M A R K E T B E AT AHMEDABAD Residential Q4 2020 Affordable and mid segments drive new launches in a subdued quarter Residential launches remained subdued in Q4 amidst a resurgence of Covid-19 cases following the relaxation of lockdown restrictions and festivities during the NEW UNIT LAUNCHES (Q4 2020) holiday season. With the government imposing weekend lockdowns and night curfews to address the health emergency, under construction residential projects 2,197 got affected as well. The city witnessed the launch of 2,197 units in Q4, a 39.2% decline on a q-o-q basis. Unit launches stood at 17,331 in 2020, a 38% decline y-o-y, primarily due to lockdown impacting project approvals and the muted sales pushing developers to defer new project announcements. Elevated levels of unsold inventory and liquidity challenges have also kept new launches lower with developers looking to complete projects which are under development. The 51.1% SHARE OF AFFORDABLE affordable and mid segments continued to dominate new launches in Q4, together accounting for all the quarterly launches, with the mid segment contributing a SEGMENT 51% share. Similar trends were observed for the whole year with affordable and mid segments contributing 58.0% and 33.4% respectively to new launches followed by the high end (5.4%) and luxury (3.2%) segments. Going forward, residential launches and sales are expected to pick up in H1 2021 as construction SHARE OF EAST & WEST PERIPHERAL activities normalize further and developers continue to extend various price incentives to homebuyers. Low home loan rates and rising demand for new 56% MARKETS IN NEW LAUNCHES apartments, especially from first-time buyers, are also expected to boost the residential market. The developer community has requested the government to cut stamp duty and property registration charges; any such stimulus would facilitate faster recovery in the residential asset class. Higher launch activity in East and West Peripheral submarkets The East and West Peripheral submarkets accounted for around 28% each of new launches in Q4 followed by the North submarket with a 27% share. Higher launch activity in the East submarket, comprising Naroda, Nava Naroda, Vastral and Odhav as the major locations, was driven by easier availability of land MARKET INDICATORS OVERALL Q4 2020 parcels and robust demand for affordable housing projects. Peripheral West with Ghuma, Shela and Bopal as the key locations witnessed higher launch activity, especially of mid-segment housing projects, as developers showed greater interest in peripheral areas due to the low-cost land parcels and improving physical infrastructure. The quarter also witnessed higher demand for larger homes and farmhouses, particularly among richer homebuyers and HNIs, with the CoVID-19 Y-O-Y 12-Months Change Forecast pandemic increasing the need for spacious and healthier living environments. Locations such as Shilaj in the West Peripheral submarket saw higher traction in demand for bungalows and farmhouses and this trend is expected to continue over the next few quarters. New Launches Stable capital values with selective extension of price incentives to homebuyers Capital values remained stable at a broader city level in Q4 though some developers continued to extend discounts of 3-5% selectively to serious homebuyers to Units Sold drive sales during the festive season. This trend of selective price discounts alongwith incentives such as pre-EMI waivers and price protection plans is likely to continue over the next couple of quarters with developers prioritising sales and faster reduction of their unsold inventories. The downward pressure on capital values is, therefore, likely to persist. Rental values have trended down over the last few quarters in major submarkets due to the