1 India recorded a growth of 4.7% in Q3 FY14 (October-December 2013) over Q3 FY13. This was a marginal decline compared to Q2 FY14’s growth rate of 4.8%. Majority of the growth during the quarter was driven by services sector. The ‘financing, insurance, real estate and business services’ sector registered maximum growth of 12.5% during the quarter, followed by ‘community, social and personal services’ sector, which grew at 7% and ‘trade, hotels, transport and communication’ at 4.3%. Apart from this, all other sectors witnessed a slowdown in the growth rate as compared to the previous quarter. The pick-up in manufacturing activity during Q2 FY14 failed to sustain its momentum and registered a negative growth rate compared to the same period last year. The ‘Construction’ sector’s performance also remained almost at par with levels observed last year, recording only a 0.6% growth. The overall GDP growth for April-December 2013 was estimated at 4.6%, registering a marginal improvement from 4.5% during the same period last year. The Reserve Bank of India (RBI) raised the repo rate by 0.25 basis points to 8% in January 2014. This decision was driven by the need to set the economy on the disinflationary path; targeting CPI below 8% by January 2015 and below 6% by January 2016. Apprehension of a further decline in growth during Q3 2013-14 due to subdued outlook evident in the industrial and services sector also aided this decision. The Asian Development Bank (ADB) revised India’s 2014-15 growth forecast to 5.5% from an earlier estimate of 5.7% in October 2013. The RBI also suggested that though a revival from around 5.0% growth in 2013-14 is certain in the coming year, downside risks to central estimate of 5.5% for 2014-15 remain. This prediction came on the back of apprehensions that India might face a weak monsoon season this year. Additionally, there have been no clear indicators on sustained revival of industrial and services sector amidst a moderation in global economic activity. The easing of supply bottlenecks, revival of exports with pick-up in the world economy and the implementation of stalled projects all have to play a role in sustaining this positive outlook. The INDIA MARKET OVERVIEW GROSS DOMESTIC PRODUCT GROWTH RATE PROPERTY INSIGHTS India Quarter 1, 2014 Subdued Demand, Stable Outlook Growth Rate (%) Source: Central Statistical Organisation, Govt. of India 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Oct-Dec 07 Jan-Mar 08 Apr-Jun 08 Jul-Sep 08 Oct-Dec 08 Jan-Mar 09 Apr-Jun 09 Jul-Sep 09 Oct-Dec 09 Jan-Mar 10 Apr-Jun 10 Jul-Sep 10 Oct-Dec 10 Jan-Mar 11 Apr-Jun 11 Jul-Sep 11 Oct-Dec 11 Jan-Mar 12 Apr-Jun 12 Jul-Sep 12 Oct-Dec 12 Jan-Mar 13 Apr-Jun 13 Jul-Sept 13 Oct-Dec 13
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1
India recorded a growth of 4.7% in Q3 FY14
(October-December 2013) over Q3 FY13. This was a
marginal decline compared to Q2 FY14’s growth rate
of 4.8%. Majority of the growth during the quarter
was driven by services sector. The ‘financing,
insurance, real estate and business services’ sector
registered maximum growth of 12.5% during the
quarter, followed by ‘community, social and personal
services’ sector, which grew at 7% and ‘trade, hotels,
transport and communication’ at 4.3%. Apart from
this, all other sectors witnessed a slowdown in the
growth rate as compared to the previous quarter. The
pick-up in manufacturing activity during Q2 FY14
failed to sustain its momentum and registered a
negative growth rate compared to the same period
last year. The ‘Construction’ sector’s performance
also remained almost at par with levels observed last
year, recording only a 0.6% growth. The overall GDP
growth for April-December 2013 was estimated at
4.6%, registering a marginal improvement from 4.5%
during the same period last year.
The Reserve Bank of India (RBI) raised the repo
rate by 0.25 basis points to 8% in January 2014. This
decision was driven by the need to set the economy on
the disinflationary path; targeting CPI below 8% by
January 2015 and below 6% by January 2016.
Apprehension of a further decline in growth during Q3
2013-14 due to subdued outlook evident in the
industrial and services sector also aided this decision.
