Final Report

Market Research and Assessment of Capital Values and Rental Values for Final Report Proposed Development near Electronic City, Bangalore, Karnataka, India - 1 -

MARKET RESEARCH AND ASSESSMENT OF

CAPITAL VALUES AND RENTAL VALUES FOR

PROPOSED DEVELOPMENT NEAR ELECTRONIC CITY, BANGALORE, KARNATAKA, INDIA

FINAL REPORT

SUBMITTED TO

VALUE AND BUDGET HOUSING CORPORATION LIMITED (VBHC)

Submitted by

Jones Lang LaSalle Property Consultants India Private Limited Level 3, Concorde, UB City, #24, Vittal Mallya Road

Bangalore - 560 001 Ph: +91 80 4118 2900, Fax: +91 80 4118 2901

Internet: www.joneslanglassale.co.in

JANUARY 2011


CONTROLLED COPY

Report for

Market Research and Assessment of Capital Values and Rental Values for Proposed Development near Electronic

City, Bangalore, Karnataka, India

Submitted to

Value and Budget Housing Corporation Limited (VBHC)

Document Number: 2010/10/MARKET ASSESSMENT/UK/BLR/276 Document Status: Revision 1.0 Date: January 13, 2011 Document prepared by: Y. Umakanth Document approved by: Deepa Hurali No. of copies circulated: 02 Circulation Copy 01: Value and Budget Housing Corporation Limited (VBHC) Copy 02: Office Copy Contact Information For further information please contact: Mr. Girish K. S. MRICS Senior Vice President - Strategic Consulting Jones Lang LaSalle Property Consultants India Private Limited Level 3, Concorde, UB City, # 24, Vittal Mallya Road Bangalore - 560 001 Ph: +91 80 4118 2900, Fax: +91 80 4118 2901 Mobile: +91 99001 54567 E-mail: [email protected]


TABLE OF CONTENTS

EXECUTIVE SUMMARY .................................................................................................. 07

1 INTRODUCTION....................................................................................................... 18

1.1 BACKGROUND ...........................................................................................................18 1.2 OBJECTIVE AND SCOPE OF WORK ..............................................................................18 1.3 REPORT STRUCTURE .................................................................................................19 1.4 LIMITATIONS ..............................................................................................................19 1.5 DISCLAIMER ..............................................................................................................19

2 PROFILE OF BANGALORE CITY................................................................................ 21

2.1 CITY SNAPSHOT ........................................................................................................21 2.2 REGIONAL CONNECTIVITY ..........................................................................................22 2.3 FUNCTIONAL BASE OF CITY ........................................................................................24 2.4 DEMOGRAPHIC CHARACTERISTICS..............................................................................24 2.5 SOCIO-ECONOMIC CHARACTERISTICS.........................................................................25 2.6 ECONOMIC ACTIVITIES ...............................................................................................28 2.7 KEY INFRASTRUCTURE INITIATIVES .............................................................................30 2.8 GROWTH TRENDS......................................................................................................36

3 REAL ESTATE MACRO-MARKET REVIEW ................................................................. 39

3.1 GENERAL SECTOR TRENDS........................................................................................39 3.2 RESIDENTIAL SECTOR TRENDS...................................................................................40 3.3 AFFORDABLE HOUSING ..............................................................................................46 3.4 CONCLUSION.............................................................................................................54

4 PROJECT SITE ANALYSIS AND APPLICABLE DCR..................................................... 56

4.1 LOCATION OF THE PROJECT SITE................................................................................56 4.2 PROJECT SITE DESCRIPTION AND ITS SURROUNDINGS.................................................57 4.3 CATCHMENT ASSESSMENT .........................................................................................61 4.4 SWOT ANALYSIS FOR THE PROJECT SITE...................................................................63 4.5 APPLICABLE DEVELOPMENT CONTROLS AND REGULATIONS .........................................64

5 REAL ESTATE MICRO-MARKET REVIEW................................................................... 65

5.1 GENERAL ..................................................................................................................65 5.2 RESIDENTIAL SUB-SECTOR - APARTMENTS .................................................................66 5.3 RESIDENTIAL SUB-SECTOR - AFFORDABLE HOUSING ...................................................68

6 CONCLUSIONS AND RECOMMENDATIONS ................................................................. 70

6.1 FUTURE OUTLOOK FOR THE MICRO-MARKET...............................................................70 6.2 ACHIEVABLE CAPITAL VALUE FOR THE PROPOSED APARTMENT DEVELOPMENT.............71 6.3 ACHIEVABLE RENTALS FOR THE PROPOSED APARTMENT DEVELOPMENT ......................72

7 ANNEXURE......................................................................................................... 75

7.1 ANNEXURE - 1: INVENTORY AND DETAILS OF SELECT RESIDENTIAL PROJECTS IN THE

MICRO-MARKET OF THE PROJECT SITE .................................................................................75 7.2 ANNEXURE - 2: INVENTORY AND DETAILS OF SELECT RESIDENTIAL PROJECTS UNDER

AFFORDABLE HOUSING SEGMENT IN THE MICRO-MARKET OF THE PROJECT SITE ....................78 7.3 ANNEXURE - 3: GEOGRAPHIC DISTRIBUTION OF SELECT RESIDENTIAL PROJECTS IN THE

MICRO-MARKET OF THE PROJECT SITE .................................................................................79


LIST OF TABLES

Table 2.1: Salient Features of Bangalore City................................................................................. 21 Table 2.2: Population Details and Growth Trends in Population of Bangalore City........................ 25 Table 2.3: City-wise Rankings - Per Capita Income and Savings per Household .......................... 26 Table 2.4: City-Wise Rankings - Economy Index and Reside Index............................................... 27 Table 2.5: Status on House Ownership and Rental Housing in Bangalore .................................... 28 Table 2.6: Software Export of Bangalore with respect to the State and Nation.............................. 29 Table 2.7: Salient Features of Major Infrastructure Projects in Bangalore ..................................... 31 Table 3.1: Major Residential Development Zones in Bangalore ..................................................... 41 Table 3.2 Year-Wise Residential Rates across various Micro Markets location (Grade-A, B&C Category).......................................................................................................................................... 43 Table 3.3 Year-Wise Residential Rates across various Micro Markets location (Grade-A Category).......................................................................................................................................................... 44 Table 3.4 Income and Dwelling Size for Affordable Housing Project.............................................. 46 Table 3.5 Inventory and Details of Affordable Housing Projects in Bangalore ............................... 49 Table 4.1: Distance of the Project Site from Important Landmarks in the Bangalore ..................... 56 Table 4.2: Salient Features of Project Site ...................................................................................... 57 Table 4.3: Immediate Surroundings of Project Site......................................................................... 58 Table 4.4: Catchment Details of the Project Site............................................................................. 61 Table 4.5: Key Demographic and Socio-Economic Features of the Primary and Secondary Catchment........................................................................................................................................ 63 Table 4.6: SWOT Analysis for the Project Site................................................................................ 63 Table 4.7: Applicable DCR for Project Site...................................................................................... 64 Table 5.1: Characteristics of the Micro-Market of the Project Site .................................................. 65 Table 5.2: Overview of the Micro-Market Situation under Residential Sub-Sector......................... 65 Table 5.3: Grade-wise Supply of Residential Apartment Units in Micro-Market with 100% Absorption ........................................................................................................................................ 66 Table 5.4: Grade-wise Supply of Residential Apartment Units Micro-Market with Vacancy .......... 66 Table 5.5: Historic Market Trends for Residential Apartment Developments in the Micro-Market of the Project Site................................................................................................................................. 67 Table 6.1: Attributes and Rationale for Premium and Discount Factors used for Price Adjustment.......................................................................................................................................................... 71 Table 6.2: Projected Base Price for the Proposed Apartments on the Project Site........................ 72 Table 6.3: Prevailing Rentals in Primary and Secondary Catchment of Project Site...................... 72 Table 6.4: Projected Rentals for the Proposed Apartment on the Project Site for 2-BHK Apartment Unit ................................................................................................................................................... 73 Table 6.5: Projected Rentals for the Proposed Apartment on the Project Site for 1-BHK Apartment Unit ................................................................................................................................................... 74


LIST OF MAPS

Map 2.1: Regional Setting Map of Bangalore.................................................................................. 22 Map 2.2: Bangalore Region Map..................................................................................................... 23 Map 2.3: Major Industrial Estates and IT&ITES Hubs in Bangalore ............................................... 30 Map 2.4: Major Infrastructure Initiative Projects in Bangalore......................................................... 36 Map 2.5: Growth Trends and Growth Corridors of the Bangalore City ........................................... 37 Map 3.1: Overview of the Real Estate Macro-Market Trends in Bangalore City............................. 39 Map 3.2: Residential Zones in Bangalore City ................................................................................ 40 Map 3.3: Locations of Affordable Housing Projects in Bangalore City............................................ 54 Map 4.1: Location of Project Site with respect to the City............................................................... 56 Map 4.2: Location of the Project Site and its Surroundings ............................................................ 60 Map 4.3: Catchment Delineation Map for Project Site .................................................................... 62 Map 4.4: Landuse Map showing Project Site .................................................................................. 64

ABBREVIATIONS

APA Anekal Planning Authority

BBMP Bruhat Bangalore Mahanagara Palike BDA Bangalore Development Authority BEL Bharat Electronics Limited BETL Bangalore Elevated Tollway Ltd BHK Bed Room- Hall- Kitchen BIAL Bangalore International Airport Limited BMA Bangalore Metropolitan Area BMIC Bangalore Mysore Infrastructure Corridor BMRCL Bangalore Metro Rail Corporation Limited BMRDA Bangalore Metropolitan Regional Development BMTC Bangalore Metropolitan Transport Corporation BPO Business Process Outsourcing BT Biotechnology BTS Build-to-Suit BUA Bangalore Urban Agglomeration BUA Built-Up Area BWSSB Bangalore Water Supply and Sewerage Board CAGR Compound Annual Growth Rate CBD Central Business District CCTVs Closed-circuit television CDP Comprehensive Development Plan DCR Development Controls & Regulations DHIFC Dubai International Financial Centre EWS Economically Weaker Section FAR Floor Area Ratio GDP Gross Domestic Product GoI Government of India GoK Government of Karnataka HUDCO Housing And Urban Development Corporation Ltd. INR Indian National Rupees IRR Intermediate Ring Road ISRO Indian Space Research Organization IT Information Technology ITES IT enabled Services JNNURM Jawaharlal Nehru National Urban Renewal Mission KBITS Karnataka Biotechnology and Information Technology KIADB Karnataka Industrial Area Development Board km kilo-metre KSRTC Karnataka State Road Transport Corporation


LIG Lower Income Group MIG Middle Income Group MOEF Ministry of Environment and Forests NCC Nagarjuna Construction Corporation NGEF The New Government Electrical Factory NH National Highway NHAI National Highway Authority of India NUHHP National Urban Housing & Habitat Policy ORR Outer Ring Road RFP Request for Proposal SEC Socio-economic Classification SEZs Special Economic Zones SPV special purpose vehicle sq. ft. square feet sq. m square metre STP Sewerage Treatment Plant STPI Software Technology Parks of India STRR Satellite Town Ring Road SWOT Strength-Weakness-Opportunity-Threat USD United States Dollar USP Unique Selling Proposition UTs Union Territories Y-o-Y Year-on-Year

CONVERSION OF UNITS

1 hectare 2.4711 acres 1 acre 43560 sq. ft. 1 acre 4046.9 sq. m 1 sq. km 247.11 acres 1 sq. m 1.196 sq. yards 1 sq. m 10.764 sq. ft. 1 meter 1.0936 yards 1 meter 3.28 ft 1 cent 435.6 sq. ft 1 acre 40 guntas


EXECUTIVE SUMMARY

BACKGROUND Value and Budget Housing Corporation Limited (hereinafter referred to as ‘VBHC’) is developing its first project named as ‘Vaibhava’ on a plot measuring an area of about 19.90 acres located on Chandapura Anekal Road, south of Electronic City, Bangalore, Karnataka, India (hereinafter referred to as the ‘Project’). VBHC is developing this residential apartment complex through a Special Purpose Company (SPC)1, comprising Studio Apartments (carpet area of 251 sq. ft.; super built-up area of 354 sq. ft.); 1-BHK Apartments (carpet area of 340-360 sq. ft.; super built-up area of 456-476 sq. ft.); and 2-BHK Apartments (carpet area of 481-500 sq. ft.; super built-up area of 620-640 sq. ft.). In this regard, VBHC has commissioned Jones Lang LaSalle Property Consultants India Private Limited 2 (hereinafter referred to as ‘Jones Lang LaSalle’) to provide an independent, expert assessment of the marketability of the Project being developed by VBHC. The objective of the market research and assessment is to provide potential buyers of apartment with supplementary information, which may be of assistance in making the decision. Notwithstanding the foregoing, this Report should be treated as additional information only and shall not constitute formal advice rendered directly to the prospective purchaser. The readers of this Report are encouraged to carefully read the ‘Disclaimer Statement’ below to understand the purpose and objective of this Report to the prospective buyers.

