others because of the additional costs borne by the developers in the process. Marketers could employ buyers’ trust while Foreword 03 Market Movers 07 Demand-Supply Analysis 11 deciding the price and sales strategy for RERA-approved projects. 99acres’ perspective on current market News that impacted Bangalore’s realty Demand-supply trends of residential The raft of reforms and legislations passed in the last two years – sentiment market in Jan-Mar 2018 apartments in Jan-Mar 2018 Demonetisation, RERA and GST – have now started coxswaining the market into a consolidation mode. This could mean fewer National Outlook 04 Bangalore at a Glance 08 Annexures 12 new project launches across budget segments. The increasing preference for affordable homes, however, would drive realty Snapshot of real estate ambience across Capital price movement in key dynamics in the long haul. Apart from a healthy end-user demand, top 8 metro cities micro-markets of Bangalore the Government’s thrust through incentives such as granting infrastructure status in Union Budget 2017-18 and the setting up of Market Indicators East and South Bangalore an affordable housing fund in this year’s Budget announcement will 05 09 ensure a rising appetite and supply for such projects across country. Changes in capital rates and inventory Key highlights - East & South status QoQ; and rental values YoY Bangalore’s capital and rental market 99acres 99acres 4 INSITE : BANGALORE India’s No.1 Property Portal India’s No.1 Property Portal INSITE : BANGALORE 5

National Outlook Market Indicators

HOME BUYING SENTIMENT Capital Values Rental Values Supply With the industry getting accustomed to RERA and GST, market was seen regaining normalcy in the first quarter of 2018. Enquiries from fence-sitters resurfaced across metros with a reinstated interest in the under-construction category. Growing transparency and improved processes are expected to fuel BANGALORE this trend in the future.

DELHI NCR

PROPERTY PRICES MUMBAI Despite burgeoning enquires, piling inventory restricted price appreciation, particularly in Delhi NCR. Infrastructural overhauls, a few new launches and incremental ‘asks’ in the resale market, fuelled price growth in some micro- markets of Mumbai, Pune and Bangalore. Affordable pockets will monopolise CHENNAI end-user demand, keeping capital growth in check in the forthcoming quarters. PUNE

HYDERABAD RENTAL LANDSCAPE The obtuseness in the buying market has unabatedly benefitted the rental landscape over multiple quarters. Lease values burgeoned across metros, YoY. Affordable pockets and areas in proximity to transport corridors ruled the KOLKATA roost with maximum traction, pushing rental ‘asks’ further. Speculations of an improvement in the rental values in the ensuing quarters are rife. AHMEDABAD

* Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com

SUPPLY Stringent laws under RERA circumscribed new supply; however, progress on project registrations spiked under-construction inventory across cities. The resale market swarmed with properties across budget segments. RERA-approved supply in the affordable segment remained low this quarter. New launches are anticipated to resurface with increased compliance in the months to come. 99acres 99acres 6 INSITE : BANGALORE India’s No.1 Property Portal India’s No.1 Property Portal INSITE : BANGALORE 7

IN F CUS Market Movers BUDGET 2018-19

The real estate sector expected Union Budget 2018-19 to address concerns pertaining to concessional GST Private equity deals swarm residential and retail markets for housing sector, regularisation of stamp duty charges, and changes in income tax slabs. While these were left The city witnessed multiple private equity deal closures in the residential, unanswered, a slew of announcements pertaining to ‘Housing for All’ counterbalanced the lack of attention to real estate expectations. commercial and retail segments. An influx of institutional finance is expected to improve real estate sentiment. Blackstone is amongst the biggest fund-raisers in the city.

INFRASTRUCTURE UPGRADES

Focus on infrastructure development is anticipated to create new real estate pockets and boost housing Bangalore Development Authority delays Master Plan 2031 demand with BDA has further delayed the release of the city’s Master Plan 2031 after the initial Funding worth Rs 5.97 lakh crore to infrastructure upgradation rd A capex of Rs 5.35 lakh crore to Bharatmala project Phase I for strengthening road network January 23 deadline. The final report of the Revised Master Plan (RMP), which was National highway budgetary allocation of Rs 71,000 crore to be released by May-June 2018, will now face a delay of around six months, leaving the city’s development dependent on the timeworn RMP 2015.