The Asian Development Bank (ADB) revised India’s
2014-15 growth forecast to 5.5% from an earlier
estimate of 5.7% in October 2013. The RBI also
suggested that though a revival from around 5.0%
growth in 2013-14 is certain in the coming year,
downside risks to central estimate of 5.5% for 2014-15
remain. This prediction came on the back of
apprehensions that India might face a weak monsoon
season this year. Additionally, there have been no
clear indicators on sustained revival of industrial and
services sector amidst a moderation in global
economic activity. The easing of supply bottlenecks,
revival of exports with pick-up in the world economy
and the implementation of stalled projects all have to
play a role in sustaining this positive outlook. The
INDIA MARKET OVERVIEW
GROSS DOMESTIC PRODUCT GROWTH RATE
PROPERTY INSIGHTS
India Quarter 1, 2014
Subdued Demand, Stable Outlook
Gro
wth
Rate
(%
)
Source: Central Statistical Organisation, Govt. of India
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Oct-D
ec 0
7
Jan-M
ar 0
8
Apr-Jun 0
8
Jul-Sep
08
Oct-D
ec 0
8
Jan-M
ar 0
9
Apr-Jun 0
9
Jul-Sep
09
Oct-D
ec 0
9
Jan-M
ar 10
Apr-Jun 10
Jul-Sep
10
Oct-D
ec 10
Jan-M
ar 11
Apr-Jun 11
Jul-Sep
11
Oct-D
ec 11
Jan-M
ar 12
Apr-Jun 12
Jul-Sep
12
Oct-D
ec 12
Jan-M
ar 13
Apr-Jun 13
Jul-Sep
t 13
Oct-D
ec 13
Economic Trends
Trends & Updates
2
EXCHANGE RATE MOVEMENT (INR/USD)
BSE REALTY INDEX
Source: RBI
INR
/US
D
Ma
r-12
Ap
r-12
May
-12
Ju
n-1
2
Ju
l-12
Au
g-1
2
Se
p-1
2
Oct-
12
No
v-1
2
De
c-1
2
Ma
r-13
Ma
r-14
Ap
r-13
May
-13
Ju
n-1
3
Ju
l-13
Au
g-1
3
Se
p-1
3
Oct-
13
No
v-1
3
De
c-1
3
Ja
n-1
3
Ja
n-1
4
Feb
-13
Feb
-14
70
65
60
55
50
45
40
IND
EX
Source: BSE
Jun-10
Jun-11
Jun-12
Jun-13
Sep-10
Sep-11
Sep-12
Sep-13
Dec-10
Dec-11
Dec-12
Dec-13
Mar
-11
Mar
-12
Mar
-13
Mar
-14
4000
3500
3000
2500
2000
1500
1000
500
500
1 Top eight cities include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune.
Current Account Deficit (CAD) shrunk to 0.9% of
GDP during Q3 2013-14 due to a narrowing trade
deficit resulting from higher exports and
moderation in imports. However, it is expected to be
around 2% of the GDP for 2013-14, much lower than
the 4.8% of GDP in 2012-13. External financing
conditions improved in February, as investors
started responding to the economic developments
in emerging markets by the way of reallocations
considering the probable impact of the U.S. Fed
tapering. However, exports growth dipped during
the quarter, amidst decline in global demand due to
overall slowdown.
The commercial office space across top eight 1 cities of India recorded total net absorption of 5.9
million square feet (msf) during the first quarter of
2014. Nearly 92% of this net absorption was in Grade
A developments. Hyderabad contributed 30% of the
total net absorption during the quarter followed by
NCR with 25% share. Majority of the absorption in
Hyderabad (which recorded more than 100%
quarterly rise) was driven by pre-commitments. The
total leasing during this period across the top eight
cities was 8.5 msf, indicating the continuing trend of
relocation. These cities recorded a total supply of
nearly 7.3 msf during the quarter and an overall
vacancy of 18.9%. In the retail sector, only 0.35 msf of
mall space supply was added across the eight cities
compared to 1.18 msf in Q4 2013. Due to this supply
decline and stable transaction activity, mall vacancies
dropped or remained stable in most of the cities
except Ahmedabad and Pune.
In 1Q 2014, residential unit launches across the top
eight cities recorded a quarter-on-quarter (q-o-q)
increase of 42%. Nearly 55,500 units were launched
in this quarter, with Bengaluru contributing around
30% to the total launches. The capital values
continued to remain sticky across segments in these
top cities. However, GST submarket in Chennai
recorded the highest quarterly capital value
appreciation of 10% in the mid-end segment due to
persistent demand for residential properties located
in proximity to the workplaces. Quarterly mid-end
segment capital value appreciation of upto 8% was
recorded in certain submarkets of Bengaluru,
Hyderabad and Pune. NCR witnessed a correction
across segments in certain submarkets of the city due
to sluggish demand and unsold inventory pile-up.
Thus, although the launch activity picked up during
the quarter, residential markets across cities
continued to exhibit a subdued demand trend with
buyers adopting a wait-and-watch approach due to
prevailing economic scenario and uncertainty on
results of upcoming general elections.
After the repo rate hike in January 2014, headline
inflation receded from 11.2% in November 2013 to
8.1% in February 2014. This decline in inflation could
be attributed to the sharp seasonal correction in food
prices. The ex-food and fuel CPI inflation has remained
sticky at around 8% for nearly 20 months in a row,
posing significant threat to growth and making a
strong case for retightening of monetary policy to
align with country’s fiscal targets. The WPI inflation
also eased to 4.7% in February 2014 from 7.5% in
November 2013. This was led by the disinflationary
impulses in food prices; however, the inflation in non-
food manufactured products rose marginally from
2.2-2.6% in May-September 2013 to 3.1% in February
2014. The RBI has stated that though the inflation
FDI INFLOW IN HOUSING AND REAL ESTATE SECTORhas started to moderate, further easing of
inflationary pressures will depend on the impulses
from policy actions, the play of food inflation and the
extent of negative output gap. Thus, although the
inflation is expected to moderate, it is likely to
remain above the comfort zone.