continuation of remote working Average Capital policies and people having moved back to their hometowns and Q4 wasn’t an exception. However, over the next 2-3 quarters, rentals could witness an upward Values (INR/sf) trend with a gradual return of employees back to the city. SIGNIFICANT PROJECTS LAUNCHED IN Q4 2020 BUILDING LOCATION DEVELOPER UNITS LAUNCHED RATE(INR/SF) Soham Vivanta Bhopal SS Realty 280 8,100 Aaryan Ambience Gota Aaryan Group 230 8,400 Maher Homes 4 Shela Vishwanath Realtors 224 8,500 Bhagwat Enclave New Maninagar Gajanand Corporation 186 5,500 Himalaya Mainland Pinnacle 2 Tragad K P & Company 175 6,200 M A R K E T B E AT AHMEDABAD Residential Q4 2020 RENTAL VALUES AS OF Q4 2020 CAPITAL VALUES AS OF Q4 2020 AVERAGE QUOTED QoQ CHANGE YoY SHORT TERM AVERAGE QUOTED QoQ CHANGE YoY SHORT TERM SUBMARKET SUBMARKET RENT (IND/MONTH) (%) (%) OUTLOOK RENT (IND/MONTH) (%) (%) OUTLOOK High-end segment High-end segment Central 20,000 – 100,000 0% 0% Central 5,500-8,200 0% 0% West 18,000 - 100,000 0% 0% West 5,500-8,200 0% 0% Mid segment Mid segment Central 7,500-25,000 0% 0% Central 4,500-6,500 0% 0% North 5,500-12,000 0% 0% North 2,800-4,500 0% -2% South 4,500-15,000 0% 0% South 2,000-5,000 0% 0% West 8,000-30,000 0% 0% West 3,600-6,100 0% -1% West Peripheral 8,000-30,000 0% 0% West Peripheral 2,850-5,200 0% -3% East 4,000-12,000 0% 0% East 2,000-4,000 0% 0% SIGNIFICANT PROJECT COMPLETED IN Q4 2020 BUILDING LOCATION DEVELOPER NO. OF UNITS UNIT SIZE Silver Brook Shilaj Avirat Infrastructure 292 1,298 – 1,484 Rohan Sharma Madhuram Posh Chandkheda Madhuram 86 1,179 - 1,440 Director, Research Services Kaveri Soham Bopal A Shridhar Construction 120 814 +91 124 4695555 /[email protected] Pramukh Elysium Uvarsad PSY Organiser 252 1,161 – 1,170 Kapil Kanala SIGNIFICANT PROJECTS UNDER CONSTRUCTION – TO BE COMPLETED IN NEXT 12 MONTHS Senior Associate Director, Research Services BUILDING LOCATION DEVELOPER ESTD NO. OF UNITS EXPECTED COMPLETION +91 40 40405555 /[email protected] Cloud 9 Nehrunagar Addor Realty & Vivan Infrastructure 448 Q2 2021 Aavali Signature Motera H R Infrastructure 264 Q2 2021 Sadguru Landmark Naroda Sadguru Group 154 Q1 2021 Anant Sky Ranip Nila Infrastructure ltd 460 Q4 2021 Data collated from primary and secondary resources. Estimations are subject to change. The above values for high-end segment are for units typically of 1,600-3,000 sf cushmanwakefield.com The above values for mid segment are for units typically of 900-1,800 sf ** Affordable Housing project with units typically of 200-900 sf A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION ^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 Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 KEY TO SUBMARKETS Mid Segment employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 Central: C.G. Road, Ashram Road, Navrangpura, Gulbai Tekda billion across core services of property, facilities and project management, leasing, High-end Segment North: Ram Nagar, Sabarmati, Motera, Chandlodia, Ranip, Chandkheda, Gota, Vaishnodevi, Jagatpur capital markets, valuation and other services. To learn more, visit Central: C.G. Road, Ashram Road, South: Maninagar, Vinzol, Narol, Vatva, Ghodasar, Lambha www.cushmanwakefield.com or follow @CushWake on Twitter. Navrangpura, Gulbai Tekda West: Vastrapur, Satellite, Thaltej, Prahladnagar, Makarba, Vejalpur, Sarkhej, Vasna ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is West: Vastrapur, Satellite Thaltej, West Peripheral: Bopal, South Bopal, Ambli, Ghuma, Shilaj gathered from multiple sources believed to be reliable. The information may contain errors or Prahladnagar East: Khokhra, New Maninagar, Naroda, Nava Naroda, Nikol, Hansol, Odhav, Vastral omissions and is presented without any warranty or representations as to its accuracy..