AFFORDABLE HOUSING FUND Authority privatises redevelopment of commercial complexes

Increased focus on the affordable segment is evident from the establishment of a dedicated affordable housing BDA has partnered with private developers to rebuild seven commercial complexes fund worth Rs 60,000 crore under the National Housing Bank (NHB) located in Indira Nagar, , HSR Layout, Sadashiv Nagar, Vijay Nagar, A target of 37 lakh homes in urban areas and 51 lakh homes in rural India in 2018-19 RT Nagar and . Access to cheaper and alternative funds to boost low-income housing Reduction of GST to an effective eight percent from earlier 12 percent on homes purchased and constructed under Credit linked subsidy scheme (CLSS) State ends land acquisition woes at Kempegowda Layout The 10-km long Peripheral Ring Road-II between Magadi Road and Mysore Road cleared its final hurdle with BDA managing to acquire the required 321 acres of land DISINVESTMENT from farmers. Post this breakthrough, work on development of Kempegowda Layout

A disinvestment target of Rs 80,000 crore for FY 2018-19 will open new pockets for private developers is expected to start soon. This will offer aid to private developers for buying landlocked parcels The move is expected to address the housing shortfall that India currently faces Karnataka RERA approves 1,500 realty projects Out of the 2,100 project applications received, Karnataka RERA approved more than 1,500 real estate projects, with majority of them located in Bangalore. Additionally, approximately 1000 agents/brokers, too, have been registered under the Act.

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SOUTH AND EAST BANGALORE Bangalore at a Glance Undeterred by the piling residential stock in select pockets, the East and South zones managed to stand resilient to the uncertain market forces elicited by snail-paced project registrations process under RERA. Robust commercial expansion kept stakes high for residential investments, resulting in the zones to maintain status quo in the current quarter.

Price movement in key micro-markets Key Highlights

Locality Average ‘Ask’ Rate QoQ YoY Residential real estate activity in East and South zones (BBMP) elections. Residential ‘asks’ in areas such as (Per sq ft) Change Change remained concentrated towards the IT hubs and Singasandra, Begur, Harlur and went transport corridors. Kanakapura Road and north by an average of one to four percent, QoQ. Electronic City 3,300 - 4,450 1% 7% in the South ruled the roost with growing interest from buyers and developers. While both enquiries and South Bangalore commanded a lion’s share of demand Whitefield 4,500 - 5,500 2% 5% sales improved against the previous quarter, there for budget homes owing to robust progress towards affordable housing in locales such as Doddathoguru, 3,600 - 4,250 2% 1% was no notable price appreciation. Kodichikkanahalli and Gottigere. Poor conversion rate, JP Nagar 3,700 - 6,100 -3% -4% East Bangalore clocked a marginal upward price however, prevented prices from appreciating. revision due to ambitious ‘asks’ in the secondary Hennur 4,600 - 6,000 -1% -3% market triggered by burgeoning enquiries. The rental market, like previous quarters, remained Well-developed locales such as CV Raman Nagar, unabated and posted a two percent growth between Silk Board 3,800 - 4,800 1% 3% Mahadevpura, Banaswadi and Ramamurthy Nagar Jan-Mar 2017 and Jan-Mar 2018. Locations offering witnessed average prices going north by two to four affordable rental inventory such as Bommasandra 4,000 - 5,100 1% 3% percent, QoQ. and Subramanyapura in the South and Ramamurthy Nagar in the East topped the charts with eight to nine 3,900 - 4,400 1% 1% New project launches by reputed developers percent hike in rental values, YoY. 5,000 - 6,500 1% 6% continued to keep the ante up in the IT hub of Whitefield, where prices appreciated by two percent The recently started suburban train services between Raja Rajeshwari Nagar 3,800 - 4,200 -1% 3% in the current quarter. Baiyappanahalli and tech-hubs Whitefield, and Electronic City are expected to thrust ‘asks’ * Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter Locales along Hosur Road, which saw dwindling north in the ensuing quarters. Locales such as Hosur sales in the previous quarter, seemed to regain and Banaswadi, which have reported minimal rental foot post Bruhat Bengaluru Mahanagara Palike appreciation in the last one year, are also expected to benefit from the improving connectivity. 99ACRES OUTLOOK

The period post the implementation of Real Estate Favoured areas witnessed new project announcements Top Performers - Capital Market Top Performers - Rental Market (Regulation and Development) Act (RERA) and Goods from several Grade A developers, all enlisted with RERA. and Services Tax (GST) has got financial institutions and The city witnessed an addition of more than 20 new 2% 2% 2% 8% developers go gung-ho for the future of real estate. This residential projects in the first quarter of 2018 alone. This 2 8 inherent optimism reflected in Bangalore realty’s quarter- is a complete contrast to the meagre numbers reported in on-quarter performance with regard to residential price 2017, suggesting a brighter story for Bangalore’s real estate 1% 6% 1 6 points and buyer sentiment. The city closely followed in the ensuing quarters. Delhi NCR and Mumbai in attracting investments in the -2% residential space due to relatively lower risk, presence of The rental market remained the prime gainer from the 0 4 multiple events of the past, with East and South zones 3% 3% 3% % Change branded developers and robust housing demand backed by % Change commercial expansion. reigning the demand charts. A low Grade-A office vacancy -1 2 rate of 2.9 percent held the baton to the burgeoning rental New launches, too, resurfaced, as developers exhausted their market across prime locations such as Whitefield in the East

promotional plans towards offloading the existing stock. and Electronic City in the South. -2 0 Bellandur HSR Layout Whitefield Electronic City Marathahalli Koramangala Electronic City JP Nagar Whitefield

