RoofandFloor

IntelligenceReport

AUGUST 2020

Indian Residential Real Estate: Half-Yearly Report Card H1 2020 | & Bengaluru Index

Foreword 3

Our Users 4

Age & Gender Distribution 4

Overview 6

Chennai & Bengaluru 8

Purpose of buying a property 8 Chennai

H1 2020 Snapshot 11

Upcoming Infrastructure Projects in Chennai 12

Budget Preferences 14

Property Type Preferences 16

Zone-Wise Analysis 18

Top 10 Micro-markets 25

Medavakkam, Guduvanchery, : A Quick Primer 27 Bengaluru

H1 2020 Snapshot 32

Upcoming Infrastructure Projects in Bengaluru 33

How Bangalore’s Suburban Rail Network Will Boost Real Estate 35

Budget Preferences 38

Preferred Property Type 39

Zone-Wise Analysis 40

Top 10 Micro-markets 45

Use of Technology in Real Estate to Become Imperative post-Covid 47

The Journey Ahead 51 Foreword

It gives me immense pleasure to present the seventh edition of our RoofandFloor Intelligence, a one-of-a-kind report on consumer sentiment in the real estate market. This edition summarises the larger picture for Chennai and Bengaluru observed in H1 2020 and helps the reader unravel the dynamics of these two realty markets.

We, at RoofandFloor, believe that this is an important new source of information for various industry stakeholders, providing insights for the first time into the prevailing sentiment of prospective homebuyers.

Our ability to be a successful matchmaker has boiled down to our diligence in gathering data about homebuyers as well as properties. For the report, we carefully analyse over 30 parameters across Chennai and Bengaluru, both implicit and explicit. Further, we use data analytics and visualisation to give insights into changing user preferences, hot markets for investment, preferred budget, preferred property type, the purpose of buying, and much more.

While most real estate reports give post facto analysis of what happened in the market, RoofandFloor Intelligence goes one step ahead. It provides intelligence that is derived from what the user is doing before making a purchase. In that sense, it is predictive intelligence that allows businesses to be proactive rather than reactive when operating in the real estate sector.

I believe that with every edition, the report has become more insightful. Hope you will find it useful too.

Thejaswi Udupa CTO, RoofandFloor

RoofandFloor Intelligence roofandfloor.thehindu.com Page 3 Our Users

RoofandFloor is India’s fastest growing and most trusted home buying platform. Launched by Group in September 2014, it has quickly grown to influence over 6 million homebuyers across the country, facilitating over 2 million connections between builders and high- intent customers. We operate in over 31 cities, including Bengaluru, Chennai, Delhi, Hyderabad, Mumbai, and Pune.

Age & Gender Distribution

Our website boasts of an urban, young, and tech- savvy user base that harnesses the power of data and technology to make an informed real estate decision.

According to Statista, India’s median age is estimated to be 28 years making us amongst the youngest countries in the world and home to a growing middle-income segment. This demographic group continue to drive the consumption story across sectors, including real estate; which explains why the majority of our users are in the 25-34 years age group.

Of all the users looking for residential property in Chennai and Bengaluru in H1 2020, 43% were within the 25-34 years age group, while 25% fall within the 35-44 years age group.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 4 With ample employment options and cosmopolitan culture, properties in Bengaluru and Chennai clearly continue to garner maximum interest from the youth.

Based on available historical data, our user base mostly consists of young urban men usually looking for their first home. It is interesting to note that the share women buyers aged between 35-44 have increased by 11% in the first of 2020 as against the same period last year.

The graph below shows the distribution of these buyers over the months across age and gender.

Homeseekers Demography (H1 2020 vs H1 2019)

80 18-24+ 25-34+ 35-44+ 45-54+ 55-64+ 65+

60

40 tal users in % To

20

0 Female Male Female Male

H1 2020 H1 2019

RoofandFloor | August 2020 | Infographic 01 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 5 Overview

Over the last few years, the Indian real estate sector saw a slew of structural reforms. From RERA to GST to Benami Transactions (Prohibition) Amendment Act, 2016, these regulations ensured accountability and transparency in the otherwise brick and mortar sector. Developers were only coming to terms with this new normal when the liquidity issues due to NBFC crisis marred the sector, derailing the growth.

However, in the last quarter of 2019, the sector embarked on a recovery phase after adjusting to the new reforms. The year 2020, too started on a positive note with the residential real estate sector showing tangible signs of stability.

In February 2020, the Union Budget laid the roadmap of the journey towards a USD 5.0 trillion economy; based on three broad fundamentals of Aspirational India, Economic Development and Caring Society. The budget also provided an adequate fillip to the affordable segment by extending the date for previous tax exemptions for both homebuyers and developers by another one year.

Everything was sound until the COVID 19 outbreak in March 2020, which dampened the confidence of various stakeholders. The nationwide lockdown, coupled with reverse migration of construction workers, put the sector under immense stress. Pay cuts and job uncertainties led to a weakening of consumer sentiments. This was also validated by a dipping number of searches in the first half of 2020. When compared to H1 2019, the number of home seekers in both Chennai and Bengaluru dropped by about 30% in H1 2020.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 6 The lockdown, undoubtedly, has dampened economic growth. According to CRISIL forecasts, India’s GDP growth is likely to fall off a cliff and contract 5% in fiscal 2021. The has also echoed similar views.

