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BANGALORE RESIDENTIAL MARKET UPDATE JANUARY - MARCH 2020

Market Sentiment INSITE acres India’s No.1 Property Portal

FROM CBO’S DESK

The calendar year 2020 began with some Real Estate (Regulation and Development) hopes of a revival for the residential realty Act 2016, Goods and Services Tax (GST), market in India with an increase in property and more lately the liquidity crisis amongst enquiries in January and February. Sales NBFCs and developers. The industry expects volume, too, reported growth over the home buyers to returning to the market only previous months in most metro cities, gradually as social distancing restrictions get barring Delhi NCR and Mumbai, where lifted, even though prices are likely to come supply overweighed demand. New housing down. Pro-realty measures announced by the launches remained low as the liquidity crisis Government, including loan moratorium and continued troubling developers; however, repo rate cut by 75 basis points have helped the silver lining was the upcoming festive soothe the sentiment of uncertainty among season in March. Fast-forward less than a homebuyers, but the industry is looking to month and the outbreak of novel COVID-19 in more support from the government. India turned tables as construction activities Currently sitting with an unsold inventory came to a sudden halt, and restrictions on of around 6.24 lakh residential units and site visits shrunk property sales significantly. 15 lakh under-construction homes in top The announcement of the 21-day lockdown eight metros, the real estate industry would further marred hopes of a quick revival in need more definite growth stimulators business activities. The event is most likely such as further cuts in borrowing costs for to delay project deliveries by at least 2-3 homebuyers, staggered/deferred payments quarters, defer any new launches planned of various levies, support to NBFCs to and drive real estate prices downwards in improve their liquidity which in turn would most markets. mean better access to capital for developers, The real estate sector in India has and penalty exemptions for the delay in project completions for developers. It will Maneesh Upadhyaya effectively survived several past challenges starting with demonetisation, be interesting to see how the market Chief Business Officer followed by the implementation of behaves post-COVID-19. 99acres.com COVID-19 AND REAL ESTATE: A SNAPSHOT

The outburst of novel Coronavirus in India has undoubtedly been detrimental to the economic health of the country, and both real estate and construction sectors have been at the receiving end, like many others. The initial impact was noted with reducing number of site visits, which gradually converted into fewer sale conversions. The subsequent 21-days nationwide lockdown put a temporary break on the construction work of over 15 lakh housing units across the top eight cities alone, further delaying project deliveries by a minimum of 2-3 quarters.

IMPACT ON HOMEBUYERS IMPACT ON DEVELOPERS • Stalled work on under-construction units to further • Construction work comes to a halt due to curtailed delay completion timelines imports from China, soon followed by the lockdown in India • Reduced payment capacity amid economic slowdown and job cuts • Lack of sales to impede cash flows, further straining the financial health of developers • Festive offers postponed to the subsequent quarters • New launches and festive offers deferred for at least • Deal closers become challenging in absence of physical 2-3 quarters movement • Possible identification of COVID-19 outbreak as a • Reduced payment capacity amongst homebuyers amid Force Majeure event under Real Estate (Regulation and economic slowdown and job cuts Development) Act, 2016, to bring some relief • Extension of project completion deadlines amongst the IMPACT ON SELLERS biggest requests by the developer community • Reduced demand for under-construction units, and restrictions on site visits IMPACT ON REAL ESTATE AGENTS • A possible hike in negotiations in the favour of buyers • Direct hit on business during COVID-19-induced lockdown • Governmental initiatives resulting in reduced home loan interest rates, extended timelines to pay property • Increased dependence on digital platforms for taxes and deferment of EMIs via loan moratorium for networking three months to benefit homeowners

acres India’s No.1 Property Portal NATIONAL MARKET OUTLOOK INDICATORS

Capital Values Rental Values Supply HOME BUYING SENTIMENT While and January and February saw moderate recovery in sales across metro cities, barring Delhi NCR, the month of March saw site visits and transactions coming to a halt due to the outbreak of COVID-19 in India. Enquiries in the affordable segment stayed afloat; however, sale conversions are expected to remain bleak until the next quarter. DELHI NCR

PROPERTY PRICES Barring Hyderabad, Bangalore and Ahmedabad, which posted a one percent uptick in capital ‘asks’, each, all metros saw prices remaining stable, QoQ. Unlike KOLKATA expectations, property prices may dwindle in the short- AHMEDABAD to-mid term due to dented home buying sentiment. Eventually, the COVID-19-infused slowdown might also mar the pace of realty growth across metros. MUMBAI