The Indian economy recorded a GDP growth of
4.7% in Q3 2013-14. Although this was marginally
higher than the growth recorded during the
corresponding quarter of previous year, concerns of
growth revival escalated because the economy now
needs to record a 5.5% growth in Q4 2013-14 in order
to meet estimates of 4.9% GDP targeted for the fiscal
year. This seems difficult considering Q3 2013-14 was
the seventh consecutive quarter with a sub 5%
growth. Although moderation in inflation provided
some room for recovery, the downside risks continued
to remain due to weak performance of the
manufacturing sector and increased risks to the
agricultural sectors’ performance due to
uncertainty of south-west monsoons. Thus, recovery
remains largely dependent on improvement in the
investment climate, external demand facilitated by
improvement in global financial and monetary
conditions and improvement in business and
consumer confidence aided by the formation of a
stable central Government. The Rupee closed at INR
60.1 against the U. S. Dollar in March 2014 almost
reaching levels prior to the devaluation/volatility
slide in June 2013. This improvement in the Rupee
value could majorly be attributed to the decline in
inflationary pressures during the past two-three
months. In addition, reallocations and improvement
Residential capital values remained stable across
the high-end segment in Ahmedabad, Chennai,
Hyderabad and Mumbai. Mid-end segment capital
values in Ahmedabad and Mumbai also remained
stable; however GST Road in Chennai registered a
10% appreciation on a q-o-q basis, mainly driven by
high demand from working professionals and new
projects being launched at higher price points.
Though high-end capital values for Bengaluru mostly
remained stable, certain areas such as Koramangala,
JP Nagar, Bannerghatta, Kanakpura, etc. in the
southern region registered a marginal q-o-q
in the external financing conditions also played a
pivotal role in strengthening of the Rupee.
The tightening of financial conditions during
beginning of the year, the downslide of inflation and
the improvement in the Rupee contributed to the
recovery in BSE Realty Index. The index touched 1468 stpoints on 31 March 2014 at the close of the financial
year, rising nearly 35 points above its December
closing of 1433 points.
India witnessed total FDI inflows of INR 24,632
crore in Q3 2013-14 (October-December 2013). The
Construction Development sector contributed 6%
(INR 1,432 crore) to the total FDI, registering a 55% q-
o-q decline. This decline could majorly be attributed to
the fact that the previous quarter registered highest
FDI in Construction Development in sixteen quarters.
In addition, FDI numbers for July-September 2013
were revised to 45,153 crore, leading to overall q-o-q
decline of 45%. Thus, the improvement in market
sentiment evident from the pick-up in FDI inflows
during the last quarter failed to sustain in Q3 2013-14.
Residential Trends
RESIDENTIAL CAPITAL VALUES GROWTH INDEX
3
INR
Cro
re
Source: Dept. of Industrial Policy & Promotion, Govt. of India
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
171
20
05
-06
20
06
-07
20
07-0
8
20
08
-09
20
09
-10
20
10-1
1
20
11-1
2
20
12-1
3
1 2
013
-14
2 2
013
-14
3 2
013
-14
2,121
8,749
12,62113,586
5,149
3,443
7,248
946
3,210
1,432
Source: Cushman & Wakefield Research
2001
2002
2003
2004
2005
2006
2007
2008
2009
1Q20
102Q
2010
3Q 2
010
4Q
2010
1Q20
112Q
2011
3Q 2
011
4Q
2011
1Q20
122Q
2012
3Q 2
012
4Q
2012
1Q20
132Q
2013
3Q 2
013
4Q
2013
1Q 2
014
1,000900800700600500400
300200100
-
Bengaluru (Brunton Road Lavalle Road) Chennai (Boat Club)
Kolkata (Ballygunge)
NCR (Satya Niketan and Anand Kiketan)
Hyderabad (Banjara Hills)
Mumbai (South)
Pune (Koregaon Park)
appreciation. The quarterly mid-end segment
appreciation ranged from 1-7% across Bengaluru. In
Hyderabad, areas such as Madhapur, Gachibowli,
Miyapur, Nizampet and Kukatpally registered a 3% q-
o-q capital value appreciation in the mid-end segment.
Prices in Kolkata also remained sticky except in high-
end properties of South-east (comprising of locations
such as EM Bypass, Christopher Road and Pancha
Sayar) where new units were launched at higher price,
leading to 3% q-o-q capital value increase. A few
micro-markets in Pune witnessed 2-3% q-o-q
increase in capital values in the high-end segment
and 2-8% increase in the mid-end segment. This was
primarily due to project launches at higher prices
and higher demand for properties in close proximity
to the commercial hubs. NCR was the only location
that witnessed q-o-q capital value correction of 3-
9% in certain locations in both the high-and-mid-end
segments, primarily due to subdued demand and
decline in transaction activities.
Nearly 55,500 units were launched in the first
quarter of 2014. The launch activity picked up by 42%
compared to the last quarter of 2013. Ahmedabad
and NCR were the only two cities that registered a
quarterly decline of new launches; 8% and 18%
respectively. Conversely, number of launches almost
tripled in Kolkata and Chennai. The increase in the
number of launches in Kolkata was mainly due to the
launch of a large township project. Maximum number
of project launches was witnessed in Bengaluru
among the top eight cities; it contributed nearly 30%
of the total number of launches in the 8 cities during
the quarter. Mumbai contributed almost 19% of the
units launched. Although NCR witnessed a decline in
the number of new launches, it still featured among
the top three cities with maximum project launches
for the quarter. Pune registered new launches in the
range of 3,500-4,000 units for the third consecutive
quarter. Hyderabad, which registered the lowest
number of launches this quarter (930 units), recorded
a 25% increase from Q4 2013. Going forward, new
launch activity in Hyderabad is likely to remain stable
or increase marginally as several delayed projects are
expected to be launched in H1 2014.