To mitigate the adverse economic impact, the government introduced a plethora of short-term relief measures in the last two months. The Reserve Bank of India, too, has slashed the repo rates to 4%, making it the lowest ever. Along with three-month EMI moratorium, banks have also started transmitting the rate cut benefits to consumers in terms of low-interest rates.

With economic activity muted, the real estate sector is poised to face some challenges. Even after the normalcy returns, developers are likely to face liquidity challenges, restricting new launches.

Given the current situation, it was imperative to take stock of how residential markets have reacted in Chennai and Bengaluru. This report summarises the larger picture for residential trends observed in H1 2020 in these two cities of southern India.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 7 Chennai & Bengaluru

Chennai and Bengaluru are two of the most prominent real estate markets in South India, which accounts for a significant number of real estate transactions every year. Through this report, we highlight some of the trends that can be seen emerging from the preferences submitted by our users and try to gauge the market sentiment.

Amidst the current Covid-19 outbreak, as expected, home buying decisions seems to have taken a backseat for the next few months.

By the end of this report, we will try to answer a few questions about the market sentiment in these two cities. These include the purpose of home buying, prominent localities among home seekers, preferred budget and housing type, and much more.

Purpose of buying a property

End-users continue to rule both Bengaluru and Chennai residential markets in H1 2020 with 90% users wanting 90% users in H12020 wanted to buy a property to buy a property for self-use. The pandemic has clearly for self-use. brought out a newfound appreciation for owning a home. Not to mention, prospective buyers can now benefit from all-time-low interest rates on a home loan and extension of the CLSS scheme.

Due to overall uncertainty in the market, prospective buyers in Bengaluru are looking to buy a property over the next six months. On the contrary, about 58% of home seekers in Chennai are looking to buy a property in the short-term. This could be attributed to several sops announced by the government over the last two months. Moreover, these home seekers must be in the last stage of negotiation and are just waiting to sign the dotted lines.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 8 Additionally, several developers will now try to lure homebuyers with good discounts and freebies to sell their existing inventory. Buyers entering the market in the short-term can definitely take advantage of the buyers’ market.

Purpose of Buying a Property ( H1 2020 vs H1 2019

Chennai Bengaluru Investment H1 2019 Self Use

Investment

H1 2020 Self Use

02 04 06 08 0 100 % of homebuyers

RoofandFloor | August 2020 | Infographic 02 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 9 Chennai Chennai

Over the last few decades, Chennai has embraced diversified industries, making it an economic powerhouse. From textiles to automobiles to IT-ITeS hub, the city has evolved significantly over this period. These industries have created ample job opportunities, thereby attracting people from across the country.

Chennai’s strong economic growth has been buffeted by the spirit of the people of the city who have coped with political uncertainties and devastating natural calamities. The city, today, boasts of a robust residential and commercial real estate market.

H1 2020 Snapshot

• Due to the virus outbreak, the new launch supply took a backseat in the first half of 2020.

• Developers remained focused on affordable and mid segments. Much in line with the supply, about 91% of home seekers showed interest for properties priced within Rs 70 Lakh in H1 2020.

• With fear over job loss and an overall slump in economic activities, the case for affordable properties got further strengthened in the first half of 2020.

• In terms of property type, apartments remained the preferred choice of homebuyers in the city. Interestingly, inclination towards plots increased from 18% in H1 2019 to 26% in H1 2020.

• Southern and western markets witnessed high interest from prospective homebuyers. Developers, also, continued to bet high on these markets owing to strong demand emanating from IT/ITeS hubs in the region.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 11 Upcoming Infrastructure Projects in Chennai

Despite massive development, Chennai still has potential for infrastructure growth. The upcoming phases of metro rail and monorail will enhance the connectivity quotient and unlock the potential for future real estate developments.

Additionally, the upcoming Aerospace Park at will be a catalyst in boosting Chennai’s economy by creating employment opportunities. This is also likely to have a favourable impact on residential real estate in the city.

We look at some of the major upcoming infrastructure projects in the city.

Mass Rapid Transit System Chennai Peripheral (MRTS) - Phase II Extension Ring Road

Length: 5 km Length: 133.381 km – St. Thomas Mount - In 2019, the project was brought under Expected completion in 2023 the purview of Pro-Active Governance and Timely Implementation (PRAGATI)

RoofandFloor Intelligence roofandfloor.thehindu.com Page 12 Elevated Corridor (Chennai Airport – Chengalpet Chennai Monorail Toll Plaza)

Length: NA Length: 40 km NA This 40km corridor is planned along NH-32. Under planning Proposed

Chennai Metro

Chennai Metro Corridor III Chennai Metro Corridor IV

Madhavarma - – Lighthouse 45.81 km 26.1 km Expected completion in 2026 Expected completion in 2026

Chennai Metro Corridor V

Madhavaram – CMBT 16.34 km Expected completion in 2025

RoofandFloor Intelligence roofandfloor.thehindu.com Page 13 Budget Preferences

The government’s push for affordable housing has been unmistakable in the last six years. As a result, there has been a significant increase in activity in the affordable segment over the last few years. Currently, out of the total under-construction units across the city, nearly 23.5% are in the affordable segment priced

Interestingly, the demand is much in line with the supply. Continuing the trend from H1 2019, properties in the affordable (< Rs 40 Lakh) and mid-segment (Rs 40- 70 Lakh) continue to rule the roost even in H1 2020. Our research indicates that about 48% prospective homebuyers in the city were looking to buy a property within Rs 40 Lakh, followed by 43% users looking for a home within Rs 70 Lakh.