BANGALORE - MOST HAPPENING CITY IN SOUTH INDIA Bangalore, the capital city and the largest city of the Karnataka State is now popularly known as the ‘Silicon Valley of India’ and has become one of Asia’s fastest growing cities since emergence of IT-ITES industry. Karnataka State itself is globally known for its vibrant economy and investment potential. Bangalore was popularly known as a ‘Pensioners’ Paradise’, and Garden city for its delicate blossoms and greenery that imparts a unique beauty to it. The growth of IT-ITES in the city, which is the largest contributor to India's software exports, has led to Bangalore to be recognized as the ‘Silicon Valley of India’. It is now regarded as a high-tech city with office or development centers of a number of mega software companies having wholly owned subsidiaries or joint ventures in Bangalore, including IBM, Hewlett-Packard, Texas Instruments, Oracle, Novell, Fujitsu, and Digital Equipment. Bangalore is also headquarters to a large number of Indian software companies. Bangalore produces more than 35% of all software that India currently exports. In a short time, Bangalore has experienced rapid growth and international recognition in the field of software development. This has resulted in placing the city at a promising position in the international market for software. After establishing itself as an IT and BPO hub, Bangalore has successfully attracted the Biotech industry. Bangalore currently houses approximately 47% of the total biotechnology companies in India. The city also attracts people from all over the world for its excellent schools and universities, such as the Indian Institute of Science, National Institute of Mental Health and Neuro-Physics, the

1 Name of the SPC is VBHDC Bangalore Value Homes Private Limited (VBHC-Bangalore). VBHC- Bangalore has two share holders, VBHC, which holds the majority stake, and HDFC Portfolio Management Services, which owns the remaining equity. 2 Jones Lang LaSalle, the Indian operations of Jones Lang LaSalle (NYSE: JLL), is the only real estate money management and services firm named to FORTUNE magazine's "100 Best Companies to Work For" and Forbes magazine's "400 Best Big Companies". It is the premiere and largest real estate Services Company in India, with an extensive geographic footprint across ten cities (Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and staff strength of over 3,000. The company provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, consultancy, transactions, project and development services, integrated facility management, property management, capital markets, residential, hotels and retail advisory. For further information, please visit www.joneslanglassale.co.in. Brief profile of the team members who authored this Report is given at the end of this report.


Indian Space Research Organization, Indian Institute of Management and Indian Institute of Aero-physics. Bangalore is even gaining the status of the ‘Floriculture Capital’ due to the present boost of the flower export from the city. Due to the rich stone resources Bangalore is also known the ‘Stone City’, especially for its granite deposits.

DEMOGRAPHIC & SOCIO-ECONOMIC CHARACTERISTICS Bangalore developed into a preferred location for high technology industries such as electronics, IT, telecommunications and emerged as a globally integrated center of high technology research and production during 1990s. This has resulted in sudden population increase of Bangalore Urban Agglomeration with decadal growth touching the figure of 38% with a population of 5.68 million as per Census 2001. estimated present population is about 8 million. Bangalore has the second highest literacy rate (83.91%) for an Indian metropolis, after Mumbai. The per-capita income of population of the city at present is INR 88,991 per annum. Bangalore has about 33.4% of SEC A and B population in city, which is third highest in comparison to other major cities in India, next only to Mumbai and Hyderabad. Bangalore is India's fourth largest FMCG and clothing and footwear market. The city is the third-largest hub for high net worth individuals (HNWI/ HNIs), after Mumbai and Delhi. IT population forms about 5% of the total population of Urban Bangalore (550,000 IT Professionals - 1/3rd of total IT professionals in the Country). Overall the socio-economic profile of the city provides information about the fact that the market is lucrative for the development of organized retail sector. Bangalore has very high ‘Youthfulness Index’ (20% population: 18-24 years, 14%: 25-35 years). More than half of the employees in IT/ITES sector are below the age of 28. Bangalore stands No. 6 in Economy Index and No. 27 in Reside-In Index out of 112 cities surveyed is good (Top City: 1). "Economy" Index reflects the economic conditions in a particular city, opportunities to start a new business, investment etc while “Reside-In” Index reflect a city's suitability for residing based on the sub-heads, health, education, environment, safety, public facilities, entertainment and housing. Continued influx of working population to Bangalore City and lack of adequate response of the Government to meet the growing housing needs have gradually widened the demand-supply-gap resulting in exponential increase in capital values of residential units making ‘less affordable’ to buy a home for large segment of the population. This has resulted in increasing demand for rented


accommodation both in terms of volume and price. At present, due to the rapid pace of urbanization, rental housing has provided much needed ‘room for maneuver’ for individuals and households and also responsive to changes in individual and household life-cycles and is an asset for tenants as well as landlords. An assessment of housing ownership and rental housing status in Bangalore during the year 2000-01 indicates about 39% of households had house ownership while 56% of the households were found to be in rented accommodation. However, considering the incremental increase in number of households during the period from 2000-01 and 2008-09, about 23% of this incremental households could attain house ownership while significant two-third of the incremental households resorted to rental accommodation during the same period. The above findings clearly demonstrates increasing demand for the rental housing in the city and reduced affordability of the population to have house ownership due to high capital values. Consequence of above imbalance is expected to increase both volume and pricing of rented housing in the city. During the 1990s, Bangalore developed into a preferred location for hi-tech industries such as electronics, information technology and telecommunications and emerged as a globally integrated centre of technology research and production. This has resulted in significant in-migration of intellectual / knowledge population from various parts of the country contributing to the decadal growth of 38%. Karnataka is among the top five industrialized states in the country and is the science capital of India with more than 100 R&D centre’s and majority of them are in Bangalore. Bangalore has been contributing almost 33-37% of national software export revenues over the last decade and thus is rightfully tagged as the IT Capital of India. The physical growth in Bangalore is fuelled by the IT-ITES and the Bio-Tech sector. There are nearly 2,000+ STPI registered companies in the city. These companies are contributing INR 726,690 million, which is nearly 32.68% of the national revenues for software exports. IT/ITES sector is growing at a compounded annual average growth rate of 25.67% over the past three years. Some of the major industrial estates and IT& ITES hubs in Bangalore is shown in the map below.


After establishing itself as an IT and BPO hub, Bangalore has successfully attracted the Biotech industry. Bangalore currently houses approximately 47% of the total biotechnology companies in India. The Karnataka government’s various initiatives such as a biotech policy, fiscal incentives and proposed biotech park in Bangalore are likely to aid the process. Karnataka is one of the few states to come out with a clear-cut biotechnology policy called ‘The Millennium Biotech Policy’, while the Centre is still dithering to formulate such a policy at the national level. Karnataka’s policy promises to establish a biotech corridor and the state has also set up a ‘Vision Group on Biotechnology’ to provide an impetus to the growth of the sector through other initiatives.

INFRASTRUCTURE INITIATIVES There are various proactive measures taken up by the GoK in augmenting & expanding the city physical infrastructure and developing major infrastructure projects to encourage overall economic development. The map below presents some of the key existing and proposed road network of the Bangalore City, which have been the factors fueling the physical growth of the city. Also existing and proposed infrastructure projects have been highlighted.

GENERAL REAL ESTATE MARKET TRENDS In the last decade, Bangalore has gained a special significance in the real estate market. The boom in Information Technology was largely responsible in triggering the real estate activities in city. Other than IT and ITES, other sectors like automobile, garments, finance and real estate also have shown phenomenal growth in the past 5 years. The increasing demand for commercial sector reflected in generation of more employment, increasing people with higher disposable incomes, need for better residential enclaves and different formats of retail, leisure and


entertainment. The spur of activities led to increase in spread of city catchment. The map below presents the overview of the real estate sector trends in Bangalore.

Bangalore has grown in radial direction along the main corridors. The centre is the CBD (Central Business District) followed by ring of SBD (Secondary Business District) developments and further is the PD (peripheral districts) comprising of developments in suburban areas. Following are the prime areas witnessing different real estate activities � High-end corporate offices & retail developments: CBD Area (MG Road, Brigade Road,

Commercial Street, Residency Road, Langford Town, Cunningham road, Richmond road etc). � IT/ ITES Offices & SEZs: towards Eastern and Southern suburban areas: Electronic City,

Whitefield, ORR, Sarjapur Road, Hebbal etc. � Corporate / Office: CBD and SBD areas: Koramangala, Indiranagar, Jayanagar,

Bannerghatta Road etc. � Residential: Hebbal, Sahakarnagar, Yelahanka, Jalahalli, Kengeri, Rajajinagar, JP Nagar,

Banashankari, Jayanagar, Koramangala, Indiranagar, HSR Layout, Brookefield, Whitefield, Sarjapur road, Hosur road, Bannerghatta road, Kanakpura road etc.

� Industrial: Peenya, Yeshwantpur, Rajajinagar Industrial Suburb, Jigini, Bommasandra

PROJECT SITE The Project Site measures an area of about 19.90 acres, located towards the southern quadrant of city and is located at a distance of about 5 km off Hosur Main Road (NH-7). The Project Site is located under the jurisdiction of Bangalore Metropolitan Regional Development (BMRDA), under Anekal Planning Authority (APA), revenue administration of Byagadadenahalli Village, Kasaba (Anekal), which forms a part of the Anekal Taluk. The map below presents location of the Project Site with respect to the city.


The Project Site has two access roads, wherein the primary access is through Chandapura Anekal Main Road, which is about 30 m wide (Right of Way). The above said road connects the Hosur Road (NH-7) at a distance of 5 km from the Project Site. While the secondary access road is kutcha village road with the width of 7 m, connects Byagadadenahalli Village in the south of the Project Site. The Project Site is fairly regular in shape and has a frontage of approximately 150 m on the eastern side, towards the Chandapura Anekal Main Road and 410 m on the western side. The Project Site has power lines, water supply and drainage & sewerage facilities. Some of the salient features of the Project Site are summarized in the table below:

Area 19.90 acres (i.e. 866,837 sq. ft. approximately)

Access Chandapura Anekal Main Road

Existing Access Road Access is through two approach roads namely the Chandapura Anekal Main Road and Byagadadenahalli Village road which is on eastern and western side of the Project Site with the width of 30.0 m and 7.0 m.

Shape Fairly regular in shape

Visibility Visible from the approach road (Chandapura Anekal Main Road) and secondary access road

Contiguity Contiguous in nature


Topography Flat terrain

Frontage The property has frontage of Approx. 150 m on the eastern side, towards Chandapura Anekal Main Road and 410 m on western side.

Land use Residential Use (As informed by VBHC)

Google map below shows the location of the Project Site and its surroundings.

SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis has been done for the Project Site based on location, infrastructure, linkages, frontage and potential usage and is presented below:

Strengths

� Location is on Chandapura Anekal Main Road - easy access of public transport

� Site is contiguous with excellent frontage and visibility

� Two main approach roads towards east and west

� Good Access road - 30 m wide road

Weaknesses

� Large distance from city CBD and also the site is located 5.0 km off Hosur Road

� The immediate surrounding lacks social infrastructure which can be addressed through project amenities

� Social index of the region is poor presently

Opportunities

� Proximity to Electronic City, proposed SEZ projects, Jigni Industrial areas offers captive demand for the proposed development on the Project Site.

� The size of Project Site explores possible options for large-scale integrated real estate development.

� Surya city and many plotted developments have already created visibility of the area for home-seekers

Threats

� Competition from other newly launched projects like Janaadhar Shubha, Shriram Smrithi, Pride Horizon and Concorde South Scape which are focusing on affordable category of apartments.


FUTURE OUTLOOK FOR THE MICRO-MARKET As stated earlier, the micro-market of the Project Site comprises areas in and around the Electronic City and Bommasandra Industrial area. Hosur Road is the main growth corridor for the micro-market of the Project Site. Hosur Road is the part of NH-7, which connects the Bangalore City and Hosur in Tamil Nadu. Hosur Road has been witnessing developments due to high commercial activity ever since KEONICS Electronic City Phase 1 (spread over 332 acres) planned during 1976- 1980. The first Software Technology Parks of India (STPI) was set up in Electronics City in 1981-85 and now prominent companies like Infosys, Wipro, Siemens, Motorola have their operations in the campus developments within the Electronic City. KIADB acquired additional 320 acres as part of the Electronics City - Phase 2 & Phase 3 development. The land was allocated to various IT/ITES, Biotech and other related industries. Development of Electronics City has induced development of many commercial complexes and IT parks along Hosur Main Road, translating the micro-market of the Project Site into one of the economic hubs of the city. These commercial developments gradually generated substantial demand for the residential sub-sector in the micro-market, which eventually led to construction of various apartment projects. In-terms of physical growth potentials, the micro-market of the Project Site enjoys growth drivers similar to that of Bannerghatta Road, Sarjapur Road, Marathalli Sarjapur Outer Ring Road, Kanakapura Main Road and Whitefield, which have been witnessing significant growth in terms real estate development primarily driven by IT-ITES related development. All these locations lie on the South, Southeast and Eastern quadrant of the Bangalore City in the close proximity of IT&ITES and industrial development.

Looking at the historic growth evolution of locations like Bannerghatta Road, Sarjapur Road, Marathalli Sarjapur Outer Ring Road, Kanakapura Main Road, over last 4-5 years, Hosur Road and the areas within the micro-market of the Project Site is expected to undergo similar evolution and transformation over next 2-3 years. With the operation of the Elevated Expressway connecting Silk Board Junction and the Electronics City, the travel time from the city (Silk Board Junction) has reduced from 45-50 minutes to just 10 minutes. With this improved connectivity and other infrastructure initiatives of the Government and development agencies in the city like Peripheral Ring Road, the micro-market is expected to have excellent connectivity from different parts of the city over next 2-3 years.

Further, the micro-market has good social infrastructure such as healthcare, schools, recreation (resorts) and general retail when compared to other development corridors in the city. This is also expected to offer competitive advantage for the micro-market over other developing micro-markets in the city for residential development. Considering the growth of commercial activities in the region and also the proposed 4 SEZs projects namely; Biocon, WIPRO, HCL Technologies and Karnataka Biotechnology and Information Technology (KBITS), covering about 89.19 hectares (220.39 acres) will further augment economic drivers of this micro-market, which is expected to have positive impact in terms of demand growth and price appreciation for the real estate products over next 2-3 years.

ACHIEVABLE PRICING FOR THE PROPOSED APARTMENT DEVELOPMENT Proposed residential apartment units on the Project Site have been evaluated with respect to the detailed market assessment carried out within the micro-market pertaining to similar developments. Prevalent price range for conventional as well as affordable housing segment has been considered for determining the ‘average benchmark price’ for the proposed residential apartment development on the Project Site. The ‘average benchmark price’ determined above is considered for potential price adjustments for various attributes like location, accessibility, developers’ profile, size of the development,


product offering, present project status, site attributes, etc. among others, to determine ‘achievable pricing’ for the proposed residential apartment development on the Project Site. The price adjustments have been carried out in terms of premium and/or discount on attributes of the Project Site with respect to the competing projects in the micro-market. There are 5 projects under affordable housing segment in the micro-market, bringing total supply of 2,812 units. Average present price of these projects range between INR 1700-1800 per sq. ft. Building specifications and amenities play a vital role in marketing residential products in Bangalore. The decision making of the end-users largely depend on superior building specifications, comparable to the buildings of Grade A developers in the city and level of civic amenities provided within the residential development. Considering both building specifications and level of amenities provided/envisaged, Janaadhar Shubha may not be a comparable to the building specifications and level of amenities provided/envisaged in VBHC Project. Excluding Janaadhar Shubha, the micro-market has 4 projects under affordable housing segment, bringing total supply of 1,672 units. Average present price (on weighted average basis) of these projects range between INR 2,000-2,100 per sq. ft. Accordingly, INR 2,000 per sq. ft. is considered as the ‘average benchmark price’ for the micro-market of the Project Site. Based on various assumptions and price adjustments, Jones Lang LaSalle is of the opinion that the achievable pricing for the residential apartment on the Project Site will be INR 2,000 per sq. ft (applied over the saleable/super built-up area). This achievable pricing is for a residential apartment product for affordable housing project for apartment development. It may be noted that the above achievable pricing is as on the date of assessment (October 2010) and the indicated price is only the base price for the unit saleable area of the apartment. Other charges like parking, club membership, deposits payable to civic authorities, etc. are chargeable over and above the base price. Details of such charges are covered in Page 45 of the detailed report.

In the case of year wise price increase, Hosur Road micro market has an average CAGR of 7% per annum in residential apartment projects whereas, Bangalore City has CAGR of 13%. Considering the factors like city average appreciation, Hosur Road micro market average price appreciation, proposed IT&ITES commercial development, improved / proposed urban infrastructure projects towards the micro-market and future outlook, a CAGR of 10% is considered for future projection. The details pertaining to the same are mentioned in the table below:

Year Projected Capital Value (INR per sq. ft.)

Suggested Annual Increase

Price Increase over Previous Year (INR per sq. ft.)

2010 2,000

2011 2,200 10% 200

2012 2,420 10% 220

2013 2,662 10% 242

Note: Please note that the above projected pricing is for a residential apartment product under affordable housing segment. It may be noted that the above achievable pricing is only the base price for the unit saleable area of the apartment. Other charges like parking, club membership, deposits payable to civic authorities, etc. are chargeable over and above the base price. Details of such charges are covered in Page 45 of the detailed report.

ACHIEVABLE RENTALS FOR THE PROPOSED APARTMENT DEVELOPMENT The achievable rentals for the proposed development on the Project Site is determined by carrying out appropriate price adjustments on the average rentals of similar residential projects in the micro-market of the Project Site. The table below summarizes prevailing rentals in some of the sub-markets within the micro-market of the Project Site for a typical 2-BHK unit.


SI. Location Rental Range (INR per month) Unit Size (sq. ft)

1. Chanadapur Anekal Surrounding (Surya City) 2,500 to 3,000 600 to 700

2. Jigini Road 3,000 to 4,500 800 to 1,000

3. Electronic City 6,000 to 11,000 1,000 to 1,400

4. Begur Road 5,500 to 7,000 1,000 to 1,200

5. BTM Layout 10,000 to 15,000 1,000 to 1,200

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010

Based on the assumptions as mentioned above and price adjustments, the Consultants are of the opinion that the achievable rental value for a 2-BHK apartment unit will be INR 3,300 per month. In addition, the tenant is expected to pay for Maintenance Charges as determined by the Resident Welfare Association of the Project Site. There is no rental trend available for the apartments in the micro-market. Considering the fact that the market typically maintains the capital value & rental value gap, average annual increase of 10% (same as capital values) is considered for projecting the rentals for future. The table below presents project rental values for the proposed apartment development (2-BHK unit) on the Project Site.

Year Projected Rental Value (INR per Unit)


Price Increase over Previous Year (INR per Unit)

2010 3,300

2011 3,630 10% 330

2012 3,993 10% 363

2013 4,392 10% 399

Note: In addition to above rentals, the tenant is expected to pay for Maintenance Charges as determined by the Resident Welfare Association of the Project Site.

Since there are no instances of renting of 1-BHK apartment units in the micro-market, the rentals for 1-BHK apartment units is calculated based on the yield rate (ratio of annual rental value to capital value expressed in percentage). As stated earlier, typically yield rate of residential projects in Bangalore range from 3-4%. Established micro-markets offer about 4% yield rate, which may go up to 5% in select SBD micro-markets. Most of the suburban and developing micro-markets typically offer 3-4%. Considering the saleable area of different type of apartment units proposed in the Project Site and the recommended achievable capital value & rental value for the Project Site, yield rate for the apartment units proposed in the Project Site is calculated. 2-BHK apartment units proposed in the Project Site have carpet area ranging between 481-500 sq. ft. and super built-up area ranging between 620-640 sq. ft. Considering achievable capital value of INR 2,000 per sq. ft. as recommended above, the total average capital value of a 2-BHK apartment unit in the Project Site works out to INR 1,260,000 per apartment unit. Considering achievable rental value of INR 3,300 per month, the annual rental value works out INR 39,600 per 2-BHK apartment unit. Accordingly, the yield rate for a 2-BHK apartment unit works out to 3.14%, which is well within the typical yield rate range for residential apartments in the city (i.e. 3-4%). 1-BHK apartment units proposed in the Project Site have carpet area ranging between 340-360 sq. ft. and super built-up area ranging between 456-476 sq. ft. Considering achievable capital value of INR 2,000 per sq. ft. as recommended above, the total average capital value of a 1-BHK apartment unit in the Project Site works out to INR 932,000 per apartment unit. Considering the yield rate of 3.14% as worked out for 2-BHK apartment unit in the Project Site, the achievable rental value for a 1-BHK apartment unit works out to INR 2,441 per month, rounded off to INR


2,450 per month. Considering annual appreciation of 10%, the table below presents project rental values for the proposed apartment development (1-BHK unit) on the Project Site.




2010 2,450

2011 2,695 10% 245

2012 2,965 10% 270

2013 3,261 10% 296


Considering the achievable capital value of INR 2,000 per sq. ft. as recommended above, rental value at average yield of 3-4% per annum and capital appreciation of about 10-12% year-on-year, the gross yield over 5 years will be in the range of 12-15%. Any increase in price appreciation over years than estimated, due to various growth potentials of the micro-market highlighted above, will have significant upside in the returns to a purchaser.

DISCLAIMER This Report has been authored by Jones Lang LaSalle acting on the instructions of VBHC. Jones Lang LaSalle was instructed by VBHC to provide an independent, expert assessment of the marketability of the Project being developed by VBHC as ‘Vaibhava’ situated near Electronics City, Bangalore. This Report has been formulated by Jones Lang LaSalle independent of any inputs (other than information specifically sought for) from VBHC and VBHC has not in any manner influenced the findings of this Report. The prospective purchaser may however note that VBHC has paid JLL professional fees for the formulation of this Report. Notwithstanding the foregoing, this Report should be treated as additional information and not be taken as a substitute for comprehensive due diligence to be exercised by a prospective purchaser including visiting the project site and evaluating the suitability of the Project to their specific needs, their ability to meet the financial commitment either through purchase or through loan servicing and the availability of third party financing. It is specifically noted that while the Report contains certain views regarding the possible marketability of the Project in the future, prospective purchasers are encouraged to evaluate the Project based on their personal requirements rather than from the perspective of future real estate price appreciation. This Report does not constitute any commitment whatsoever from VBHC and shall not give rise to any claims whatsoever from any prospective purchaser regarding the veracity or otherwise of this Report. This Report is provided for information only. This Report shall not constitute formal advice rendered directly to the prospective purchaser.