4
NEW RESIDENTIAL UNIT LAUNCHES ACROSS LOCATIONS IN 1Q 2014
3 BHK: 1,846 to 1,850 Shreyas Villas Sare Homes Singaperumalkoil 130 Villas 3 BHK: 2,316 to 2,616 Pavillion - Phase II Casa Grande Pvt. Ltd Thalambur 127 Apartments 3 BHK: 1,193 to 1,771
Note: The above values for mid segment typically include units of 1,000-2,000 sf
*The values for North-East micro market have been revised due to increased market coverage
Average Capital Values – Mid Segment (INR ‘000/sf)
Location
South
South - Central
South - East
North - East
North
2009
2.7 - 3.9
4.2 - 5.3
2.4 - 2.8
1.9 - 2.2
1.8 - 3.4
2010
3.2 - 4.5
4.5 - 6.0
2.5 - 3.2
2.2 - 2.7
2.2 - 4.7
2011
3.8 - 5.5
5.5 - 8.0
2.8 - 4.5
2.4 - 3.0
2.8 - 5.2
2012
3.8 - 5.5
5.5 - 8.0
2.8 - 4.5
2.4 - 3.5
2.8 - 5.2
2013
3.8 - 6.5
5.8 - 8.8
2.9 - 5.0
2.7 - 4.0
3.0 - 5.8
1Q 2013
3.8 - 6.5
5.8 - 8.8
2.9 - 5.0
2.7 - 4.0
3.0 - 5.8
Average Capital Values -Mid-Segment (INR ‘000/sf)
Source: Cushman and Wakefield Research
Note: The above values for high-end segment typically include units of 2,000-4,000 sf
*The values for Central, East and North-East micro markets have been revised due to increased market coverage.
Average Capital Values – High End (INR ‘000/sf)
East
North - East
Location
South
South - Central
South - East
South - West
Central
4.0 - 5.2
3.0 - 4.0
2009
4.8 - 5.9
8.5 - 9.6
4.5 - 5.7
8.6 - 9.8
7.2 - 10.0
4.5 - 6.0
3.5 - 5.0
2011
6.3 - 8.5
10.0 - 18.0
5.8 - 9.2
10.0 - 15.0
9.0 - 15.0
4.5 - 6.8
3.8 - 5.7
2012
7.0 - 12.0
10.0 - 18.0
5.8 - 9.5
10.0 - 15.0
10.0 - 17.0
5.0 - 7.7
4.2 - 6.5
2013
7.5 - 13.0
12.5 - 18.5
6.0 - 10.5
12.0 - 17.0
12.0 - 19.5
5.0 - 7.7
4.2 - 6.5
1Q 2014
7.5 - 13.0
12.5 - 18.5
6.0 - 11.0
12.0 - 17.0
12.0 - 19.5
Average Capital Values - High-end Segment (INR ‘000/sf)
Location
4.0 - 5.5
3.2 - 4.5
2010
5.3 - 6.8
9.5 - 13.0
4.5 - 8.0
8.9 - 13.0
8.0 - 12.5
2010
31
In 1Q 2014, around 6,700 residential units were
launched in Kolkata, 3.5 times the number of units
launched in the previous quarter. This was primarily
due to a few high-density affordable and mid-end
projects launched in southern peripheral locations
such as Joka and Maheshtala. These projects
contributed almost 70% to the total new unit launches
New Residential Launches
during the quarter. In 1Q 2014, affordable segment
overall accounted for 57% of total new unit launches
followed by the mid-end segment with 40% share.
This quarter witnessed launch of a theme-based
project in collaboration with Disney UTV, which is first
of its kind in the region.