Locality Locality

* %change represents quarterly capital movement * %change represents yearly rental movement 99acres 99acres 10 INSITE : BANGALORE India’s No.1 Property Portal India’s No.1 Property Portal INSITE : BANGALORE 11

NORTH, WEST AND CENTRAL BANGALORE DEMAND-SUPPLY ANALYSIS

The capital graph across North, West and Central Bangalore tread a steady growth path. While North benefitted from The Jan-Mar 2018 quarter started exhibiting the long-envisioned impact of transparent governance in real estate. After an elongated the gradually expanding commercial IT base coupled with transport corridors, the western quadrant remained popular lull, demand for under-construction units resurfaced as developers were made to comply with strict regulations under RERA. The amongst budget homebuyers. Demand-supply mismatch in central areas was the prime factor triggering growth in average stringent approval process and rejection of more than 45 projects in the last three months firmed buyer’s confidence in the Act. weighted capital prices. Key Trends Key Highlights Bangalore continued to reel under the pressure of Transport corridors continued to be the focal point Hormavu and Nagavara, too, recorded a hike of two unsold inventory standing at around 42,000 units. of real estate development and transactions across percent, each, in average weighted capital ‘asks’, QoQ. Despite this, developers made a comeback with RERA- the zones. While Main Road and Bellary The metro proposal along the Outer Ring Road (ORR) approved projects, using the status as a bait for long- Road took the lead in North Bangalore, Tumkuru Road led to ambitious ‘asks’ in the resale market. time fence-sitters. With more than 20 new project Distribution of Residential Apartments emerged as the hotspot in the West. Mysore Road, launches in the city between January and March 2018, too, garnered buyer attention owing to the metro and While the upmarket RMV Extension witnessed a hike the overall supply of residential apartments went up UC RTM Demand UC RTM Supply road expansion projects. of four percent in property rates last quarter, the marginally in the quarter. capital market countered a marginal price correction Availability of ready stock helped Hegde Nagar, in Jan-Mar 2018. Poor response from buyers due to A majority of the newly launched projects belonged 60 59% 57% Thanisandra and report positive price inflated prices led owners to revise ‘ask’ rates. to the mid-income budget category (Rs 40-60 lakh), the second most preferred in the city. This helped the movement up to four percent in the current quarter. 50 Alternate road from the Kempegowda International The rental landscape remained positive with a three city inch closer to a demand-supply equilibrium in the 40% 40% Airport exit gate eased commuting to these localities percent hike in average rentals, YoY. Affordability segment. The supply now remains short of demand by 40 along Thanisandra Main Road, uplifting the livability continued to be the driving force for majority of the a mere two percent, as opposed to five percent in the index here. tenant community, impacting rental rates in locales previous quarter. 30 such as , Yelahanka, Hormavu Agara, RT Nagar Areas along the Bellary Road, such as RT Nagar, and Vidyaranyapura in the North. Towards the West, Demand for affordable inventory (within Rs 40 lakh) 20 and Hebbal, witnessed average ruled the roost with lease rates as low as continued to outstrip supply by 16 percent. Poor weighted capital prices firming by two to four Rs 12,000 per month for a 2BHK apartment. status of approvals resulting in multiple projects 10 percent, QoQ. In addition to their strategic location getting rejected under RERA remained key deterrents A fair share of the tenant community also held the to the growth in supply of budget homes. 0 near the expanding IT corridor, the housing pockets Jan-Mar Oct-Dec are also gaining popularity owing to the proposed penchant to stay closer to the city centre. This pushed 2018 2017 As projected in the previous quarter, a fast-paced Special Development Zone and the planned metro rental values in Cox Town and by seven to ten absorption of homes in the premium category led the connectivity under the Revised Master Plan 2031. percent, YoY. Graph depicts the availability of residential apartments wrt luxury and ultra-luxury budget segments (beyond Rs 1 other property types, QoQ, along with the distribution of crore) to reach a state of demand-supply equilibrium under-construction and ready stock in Jan-Mar 2018.