Collectively, a whopping 91% home seekers preferred to buy properties priced within Rs 70 Lakh in H1 2020. Chennai has a large share of mid-level IT professionals who drive the majority of the demand in the budget segment of sub INR 70 Lakh.

The demand for luxury properties remained subdued even in H1 2020.

H1 2019 49% 48% H1 2020 41% 43%

Homebuyers in Chennai 6% 6% 4% 3%

RoofandFloor Intelligence roofandfloor.thehindu.com Page 14 12% 17%

3%

38%

50% 80%

32%

50% 50%

3% 69%

Apartments Plots Villas

In terms of property type, apartments remained the preferred choice of homebuyers in the city. Interestingly, inclination towards plots increased from 18% in H1 2019 to 26% in H1 2020.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 15 Property Type Preferences

Over the last few years, apartments have emerged as a most preferred property type in Chennai. This can be attributed to a quality-lifestyle that comes with multi- storey apartments. Secondly, unlike villas and plotted developments, apartment projects are usually close to employment hubs in the city. Last but certainly not the least, professionals with family prefer living in communities for the safety and overall development of their children.

According to RoofandFloor research, about 57% home seekers were looking to buy an apartment in H1 2020; followed by plots and villas with 26% and 17% respectively.

Preferred Property Type in Chennai (H1 2019 vs H1 2020)

H1 2019 63% 57% H1 2020

26%

% Homebuyers in Chennai 18% 19% 17%

Apartments Plots Villas

RoofandFloor | August 2020 | Infographic 5 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 16 A trend worth noticing in the graph titled “Preferred Property Type in Chennai (H1 2020 vs H1 2019) is the growing interest for plots in the city. In H1 2019, about 18% users were looking to invest in a plot. This number increased to 26% in H1 2020. Thanks to branded players entering the segment. Unlike earlier, where smaller developers usually launched plot projects, today many leading developers have ventured into the segment. This has instilled confidence in many investors. Not to mention, land is an appreciating asset.

According to our research, maximum users are looking for plots in Poonamallee, , Avadi, Guduvanchery, and West.

In terms of budget, in H1 2020, apartments within Rs 70 Lakh saw maximum searches on our portal, while for plotted developments,

Surprisingly, during the same period, apartments priced within Rs 40 Lakh garnered minimum interest (38%), while apartments priced over 1 Cr saw interest from 65% users. Clearly, when it comes to apartments, home seekers are looking for a great location with the best amenities and features.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 17 Zone-wise analysis

For our analysis, we have broadly divided Chennai into four zones – South, West, North and Central.

Zone Preferences in Chennai

15% 4%

North

Central

West 38%

South 43%

RoofandFloor | August 2020 | Infographic 6Source : RoofandFloor Research

Continued expansion in

South Chennai is the heart of the city’s IT growth. Bustling with life, the region has enjoyed stratospheric growth over the past decade with OMR and ECR transforming into IT hubs. Most of the markets in the southern part of the city are located strategically along IT corridors and industrial areas, which has led to the rapid development of new projects along with amenities like schools, colleges, hospitals and other civic facilities making them attractive to homebuyers.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 18 Naturally, about 43% home seekers were looking to buy a property in South Chennai. Out of all home seekers, 60% showed interest for apartments, followed by 21% and 19% interest for plots and villas respectively. When compared to H1 2019, the interest for apartments has slightly decreased; while for plots and villas it has increased.

88%

H1 2019 H1 2020

43% 46% Homebuyers in South Chennai 7% 3% 10% 1% 1%

Housing Preferences in outh Chennai (H1 2020 vs H1 2019)

67% H1 2019 60% H1 2020

21% % Homebuyers in South Chennai 19% 18% 14%

Apartments Plots Villas RoofandFloor | August 2020 | Infographic 8 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 19 In terms of budget preferences, home seekers in South Hot Markets: Chennai showed a maximum inclination for mid-segment Guduvanchery, properties with 46%, closely followed by affordable , , properties with 43%. In H1 2020, interest for

All Eyes on West Chennai’s Realty Market

South Chennai was followed by West Chennai with 38% home seekers looking to buy a property in the region. West Chennai is the biggest manufacturing hub of the city housing major industrial estates and industrial parks. The difference in the economic profile of the buyers in South and West Chennai is the direct product of the kind of economic opportunities created in both the zone.

Just like its southern counterpart, apartments dominated property spectrum in West Chennai too with 55% in H1 2020. About 31% home seekers showed interest in plots, while 14% were looking for villas. The western part of the city saw an increased interest for plotted developments in H1 2020 as against the same period in 2019. It must be noted that the zone has more plotted developments when compared to South Chennai.

Hot Markets: In terms of budget, properties within Rs 40 Lakh are most Poonamallee, , Avadi, , preferred, followed by mid-segment properties.