Hiland Green
Hiland Group
Maheshtala 3,817
Apartments
2 BHK: 712
The County - Phase I
Team Taurus
Joka 850
Apartments
1 BHK: 869
2 BHK: 919 to 1,053
3 BHK: 1,253
Ivy Green
Vedic Realty
Vedic Village, Rajarhat
480 Apartments
2 BHK: 867 to 967
3 BHK: 1,174 to 1,274
North Grande
Mounthill Realty
Belghoria 474
Apartments
2 BHK: 1,022
3 BHK: 1,231 to 1,903
4 BHK: 2,311
Merlin Paradise
Merlin Group
Dum Dum 264
Apartments
2 BHK: 960
3 BHK: 1,365 to 1,663
4 BHK: 1,888
Ideal Aquaview (Tower A, B)
Ideal Group
Maheshbathan, New town
234 Apartments
2 BHK: 1,080 to 1,090
3 BHK: 1,475 to 1,510
4 BHK: 1,950
Eternia
Unimark Group & Concast Group
EM Bypass
104 Apartments
3 BHK: 2,398 to 2,573
4 BHK: 2,857 to 3,297
Rohit Apartments
Parasrampuria Realty
VIP Road 80
Apartments
2 BHK: 977 to 1,159
3 BHK: 1,431 to 1,530
Goldwin Ganpati Sharnam
Goldwin & Ganpati Group
Kaikhali
72 Apartments
2 BHK: 964 to 1,083
3 BHK: 1,045 to 1,114
Ideal Heights: Ph II (Cirrus)
Ideal Group
Sealdah
60 Apartments
2 BHK: 1,330 to 1,355
3 BHK: 1,715 to 1,995
Yahvi
A. Sarkar & Associates
Joka 46
Apartments
2 BHK: 993
3 BHK: 1,165 to 1,195
Curiocity
Realtech Nirman
Rajarhat 44
Apartments
2 BHK: 996 to 1,018
3 BHK: 1,398 to 1,502
The Address
PS Group
EM Bypass 40
Independent Floors
3 BHK: 2,440 to 2,486
4 BHK: 2,688 to 2,734
Ivory Tower
Shrishti Comotrade
Kudghat Metro 39
Apartments
2 BHK: 1,387
3 BHK: 1,556 to 1,656
Inia
JC Infratech
Park Circus Connector
37 Apartments
3 BHK: 2,180 to 2,450
4 BHK: 4,300
5 BHK: 4,630
Fort Rejoice
Fort Group
Behala 24
Apartments
3 BHK: 1,555
Florenza
Vinayak Group
Diamond Harbour Road
22 Apartments
3 BHK: 1,765
4 BHK: 2,100
Sukhmani Imperia
Sukhmani Developer
Diamond Harbour Road
22 Apartments
3 BHK: 1,858 to 1,881
Euphoria
Multicon
Ballygunge 15 Apartments
4 BHK: 5,000
Project Name Developer Location Number of Units* Type Area of Units (in sf)
* Estimated and as per market information
32
Under Construction Residential Property Update
In 1Q 2014, capital values largely remained stable in
both mid and high-end segments across most
submarkets. Most of the developers kept prices stable
to garner sales in the current subdued environment.
However, select projects in north, north-east and
south-east submarkets witnessed around 3-5% q-o-q
capital value appreciation. The construction activity
picked up pace during the quarter and nearly 2,100
units are likely to be completed in Q2 2014; majority of
this upcoming supply will cater to the mid-end
segment. North-east submarket would continue to
see maximum number of project completions as lot of
projects have been launched in last couple of years.
Some of the prominent projects that are nearing
completion include Promenade and Orbit Royale in
prime south central and south west submarkets.
Commercial Office Sector
The commercial office sector witnessed total
supply addition of 72,500 sf, a q-o-q decline of about
90%. 1Q 2014 did not witness any new Grade A
supply addition due to slow pace of project
construction in Salt Lake and Rajarhat micro-
markets, which together constitutes majority of
Grade A stock in Kolkata. Net absorption also
declined by about 62% on q-o-q basis and was noted
at 156,700 sf. Average deal size in Q1 2014 fell to
4,400 sf as against 5,300 sf in the preceding
quarter. IT-ITeS sector continued to witness highest
share (50%) in total net absorption, followed by
BFSI and Consulting sectors together accounting
for nearly 20%. The overall quarterly vacancy
dropped marginally by about 0.4 percentage points,
primarily due to lower supply infusion than net
absorption in this quarter. Weighted average rentals
remained stable across micro-markets owing to low
leasing activity.
During 1Q 2014, no new mall supply was added to
the Kolkata retail sector, leading to total mall stock
remaining unchanged at 3.7 msf. The malls in Central
location (Elgin Road) and East Kolkata (EM Bypass)
witnessed healthy leasing activity from F&B and
apparel retailers. Lack of new mall supply and
healthy leasing activity in a few malls led to a q-o-q
decline of 0.3 percentage point in vacancy level,
which was noted at 3.6% at the end of 1Q 2014. Main
street locations witnessed negligible transactions
despite demand from apparel, accessories and F&B
retailers due to lack of quality retail space on the
main streets. This in turn benefited the mall leasing
activity during 1Q 2014.
Retail Sector
In 1Q 2014, rentals remained stable during the
quarter in both main streets and malls. Also, a few
locations having retail space availability did not
witness significant leasing activity due to lack of apt
catchment area to attract shoppers towards these
locations.
33
Outlook
North-east submarket along with peripheral
locations such as Narendrapur, Sonarpur and Joka in
South and Madhyamgram and BT Road in North are
expected to witness majority of new launches in 2Q
2014. Demand in the mid-end segment may further
improve in the upcoming quarter, post general
elections and establishment of a stable government.
However, capital values are expected to remain
stable across most submarkets with minor
appreciation in the north-east region owing to
continued demand.
Kolkata office space sector is expected to witness
supply infusion of around 1.8 msf in 2Q 2014,
majority of which was supposed to have been added
during 1Q 2014 but got deferred due to slow pace of
construction. Net absorption is expected to improve
considering current pre-commitment levels. Overall
vacancy is expected to remain high due to
anticipated supply addition. Weighted average
rentals are expected to remain stable with slight
downward pressure in Salt Lake micromarket, owing
to existing high vacancy levels and likely new supply
addition.