PUNE

RENTAL LANDSCAPE HYDERABAD Mumbai, Pune, Bangalore and Hyderabad posted a 3-4 percent growth in rental ‘asks’, YoY. Surplus housing stock in Delhi NCR kept rental rates under check. A slowdown in sales in the upcoming quarters may drive the rentals across cities. Bangalore and Kolkata were the most lucrative for rental income with the yield ranging between 3.65 and 3.75 percent. BANGALORE

CHENNAI SUPPLY With sales limiting to the first two months of the quarter and developers missing on the opportunity to boost absorption around the festive season, unsold inventory remained largely unchanged at 6.24 lakh units in the top eight metro cities. There are about 15 lakh delayed under-construction units, which have been stalled acres temporarily due to COVID-19 crisis. India’s No.1 Property Portal * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com MARKET MOVERS K-RERA to improve dispute redressal mechanism Karnataka RERA has drafted a proposal to grant judicial rights to the authority to expedite the dispute resolution process between builders and buyers. In another move, the authority has set up a conciliation forum to enable out-of-court settlements by referring cases to an adjudicating officer.

Work on Namma Metro in full swing Following the successful trial runs, the two metro corridors under the Phase 2 of the Namma Metro, Yelachenahalli Road to Anjanapura Township and Mysore Road to Kengeri would become operational from August and November this year, respectively. In addition, the metro authority acquired 93,000 sq metre land parcel on Bellary Road for the development of the elevated Metro corridor connecting Kempegowda International Airport. Tax burden to increase on homeowners COMMERCIAL The civic body has planned to levy Land Transportation Cess on all the property owners in Bangalore. The owner will bear the additional tax burden of two percent from April 2020 onwards. The proposed cess would be REAL ESTATE utilised for various urban infrastructure projects such as roads, drains, and installation of streetlights at different locations across the city. OUTLOOK State amends land reforms • Bangalore continued to dominate the office space market in The State amended the Land Reforms Act to allow companies to sell their India with an absorption of 15.6 million sq ft in 2019, a hike of land parcels with the condition that the entity is on the verge of collapse 15 percent, YoY. and require assets for debt settlement. However, the company can dispose of their land only after seven years of acquisition. In addition, the State has • Avant Garde Estates bought a 15,000 sq ft commercial land parcel proposed to introduce a process under the Act to procure agricultural land worth Rs 42 crore in Indiranagar. easily for setting up industrial projects. • Blackstone Group and Salarpuria Sattva acquired Global Village Tech Park, a 3.3 million sq ft office space, at Rs 2,500 crore. • Myntra leased three lakh sq ft office space at an annual rent of Rs 31 lakh from workspace solutions provider, IndiQube. • Google and Amazon plan to lease office space of about 1.2 million sq ft in Bagmane Rio Business Park and 2 million sq ft in North Bangalore, respectively. • Kovorks & Marvel Infrabuild plan to lease 15 lakh sq ft of co-working acres space with a capacity of about 25,000 desks in Whitefield. India’s No.1 Property Portal * Capital values represent quarterly change * Rental values represent yearly change * Supply is basis properties listed on 99acres.com BANGALORE’S REALTY AT A GLANCE

Property Rental Prices ‘Asks’

Price movement in key micro-markets

Localities Jan-Mar 2020 QoQ YoY Rental % Change % Change Yield Whitefield 4,760 - 6,240 3% 4% 4% Demand Supply Electronic City 3,880 - 4,970 3% 6% 4% JP Nagar 5,390 - 6,370 2% 9% 3% Yelahanka 4,590 - 5,390 1% 5% 3% Marathahalli 5,010 - 6,460 3% 5% 4% Thanisandra 5,270 - 6,030 3% 0% 3% * Property prices represent quarterly change * Rental ‘asks’ represent yearly change * Supply is basis properties listed on 99acres.com * Demand is basis queries received on 99acres.com Hebbal 5,370 - 7,590 0% 2% 3% Bellandur 5,780 - 6,880 1% 5% 4% Kaggadasapura 3,690 - 4,460 -3% 0% 5% Uttarahalli 3,910 - 4,670 2% 5% 3%

* Average ‘ask’ rates have been calculated as per listings posted on 99acres.com ** Rental Yield has been calculated for a 1,000 sq ft apartment

INSITE : Bangalore 11 acres DEMAND & SUPPLY India’s No.1 Property Portal DYNAMICS 99ACRES‘ 17% OUTLOOK

32% 22% Bangalore garnered steady flow of property enquiries in the first two months, however, sales remained meek in the quarter due to the economic slowdown. With the Government advisory of nationwide lockdown during coronavirus outbreak, site visits and enquires came to a sudden halt but a share of prospective homebuyers continued their search online in March 2020. The first 37% quarter of 2020 resultantly reported a negligible hike of a percent in the average property prices in Bangalore.