With the development of metro rail, Peripheral Ring Road, Average Price: Rs 4,225 per sq. ft. and monorail, the footprint of IT-ITeS companies is going to increase in the region. As a result, West Chennai may experience increased real estate activities in the future.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 20 53% 54% H1 2019 est Chennai 41% H1 2020 37% Homebuyers in W 4% 5% 4% 2%

Housing Preferences in est Chennai (H1 2020 vs H1 2019)

55% 55% H1 2019 H1 2020

31%

23% 21%

% Homebuyers in West Chennai % Homebuyers in West 14%

Apartments Plots Villas

RoofandFloor | August 2020 | Infographic 10 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 21 to Develop Further

North Chennai is a busy industrial area, a defining characteristic that has been existing since the 16th century due to the area’s proximity to ports. The region’s economy and evolution have always centred around maritime and trade activities, which has been the main driver behind real estate growth. Dominated by the presence of large industrial behemoths like Indian Oil, Chennai Petroleum Corporation, and Manali Petrochemicals as well as IT and ITeS corporate houses, North Chennai’s real estate future looks robust in 2020.

North Chennai recorded interest from 15% home seekers. Like other regions, this part of the city also saw maximum demand for apartments, followed by plots and villas.

In the first half of 2020, properties in the affordable segment ruled the roost in the region.

Projects expected to complete soon like the Outer Ring North Chennai Road stretch from Nemilichery to , the Chennai Peripheral Ring Road connecting Poonjeri junction to Average Price: Ennore Port, and Corridor Three and Five of the metro rail Rs 3,589 per sq. ft. are additional factors that are expected to increase real estate activity in 2020.

55% 53% H1 2019 42% 42% H1 2020 Homebuyers in North Chennai 4% 2% 1% 1%

RoofandFloor Intelligence roofandfloor.thehindu.com Page 22 Housing Preferences in orth Chennai (H1 2020 vs H1 2019)

70% H1 2019 56% H1 2020

29%

% Homebuyers in North Chennai 18% 13% 1% 1% 11%

Apartments Plots Ro Houses Villas

RoofandFloor | August 2020 | Infographic 12 Source : RoofandFloor Research

Central Chennai

The central parts of the city saw interest from merely 4% Central Chennai users. Being a developed region, it does not have much

Average Price: scope for further development. Rs 3,589 per sq. ft. In Central Chennai, ultra-luxury properties (over Rs 1 Crore) saw 13% interest. This could also be because of high average per sq. ft. in the region.

56% 47% H1 2019 H1 2020

21% 19% 2% 13% % Homebuyers in Central Chennai 12% 11%

RoofandFloor Intelligence roofandfloor.thehindu.com Page 23 Housing Preferences in Central Chennai (H1 2020 vs H1 2019)

53% 51% H1 2019 H1 2020

24% 25% 25% 22% % Homebuyers in Central Chennai

Apartments Plots Villas

RoofandFloor | August 2020 | Infographic 14 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 24 Top 10 Micro-Markets in H1 2020

Based on the number of searches on RoofandFloor, following were the top 10 micro-markets in Chennai in H1 2020.

• Guduvanchery that secured the first spot in H1 2019 moved to the third spot in H1 2020. While Poonamallee that was on the fourth spot in H1 2019 moved up places to secure the first spot. Avadi, interestingly, maintained the fifth slot.

• In H1 2020, Tambaram East, Tambaram West, , and made it to the top 10 micro-market list.

Micro-markets in Chennai which dropped below top 10 in H1 2020 compared to H1 2019

9 Kolathur Ranked 9th in 2019

10 Porur Ranked 10th in 2019

Perumbakkam 2 Ranked 2nd in 2019 7 Ranked 7th in 2019

RoofandFloor | August 2020 | Infographic 15 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 25 Top 10 Micro-markets in Chennai (H1 2020)

North #5 Avadi (Rs 3,094/sq. ft.) 2019 ranking - #5 5

NEW ADDITION TO TOP 10 #10 Pallavaram Central (Rs 5,537/sq. ft.) Not in top 10 in 2019 West

#1 Poonamallee 1 NEW ADDITION TO TOP 10 (Rs 3,130/sq. ft.) #9 Pallikaranai 2019 ranking - #4 (Rs 5,350/sq. ft.) Not in top 10 in 2019

#2 Medavakkam South #6 Sholinganallur (Rs 4,820/sq. ft.) 2 (Rs 5,110/sq. ft.) 2019 ranking - #6 10 2019 ranking - #3 9 8 6 #3 Guduvanchery 7 NEW ADDITION TO TOP 10 (Rs 2,820/sq. ft.) 3 2019 ranking - #1 #7 Tambaram East (Rs 4,414/sq. ft.) Not in top 10 in 2019

#4 (Rs 3,011/sq. ft.) 4 NEW ADDITION TO TOP 10 2019 ranking - #8 #8 Tambaram West (Rs 3,350/sq. ft.) Not in top 10 in 2019

RoofandFloor | August 2020 | Infographic 16 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 26 Medavakkam, Guduvanchery, Avadi: A Quick Primer

Medavakkam

Falling under the Chennai Municipal jurisdiction, Medavakkam is one of the fast-developing residential localities in South Chennai. Lying close to the IT corridor of Old Mahabalipuram Road and SEZ on Medavakkam- Sholinganallur Road, the locality still holds the potential for further growth.

It is easily accessible to the prime areas on GST Road like St Thomas Mount, , and Pallavaram. It is also close to the other upcoming suburbs like Ponmar, Sithilapakkam, and Otiyambakkam.

