M A R K E T B E AT Industrial H2 2020

Warehousing leasing activity picks up momentum in H2 2020 Warehousing leasing in Mumbai saw some renewed traction during the second half of 2020 as the city opened up post lockdown across all sub-markets in the third quarter. Sustained demand from 3PL, E-commerce, FMCG, Retail and Pharma firms was the primary driver for the improved leasing activity. remained the most active sub- market in terms of warehouse leasing in H2 2020, accounting for a major share in transactions. Key transactions recorded during H2 included FM Logistics leasing 900,000 sf and RISE IN WAREHOUSING RENTS (Y-O-Y) a major E-Commerce company (confidential) leasing 330,000 sf, both in Bhiwandi and surrounding locations. Similar to the first half of 2020, the demand for temporary, short-term 8.3% spaces remained high during the remainder of the year, as e-commerce players and e-retailers were on the lookout for such spaces to fulfil the increased demand during the IN PEN ROAD lockdown and even post that, as online shopping became a major trend in consumption patterns. Going forward, we expect that demand for large warehousing spaces from e- commerce players as well as e-grocers will continue to grow. The demand from 3PL operators will also increase in the near future, as major MNCs will look to outsource their 4.3% GROWTH IN INDUSTRIAL RENTS (Y-O-Y) supply chain management to 3PL operators. Moreover, FMCG, Healthcare and Pharma companies will remain key occupier categories for Grade A warehousing developments IN JNPT & ROAD over the next few quarters. The projects which were expected to be completed during H2 2020 have been pushed by at least 2-3 quarters, as most of the developers are still facing labour shortages on construction sites. The overall rentals for grade A warehousing space across all sub-markets remained stable, with only Pen Khopoli Road belt witnessing half yearly growth of 8.3% during the SPACE LEASED BY FM LOGISTICS second half of 2020. However, Grade B / C warehouses continue to exhibit rental correction in the range of 5-10%. We expect rental values for Grade A projects to remain range- 0.9 msf bound over the next 3-6 months. IN BHIWANDI Growing demand for warehousing and data centres to drive land rates in select locations Amidst a temporary slowdown in market activity in 2020 due to the Covid-2019 outbreak and subsequent lockdown, land prices remained unchanged across all submarkets. However, continued demand from warehousing and industrial space operators in Bhiwandi and surrounding areas will likely drive land rates during the upcoming quarters. Demand from institutional players is also high for fully compliant, aggregated large land parcels typically within the size range of 25 acres to 100 acres, to build Grade A logistics parks in ECONOMIC INDICATORS Q4 2020 Bhiwandi. The landowners in Taloja and nearby areas are also bringing in land parcel supply for logistics and warehousing. Data centres are another emerging asset class with immense growth potential and data centre operators are driving the demand for land in the -Belapur Road submarket. is a key location for setting up data centres as land availability along with reliable power supply make this a very attractive location for the setting up of data centre parks. Data centre operators are also exploring JVs 2021 with private developers with existing land parcels for greenfield data centre development in this region. 2019 2020 Forecast The upcoming Navi Mumbai International Airport will drive land rates higher in and nearby areas along with the JNPT & Uran submarkets in the near future. Even prominent warehousing operators are looking for prime land parcels which are strategically located in the vicinity of the airport. Land rates across the other warehousing and industrial corridors in Mumbai are likely to remain steady; however, select locations like Bhiwandi, Taloja, Panvel and nearby areas are expected to see marginal appreciation in land rates in GDP the near term. Growth 4.2% -7.5% 8.8% Industrial rents across locations remained stable in H2 2020 CPI Growth 3.4% 6.1% 4.5% Industrial space leasing activity continued to remain muted across all submarkets during the second half of 2020 with no major transactions recorded during this period. The current average rents remained stable across all major corridors in 2020, with only JNPT & Uran Road witnessing 4.3% y-o-y growth in rents. We expect the demand for industrial Consumer space to be low in the near term with rental values to be range-bound in the coming quarters. Spending 5.0% -8.5% 7.2% INDUSTRIAL RENT / Y-O-Y GROWTH WAREHOUSING RENT / Y-O-Y GROWTH Govt. Final 40 10% Expenditure 13.2% 5.7% 10.5% 60 5% 8% Growth 50 4% 30 40 6% 3% 20 30 4% Source: Oxford Economics, IMF, RBI 2% 20 10 2% 10 1% 0 0% 0 0%

INDUSTRIAL RENT (INR/SF/MONTH) INDUSTRIAL RENT Y-O-Y % GROWTH WAREHOUSING RENT (INR/SF/MONTH) WAREHOUSING RENT Y-O-Y % GROWTH M A R K E T B E AT MUMBAI Industrial H2 2020

LAND RATES – DECEMBER 2020 SUBMARKET INR MN/ACRE US$ MN/ACRE EURO MN/ACRE Y-O-Y Change

Bhiwandi 25 0.3 0.3 0.0%

Thane-Belapur Road 95 1.3 1.1 0.0%

Taloja Industrial Estate 80 1.1 0.9 0.0%

Panvel ( Phata)# 55 0.7 0.6 0.0%

JNPT & Uran Road# 22 0.3 0.3 0.0%

Rasayani Patalganga 20 0.3 0.2 0.0%

Pen Khopoli Road 16 0.2 0.2 0.0%

Note: Quoted land rates for serviced industrial land parcels are mentioned # Represents government owned serviced plots in industrial parks Percentage growth are in local currency; Y-O-Y – Year on Year Rohan Sharma Conversion Rate: US$1= 73.50 INR and Euro 1 = INR 87.60 Director, Research Services +91 124 4695555 /[email protected]

SIGNIFICANT LEASE TRANSACTIONS H2 2020 Kapil Kanala Senior Associate Director, Research Services Lessee Lessor Type Submarket Area (sf) +91 40 40405555 /[email protected]

Large E-Commerce Player (NDA Mahindra Logistics Warehousing Bhiwandi 330,000 cushmanwakefield.com Signed)

FM Logistics Welspun One Warehousing Bhiwandi 900,000 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION 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 KEY SALES TRANSACTIONS H2 2020 among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 Buyer Seller Type Submarket Area countries. In 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project Mapletree Investments Kanakia Spaces Residential 6.7 acre management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com Ashwin Sheth Group. Cine Vista Residential Eastern Suburbs 4.0 acre or follow @CushWake on Twitter. Godrej Properties Individual Landlord Residential Extended Eastern 20.0 acre Suburbs ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.