India- Hyderabad- Residential Q4 2019
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M A R K E T B E AT HYDERABAD Residential Q4 2019 New launches on the rise, more projects underway in 2020 A total of 4,340 new units were launched in Q4, a 2X rise on a quarterly basis. This is in line with our predictions during Q2-Q3 when several large- scale projects were awaiting approvals. Established catchments such as Kondapur, Hafeezpet, Nallagandla and fast-growing locations such as 14,464 NEW UNIT LAUNCHES (2019) Gopanpally – Tellapur, Bachupally are have witnessed new launches during the quarter. On an annual basis, the number of launches were higher by 30% y-o-y, suggesting a positive momentum in the residential market. Western quadrant accounted for 3/4th of the total launches during the year with majority of the projects launched within close proximity to IT and financial districts. Locations with major new launches in other parts of the SHARE OF MID SEGMENT IN NEW city include Uppal, Bolarum, Patancheru and Kismatpur etc. Mid segment projects accounted for nearly 90% of the units launched during the quarter 46% LAUNCHES (2019) in addition to a a luxury project in Kondapur. This sub-market continues to attract buyers in the premium segment on the back of its excellent physical and social infrastructure and proximity to IT and financial districts. Growth in new launches is likely to continue as developers are gearing up to launch nearly 20,000 units over the next 12-18 months. Several high-end projects with basic selling price exceeding INR 6000/sf were SHARE OF WESTERN QUADRANT IN launched in 2019, indicative of a demand shift and robust market fundamentals. We expect the residential market in Hyderabad to continue to grow 80% NEW UNIT LAUNCHES (2019) in 2020 as well with demand momentum seeming to sustain and strengthen. New catchments emerging in the Western corridor A steep rise in land values, scarcity of large-sized land parcels and robust commercial growth in the core locations of Madhapur, Kondapur and Gachibowli are pushing developers to look at alternative corridors. Locations such as Narsingi, Tellapur and Kokapet are already riding the growth curve with demand for mid to high-end projects as well as villas gaining momentum. Developers are also looking at areas such as Kollur, Velimela, MARKET INDICATORS OVERALL Q4 2019 Gopanpally and Bachupally – Bowrampet, Patancheru etc. where land values are about 30-50% lower compared to the neighbouring established residential catchments of Kukatpally, Miyapur, Manikonda etc. These emerging locations are also within a 15-20 km radius from the core IT and Y-O-Y 12-Months Change Forecast financial districts. As such, these new catchments along ORR, Gopanpally, Patancheru and Bachupally together are expected to account for around one-third of the new launches likely during 2020-2021. New Launches Prices rise across the city, growth to continue in 2020 The robust growth in office and retail sectors, metro connectivity and ongoing/upcoming infrastructure projects will continue to drive the positive momentum in the residential market across the city. Prices in the mid and high segments have risen by 2-5% q-o-q / 7-13% y-o-y on average Units Sold across the city. Rentals across major catchments such as Kukatpally, Madhapur, Manikonda, Gachibowli, Kondapur, Uppal and Nagole have also witnessed a 2-3% growth during the quarter. Prices in the Eastern quadrant have grown steeply (~12-15% y-o-y) in line with a surge in land values following the e-auction conducted by the government. In the western quadrant, newer catchments coming up along ORR have recorded a growth of Average Capital 3-5% in capital values during the quarter. We expect price growth to continue across the city over the next 6-12 months. Values (INR/sf) SIGNIFICANT PROJECTS LAUNCHED IN Q4 2019 BUILDING LOCATION DEVELOPER UNITS LAUNCHED RATE*(INR/SF) Lake City Hafeezpet Vassavi Group 1,845 5,500 Honer Aquantis Gopanapally Honer Homes 1,216 5,499 Luxor Park Kondapur Aparna Constructions 420 7,999 Aparna Cyberscape Nallagandla Aparna Constructions 322 5,650 Fortune Mayura Bachupally Fortune Green Homes 393 5,200 Praneeth Jagruthi Elite Kollur Praneeth Group 144 5,000 M A R K E T B E AT HYDERABAD Residential Q4 2019 RENTAL VALUES AS OF Q4 2019 CAPITAL VALUES AS OF Q4 2019 AVERAGE QUOTED QoQ CHANGE YoY SHORT TERM Average Quoted Rate QoQ CHANGE YoY SHORT TERM SUBMARKET SUBMARKET RENT (IND/MONTH) (%) (%) OUTLOOK (INR/sf) (%) (%) OUTLOOK High-end segment High-end segment Banjara Hills 58,000-1,50,000 0% 0% Banjara Hills 8,200-12,200 2% 4% Madhapur, Gachibowli 36,000-70,000 1% 1% Madhapur, Gachibowli 5,600-8,000 2% 9% Kukatpally 21,000-40,000 2% 2% Kukatpally 5,000-6,500 4% 6% Himayathnagar 20,000-36,000 0% 0% Mid segment Mid segment Madhapur, Gachibowli 4,500 – 5,700 6% 13% Banjara Hills 22,000-32,000 3% 3% Kukatpally 4,000 – 5,000 8% 15% Madhapur, Gachibowli 18,500-28,500 3% 11% Himayathnagar 4,000 – 4,700 7% 9% Kukatpally 15,000-23,000 3% 6% Miyapur 4,200 – 4,500 2% 9% Himayathnagar 13,500-18,000 0% 0% Rohan Sharma SIGNIFICANT CONSTRUCTION COMPLETIONS IN Q4 2019 Director, Research Services +91 124 4695555 /[email protected] BUILDING LOCATION DEVELOPER ESTD NO. OF UNITS UNIT SIZE Kapil Kanala NCC Gardenia Madhapur NCC Urban 184 3000 - 4000 Associate Director, Research Services +91 40 40405555 /[email protected] Aparna serene Park Kondapur Aparna Constructions 1680 1290 - 2250 cushmanwakefield.com SIGNIFICANT PROJECTS UNDER CONSTRUCTION – TO BE COMPLETED IN NEXT 12 MONTHS A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION BUILDING LOCATION DEVELOPER ESTD NO. OF UNITS EXPECTED COMPLETION Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for Mangala Kondapur My Home 1860 Q1 2022 (MARCH) real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with The Art Kismatpur Giridhari constructions 270 Q1 2022 (MARCH) approximately 51,000 employees in 400 offices and 70 countries. In 2018, the firm had revenue of $8.2 billion Apila Gandipet EIPL 470 Q2 2020 (JUNE) across core services of property, facilities and project management, leasing, capital markets, valuation and other Data collated from primary and secondary resources. Estimations are subject to change services. * Rental and capital values have been depicted only for key submarkets ©2019 Cushman & Wakefield. All rights reserved. The information ** Quoted base capital value and does not include other charges such as Preferential Location Charges, External Development Charges, Internal Development Charges, etc. contained within this report is gathered from multiple sources believed The above values for high-end segment are for units typically of 1,200-3,000 sf to be reliable. The information may contain errors or omissions and is The above values for mid segment are for units typically of 800-1,400 sf presented without any warranty or representations as to its accuracy. ^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.