Medavakkam being a well-developed locality, has no shortage of essential amenities like schools, colleges, healthcare, shopping, and entertainment options.

Being close to Sholinganallur, the residents of Medavakkam can make good use of the SEZ or IT park there to find employment opportunities. Some of the major companies housed there are Ford Global, HCL, Tech Mahindra, Wipro, Cognizant, TCS, Infosys, and others.

The ongoing property prices in Medavakkam is Rs 4,823 per sq. ft.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 27 Guduvanchery

Guduvanchery is located right on NH-45, making it one of the most sought-after residential areas in Chennai today. Aside from an unbeatable location, it is well- connected via road through ample bus and rail links and is easily accessible from prime neighbourhoods like Tambaram and Chengalpattu. The micro-market also scores high on natural beauty with several lakes and parks like Nandivaram lake and Potheri park nearby.

Located 35 km away from the city centre, it is served by the Guduvanchery railway station as well as numerous buses. Employment options in the vicinity are aplenty with Accenture, Ford, and Mahindra World City among others which can be accessed via OMR.

Guduvanchery has good educational institutions like St. John’s Matriculation School and SRM Public School. Options for healthcare include Nandivaram Government Hospital and Christudas Hospital.

The average property price in Gudavanchery is approximately Rs 2,820 per sq. ft.

Avadi

Located 23km from Chennai, Avadi is one of the oldest areas in the city and was mostly known for being home to various defence establishments and manufacturing units. Once populated mainly by the employees of these units and their families, Avadi’s meticulously planned layout, well-maintained landscapes, and excellent connectivity are factors that are attracting a growing number of professionals from other industries employed in areas close by.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 28 Today, Avadi has expanded to encompass the booming IT industry, a process that is changing its landscape. In the latest bid to promote IT growth in Avadi, the government has approved permits for a new IT Park in the Avadi- area worth Rs 230 crores. Spread across 10 acres the project will be managed by , which is one of the largest IT parks in the country.

This thrust to develop the IT sector is based partly on the ever-increasing need for jobs as well due to the constant arrival of migrants from all over India, which in turn has pushed up the demand for housing.

With its robust social infrastructure that includes well- known educational and healthcare institutions, a plethora of employment opportunities, and proximity to well- developed areas, Avadi is an attractive residential area for young professionals with small families. More so, because Avadi continues to be affordable with weighted average price of Rs 3,095 per sq. ft. despite being close to prime areas like .

RoofandFloor Intelligence roofandfloor.thehindu.com Page 29 Need custom insights on micro-markets?

We provide customised user and builder-level data for major micro-markets across the top 5 cities. These include Bangalore, Chennai, Hyderabad, Pune, and Mumbai.

For business enquiries, please contact [email protected]

RoofandFloor Intelligence roofandfloor.thehindu.com Page 30 Bengaluru Bengaluru

As the IT capital of India, Bengaluru has always attracted thousands of people from across the country, especially millennials. A dynamic youth population is probably one of the reasons why Bengaluru was one of the first cities in India to promote and embrace the startup culture actively. Today, it is the startup hub of India with the maximum number of startups in the country. And that’s reflected in the city’s healthy real estate sector.

H1 2020 Snapshot

• Properties in the mid-segment (Rs 40-70 Lakh) recorded the highest number of searches in Bengaluru in H1 2020. The number has increased by 9% when compared to H1 2019.

• In terms of property type, apartments remained the preferred choice of homebuyers in the city, followed by plots and villas. Interestingly, apartments within Rs 70 Lakh saw maximum searches on our portal, while for plotted developments,

• Continuing the trends from last year, eastern and northern markets witnessed high interest from prospective homebuyers.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 32 Upcoming Infrastructure Projects in Bengaluru

The robust real estate growth has put immense pressure on Bengaluru’s existing infrastructure. To improve the road infrastructure, the government is now pursuing elevated corridors, and road networks are being expanded to decongest the city. Once completed, newer markets for commercial and residential development are likely to emerge.

Satellite Town Ring Road Peripheral Ring Road (STRR)

Length: 65 km Length: Also known as PRR, Apart from easing city traffic by providing this 8-lane road will connect a bypass for inter and intra city freight Hosur Road and Tumkur Road. traffic, STRR will also connect 12 towns in Bengaluru’s peripheries; some of Under Planning which will be developed as satellite towns to provide alternate economic centres around the city. Expected completion in 2022

RoofandFloor Intelligence roofandfloor.thehindu.com Page 33 NA

Bengaluru-Mysore Kempegowda International Infrastructure Corridor (BMIC) Airport Terminal 2

Length: 111 km The new terminal will handle upto 50 million passengers per annum; along 4km of Expressway is completed. 41km with creating ample job opportunities. of Peripheral Road and 8.5km of Link Road is also operational. Expected completion in 2021

Under planning

Bengaluru Metro Rail (Phase II)

Baiyappanahalli-Whitefield Mysore Road – Kengeri Nagasandra – BIEC Yelachenahalli – Anjanapura 34 km

Suburban Railway RV Road – Bommasandra Length: 161 km Gottigere - Nagawara This will improve connectivity. 81 19 km , 25 km suburban stations are planned.