Top Performers - Capital Market Top Performers - Rental Market

Demand Supply 3% 8% 3 8 50 6% 6 2% 2% 2 40 4% 4 3% 30 -18% -2% -2% 17% 17% 18% 1% -16% -5% 1 2 -16%

20 0% % Change % Change -3% 0% 0 1% -1% 0 3% 10 1% 2% -2

0 -1 -4 Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Jan-Mar Oct-Dec Jan-Mar Thanisandra Hebbal Hormavu Yelahanka Hennur Yelahanka Hennur Raja Rajesh- Thanisandra Hebbal 2018 2017 2017 2018 2017 2017 2018 2017 2017 2018 2017 2017 2018 2017 2017 wari Nagar Within Rs 40 Lakh Rs 40-60 Lakh Rs 60 Lakh - Rs 1 Crore Rs 1-2 Crore Rs 2 Crore and Above Locality Locality

* %change represents quarterly capital movement * %change represents yearly rental movement Graph depicts the fluctuation in supply wrt demand for residential properties in various budget categories 99acres 99acres 12 INSITE : BANGALORE India’s No.1 Property Portal India’s No.1 Property Portal INSITE : BANGALORE 13

Annexures Annexures

CAPITAL VALUES CAPITAL VALUES RENTAL VALUES RENTAL VALUES Locality Jan-Mar 2018 Locality Jan-Mar 2018 Locality Jan-Mar 2018 Locality Jan-Mar 2018

Akshaya Nagar 4200 JP Nagar 5500 Akshaya Nagar 13 Kalyan Nagar 17 5200 3925 Arekere 17 15 Babusapalaya 3400 Kalyan Nagar 4810 16 Kasavanhalli 18 Banashankari 6100 Kengeri 3710 Banaswadi 16 Kengeri 12 Banaswadi 5170 Kodichikkanahalli 3950 Basavangudi 22 Kodihalli 17 Bannerghatta 5700 Koramangala 9360 Begur 14 Koramangala 26 Basavangudi 9800 KR Puram 4340 Bellandur 19 KR Puram 14 Basaveshwara Nagar 6600 5500 17 Kumaraswami Layout 13 Begur 4050 Mahadevpura 5600 Bommasandra 12 Kundalahalli 18 Bellandur 6230 Malleshwaram 11700 18 Mahadevpura 18 Benson Town 9800 Marathahalli 5800 BTM Layout 17 Malleshwaram 25 Bommasandra 2900 4400 Cooke Town 23 Marathahalli 21 Brookefield 5850 Nagavara 4900 Cox Town 23 Mathikere 14 BTM Layout 5810 4950 CV Raman Nagar 18 Murugeshpalya 19 Budigere 5020 Panathur 5700 Doddathoguru 15 Nagarbhavi 14 Cooke Town 9100 Raja Rajeshwari Nagar 4070 24 Nagavara 15 Cox Town 7250 Rajaji Nagar 12200 Electronic City 15 Panathur 20 CV Raman Nagar 5450 Ramamurthy Nagar 4200 Frazer Town 23 Raja Rajeshwari Nagar 12 Doddathoguru 3675 11060 Gottigere 12 Rajaji Nagar 18 Electronic City 4400 RMV Extension 7100 HBR Layout 18 Ramamurthy Nagar 14 Frazer Town 8900 RT Nagar 5300 Hebbal 16 Richmond Town 28 Gottigere 3800 Sahakara Nagar 5820 Hennur 17 RT Nagar 15 Harlur 5850 Sanjay Nagar 7300 17 Sahakara Nagar 16 HBR Layout 4900 Silk Board 4500 Hormavu 16 Sarjapur 13 Hebbal 6425 Singasandra 4000 HSR Layout 21 Singasandra 14 Hegde Nagar 5700 Subramanyapura 5200 15 Subramanyapura 13 Hennur 5350 TC Palaya 5200 Indira Nagar 25 TC Palaya 13 Hoodi 5750 Thanisandra 5600 ITPL 17 Thanisandra 16 Hormavu 4400 Ulsoor 10400 Jakkur 13 Ulsoor 29 HSR Layout 5400 Uttarahalli 4200 Jalahalli 16 Uttarahalli 12 Hulimavu 5025 4300 Jayanagar 21 Vidyaranyapura 12 Indira Nagar 9700 Vidyaranyapura 4450 JP Nagar 17 Vijayanagar 17 Jakkur 5240 Whitefield 5500 Kadubeesanahalli 19 Whitefield 18 Jalahalli 5600 Yelahanka 5110 Kadugodi 14 Yelahanka 14 Jayanagar 9850 Yeshwanthpur 7300 16 Yeshwanthpur 19

*All prices are per sq ft rates *Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter *All prices are per sq ft rates *Average ‘ask’ rates have been calculated as per listings posted on 99acres.com in the current quarter FIND BEST OTIONS TO BUY, SELL, RENT PROPERTY

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