In 2Q 2014, new mall supply of about 120,000 sf is
likely to be added to the south Kolkata retail market.
Retailers are likely to depict a higher preference for
malls over main streets primarily due to lack of
quality retail spaces on the main streets. The
upcoming quarter might witness leasing of a few
premium and upscale apparel brands. In 2Q 2014,
rentals are expected to remain stable across both
main streets and malls.
34
MARKET OVERVIEW
Mumbai
In 1Q 2014, around 10,700 new residential units
were launched in Mumbai, which is double the
number of the previous quarter. This substantial
increase was primarily due to the launch of new
phase in a large township project located on the
outskirts of city. This project received healthy
response from the market due to its lower ticket size
offerings. New launches in the quarter were
concentrated in the sub-markets of Dombivli (56%),
Western Suburbs (15%), Thane (15%) and Central
Suburbs (19%). In 1Q 2014, capital values remained
stable across sub-markets due to the subdued
demand and new launches at competitive prices.
Mumbai’s commercial office sector witnessed an
overall net absorption of approximately 750,000 sf
during the first quarter of 2014, a q-o-q decline of
35%. Majority of the net-absorption was in Grade A
developments concentrated in the sub-markets of
Thane-Belapur Road (29%), Lower Parel (29%),
Central Suburbs (19%) and Vashi (10%). Office space
demand was primarily driven by the IT-ITeS (48%),
E n g i n e e r i n g ( 3 0 % ) , B F S I ( 1 6 % ) a n d
Pharmaceuticals (4%) sectors. Lower demand in the
CBD resulted in the weighted average rental decline
of 3.7% from the previous quarter.
Retailers’ demand for space in malls and main-
streets remained stable during the first quarter of
2014. Demand from the apparel segment was high,
especially in Lower Parel, resulting in mall rentals
increasing by 4% during the quarter. Due to stable
demand, mall rentals in other suburban locations
such as Andheri, Malad, Goregaon, Ghatkopar,
Thane and Vashi remained stable from the previous
quarter. Overall mall vacancies also remained
unchanged and were noted at 15.3% for 1Q 2014.
Demand for spaces on main-street locations was
driven by the F&B and apparel sectors. However,
stable demand resulted in landlords quoting similar
rentals from the previous quarter across all major
sub-markets.
Ready Residential Property Update
TRENDS AND UPDATES
With low demand levels, capital values of ready
residential properties continued to remain stable
during the quarter. Even in submarkets with healthy
supply and continued end-user demand such as
Thane and Navi Mumbai, capital values remained
stable during the quarter. With a number of under-
construction projects facing completion delays, end-
users preferred ready projects over under
construction properties.
35
READY RESIDENTIAL PROPERTY VALUES IN MARCH '14
Source: Cushman & Wakefield Research Represents Mid and High End segments
Planet Godrej
Ashok Towers
Summer Trinity
Orchard Residency
Rustomjee Athena
Godrej Riverside
50,00046,000
44,000
14,0009,800
6,000
50,000
40,000
30,000
20,000
10,000
0
Source- Cushman and Wakefield Research
Note: The above values for high-end segment typically include units of 2,500-6,000 sf for South, South-Central, Central and North and units of 1,650-3,000 sf
for North (Santacruz & Juhu), Far North and North-East
South
South Central
Central
North
Far North
North East
Location 2008
43.0 - 55.0
47.0 - 67.0
27.0 - 31.0
9.0 - 13.0
33.0 - 53.0
14.0 - 18.0
34.0 - 55.0
10.0 - 16.0
42.5 - 58.0
42.0 - 66.0
22.0 - 30.0
10.0 - 16.5
2009
35.0 - 55.0
10.0 - 16.0
43.0 - 60.0
45.0 - 70.0
24.0 - 32.0
11.0 - 16.5
2010
48.0 - 70.0
46.0 - 78.0
34.0 - 58.0
28.0 - 40.0
12.5 - 18.0
14.0 - 22.0
2012
48.0 - 75.0
46.0 - 83.0
27.0 - 65.0
28.0 - 48.0
12.5 - 18.0
15.0 - 22.0
1Q 2014
48.0 - 75.0
46.0 - 83.0
27.0 - 65.0
28.0 - 48.0
12.5 - 18.0
15.0 - 22.0
2013
32.0 - 54.0
10.0 - 18.0
45.0 - 65.0
45.0 - 75.0
24.0 - 32.0
11.0 - 16.5
2011
Average Capital Values -High-end Segment (INR ‘000/sf)
South
South Central
Central
North
Far North
North East
Location 2008
27.0 - 34.0
34.0 - 43.0
13.5 - 19.5
7.0 - 9.0
18.0 - 28.0
6.0 - 7.4
15.0 - 26.0
6.4 - 8.5
28.0 - 37.0
35.0 - 45.0
16.0 - 24.0
8.5 - 11.5
2009
17.0 - 30.0
6.5 - 8.5
30.0 - 40.0
40.0 - 48.0
16.0 - 25.0
9.0 - 12.0
2010
35.0 - 45.0
43.0 - 52.0
22.0 - 37.0
18.0 - 27.0
10.0 - 14.0
8.5 - 12.5
2012
40.0 - 50.0
45.0 - 58.0
23.0 - 40.0
20.0 - 30.0
10.0 - 14.0
8.5 - 12.5
1Q 2014
40.0 - 50.0
45.0 - 58.0
23.0 - 40.0
20.0 - 30.0
10.0 - 14.0
8.5 - 12.5
2013
17.0 - 35.0
6.5 - 10.0
30.0 - 40.0
43.0 - 52.0
16.0 - 25.0
9.0 - 13.0
2011
Average Capital Values – Mid Segment (INR'000/sf)
Source: Cushman and Wakefield Research
Note: The above values for mid-end segment typically include units of 1,400-2,500 sf for South, South-Central, Central and North and units of 900-1,400 sf
for Far North and North-East
South: Colaba, Cuffe Parade, Nariman Point, Churchgate, etc.