1 INTRODUCTION

1.1 BACKGROUND Value and Budget Housing Corporation Limited (hereinafter referred to as ‘VBHC’) is developing its first project named as ‘Vaibhava’ on a plot measuring an area of about 19.90 acres located on Chandapura Anekal Road, south of Electronic City, Bangalore, Karnataka, India (hereinafter referred to as the ‘Project’). VBHC is developing this residential apartment complex through a Special Purpose Company (SPC)3, comprising Studio Apartments (carpet area of 251 sq. ft.; super built-up area of 354 sq. ft.); 1-BHK Apartments (carpet area of 340-360 sq. ft.; super built-up area of 456-476 sq. ft.); and 2-BHK Apartments (carpet area of 481-500 sq. ft.; super built-up area of 620-640 sq. ft.). In this regard, VBHC has commissioned Jones Lang LaSalle Property Consultants India Private Limited 4 (hereinafter referred to as ‘Jones Lang LaSalle’) to provide an independent, expert assessment of the marketability of the Project being developed by VBHC.

1.2 OBJECTIVE AND SCOPE OF WORK The objective of the market research and assessment is to provide potential buyers of apartment with supplementary information, which may be of assistance in making the decision5. Following is the scope of work covered under this Report: City Level Assessment � Brief city overview, infrastructure development initiatives in the city and future growth

direction; and � Macro-market assessment of residential sub-sector focusing apartments under budget

and value home segment. Micro-Market Level Assessment � Site analysis, SWOT analysis and micro-market delineation (with respect to the Project

Site) and analysis; � Real estate micro-market scan including mapping of core residential real estate

developments, focus on apartments under budget and value home segment; � Provide micro-market research findings for the micro-market of the Project Site

covering demand drivers, supply dynamics, absorption, vacancy rates, pricing, etc. (pricing to cover both capital and rental values); and

� Suggestions on achievable and projected rental and capital values for proposed apartment typologies on the Project Site and any other conclusions/recommendations based on market assessment.

3 Name of the SPC is VBHDC Bangalore Value Homes Private Limited (VBHC-Bangalore). VBHC- Bangalore has two share holders, VBHC, which holds the majority stake, and HDFC Portfolio Management Services, which owns the remaining equity. 4 Jones Lang LaSalle, the Indian operations of Jones Lang LaSalle (NYSE: JLL), is the only real estate money management and services firm named to FORTUNE magazine's "100 Best Companies to Work For" and Forbes magazine's "400 Best Big Companies". It is the premiere and largest real estate Services Company in India, with an extensive geographic footprint across ten cities (Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and staff strength of over 3,000. The company provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, consultancy, transactions, project and development services, integrated facility management, property management, capital markets, residential, hotels and retail advisory. For further information, please visit www.joneslanglassale.co.in. Brief profile of the team members who authored this Report is given at the end of this report. 5 Notwithstanding the foregoing, this Report should be treated as additional information only and shall not constitute formal advice rendered directly to the prospective purchaser. The readers of this Report are encouraged to carefully read the ‘Disclaimer Statement’ below to understand the purpose and objective of this Report to the prospective buyers.


1.3 REPORT STRUCTURE This report has the following structure and contents: � Introduction: This chapter describes the assignment and project details in brief,

scope of work, approach & methodology adopted for the assignment, report structure, limitations while carrying out the assignment and disclaimer statements.

� Profile of Bangalore City: This chapter presents profile of Bangalore City in brief

highlighting location attributes of the city, regional linkages & connectivity, demographic and economic characteristics, infrastructure development of the city along with a commentary on the general growth trends.

� Real Estate Macro-Market Review: This chapter presents overview of Bangalore real

estate market highlighting the inherent potential of the Bangalore City for of residential sub-sector focusing apartments under budget and value home segment.

� Project Site Analysis and Applicable Development Controls & Regulations: This

chapter presents a description of the Project Site and its neighborhood in terms of location, linkages, salient features, etc., site surroundings and the site SWOT. This chapter also outlines applicable DCR for the Project Site.

� Real Estate Micro-Market Review: This chapter presents an overview of the

prevalent micro-market scenario of the Project area. In addition, this chapter presents in-depth assessment of the real estate market trend for residential sub-sector focusing on apartments under budget and value home segment.

� Conclusions and Recommendations: This chapter summarizes the outcome of the

findings of the site analysis, macro- & micro-market assessment and suggestive achievable and projected capital and rental values for the proposed apartment typologies on the Project.

1.4 LIMITATIONS Following are the limitations to this assignment: � The interpretation of real estate key trends is based on market survey and interactions

with limited key players in real estate market, viz. developers, brokers and investors. Hence, they are reflective of situations prevalent at the time of assessment.

� All facts & figures, findings, conclusions of the macro- and micro-market assessment

are captured from key players in the real estate market as indicated above. Hence, they are indicative of situations prevalent at the time of assessment.

1.5 DISCLAIMER This Report has been authored by Jones Lang LaSalle acting on the instructions of VBHC. Jones Lang LaSalle was instructed by VBHC to provide an independent, expert assessment of the marketability of the Project being developed by VBHC as ‘Vaibhava’ situated near Electronics City, Bangalore. This Report has been formulated by Jones Lang LaSalle independent of any inputs (other than information specifically sought for) from VBHC and VBHC has not in any manner influenced the findings of this Report. The prospective purchaser may however note that VBHC has paid JLL professional fees for the formulation of this Report.


Notwithstanding the foregoing, this Report should be treated as additional information and not be taken as a substitute for comprehensive due diligence to be exercised by a prospective purchaser including visiting the project site and evaluating the suitability of the Project to their specific needs, their ability to meet the financial commitment either through purchase or through loan servicing and the availability of third party financing. It is specifically noted that while the Report contains certain views regarding the possible marketability of the Project in the future, prospective purchasers are encouraged to evaluate the Project based on their personal requirements rather than from the perspective of future real estate price appreciation. This Report does not constitute any commitment whatsoever from VBHC and shall not give rise to any claims whatsoever from any prospective purchaser regarding the veracity or otherwise of this Report. This Report is provided for information only. This Report shall not constitute formal advice rendered directly to the prospective purchaser.


2 PROFILE OF BANGALORE CITY

2.1 CITY SNAPSHOT Bangalore, the capital city and the largest city of the Karnataka State is now popularly known as the ‘Silicon Valley of India’ and has become one of Asia’s fastest growing cities since emergence of IT-ITES industry. Karnataka State itself is globally known for its vibrant economy and investment potential. The table below presents salient features of Bangalore City. Table 2.1: Salient Features of Bangalore City

City Bangalore

Population (2001 Census) 5.68 Million

Estimated Population (2010) 7.79 Million (Projected)6

Area � Municipal Area (BBMP): 741 sq. km

� Planning Area (Bangalore Development Authority): 1,307 sq. km

� Development Area (Bangalore Metropolitan Regional Development Authority): 2,190 sq. km

Geographic Location � 770 37’ E Longitude and 120 8’ N Latitude.

� Elevation: 920 m above the mean sea level.

Connectivity and Linkages � Air: The city has an international airport with regular flights from & to important destinations both in India and abroad. Bangalore International Airport started its operations of Phase 1 in April 2008

� Road: The city is strategically located on NH-4 (Chennai-Bangalore-Pune), NH-7 (Bangalore-Hyderabad), NH-48 (Mangalore), NH 207 (Chikaballapur), & NH-209 (Coimbatore) and State Highways to other cities in the State.

� Rail: The city has three railway stations, viz. Central, Cantonment and Yeshwantpur. The city is well connected to all major Indian cities by rail network.

Climate � Tropical Savanna climate

� March to May (warmest months)

� December to February (coldest months)

� June to September (rainy - southwest monsoon)

� November to December (rainy - northeast monsoon)

Temperature � Highest maximum temperature of 33 degree C

� Lowest minimum temperature of 14 degree C

Languages � Regional language: Kannada

� English, Hindi, Telugu and Tamil are widely spoken and understood.

City Administrator Greater Bangalore Municipal Corporation (Bruhat Bangalore Mahanagara Palike)

City Functions Administrative Capital, IT capital of the country

Distance of International Airport from CBD

35.0 km

6 As per Revised Master Plan-2015, Bangalore


Key Advantages of Bangalore

� Availability of world class skilled manpower

� Location advantage - good connectivity and linkages

� Salubrious climate

� Reform oriented governance

� Cosmopolitan culture

� Excellent social, education & health facilities

� Telecom connectivity

� Presence of multinational companies

� Fastest growing city in Asia and availability of ‘Grade A’ properties

2.2 REGIONAL CONNECTIVITY Bangalore is bound by Kolar District on the northeast, Tumkur District on northwest, Mandya District on the southwest and state of Tamil Nadu on the southeast. The regional setting of Bangalore City is shown below: Map 2.1: Regional Setting Map of Bangalore

The following map shows the major corridors of Bangalore and the areas governed by various jurisdiction bodies.


Map 2.2: Bangalore Region Map

Bangalore is very well connected to the other regional areas as indicated in map above. The city has access to other parts of state and neighboring states and few countries by roadways, railways and airways. Road: Bangalore has 2 major National Highways that connect the city to other metro cities like Mumbai, Chennai (NH-4). Hyderabad (NH-7). The state highways connect the city to other cities in Karnataka like Mysore, Mangalore, Tumkur, etc. The Bangalore Metropolitan Transport Corporation (BMTC) handles all the buses plying within the city, and the Karnataka State Road Transport Corporation (KSRTC) operates the buses within the state as well as outside the state. The KSRTC and private companies operate bus services to all major cities in South India, and even to Mumbai and Pune. Railways: There are three major railway stations in Bangalore, viz. City Railway Station, Cantonment Railway Station, and Yeshwanthpur Railway

Mysore

Bangalore

Mangalore

Hubli

NH-7NH-4

NH-4

Mysore

Mangalore

Bangalore

Goa

Hubli

Hyderabad

Mumbai

NH-7


Station. The main station, i.e. City Railway Station is well connected to all major Indian cities. There are number of daily express trains to and from Bangalore thus making the city accessible from every metropolitan city in the country and also from other major cities. Airways: Bangalore International Airport at Devanahalli started its phase-I operation in April 2008. It is located at a distance of about 35 km from the Central Business District (CBD). Over the past year, BIA has handled 8.7 million passengers (national and international business travelers) and over 120,000 aircraft movements. The airport is expected to handle about 10 million passengers per annum by 2010. There are 11 domestic airlines (including two freighters) to important cities like Kolkata, Mumbai, Delhi, Hyderabad, Chennai, Ahmedabad, Goa, Cochin, Mangalore, Pune and Thiruvananthapuram. Bangalore also has 20 international airlines to Muscat, Dubai, Sharjah, New York, London, Mauritius and Singapore etc.

2.3 FUNCTIONAL BASE OF CITY Bangalore was popularly known as a ‘Pensioners’ Paradise’, and Garden city for its delicate blossoms and greenery that imparts a unique beauty to it. The growth of Information Technology (IT) in the city, which is the largest contributor to India's software exports, has led to Bangalore to be recognized as the ‘Silicon Valley of India’. It is now regarded as a high-tech city with office or development centers of a number of mega software companies having wholly owned subsidiaries or joint ventures in Bangalore, including IBM, Hewlett-Packard, Texas Instruments, Oracle, Novell, Fujitsu, and Digital Equipment. Bangalore is also headquarters to a large number of Indian software companies. Bangalore produces more than 35% of all software that India currently exports. In a short time, Bangalore has experienced rapid growth and international recognition in the field of software development. This has resulted in placing the city at a promising position in the international market for software. After establishing itself as an IT and BPO hub, Bangalore has successfully attracted the Biotech industry. Bangalore currently houses approximately 47% of the total biotechnology companies in India. The city also attracts people from all over the world for its excellent schools and universities, such as the Indian Institute of Science, National Institute of Mental Health and Neuro-Physics, the Indian Space Research Organization, Indian Institute of Management and Indian Institute of Aero-physics. Bangalore is even gaining the status of the ‘Floriculture Capital’ due to the present boost of the flower export from the city. Due to the rich stone resources Bangalore is also known the ‘Stone City’, especially for its granite deposits.