Grade A developers curtailed new launches. However, 41% Grade B and C builders entered the market with properties priced within Rs 45-60 lakh. The city recorded nearly 80 new housing projects, denoting a surge of about 45 percent, QoQ.

Properties priced around Rs 60-70 lakh drew almost 51% 70 percent of the housing demand against a 30 percent deficit in supply. Ready housing units remained the first choice of homebuyers; however, limited supply in the preferred budget category shifted a share of buyer interest to the under-construction segment. Land parcels within Rs 15-35 lakh also garnered investors’ attention in Demand Supply the neighbouring areas of Devanahalli and Sarjapur.

Affordable Housing With construction activities and sales coming to a halt (Within Rs 40 lakh) Mid-income Housing owing to coronavirus lockdown, developers would (Rs 40 lakh - Rs 1 crore) struggle to manage their cash flows and to deliver on- Luxury Housing going projects timely. A few of the developers have also (Rs 1 crore and above) planned to organise virtual site visits to overcome the impact of COVID-19 in the ensuing months.

* Graph depicts demand and supply of residential inventory across budget segments in the studied quarter INSITE : Bangalore 13 KEY HIGHLIGHTS

Out of 80 new launches in the budget segment of Rs 45-60 lakh, South Bangalore garnered the maximum share of around 40 percent. It was followed by East and North Bangalore in areas such as Varthur, Hoskote, Kodigehalli, Yelahanka, Devanahalli, and Horamavu.

About half of the tracked locales reported an increase in CAPITAL & property prices on account of ambitious ‘asks’. Some of the residential hubs, such as Bommasandra, Bannerghatta and Hulimavu in the South, and Hormavu and Budigere in RENTAL the North, topped the popularity charts and bagged four percent hike in property prices, each, QoQ. The remaining 9% localities clocked a capital growth of 1-3 percent, QoQ.

8% 8% The city recorded a steady volume of enquiries in the first two months of the quarter, only to take a hit in March 7% 7% following the COVID-19 outbreak. A few residential areas in the North and East zones, such as Jakkur, Yelahanka, 6% Whitefield, Sarjapur and Marathahali, bagged maximum enquiries for properties priced within Rs 65-90 lakh.

The residential rental market remained upbeat and recorded a spike of three percent, YoY. Some localities such as Ulsoor, Brookefield, Rajaji Nagar, Kammanahalli, 3% 3% 3% Uttarahalli, Cox Town, Frazer Town and BTM Layout, witnessed average rentals going north by nine percent, 2% 2% 2% each, in Jan-Mar 2020 against Jan-Mar 2019. The growing 1% 1% demand of co-living homes and greater accessibility to workplaces led to the aforementioned growth. 0% 0% 0% 0% Whitefield Rajaji Nagar Thanisandra Hebbal Akshaya Yelahanka Bellandur Kadugodi Marathahalli Koramangala Cheaper property rates and steady demand from the Nagar tenant community were among the major driving factors behind higher rental yield in certain pockets of Capital Bangalore. Kaggadasapura scored maximum rental yield of five percent, YoY. Other residential hubs such as Whitefield, Electronic City, Marathahalli Rental -3% and Bellandur, also reported rental yield of four percent, each, YoY.

* %change represents quarterly capital movement and yearly rental movement -6% INSITE : Bangalore 15 CONCLUDING NEW LAUNCHES 1% REMARKS KOLKATA Several pro-industry measures, including lower home loan interest rates, 2% DELHI NCR were counter-balanced by the impact of COVID-19 in Jan-Mar 2020. Despite 7% a steady flow of enquiries till February 2020, the city did not record any CHENNAI substantial growth in real estate transactions in Jan-Mar 2020 over the previous quarter. The COVID-19 crisis added to the existing liquidity crunch for the builders. Developers might refrain from launching new projects in the coming 2-3 quarters and focus on timely completion of their ongoing 9% projects once the country is out of the health crisis. Some developers AHMEDABAD 38% may also introduce innovative and aggressive marketing strategies, such MUMBAI as digital project launches and virtual site visits, to regain the interest of 10% potential homebuyers and prepare themselves for a comeback. HYDERABAD

12% BANGALORE 21% PUNE BUDGET-WISE DEMAND SUPPLY The data depicts share of new launches across metro cities in the studied quarter

4% 15% 10% 13% 13% 12% 21% 22% 20% 20% 18% 16% 24% 32% 30% 42% 47% 32% 26% 26% 36% 36% 28% 30% 36% 41% 41% 51% 41% 80% Demand Supply 33% 51% 36% 61% 62% Affordable Housing 51% 58% 49% 51% 46% 37% 44% 41% Mid-income Housing 29% 25% 29% -5% 17% 17% Luxury Housing -6%