South Central: Altamount Road, Carmichael Road, Malabar
Hill, Napeansea Road, Breach Candy, Pedder Road, etc.
Central: Worli, Prabhadevi, Lower Parel/ Parel
North: Bandra (W), Khar (W), Santacruz (W), Juhu, etc.
Far North: Andheri (W), Malad, Goregaon, etc.
North-East: Powai
Key to Locations:
36
New Residential Launches
Approximately 10,700 units were launched in 1Q
2014, which is close to double the previous quarter.
Mid-end segment accounted for about 67% of the
total units launched in the quarter whilst high-end
segment contributed 33%. New residential launches
during the quarter were concentrated in Dombivli
(56%), Western Suburbs (15%), Thane (15%) and
Central Suburbs (19%). Launches in the Western
Suburbs were concentrated between Goregaon-
Kandivali whilst in the Central Suburbs were located
at Chembur and Mulund. Thane also witnessed a few
launches at Kolshet and along the Ghodbunder road.
Lakeshore Greens
Lodha Developers
Dombivli 6,000
Apartment 1 BHK: 729 to 774
2 BHK: 927 to 1,026
3 BHK: 1,197
Ariisto Siesta
Ariisto Realty
Mulund 576 Apartment 2 BHK: 1,310 to 1,335
3 BHK: 1,715 to 1,925
Eastern Heights
Satara Properties
Chembur 480 Apartment 1 BHK: 367
1.5 BHK: 442
2 BHK: 503
BBJ Worldwide Roma
BBJ Worldwide
Andheri 432 Apartment 2 BHK: 1,095
3 BHK: 1,580
Rajesh Whitecity
Rajesh Lifespaces
Kandivali 416
Apartment 1 BHK: 745
2 BHK: 980
3 BHK: 2,015
4 BHK: 2,685
Rajesh Tattva
Rajesh Lifespaces
Thane 368 Apartment 3 BHK: 1,935
4 BHK: 2,985
Runwal Eirene
Runwal Developers
Thane 304 Apartment 1 BHK: 620
2 BHK: 830 to 1,075
2.5 BHK: 1,335
3 BHK: 1,510 to 1,535
Raheja Ridgewood
Raheja Universal
Goregaon 262 Apartment 1.5 BHK: 690
2 BHK: 1,274
3 BHK: 1,663 to 1,742
4 BHK: 2,232 to 2,465
La Riveria
Lakhani Builders
Panvel 234 Apartment 1 BHK: 640 to 720
2 BHK: 1,000 to 1,135
Omkar Ananta
Omkar Developers
Goregaon 221 Apartment 2 BHK: 1,050
Rosa Neo Orbis
Rosa Group
Thane 192
Apartment 2 BHK: 960
Acme Ozone - Phase 2 (Alpinia)
Acme Developers
Thane
180 Apartment 2 BHK: 1,066
3 BHK: 1,318
Unique Vistas
Unique Shanti Developers
Thane
176 Apartment 2 BHK: 1,250
Acme Ozone - Phase 2(Herbelia
Acme Developers
Thane
108 Apartment 3 BHK: 1,482
Puranik Hometown Smart Homes
Puranik Developers
Thane
100 Apartment 2 BHK: 715
3 BHK: 957
Neona
K Hemani Developers
Mulund 90
Apartment 1 BHK: 850
2 BHK: 1,190
Tridhaatu Harsh Aangan
Tridhaatu Princecare Group
Chembur
80 Apartment 2 BHK: 743
2.5 BHK: 881
White Orchid
Kamala Landmarc
Kandivali 80
Apartment 1 BHK: 725
2 BHK: 1,110
Marina
Shree Tirupati Group
Thane 80
Apartment 1 BHK: 695
2 BHK: 1,060
Iris
Hubtown Developers
Mira Road 77
Apartment 1 BHK: 795
2 BHK: 945
Project Name Developer Location Number of Units* Type Area of Units (in sf)
37
38
Rosa Oasis - Phase 2
Rosa Group
Thane 68
Apartment 2 BHK: 950 to 985
Pashmina Lotus
Pashmina Developers
Andheri 60
Apartment 4 BHK: 2,350 to 2,400
Celeste
Hubtown Developers
Worli 60
Apartment 1 BHK: 724
2 BHK: 1,048
Raheja Reflections Odessy
K. Raheja Universal Pvt. Ltd
Kandivali
54 Apartment 4 BHK: 3,454
Project Name Developer Location Number of Units* Type Area of Units (in sf)
* Estimated and as per market information
In 1Q 2014, Mumbai witnessed an overall office
space supply addition of 1.1 msf, 70% of which was in
Grade A developments. Overall supply increased by
21% from the previous quarter and was
concentrated in the sub-markets of Vashi (34%),
Lower Parel (24%) and Kanjurmarg (24%). With a
few companies deferring plans to take-up new space,
there was a decline in net-absorption during 1Q 2014.