2.4 DEMOGRAPHIC CHARACTERISTICS

Population Growth Bangalore has been witnessing industrialization way back from early 20th century when the princely state of Mysore took pioneering steps to promote industry in the state sector. During the post independence period, Bangalore attracted massive investments from the Government of India (GoI) for building large-scale knowledge-based public sector research and production facilities as well as the nation’s most sensitive and advanced military and space research facilities. Later, during 1980s, due to soaring real estate prices and overcrowding in Mumbai, there was an influx of Mumbai industrialists, who relocated high-tech aspects of their businesses to Bangalore. During the 1990s, Bangalore developed into a preferred location for high technology industries such as electronics, IT, telecommunications and emerged as a globally integrated center of high technology research and production. This has resulted in sudden


population explosion of Bangalore Urban Agglomeration with decadal growth touching the figure of 38% with a population of 5.68 million as per Census 2001. The decadal population figures and the growth rate from year 1951 to 2001 have been given in the table and the projected population till 2021 is shown in the charts below:

The demographic profile of Bangalore has changed rapidly over the last decade due to the massive in-migration of people into the city following the IT boom. This in-migration has included persons from various parts of the state and country, cutting across different income groups and cultural backgrounds. It has added to the multicultural flavor of the city and been one of the main drivers of latest trends and lifestyles entering the city. In this sense, Bangalore is perhaps one of the most cosmopolitan cities in the South India region. Table 2.2: Population Details and Growth Trends in Population of Bangalore City

Census Year Population (Million) Decadal Growth (%age)

1951 0.80 --

1961 1.21 51.25

1971 1.68 38.84

1981 2.94 75.00

1991 4.13 40.48

2001 5.68 37.53

2011* 8.01 41.02

*Estimated Source: Census of India, 2001

In the year 2007, during the preparation of Revised Master Plan- 2015, Bangalore, the entire Bangalore Urban Agglomeration area was resurveyed by the Bangalore Development Authority, indicating the population as 6.16 million.

2.5 SOCIO-ECONOMIC CHARACTERISTICS Literacy Rate Bangalore has the second highest literacy rate (83.91%) for an Indian metropolis, after Mumbai. Out of this, male literate accounted for 88.36% and 78.98% for females. Number of households in the city is estimated to be 1.29 million. The average household size is 3.86, which is a reduction from 4.5 that existed in 2006 (Source: Skyline India 2008-09).

Population Growth Trend

2.94

4.13

5.686.17

8.018.85

9.96

0

2

4

6

8

10

12

1981 1991 2001 2007 2011 2015 2021

Year

Popula

tion (In

Millions)

As per Revised Master Plan (Projected Population)


Per Capita Income The per-capita income of population of the city at present is INR 88,991 per annum. SEC Distribution in City Bangalore has about 33.4% of SEC A and B population in city, which is third highest in comparison to other major cities in India, next only to Mumbai and Hyderabad, as presented in the chart below.

SEC Share across Cities

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bangalore Chennai Hyderabad Mumbai Delhi

SEC E

SEC D

SEC C

SEC B

SEC A

Consumer Population Bangalore is India's fourth largest FMCG and clothing and footwear market. The city is the third-largest hub for high net worth individuals (HNWI/ HNIs), after Mumbai and Delhi. IT population forms about 5% of the total population of Urban Bangalore (550,000 IT Professionals - 1/3rd of total IT professionals in the Country). Overall the socio-economic profile of the city provides information about the fact that the market is lucrative for the development of organized retail sector. Youthfulness Index Very high (20% population: 18-24 years, 14%: 25-35 years). More than half of the employees in IT/ITES sector are below the age of 28. Bangalore has higher percentage of about 37% of consumer population (SEC A and B) in comparison to other metro cities in India. Bangalore position on Economy Index and Reside-In Index out of 112 cities surveyed is good (Top city: 1). "Economy" Index reflects the economic conditions in a particular city, opportunities to start a new business, investment etc while “Reside-In” Index reflect a city's suitability for residing based on the sub-heads, Health, Education, Environment, Safety, Public Facilities, Entertainment and Housing. The following tables present city-wise ranking based on Per Capita Income & Savings per Household and Economy Index & Reside Index. Table 2.3: City-wise Rankings - Per Capita Income and Savings per Household

Cities Annual Per capita income of Urban Household

Annual capita savings of Urban Household

%age of Savings

Bangalore 88,991 28,355 32 %

Chennai 87,446 19,455 22%


Cities Annual Per capita income of Urban Household

Annual capita savings of Urban Household

%age of Savings

Delhi 78,660 17,962 23%

Hyderabad 69,493 20,386 29%

Mumbai 123,032 16,510 13%

Source: Skyline India 2008-09

Table 2.4: City-Wise Rankings - Economy Index and Reside Index

Cities Cosmopolitan Index Ranking based on Economy Index

Ranking based on Reside-In Index

Bangalore Very High 6 27

Chennai High 14 19

Delhi Very High 18 52

Hyderabad Very High 27 49

Mumbai Very High 2 24

Source: Skyline India 2008-09

Rented Housing The cosmopolitan nature and the employment opportunity in the city have resulted in the influx of people from other States to Bangalore. Growth of IT-ITES and other knowledge based sectors have significantly contributed to the large-scale influx of white-collar employees to the city from different States of India and abroad. As a result, Bangalore City has received over 0.76 million people as a fresh influx during the year 1991-2001, constituting about 13.4% of total population. Of these, 47% have come from outside Karnataka. Bangalore’s total migrant population as on 2001 was about 2.09 million, a little less than the total migrant influx in Delhi or Mumbai over the past decades. Unlike in most other metropolises, the bulk of influx of population is from the urban areas of the other states, about 61% over the past 5 years. Even historically, Bangalore has attracted higher proportion of people from urban areas (59%) compared to other major cities in the country. It is noteworthy that the neighboring states like Tamil Nadu, Andhra Pradesh and Kerala have contributed three fourths of migrant population. This continued influx of working population to Bangalore City and lack of adequate response of the Government to meet the growing housing needs have gradually widened the demand-supply-gap resulting in exponential increase in capital values of residential units making ‘less affordable’ to buy a home for large segment of the population. This has resulted in increasing demand for rented accommodation both in terms of volume and price. At present, due to the rapid pace of urbanization, rental housing7 has provided much needed ‘room for maneuver’ for individuals and households and also responsive to changes in individual and household life-cycles and is an asset for tenants as well as landlords. Three consequences are particularly significant, viz. a) access to affordable and well located rental housing is influential in determining the extent to which new migrants are able to secure an economic foothold in the city and consolidate their urban status; b) a majority of individuals and households progress from renting to owning, with a significant proportion going on to produce accommodation for rent - in doing so, landlords are not

7 The term ‘rental housing’ is used to denote the totality of the process of the letting of accommodation by landlords and the payment of rent for rights over the use of the accommodation that is rented by tenants. The ‘rental housing market’ refers to the various rental housing sub-markets - such as those by income group, production and exchange systems, or by type of settlement and provider.


only putting their assets to productive use but are also providing a service to tenants; and c) rental accommodation is critical for those who do not intend being permanent urban residents - it is clear, therefore, that tenure as to be viewed more broadly than it has been. The following table presents housing ownership and rental housing status in Bangalore during the period 2000-01 and 2008-09. Table 2.5: Status on House Ownership and Rental Housing in Bangalore

Particulars Year 2000-01 Year 2008-09 Incremental Increase

Total No. of Households 1,395,108 1,749,845 354,737

House Ownership

No. of Households 594,874 675,842 80,968

Percentage 43% 39% 23%

Rented Housing

No. of Households 751,405 988,252 236,847


Others

No. of Households 48,829 85,751 36,922


Source: City Skyline 2008-09 India and Directorate of Economic and Statistics, Karnataka

As seen from the table above, about 39% of households had house ownership while 56% of the households were found to be in rented accommodation. However, considering the incremental increase in number of households during the period from 2000-01 and 2008-09, about 23% of this incremental households could attain house ownership while significant two-third of the incremental households resorted to rental accommodation during the same period. The above findings clearly demonstrates increasing demand for the rental housing in the city and reduced affordability of the population to have house ownership due to high capital values. Consequence of above imbalance is expected to increase both volume and pricing of rented housing in the city. According to the Mercers World wide Quality of Living Survey 2010 for 221 cities globally, Bangalore is the best placed at 140th rank this year, an improvement of two ranks from the year 2009.

2.6 ECONOMIC ACTIVITIES Industrialization in Bangalore started during the early 20th century when princely state of Mysore took pioneering steps to promote industrial growth in the state. After independence in 1947 for four decades, the GoI made substantial investment in building the city’s large-scale knowledge-based public sector research and production facilities as well as the Nation’s most sensitive and advanced military and space research facilities. Between 1956 and 1960, large public sector undertakings like Bharat Electronics Limited and Hindustan Aeronautics Limited were established by the GoI in Bangalore, along with National Defence Research Laboratories. In the 1970s, the Indian Space Research Organizations (ISRO) and Bharat Heavy Electrical Limited were also located here. In the 1980s, due to soaring real estate costs and overcrowding in Mumbai, there was an influx of Mumbai industrialists who relocated the hi-tech aspects of their businesses to Bangalore.


During the 1990s, Bangalore developed into a preferred location for hi-tech industries such as electronics, information technology and telecommunications and emerged as a globally integrated centre of technology research and production. Presently this has resulted in significant in-migration of intellectual / knowledge population from various parts of the country contributing to the decadal growth of 38%. Karnataka is among the top five industrialized states in the country and is the science capital of India with more than 100 R&D centre’s and majority of them are in Bangalore. Bangalore has been contributing almost 33-37% of national software export revenues over the last decade and thus is rightfully tagged as the Information Technology (IT) Capital of India. The physical growth in Bangalore is fuelled by the IT-ITES and the Bio-Tech sector. There are nearly 2,000+ STPI registered companies in the city. These companies are contributing INR 726,690 million, which is nearly 32.68% of the national revenues for software exports. IT/ITES sector is growing at a compounded annual average growth rate of 25.67% over the past three years. The software export of Bangalore with respect to Karnataka and the nation is shown in table below. Table 2.6: Software Export of Bangalore with respect to the State and Nation

Software Export (INR Million) Year

Bangalore Karnataka India

Sectoral Contribution (Bangl-

Karnataka)

Sectoral Contribution (Bangl-India)

Sectoral Contribution

(Karnataka- India)

2004-05 267,200 276,000 740,190 96.81% 36.10% 37.29%

2005-06 366,330 376,000 1,009,650 97.43% 36.28% 37.24%

2006-07 472,500 487,000 1,442,140 97.02% 32.76% 33.77%

2007-08 591,420 608,000 1,841,400 97.27% 32.12% 33.02%

2008-09 726,690 749,290 2,223,600 96.98% 32.68% 33.70%

Source: Software Technology Park of India, Dept. of IT, Ministry of Communication & IT, Govt. of India.