Expected completion in 2025 Expected completion in 2021

Bengaluru Metro Rail Bengaluru Metro Rail (Phase 2A) (Phase 2B)

ORR Metro- Silk Board Junction KR Puram – Kempegowda to KR Puram International Airport (KIA) 17 km 37 km

RoofandFloor Intelligence roofandfloor.thehindu.com Page 34 How Bangalore’s Suburban Rail Network Will Boost Real Estate

Bangalore is one of Asia’s fastest-growing cities with a projected average annual GDP growth rate of 9.9% between 2020 and 2024, according to a recent report from Oxford Economics.

Economic growth means a boom in the population and Bangalore’s narrow roads, thick with unmoving traffic, are a testimony to that.

But in the 2020-21 Karnataka Budget, infrastructure development was given a significant boost with a sanction of Rs 8,772 crores. The expansion of the much- awaited suburban rail network received an allotment of Rs 500 crores out of the total in the hope that it would ease traffic and bolster economic performance.

The planned suburban railway network covers 148 km and four corridors. Overall, the end-to-end implementation of the project is expected to cost a total of Rs 18,600 crores.

Impact on people and real estate

The network with 57 stations in the offing is expected to considerably ease commuting times for many professionals who work in IT/ITeS and manufacturing as well as startups all over Bangalore. The project, expected to be operational by 2025, will spread across four corridors:

RoofandFloor Intelligence roofandfloor.thehindu.com Page 35 Corridor 1: KSR Bangalore – Devanahalli

Running between Krantiveera Sangolli Rayanna (KSR) station and Devanahalli, this route will cover a proposed 15 stations including areas like Channasandra, Thanisandra, Yelahanka, Bettahalasur and Doddajala.

Corridor 2: Chikkabanavara-Byappanahalli

The second route, covering around 14 stations, will connect the further reaches of North Bangalore to Whitefield, which comprise a blend of upcoming towns, villages, and established micro-markets.

Corridor 3: Heelalige – Rajankunte

The second route, covering around 14 stations, will connect the further reaches of North Bangalore to Whitefield, which comprise a blend of upcoming towns, villages, and established micro-markets.

Corridor 4: Kengeri – Whitefield

This key route is expected to cover nine stations and link two disparate ends of Bangalore that currently struggle with connectivity.

In addition to relieving an estimated 80% of the traffic from 12 of Bangalore’s high-traffic routes, the suburban rail network will also give an impetus to the real estate along the proposed corridors.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 36 • Increased activity across all housing and commercial segments.

• The project will give rise to not just new neighbourhoods but also affordable housing options in already established areas like Electronic City and Devanahalli.

• It will also open up more opportunities for development in far-flung areas that were otherwise easily inaccessible.

• Land value will invariably increase in all the areas across transit stations as well as the railway stops.

• Areas with reasonably good connectivity will experience more nuanced infrastructure development like the laying out of cycle tracks and bus facilities.

• Infrastructural development will be inevitable as the need for more expressways and highways will rise.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 37 Budget Preferences

In May 2020, the Karnataka government slashed the stamp duty on new apartments costing up to Rs 35 Lakh. For properties costing less than Rs 20 Lakh, the existing 5% was reduced to 2%, while for properties costing between Rs 21-35 Lakh, the rate was reduced to 3%.

The reduction in stamp duty coupled with low interest rates is expected to boost demand for affordable housing in the coming months. This was also validated by our data which indicated that about 32% prospective home seekers were looking to buy a property in within Rs 40 Lakh.

Properties in the mid-segment (Rs 40-70 Lakh) recorded the highest number of searches in Bengaluru in H1 2020. The number has increased by 9% when compared to H1 2019.

55% H1 2019

u 46% H1 2020 40%

32% Homebuyers in Bengalur

8% 9% 6% 5%

RoofandFloor Intelligence roofandfloor.thehindu.com Page 38 Preferred Property Type

Continuing the trends from H1 2019, apartments emerged as the showstopper in terms of preferred property type in Bengaluru. Nearly 71% home seekers were looking to buy an apartment, followed by plots and villas with 22% and 7% respectively.

Preferred Property Type in Bengaluru (H1 2019 vs H1 2020)

71% 67%

H1 2019 H1 2020

23% 22% % Homebuyers in Bengaluru 10% 7% Apartments Plots Villas

RoofandFloor | August 2020 | Infographic 18 Source : RoofandFloor Research

It must be noted that interest for plots has remained stable in H1 2020.

Interestingly, apartments within Rs 70 Lakh saw maximum searches on our portal, while for plotted developments,

RoofandFloor Intelligence roofandfloor.thehindu.com Page 39 Zone-wise analysis

For our analysis, we have broadly divided Bengaluru into six zones –North, East, West, South, South-East, and Central.