Commercial Office Sector
With similar levels of supply and net-absorption in
Grade A developments, q-o-q vacancy declined
marginally to 19.7%. Rentals at all sub-markets
remained stable during the quarter except CBD,
which witnessed a decline due to lower demand.
Attractive rentals at Thane-Belapur road resulted in
pre-commitments of approximately 450,000 sf
during the quarter.
Western and central suburban locations witnessed
healthy construction activity during the quarter. With
new launches at attractive prices, capital values in
under construction projects remained stable during
Under Construction Residential Property Update
the quarter. A few developers also offered attractive
discounts in the high-end segment under
construction projects.
Retail Sector
Main street locations in Colaba, Andheri (West)
and Borivali continued to witness high level of enquiry
from F&B retailers. Limited availability of quality
spaces remains a concern especially in mature main-
streets such as Colaba, Breach Candy and Borivali.
With limited transactions and churn, rentals remained
stable across main-street locations. Mall rentals at
Mulund declined 4.6% during the quarter due to
existing high vacancy. A number of apparel and
footwear brands are expanding operations in
peripheral main-streets of Vasai and Virar due to
increasing residents in this region.
Outlook
Mumbai’s residential real estate demand is likely
to remain stable in 2Q 2014, resulting in stagnant
capital values from 1Q 2014. Developers are likely to
delay new launches and focus on clearing existing
unsold inventory. With economic fundamentals
likely to improve in 2H 2014, post general elections,
demand in the residential real estate sector might
revive.
In 2Q 2014, office space supply of 1.9 msf is
expected to be added in sub-markets of Goregaon
and Vikhroli. Net-absorption is likely to remain stable
in the upcoming quarter with transaction activity
concentrated in Andheri, Goregoan and Thane-
Belapur Road. Also, with stability in demand, rental
values are likely to remain unchanged in all major
submarkets in the short-term.
Demand for quality mall space is expected to
remain high from retailers who are planning store
expansions in the city. Limited availability and high
demand from F&B and apparel sectors for mall
spaces at Lower Parel, Malad and Goregaon could
result in rental appreciation in the short-term.
Demand for space at main-streets such as Chembur,
Borivali and Vashi is also expected to increase in the
upcoming quarter, resulting in rental values
appreciation at these locations.
39
National Capital Region
MARKET OVERVIEW
Due to current state of the economy and political
situation, NCR witnessed fewer launches in the first
quarter of 2014. New launches declined by 18% over
the previous quarter and were noted at around
6,500 units. More than 95% of the new units
launched in the quarter were in the mid-segment
and the remaining 5% were in the affordable
segment. This is a notable shift from the previous
quarter, which witnessed majority launches in the
affordable segment. Low demand continued to
impart pressure on rental and capital values across
most submarkets of NCR, resulting in capital and
rental value decline of 3-5% in many submarkets.
In 1Q 2014, NCR office sector also witnessed a
decline in supply due to completion delays in many
buildings. At 1.7 msf, Grade A supply in NCR declined
around 53% from the previous quarter.
Approximately 1 msf of pre-commitments were
noted during the quarter primarily from the IT-ITeS
companies. IT-ITeS sector also led the leasing
activity during this quarter, accounting for 46% of
total leasing followed by the Consulting and
Engineering sectors. Net absorption declined 18%
from the previous quarter and was noted at 1.4 msf.
The first quarter of 2014 did not witness any new
addition to the existing mall supply of NCR. Some
amount of transaction activity was witnessed in
select malls of South and North Delhi only. Main
street locations witnessed a number of transactions
in Connaught Place, Khan Market, South Extension
and DLF Galleria. In mall space, vacancy remained
almost similar to the previous quarter and was noted
at 13.4%. Rental values maintained status quo in
malls and main street locations.
TRENDS AND UPDATES
Ready Residential Property Update
In 1Q 2014, capital and rental values declined in the
range of 3-5% across submarkets of South Delhi,
primarily due to subdued transaction activity
prevailing for the past few quarters. Capital values in
Central Delhi maintained status quo owing to stable
supply-demand dynamics. Gurgaon and Noida
markets reported stagnant capital values in the high-
end segment from the previous quarter. In the luxury
and mid-end segment of Gurgaon, capital values
declined q-o-q by 5% and 3% respectively due to
sluggish demand and availability of ready-to-occupy
projects in the vicinity.
40
READY RESIDENTIAL PROPERTY VALUES IN MARCH '14
Source: Cushman & Wakefield Research Represents Mid and High End segments