Some of the major industrial estates and IT& ITES hubs in Bangalore are shown in the following map:


Map 2.3: Major Industrial Estates and IT&ITES Hubs in Bangalore

Source: Real Estate Market Research & Analysis; Jones Lang LaSalle; October 2010

After establishing itself as an IT and BPO hub, Bangalore has successfully attracted the Biotech industry. Bangalore currently houses approximately 47% of the total biotechnology companies in India. The Karnataka government’s various initiatives such as a biotech policy, fiscal incentives and proposed biotech park in Bangalore are likely to aid the process. Karnataka is one of the few states to come out with a clear-cut biotechnology policy called ‘The Millennium Biotech Policy’, while the Centre is still dithering to formulate such a policy at the national level. Karnataka’s policy promises to establish a biotech corridor and the state has also set up a ‘Vision Group on Biotechnology’ to provide an impetus to the growth of the sector through other initiatives.

2.7 KEY INFRASTRUCTURE INITIATIVES There are various proactive measures taken up by the GoK in augmenting & expanding the city physical infrastructure and developing major infrastructure projects to encourage overall economic development. The following table summarizes salient features of some of the major infrastructure projects in the city.


Table 2.7: Salient Features of Major Infrastructure Projects in Bangalore

Name of the Infrastructure Initiative

Executing Agency Development Phase Location Area / Coverage

Bangalore International Airport

Bangalore International Airport Limited

� Operations of Terminal 1 commenced in May 2008.

� The expansion of the existing T1 has been designed to enhance the operational performance in order to handle the increase of passenger traffic between now and 2015. The traffic is estimated to increase from the current 10.6 million passengers p/a to approximately 17 million passengers.

� The expansion is scheduled to be completed in 18 months from the commencement of construction (September 2010) at an estimated cost of USD 214 million.

Devanahalli 4,050 acres

Elevated Expressway to BIA

NHAI under Phase VII of the National Highway Development Project. Project awarded to NEC Ltd.

The project is part of an overall proposal for up-gradation, operation and maintenance of 534.72 km to 556.84 km of the Hyderabad-Bangalore section under Phase VII of the National Highway Development Project. The proposed project is 22.12 km long elevated six-lane expressway which will eliminate the traffic signals on-route to BIA.

It is estimated to be built at a cost of INR 6,800 million on a Build-Operate-Transfer (BOT) basis, the project has been given to Navayuga Engineering Co. Ltd. The construction is expected to start from early 2011 and completed by 2013

Bellary Road from Hebbal Junction to Trumpet Inter-Change at BIA

22.12 km long elevated six-lane expressway

Peripheral Ring Road

Bangalore Development Authority

PRR 1: 65 km stretch connecting Hosur Road and Tumkur Road running through the north-eastern quadrant of Bangalore cutting across Bellary Road.

PRR 2: This is the second phase connecting Hosur Road and Tumkur Road covering the south-western quadrant of the city for a length of 51 km

Expected to boost connectivity to BIA from various parts of the city.

Status: Final stages of land acquisition. Construction work expected to commence in the next 3-4 months.

Date of Completion: 30 months from the start date of construction i.e.

Bangalore 109 km




mid 2013

Estimated Budget: Approximately INR 30,000 million

Metro - Rail Corridor (Phase-I)

Bangalore Metro-Rail Corporation Limited

� Phase-I (East-West Corridor of 18.1 km in length and it will start at Byappanahalli (NGEF Complex) and terminate at Mysore Road. It would cover Indiranagar, CMH Road, Swami Vivekananda Road, M.G. Road, Ambedkar Road, Post Office Road, K.G. Road, Majestic, KSRTC Bus Stand, Bangalore City Railway Station, Magadi Road, Toll-gate, Chord Road, Vijayanagar, Mysore Road up to Ring Road Junction

� North-South Corridor of 4.9 km will start at Yeshwantpur and terminate at Jayanagar. It would cover Chord Road, Mahakavi Kuvempu Junction, Swastik, Platform Road, KSRTC Bus Stand, Chickpet, City Market, K.R. Road, Vani Vilas Road, Lalbagh, R.V. Road, South End Circle and Jayanagar.

� The Extended Phase I is along the North-South corridor. The Yeshwanthpur station is further linked to the Hessaraghatta station which is 5.6 km away and RV Station to Puttenahalli is 3.7 km.

� Status: Part of Phase 1 between Byappanahalli and MG Road is proposed to be operational by first quarter 2011. Rest of the work is under progress

Bangalore 42.3 km

Metro-Rail Corridor (Phase-II)

Bangalore Metro-Rail Corporation Limited

� The Karnataka government approved the second phase of the Bangalore Metro project in 4th Q 2010 at a cost of INR 147,740 million.

� Phase-II of Metro Rail Corridor comprises 51 km with 47 metro station, involving northwest corridor of 4.02 km in length and it will start from Madavara - Hesarghatta, Southeast corridor of 6.79 km will start from Puttenahalli - Anjanapura, Southwest corridor of 7.70 km along mysore road till kengeri, Northeastern corridor of 11.60 km starting from Byappanahalli - ITPL and northern corridor of 21.0 km starting from IIM-B - Nagavar.

Bangalore 51.0




Bangalore-Electronic City Elevated Toll Expressway

National Highway Authority of India (NHAI) - Consortium of Soma Enterprises Limited, Nagarjuna Construction Company and Maytas Infra Private Limited

� The Bangalore Elevated Tollway is a 9.985 kilometers (6 mi) long elevated, tolled, access-controlled expressway on Hosur road in Bangalore.

� The project is a part of the BETL (Bangalore Elevated Tollway Ltd)- consortium consisting of Soma Enterprise Ltd, Nagarjuna Construction Corporation (NCC), and Maytas Infra Pvt Ltd.

� The project as part of the National Highways Development Project and the Elevated Highways Project. It was initiated in early 2006, and was inaugurated on 22 January 2010.

Hosur road: The project starts before Bomanahalli signal after the Central Silk Board flyover and goes on up to Electronic City. It goes above the BMIC flyover on Hosur Road.

9.985 km

Bangalore-Mysore Infrastructure Corridor

Kalyani Group of companies, VHB International Limited, SAB International Ltd

� Phase-I: This phase started in the year 28th April 1999 and it is stated that the whole corridor project has been divided into "stand alone" development projects. These distinct project phases are expected to be commissioned over a period of 13 years.

� Status: Work in progress. Certain stretches are already operational

Southern Section of the Outer Peripheral Road: 41 km connecting NH-7 and NH-4

Bangalore-Mysore Expressway: 111 km connecting Mysore and Bangalore

Link Road: 9 km connecting the Bangalore-Mysore Expressway to SH-17

Elevated Link Road: 3 km of elevated expressway connecting the link road to downtown Bangalore

Bangalore Helix Department of IT, BT and S&T, GoK

� Infrastructure available:

1. Institute of Bioinformatics and Applied Biotechnology

2. Centre for Human Genetics

� Proposed Incubation Centre and instrumentation facility

1. In 14 acres

2. Govt. of India has provided USD 3 million for instruments

� Proposed Biotech Cluster

1. 50 acres with investment of USD 50 million on PPP mode

2. SEZ status granted

3. M/s. Deloitte Touche Pvt. Ltd. appointed as PMC

Electronic city off Hosur Road 64 acres

High-Speed Rail Bangalore Airport Rail Link � The HSRL will have a length of about 34 km from the Bangalore MG Road to BIA with 3 stops at MG 40 hectare




Link Limited (SPV: BIAL, BMRCL, Greater Bangalore City Corporation, BDA and GoK)

city centre to the International Airport passing through Cubbon Road (City Center check-in station), Hebbal (Check-in station), Yelahanka (pick-up station) and BIA Terminal Station. Cost estimated at INR 66,890 million

� Status: DPR Completed; Five consortia are short listed in response to Request for Qualification submitted; Request for Proposal (RFP) is provided to short listed consortia; Proposals to be submitted during end of September 2010. Land identification for acquisition is complete. Gazette Notification to be issued for identified land for acquisition.

Road, Hebbal and Yelahanka

Intermediate Ring Road (IRR)

National Highways Authority of India

� 185 km - including the overlap on STRR and Nelamangala bypass.

� Connects many industrial and residential establishments located on the outer periphery of Bangalore.

� Status: Alignment is finalized; Tenders to be floated; Land acquisition is yet to commence.

Lies between STRR and PRR across Bangalore periphery Passes through Tattekere, Harohalli, Bidadi, Nelamangala, Thippagondanahalli. Devanahalli, Nallur, Hoskote and Sarjapur

4182 acres

Satellite Town Ring Road

Bangalore Metropolitan Region Development Authority

� 367 km length connecting 7 major towns

� Proposed to connects the BMRDA New Townships: Nandagudi, Solur, Bidadi, Satahanur, Ramanagaram

� Connects each Town Ring Road of BMRDA Towns and lies beyond IRR

� Status: Survey completed. Techno Economic Feasibility study completed. Awaiting cabinet approval

7 major towns: Devanahalli, Dobbuspet, Magadi, Ramanagara, Kanakapura, Anekal, Hoskote and Doddaballpur

6303 acres

Mono Rail (Under Integrated Mass Transport System)

Bangalore Airport Rail Link Limited

� Government of Karnataka through Infrastructure Development Department (IDD), intends to develop Monorail/Light Rail Transit System services, which would function as a feeder services to Metro rail

� The 60.0 km feeder network for Metro Rail is being planned on Swiss Challenge method through Malaysian firm Scomi Geodesic Consortium - decision yet to be taken

Hebbal to J P Nagar (Bannerghatta Road) along the western portion of Outer Ring Road (31.0 km)

Peripheral Ring Road to Toll Gate along Magadi Road (9.0 km)

Kathriguppe Road /Ring Road Junction to National College

NA




� The first phase planned from Majestic to Agara lake (15 km)

� Status: Global tenders for PPP to be floated

(5.0 km)

Hosur Road - Bannerghatta Road Junction to PRR along Bannerghatta Road (15.0 km).

Signal Free Outer Ring Road

Bangalore Development Authority

� The proposed length is 31 km stretch from Hebbal Flyover to Central Silk Board

� There is proposal for seven underpass and one underpass

� The entire project is proposed to be completed by 2011

� The total cost for the entire project is INR 2400 million

� Status: Project under implementation

� Seven Flyovers to be constructed at -

� HSR Layout

� 14th Main- HSR Layout

� Bellandur

� Devarabeesanahalli junction

� Kalyannagar Junction

� Hennur

� Veerannapalya Junction

� An Underpass at Hennur

31 km



The map below presents some of the key existing and proposed road network of the Bangalore City, which have been the factors fueling the physical growth of the city. Also existing and proposed infrastructure projects have been highlighted. Map 2.4: Major Infrastructure Initiative Projects in Bangalore

2.8 GROWTH TRENDS Economy of Bangalore being driven by IT & ITES sector, telecommunication firms and other industries as well as in educational institutes, research colleges, etc, resulted in large immigrant white collar population and also opened avenues for many real estate developers to build large scale developments across the city-commercial, residential, retail, hospitality etc. Residential developments have been targeting primarily the middle and upper middle segments. In-terms of physical growth, most of the existing development have been witnessed along the corridors having significant presences of IT-ITES activities. Accordingly, Hosur Road, Bannerghatta Road, Sarjapur Road, Marathalli Sarjapur Outer Ring Road and Whitefield have witnessed significant growth in terms real estate development. All these locations lie on the South, Southeast and Eastern quadrant of the Bangalore city in the close proximity of IT&ITES and industrial development. The following map presents the strategic locations of Bangalore and also the growth corridors of the city.