East Bengaluru Continue to Lead in H1 2020

About 33% home seekers were looking to buy a property in East Bengaluru. All thanks to the growing presence of IT companies, numerous startups and businesses, which have driven up demand for residential spaces. The region has plenty of choices when it comes to social infrastructure. Socialising is never a problem with a plethora of options for restaurants, pubs, and malls.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 40 Out of all home seekers, 77% showed interest for apartments, followed by 12% and 11% interest for plots and villas respectively. u 60% H1 2019 50% H1 2020

33% 25%

% Homebuyers in East Bengalur 10% 10% 5% 7%

Housing Preferences in ast Bengaluru (H1 2020 vs H1 2019)

77% H1 2019 71% H1 2020

% Homebuyers in East Bengaluru 15% 14% 12% 0% 1% 11% Apartments Plots Ro Houses Villas

RoofandFloor | August 2020 | Infographic 21 Source : RoofandFloor Research

In terms of budget preferences, home seekers in East Hot Markets: Whitefield, Bengaluru showed maximum inclination for mid-segment Sarjapur Road, Varthur, Kadugodi, Hoskote properties with 60%, followed by affordable properties with 25%. Average Price: Rs 5,2318 per sq. ft. Luxury and ultra-luxury properties together merely garnered 15% interest.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 41 North Bengaluru Is Not Far Behind

About 25% home seekers were looking to buy a property in North Bengaluru. Once an investor-driven market, the region has now flourished to welcome a wide spectrum of residents ranging from families to working professionals to older NRIs who return to India to settle down.

Apartments dominated the property spectrum in the northern region with 54%, closely followed by plots with 42%. u

H1 2019 46% 47% 42% 40% H1 2020

% Homebuyers in North Bengalur 7% 7% 5% 4%

Housing Preferences in orth Bengaluru (H1 2020 vs H1 2019)

54% 53% H1 2019

42% H1 2020 39%

8% 4% % Homebuyers in North Bengaluru

Apartments Plots Villas

RoofandFloor | August 2020 | Infographic 23 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 42 It must be noted that the northern part of the city has more plotted developments when compared Hot Markets: Devanahalli, to any other parts of the city. Yelahanka, Thanisandra, Nelamangala

Average Price: In North Bengaluru, properties within Rs 40 Lakh are Rs 4,831 per sq. ft. most preferred, followed by mid-segment properties. The demand for affordable properties can also be correlated with the high demand for plotted developments in the region.

South, South-East, West, & Central Bengaluru

While the majority share of demand in Bengaluru was skewed towards the eastern and northern parts of the city, regions such as South, South-East, and West Bengaluru also recorded decent demand for properties in H1 2020. Cumulatively, these three regions recorded interest from about 42% home seekers, with maximum interest for South-East Bengaluru with 16%.

In South Bengaluru, properties priced over Rs 1 Crore ruled the roost in H1 2020, followed by mid-segment properties. In South-East part of the city, maximum interest was recorded for mid-segment properties, while in West Bengaluru, properties in the affordable segment emerged as a winner.

South Bengaluru Central Bengaluru West Bengaluru

Hot Markets: Average Price: Hot Markets: Electronic City, Banashankari Rs 14,094 per sq. ft. Kengeri, Mysore Road

Average Price: Average Price: Rs 5,661 per sq. ft. Rs 4,876 per sq. ft.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 43 100%

80

60

40

20

0

60

40

20

0

RoofandFloor Intelligence roofandfloor.thehindu.com Page 44 Top 10 Micro-markets in H1 2020

Based on the number of searches on RoofandFloor, following were the top 10 micro-markets in Bengaluru in H1 2020.

• Off Sarjapur Road maintained its first spot in the list of top 10 micro-markets in Bengaluru. Whitefield also retained its second position in both H1 2019 and H1 2020.

• Kengeri replaced Mysore Road, that secured the third spot in H1 2019, in H1 2020.

• Varthur and Thannisandra made it to the top 10 micro- market list.

K R Puram Ranked 7th in 2019

7

Mysore Road Ranked 3rd in 2019 3

RoofandFloor Intelligence roofandfloor.thehindu.com Page 45 Top 10 Micro-markets in Bengaluru (H1 2020)

#7 Devanahalli (Rs 3,510/sq. ft.) 2019 ranking - #8 #4 Yelahanka (Rs 5,460/sq. ft.) 7 2019 ranking - #4

NEW ADDITION TO TOP 10 #9 Thanisandra (Rs 5,240/sq. ft.) 4 North Not in top 10 in 2019 9 #2 Whitefield (Rs 5,840/sq. ft.) 2019 ranking - #2 Central 2 East NEW ADDITION TO TOP 10 6 #6 Varthur 8 (Rs 4,655/sq. ft.) 1 Not in top 10 in 2019 3 West 10 South 5 #1 Off Sarjapur Road (Rs 4,690/sq. ft.) 2019 ranking - #1

#8 Sarjapur Road (Rs 5,025/sq. ft.) #3 Kengeri #5 Electronic City 2019 ranking - #6 (Rs 4,465/sq. ft.) (Rs 4,664/sq. ft.) 2019 ranking - #10 2019 ranking - #5

#10 Kanakapura Road (Rs 5,760/sq. ft.) 2019 ranking - #9

RoofandFloor | August 2020 | Infographic 27 Source : RoofandFloor Research

RoofandFloor Intelligence roofandfloor.thehindu.com Page 46 Use of Technology in Real Estate to Become Imperative post-Covid

-By Rajesh Goel, Director General, National Real Estate Development Council (NAREDCO)

Covid-19 has impacted all of us in many ways, changing our lifestyle, values, and beliefs significantly. Given that our collective memory is short, as evidenced by past events, Covid is still going to have a lasting impact on us. And some of this will become a permanent part of our conscious, the ‘new normal’. The way we live, and more so, the way we would want to live is going to impact the realty sector in a big way.