DELHI NCR MUMBAI BANGALORE HYDERABAD PUNE CHENNAI KOLKATA AHMEDABAD

INSITE : Bangalore 17 * Graph depicts demand and supply of residential inventory across budget segments in top eight metro cities in the studied quarter acres ANNEXURES India’s No.1 Property Portal

CAPITAL VALUES RENTAL VALUES RENTAL VALUES

Locality Jan-Mar 2020 Locality Jan-Mar 2020 Locality Jan-Mar 2020 Locality Jan-Mar 2020 Kalyan Nagar 17 Banashankari 6300 Kaggadasapura 4350 AECS Layout 21 Kammanahalli 17 Banaswadi 5530 Kasavanhalli 5400 Akshaya Nagar 15 Kasavanhalli 19 Bannerghatta 6150 Kengeri 4300 Arekere 18 Kengeri 12 Basavangudi 10020 Koramangala 10380 Banashankari 18 Kodihalli 17 Begur 4540 KR Puram 4600 Banaswadi 16 Koramangala 30 Bellandur 6220 Kudlu Gate 5400 Basavangudi 22 KR Puram 15 Benson Town 9500 Kundalahalli 5850 Begur 14 Kumaraswami Layout 13 Billekahalli 5700 Mahadevpura 6000 Bellandur 22 Kundalahalli 20 Bommanahalli 5040 Malleshwaram 11350 Bommanahalli 16 Mahadevpura 21 Bommasandra 3650 Marathahalli 6400 Brookefield 21 Malleshwaram 27 Brookefield 6120 Nagarbhavi 4800 BTM Layout 20 Marathahalli 21 BTM Layout 6114 Nagavara 6250 Cooke Town 25 Mathikere 14 Budigere 5090 Panathur 6100 Cox Town 25 Murugeshpalya 21 Cooke Town 9200 Raja Rajeshwari Nagar 5200 CV Raman Nagar 19 Nagarbhavi 14 CV Raman Nagar 6600 Rajaji Nagar 13000 Doddathoguru 16 Nagavara 16 Devanahalli 5300 Ramamurthy Nagar 4450 Domlur 28 New Thippasandra 23 Electronic City 4900 RT Nagar 5700 Electronic City 16 Panathur 21 Frazer Town 9300 Sahakara Nagar 5994 Frazer Town 25 RT Nagar 14 Gottigere 4700 Sanjay nagar 7300 Gottigere 12 Raja Rajeshwari Nagar 12 Gunjur 4650 Singasandra 4400 HBR Layout 18 Rajaji Nagar 21 Harlur 6500 Subramanyapura 5140 Hebbal 18 Ramamurthy Nagar 14 Hebbal 7435 TC Palaya 4700 Hennur 17 Richmond Town 29 Hegde Nagar 5540 Thanisandra 5850 Hoodi 19 Sahakara Nagar 17 Hennur 5550 Uttarahalli 4600 Hormavu 15 Sarjapur 15 Hoodi 6050 Varthur 4800 HSR Layout 22 Subramanyapura 13 Horamavu Agara 4600 Vidyaranyapura 5315 Hulimavu 17 TC Palaya 13 Hormavu 4900 Vijayanagar 5800 Indira Nagar 27 Thanisandra 16 HSR Layout 6050 Whitefield 6100 ITPL 18 Ulsoor 30 Hulimavu 5800 Yelahanka 5050 Jakkur 15 Uttarahalli 13 Indira Nagar 10110 Yeshwanthpur 7300 Jalahalli 16 Vidyaranyapura 14 Jakkur 5640 Jayanagar 22 Vijayanagar 17 Jalahalli 5830 JP Nagar 17 Whitefield 21 Jayanagar 10600 Kadubeesanahalli 21 Yelahanka 15 JP Nagar 6100 Kadugodi 15 Yeshwanthpur 21 Kadugodi 4660 Kaggadasapura 18

*All prices are per sq ft rates *All prices are per sq ft rates INSITE : Bangalore 19 METHODOLOGY The Insite Report by 99acres.com captures the quarterly capital trends, the annual rental analysis of residential apartments and rental yield in top 10 popular micro-markets across key real estate markets – Delhi NCR, Mumbai Metropolitan Region (MMR), Bangalore, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad. In order to assess the prevailing sentiment, the report delves deep into demand and supply of properties across varied budget segments and occupancy stages. While demand is a function of queries received, supply is based on property listings posted on D S PS 99acres.com in Jan-Mar 2020. BUY SELL RENT PROPERTY

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