Map 2.5: Growth Trends and Growth Corridors of the Bangalore City

Broadly Bangalore can be divided or classified into strategic locations like Central Business District (CBD), Secondary BD (SBD), Northern Suburb, Southern Suburb, Eastern Suburb and Western Suburb. The CBD has limited land availability and it is densely populated with increasing traffic congestion. Physical growth potential is very limited as compared to other strategic location in Bangalore. SBD is primarily triggered by the improved connectivity of ORR, proximity to city center and the suburban areas. In the case of Northern Suburb, urban infrastructure projects like International airport, Eight lane NH 7 highways, proposed Metro rail, Airport Expressway and the availability of large land parcels for real estate development has driven the growth of this region. Suburban areas in Bangalore witnessed very high growth of real estate activites primarily because of lower land rates and other government initiatives such as Electronic City and EPIP Zone in Whitefield. The commercial development gave rise to the residential needs. Southern and Eastern Suburb continue to be on radar of real estate developers, investors and buyers due to improved connectivity via Outer Ring Road and the elevated express way (along Hosur Road) to other parts of city is driving factor for the real estate development. The Western Suburb has not witnessed sufficient real estate growth due to the distance from the IT/ITES hubs and existing Industrial profile of the region. But presently many of


these industries are either shutting down their operations and/or relocating to alternate locations to facilitate the land for the real estate development under commercial format. However, there are many infrastructure projects such as Proposed Elevated express way and Metro project in the micro market which will lead to improved connectivity and increase the real estate value in the coming future.


3 REAL ESTATE MACRO-MARKET REVIEW

3.1 GENERAL SECTOR TRENDS In the last decade, Bangalore has gained a special significance in the real estate market. The boom in Information Technology was largely responsible in triggering the real estate activities in city. Other than IT and ITES, other sectors like automobile, garments, finance and real estate also have shown phenomenal growth in the past 5 years. The increasing demand for commercial sector reflected in generation of more employment, increasing people with higher disposable incomes, need for better residential enclaves and different formats of retail, leisure and entertainment. The spur of activities led to increase in spread of city catchment. The map below presents the overview of the real estate sector trends in Bangalore. Map 3.1: Overview of the Real Estate Macro-Market Trends in Bangalore City

Bangalore has grown in radial direction along the main corridors. The centre is the CBD (Central Business District) followed by ring of SBD (Secondary Business District) developments and further is the PD (peripheral districts) comprising of developments in suburban areas. Following are the prime areas witnessing different real estate activities

� High-end corporate offices & retail developments: CBD Area (MG Road, Brigade Road, Commercial Street, Residency Road, Langford Town, Cunningham road, Richmond road etc).

� IT/ ITES Offices & SEZs: towards Eastern and Southern suburban areas: Electronic City, Whitefield, ORR, Sarjapur Road, Hebbal etc.

� Corporate / Office: CBD and SBD areas: Koramangala, Indiranagar, Jayanagar, Bannerghatta Road etc.


� Residential: Hebbal, Sahakarnagar, Yelahanka, Jalahalli, Kengeri, Rajajinagar, JP Nagar, Banashankari, Jayanagar, Koramangala, Indiranagar, HSR Layout, Brookefield, Whitefield, Sarjapur road, Hosur road, Bannerghatta road, Kanakpura road etc.

� Industrial: Peenya, Yeshwantpur, Rajajinagar Industrial Suburb, Jigini, Bommasandra

3.2 RESIDENTIAL SECTOR TRENDS Development Zones in City The Bangalore residential market is one of the fastest growing residential markets in India with a greater stress on quality developments and a higher%age of demand for apartment developments. The market is seeing tremendous growth with the support from the IT-boom and has presently positioned to be the most developed residential market, compared to all the cities in South India. Bangalore is the only city in South India to see upcoming residential developments with apartments priced as high as INR 13,000 per sq. ft. The table below presents profile of important residential development zones and prime typologies in the city. Map 3.2: Residential Zones in Bangalore City


Table 3.1: Major Residential Development Zones in Bangalore

SI. Zone Important Locations Profile

1. Central Business District - CBD

MG Road, Brigade Road, Cox Town, Residency Road, Frazer Town, Richmond Town, Lavelle Road, Benson Town, Sadashivnagar, Jayamahal, Palace Cross Road, Brunton Road and Seshadripuram

These areas are well developed with very nominal new supply. The new supply is mostly from redevelopment of old residential buildings into modern apartments. Majority of the proposed and lunched projects targets only the super luxury segment with very minimum average units of 10-15 units. In terms of social index, these areas primarily constitute a business class and upper middle-income group and higher income group households.

2. Secondary Business District (SBD)

Indiranagar, Airport Road, Koramangala, JP Nagar, Jayanagar Malleshwaram, Vijaynagar, Rajajinagar, RT Nagar, New BEL extension, RMV II Stage, Banasvadi, Basavangudi and Banashankari Stage II etc.

The developments in CBD targeted high priced buyers. Most upper-middle class buyers who wish to stay closer to both city and work place preferred the SBD area which is areas between CBD and ORR areas. The project size varied across the micro market is in the range of 80-150 units. SBD has access to well developed social and physical infrastructure facilities and the land rates are intermediate of high priced CBD and the suburban locations.

Social index: majority of household are in upper middle and middle income and business.

3. Northern Suburb Yelahanka, Jakkur, Bellary Road, HRBR Layout, and Doddaballpur road etc.

The growth of the micro market is driven by the existing international airport.

In the case of real estate residential development, most of the developments are into plots with few villa developments. Prominent developers like Sobha, Purvavankara, Godrej etc have their presences over this areas and the projects are under various stages of construction.

Social index : Middle and Lower Middle Income.

4. Southern Suburb Mysore Road, Kanakapura Road, Bannerghatta Road, Hosur Road (Electronic city).

The proximity to the IT corridor and improved infrastructure facilities has hastened the development in this region. In the case of residential development, most of them here are plotted development followed by Residential Apartments and Villa developments.

Social index: most of the residents are IT workforce with disposable incomes and propensity to spend on family shopping and entertainment.

5. Eastern Suburb Marathalli-Sarjapur ORR, Sarjapur Road, Whitefield and Brookfield

These areas gained importance because of the IT&ITES development followed by improved connectivity. Mix of apartment and independent homes/villa developments are found in these areas. Social index: Whitefield has middle and upper middle-income group settlement, who are mainly into IT and ITES sector with higher disposal income.

6. West Suburb Magadi Road and Tumkur Road Western suburb has witnessed slow off take in real estate development. Apart from the real estate development this micro market is also prominent for industries, warehouse and PSUs etc, which is presently acting like barrier for real estate developments.

Social index: mix of middle and lower income group households.



Market Status on Supply and Absorption Residential sector boom is predominantly towards the south, east and north of the city, with the eastern part of the city witnessing an increased residential activity as a spin off from the IT related corporate / office developments. Local as well as national developers are developing large-scale residential townships. The residential market in the city is presently a market of apartments, villas and independent plots. At present, high-end residential developments are mainly concentrated in the CBD and in the East and Southern parts of the city. Bangalore has the highest share as Apartments (50%) followed by Plotted developments (40%). Villa market is mostly confined to the suburban areas like Whitefield and Devanahalli, with Sarjapur road witnessing few new projects in recent times. Following are the major findings from the residential sector analysis for the city: � Bangalore residential market is estimated to be about 13,000-15,000 units per year.

Year 2010 is expected to touch 15,000 units sale, which is comparable to peak sale volume during the year 2007.

� Residential activity is high in suburban and peripheral areas due to proximity to IT-ITES commercial areas and also availability of land parcel for development.

� Migrants constitute 30-40% of the employee population who also constitute major share of buyer profile in market.

� The average absorption in the city for all the projects is around 65-70%. Grade A projects had the highest absorption in the range of 70-75% depending upon the location.

� Affordable housing developments are presently the most sought after segment after recessionary pressures have shifted the focus away from high-end luxury apartment projects.

� Good demand for luxury villa projects. Pricing ranges from INR 15 million to 35 million and above per villa.

� Amenities offered by the high end projects include clubhouse, swimming pool, landscaped parks, children’s play area, CCTVs, security etc. Emphasis is high on specifications and materials used, integrated amenities and support facilities.

� Concepts such as integrated residential townships are still nascent as compared to other cities.

� Concept of ‘walk to work’, green buildings, buildings with carbon credits etc. emerging as the new marketing mantra among developers for marketing.

Market Trends - Apartment Typology Supply: 95% of total apartment supply is in the suburbs with Eastern and Southern Suburbs taking the largest share of 34% and 33% respectively. CBD accounts for about 1% of the total apartment supply. Secondary Business District accounts for approx 4% of the total supply.

The share of Western and Northern suburbs is only 14% each. The northern suburbs are in the early stages of development while the western areas comprise of densely developed localities with little space available for new development. Grade A & B developments constitute 78% of the overall supply.

Absorption: The average absorption in the city for all the projects is around 65-70%. Grade A projects had the highest absorption in the range of 70-75% depending upon the location.

Share of Housing Typology

Apartment

Supply

50%

Villa Supply

10%

Plots Supply

40%


There has been only a minor increase in the absorption figures from 2009 to 2010. During the period of 2008-09 the residential market witnessed a price reduction to the tune of 20-25% across all markets in the city. The market has picked up gradually since first quarter 2010 with an average increase in price by 15-20%. The absorption in suburbs is lower as compared to the absorption in SBD areas like Jayanagar, JP Nagar, Banashankari, Indiranagar, Koramangala, Hebbal, etc. These areas have an average absorption rate of nearly 80% and above. This is also because of large supply in the suburbs as compared to the limited supply in the off-CBD areas.

Apartment Absorption Across Different Micro Markets

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ORR Sarjapur

Road

Hosur Road Kanakapura

Road

Bannerghatta

Road

Tumkur Road Bellary Road Mysore Road Hennur Main

Road

Old Madras

Road

Whitef ield

Pricing: The average price range in the CBD was from INR 12,000 - 18,000 per sq. ft in early 2008. However the prices have dropped to INR 12,500-15,000 per sq. ft after the downturn in the market. Secondary Business District (Jayanagar/ Indiranagar etc.) have prices ranging between INR 5,000- 7,500 per sq. ft. Prices in Suburban areas range between INR 2,500- 3,500 per sq. ft. Among the suburbs, Bellary road and Sarjapur ORR command the highest pricing with an average of INR 3100 per sq. ft. while the eastern areas have the lowest prices with average of INR 2700 per sq. ft. The prices were on a decrease since 4Q 2008 till 4Q 2009 have now started to witness a increase by almost 15% in most areas since the beginning of 2010.

There was an increased market activity during year 2009 under the affordable category/ budget apartment moving away from the luxury apartment and villa segment that had prevailed till early 2008. The market is witnessing again revival of luxury segment with launch of Prestige White Meadows in 1Q2010. The table below provides trends in residential pricing over the past six years across different micro markets in the city. Table 3.2 Year-Wise Residential Rates across various Micro Markets location (Grade-A, B&C Category)

Residential Apartments - Average Price (INR per sq. ft.) Year-Wise Micro-Markets

2004 2005 2006 2007 2008 2009 2010

CBD 3500 4000 6000 10500 10000 8500 10500

Indiranagar 2500 3000 4000 6000 6500 6000 6000

JP Nagar 1800 2000 3000 4500 4500 4000 5500

Jayanagar 2300 2800 4000 5000 5300 5000 6500


Residential Apartments - Average Price (INR per sq. ft.) Year-Wise Micro-Markets

2004 2005 2006 2007 2008 2009 2010

Koramangala 2500 3000 3500 5500 6000 5500 6500

Bannerghatta 2200 2350 2500 2950 3000 2800 4000

Bellary Road (between Hebbal & Yelahanka)

1500 1800 3000 3300 3200 3000 3200

Hosur Road 1800 2000 2300 2800 2850 2400 2650

Whitefield 1500 1800 2250 2800 2750 2500 2550

ORR (b/w Silk Board and KR Puram)

2100 2500 2800 3350 3500 3100 4000

Tumkur Road 2200 2500 2800 3000 3000 2300 2650

Kanakapura Rd 2200 2500 2900 3200 3100 2600 2800

Sarjapur Road 1800 2100 2700 3000 2900 2400 3500


Table 3.3 Year-Wise Residential Rates across various Micro Markets location (Grade-A Category)

Residential Apartments - Year-Wise Average Price (INR per sq. ft.)