While it will prompt the real estate sector to go back to the drawing board, it will also offer new avenues to explore innovations to fast- track incorporation of new technologies – be it construction technologies, home automation, IoT, or AI. The planning would need to incorporate altered norms of social distancing, mobility, density, and health considerations.

The concept of work from home has indeed caught up across the spectrum but is especially significant for the millennials in the IT and related sectors. Post- Covid, the offices shall buzz again, but not as earlier. This is going to impact significantly the commercial and residential segments, which will also need to factor in the requirement of increased spacing and other health concerns. The e-commerce picking up in a big way during the pandemic is also going to broadly impact the shopping malls and warehousing in different ways.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 47 The lesser need for travel for work or tourism will reduce demand for the hospitality sector requirement of space.

The disruption during the pandemic would also drive the potential buyers to go in for nearly completed properties rather than during launch, except for the brands they trust. The real estate sector would need to work out the new ways to deal with the emerging dimensions to sustain itself effectively.

However, urbanisation is not going to stop, but will slightly slowdown in the coming months. Accordingly, the demand for all asset classes is going to be there and increase over time.

The product and factors which would excite the customers shall be different from what we have today. Possibly living in the crowded downtown may not remain the preferred choice and the demand may prop up for satellite townships, offering a much better quality of life.

The marketing of properties will change, wherein the focus will be on the specifics which are included to make them feel safe. Be it, appropriate public spaces, voice-activated controls, safer centralised air conditioning, larger lifts, etc.

The planning for residential complexes and specific housing unit is expected to change immensely. While larger public spaces and circulation areas would see an increase, the large swimming pool may be a thing of the past. The individual home would need to have a place or two to double up as the office for self or spouse or kids. The requirement of higher personal spacing, as also for open areas like balconies, would likely push up unit sizes.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 48 Similarly, for office spaces, the need for social distancing would mean redesigning of cubicles and workstations. The centralised air conditioning would also need technological interventions to prevent the circulation of viruses. In all the cases, the need for avoidance of touching controls for lifts, lighting, etc., would mandate using voice-activated controls. IT interventions for uninterrupted availability of high bandwidth internet would be mandatory, as also higher capacity or increased number of lifts would be the norm.

The current real estate scenario with a large inventory of delayed and still unfinished houses, would drive the buyers towards nearly completed projects, requiring the builders to put in much larger investments into their projects. Servicing these increased investments would create an additional financial burden, which will necessitate completing the projects in the shortest possible time for them to be able to sell their properties to the buyers to generate resources.

To minimise the construction time, the use of construction technologies would be imperative. The technologies for modular construction, like precast systems, formwork systems, steel construction etc. are already in fashion to some extent, but post-Covid will become a norm.

These technologies would also be mandated by the non-availability of labour, mainly migrant workers who may not return fast enough. The requirement of quality for the much aware customers of today, also calls for industrialised construction in a big way. The pandemic would fast track this process of transition to new technologies.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 49 All said and done, the virus outbreak is going to change the Indian realty sector in a big way, most probably for the better. This might be the inflexion moment for the real estate sector, enabling it to think anew and reimagine in this Covid reality.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 50 The Journey Ahead

Future of Residential Real Estate Post-COVID

The ongoing pandemic has disrupted the entire existing real estate ecosystem, and the impact is so profound that it is still difficult to ascertain the quantum effect onthe sector.

Thus, one can expect there would be some paradigm shift which will shape the future of the realty industry. Some of the critical changes one can expect to witness are: Ashish R. Puravankara Managing Director, The market will see further consolidation; only serious Puravankara Limited players with a healthy balance of payment will remain in the real estate business.

The residential segment will become more and more end- user market, as customer centricity and seamless post- sale experience will be some of the key differentiators

Investing/owning a home will climb up the list when it comes to personal finance investment tools.

Assisted virtual reality and proptech will become the new norm.

- Ashish R. Puravankara, M.D., Puravankara Limited

While the underlying demand for homes remains strong, there is still a long way toward the resurrection of the Indian real estate. Having said that, there are always silver linings to the dark clouds. With a set of challenges come some opportunities. Millennials will reconcile with the idea of owning a home for financial security and stability reasons. With the strengthened US dollar, NRIs will once again find Indian markets attractive.

RoofandFloor Intelligence roofandfloor.thehindu.com Page 51 Thus, the demand for housing is expected to pick up in the second half of 2020. The festive season that falls in the last quarter of the calendar year will see an increase in sales volume.

New launches in both Chennai and Bengaluru are expected to remain modest as developers will focus on selling their existing inventory.

As mentioned earlier in the report, demand for affordable and mid-segment properties will continue to rise in the near term. Property prices are likely to remain rangebound.

In terms of preferred stage of construction, homebuyers are most likely to opt for ready-to-occupy properties to avoid all sorts of risks, including construction delays. Interestingly, both cities have a decent number of ready properties. Additionally, out of total under-construction properties in Chennai and Bengaluru, 25% and 37% respectively are slated for completion in H2 2020. Thus, there will be ample options for homebuyers to select from.

There will undoubtedly be some design innovations, both structural and architectural, especially in the residential segment. These innovations will be focusing on equipping customers with requisite facilities and amenities to address any similar situation in the future. Is the part of journey ahead!

RoofandFloor Intelligence roofandfloor.thehindu.com Page 52 For business enquiries, please contact [email protected]