Micro-Markets

2008 2009 2010

CBD 6,100-14,000 7,000-10,000 9,500-15,000

Lavelle Road 8,000-14,000 7,500-13,000 8,000-15,000

Richmond Town 7,700-10,000 7000-11,000 7800-13,500

Convent Road 6,800-9,000 6,200-9,000 7,000-12,500

SBD

Indiranagar 5,500-6,500 5,000-6,500 7,000-9,000

JP Nagar 3,500-5,800 3,400-5,400 4,000-6,050

Jayanagar 3,600-5,600 3,500-5,500 6,500-7,800

Koramangala 3,500-6,000 3,800-5,500 6,500-9,000

SUBURBS

Bannerghatta Road 3,000-3,400 2900-3,200 3,600-4,600

Bellary Road (between Hebbal & Yelahanka)

3,325-3,750 2,800-4,500 2,900-4,000

Hosur Road 2,100-3,390 2,000-2,900 2,700-3,600

Whitefield 2,640-3,100 2,600-2,900 2,600-3,500

ORR (b/w Silk Board and KR Puram) 2,700-4,400 2,700-4,400 3,900-6,400

Tumkur Road 2,400-3,200 2,500-3,500 2,600-4,500

Kanakapura Rd 2,950-3,450 3,200-3,400 3,400-5,000

Sarjapur Road 3,550-3,700 3,200-3,600 3,500-4,200



Sales Velocity: Market conditions will eventually be determined by fundamentals such as unsold inventories, new pipeline inventory, price point of new launches, availability and cost of credit and macro-market conditions of the state & the country. Similarly, if inventory risks force developers to cut losses, there are cases of developers y may resort to lower prices or use the mechanism of sales promos to offload stocks. Bangalore residential market is estimated to be about 13,000-15,000 units per year. Year 2010 is expected to touch 15,000 units sale, which is comparable to peak sale volume during the year 2007. Sale performance during the year 2010 is estimated to be about 34% increase over the pervious year (year 2009), which witnessed absorption of about 11,600 units. This increase in sale volume was primarily assisted by the affordable housing segment that provided a remarkable increase in sale volume. Few prominent player in the market who contribution for 2010 supply were DLF Westend Heights, Provident Welworth City, Brigade Metropolis, Prestige Shantiniketan, VBHC, etc. Observations on Apartments Typology: Following are some of the key observations on apartment typology in Bangalore: � Typology 2-BHK and 3-BHK are the most common units � 4-BHK and 5-BHK types are available in CBD, secondary CBD, suburban ORR area � Studio and 1BHK units are also available - more towards the work centers like

Whitefield and Hosur Road � Land is proportioned through undivided share � Loading of common areas: 15% - 25% depending on the extra amenities provided

(Super built-up area SBA). Loading factor: Grade C developers is 15%-18%, Grade A & B developers is 20%- 25%

Above observations are micro-market specific and also depend upon the Grade of the developer. Other than the loading, there few other charges like car parking, charges payable to civic authorities, clubhouse membership, floor-rise, VAT, etc. which are usually charged over the base cost of residential unit. � Other Charges - These miscellaneous charges which include statutory charges vary

greatly depending on the developer, project specification, amenities and location. The typical range of charges are listed below: � Club Membership : INR 50,000 - 200,000 per unit � Maintenance fees - Either lump sum (INR 150,000-250,000) or corpus of one year

maintenance fees. Further, a monthly fee is charged between INR 2-8 per sq. ft. for common area maintenance after a specified maintenance free period.

� Car Parking Charges : INR 100,000-300,000 per car for covered/ stilt parking, INR 50,000-250,000 for open/ peripheral parking

� Floor rise/ Premium pricing: Floor rise - INR 25-45 per floor. Alternatively, price increases in the order of approx. INR 50 for slabs of every 4-5 floors. Further a similar premium is sometimes attached based on the apartment facing.

� Private garden/ terrace areas are charged at typically 1/3 the quoted rate per sq. ft. of the project.

� VAT: 8.75% (Calculated at 12.5% on 70% of Construction Value). � Service Tax: 3.09% on construction Value, other Additional Services will be at

10.3%. However, the legal validity of payment of Service tax is been debated amongst the builder community.

� BESCOM: INR 70-100 per sq. ft. Further some developers have an additional fee for solar lighting, heating and DG back-up charges

� BWSSB & STP Charges: 75-125 per sq. ft. � Legal fees : INR 20,000 - 35,000 � Other charges payable at actual on handover - MOEF fees, Registration % Stamp

duty (based on Government guideline values)


3.3 AFFORDABLE HOUSING

Concept and Definition Affordable housing is a term used to describe dwelling units whose total housing costs are deemed "affordable" to those that have a median income or less than median income. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the concept is applicable to both renters and purchasers in all income ranges. The commonly accepted guideline across the world for housing affordability is a housing cost that does not exceed 30% of a household's gross income. Housing costs considered in this guideline generally include taxes and insurance for owners, and usually include utility costs. When the monthly carrying costs of a home exceed 30-35% of household income, then the housing is considered unaffordable for that household. Affordable Housing - National Scenario The National Urban Housing & Habitat Policy (NUHHP) 2007 envisages a strategy of scheme of affordable housing in partnership to promote various types of public private partnerships for realizing the goal of affordable housing. This scheme is part of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), wherein the affordable housing is typically defined by three significant parameters namely the income level, size of the dwelling unit and affordability. Affordable housing refers to any housing that meets some form of affordability criterion.8 The affordable housing targets primarily the LIG and MIG segments of the society. It indicates that the dwelling units should be a mix of Economically Weaker Section (EWS), Lower Income Group (LIG) and Middle Income Group (MIG) categories with the maximum size of a dwelling unit size ranges from about 300 sq. ft. (super built up area) for EWS, 500 sq. ft. for LIG and 600 sq. ft. to 1200 sq. ft. for MIG, at costs that permit repayment of home loans in monthly installments not exceeding 30% to 40% of the monthly income of the buyer. The sale price of these dwelling units should have an upper ceiling in terms of Rupees per square metre of carpet area. The price ceiling would be settled in consultation with the States/ UTs for different classes of cities. A recent analysis by research groups/consultancies defines affordable housing in India as indicated in the following table. Table 3.4 Income and Dwelling Size for Affordable Housing Project

Category Income Level (INR per Annum)

Size of Dwelling Unit

Affordability

Economically Weaker Section < 150,000 Up to 300 sq. ft.

Lower Income Group 150,000 - 300,000 300 to 600 sq. ft.

Higher Income Group 300,000 - 1,000,000 600 to 1200 sq. ft.

EMI to Monthly Income - 30 to 40%

House Price to Annual Income Ratio

Less than 5.1 (Deepak Parekh Task Force)

At present, affordable housing in India has become the new concept for several developers in the country. From buyers to the sellers to the realtors and investors, everyone is pitching for affordable quality homes in India. The story begins from the realization of the huge unmet demand for affordable housing in India since the premium section is witnessing an oversupply.

8 New options for Affordable Housing? Shelter WA Occasional Paper 2003-1, by Karel Eringa (April 2003)


The real estate property market experienced downtrend in late 2008 with a downfall of up to 15-50% in property prices across selective micro market of major metropolis cities like Delhi, Mumbai, Hyderabad, Bangalore, Kolkata, Chennai, Pune, Gurgaon, Noida, Greater Noida, etc. In the case of the completed projects the prices have hit a low of more than 25- 40% in major property markets across these cities. It was during those periods that various developers have started looking for alternatives to revive the housing demand. This resulted in change in target segment from upper class to mid segment population primarily comprising of PSU and BPO employees. Attractive interest rates offered by bank for loan size less than INR 3 million and interest subsidy of 100 basis points offered by the Government of India for loans up to INR 1 million for residential unit priced up to INR 2 million also contributed to both end-users and developers looking at the affordable housing segment. Government is also promoting affordable housing and now have recently announced subsidy of 1% for sub INR 2 million homes for a loan of INR 1 million for the first year. These properties are also good for PSU and other government employees. Since the economic slowdown had resulted in bringing down the commodities prices as well, the cost of construction also come down. The fall in cement and steel prices which constitute major chunk of construction costs during end of 2008 compelled the developers to pass on the benefit to the end users. Thus, there emerged an increase in the supply of affordable quality homes across metro cities within the price range of INR 0.55 million - INR 3 million. However with the increased costs in year 2010 the discounts that were envisaged during early 2009 have not been possible to provide. The key success factors however for affordable housing as an asset class would be Infrastructure support, use of alternate materials and low cost techniques and mechanisms, subsidized land costs, faster approvals from the government and lesser construction period. Affordable Housing Scenario - Bangalore The affordable housing concept has gained ground in Bangalore City mainly due to few graded developers like Purvankara, Brigade Group, Shriram Properties, Golden Gate Properties, Ozone Group and Nitesh Estate, etc. focusing their projects targeting this customer segment. In most of the cases, the housing units are made affordable by reducing the unit size, compromising on the civic amenities and other USPs, which were typically provided as differentiators to the competing projects in the micro-market/city. Most of the housing units under affordable housing segment have sizes ranging between 400 sq. ft. to 1,900 sq. ft. with pricing ranging between INR 1.0 million per unit to INR 3.0 million per unit. This doesn’t include the project developed by VBHC. There are few projects developed by prominent developers like DLF of Westend heights located off Bannerghatta Road and Platinum City located off Tumkur Road in Bangalore, wherein the projects were launched as affordable projects during launch period. However with the increased demand and interest of consumers the projects have witnessed increase in the capital prices and now are priced higher than the normal affordable housing projects. The focus was so aggressive that some of the projects launched during year 2007 - 2008, in locations such as Sarjapur Road or Outer Ring Road (ORR) were largely focused on mid-market residential category, which typically has budget ranging between INR 4.0 to 6.0 million per unit. The developers resorted to re-designing the projects to address the demand of the wider target segment looking at affordable homes. At present in Bangalore, there are more than 15 projects which are marketed as affordable housing. However, it is pertinent to note that few of such projects are not in the affordable segment category according to the JNNURM scheme definition. Most of the units


delivered have areas larger than the prescribed norms and the pricing are also on a higher scale. Few such Grade-A& B projects are Platinum City by Indian Builders Corp, Hyde Park by Nitesh Estates, Evergreens by Ozone Group, etc. Some of the prominent developments under the affordable housing segment launched in the recent past include the following: � ‘Provident Welworth City’ by Puravankara and Provident Housing in Doddaballapur

Road which was launched on 2009 has 2 and 3-BHK formats with unit sizes from ranging from 845 to 1920 sq. ft. The project envisages a supply of approximately 3,360 units by 2013. The base price range is from 1.6 million to 2.8 million per unit, with a unit cost of INR 1850 per sq. ft.

� ‘Janapriya Green Wood’ is a project launched by Janapriya developers along Hesaraghatta Road in 2009. This has 2 and 3-BHK formats with area ranging from 895 to 1,365 sq. ft. The project is under construction and comprises of 356 units. The base price of the units varies from 1.7 million to 2.3 million per unit, with a unit cost of INR 1,745 per sq. ft.

� Shriram Smrithi is another project worth mentioning in the affordable segment. This is developed by Shriram Properties and the Project was launched in 2009 along Attibele - Sarjapur Road. The project comprises of 1-BHK, 1-BHK plus Study, 2-BHK and 3-BHK formats with area ranging from 630 to 1090 sq. ft. The project is envisaged to supply a total of 890 units. The unit pricing for the project ranges from 1.3 million to 2.2 million, with a unit cost of INR 2,050 per sq. ft.

As on date, these branded developers have launched more than 15 projects with a committed supply of about 14,334 units in different micro-markets of the city. In addition major national level players and local developers have plans to enter the affordable housing segment of Bangalore. This includes Tata Housing, Usha Breco Realty, Godrej Properties, Ashoka Group, Jannaadhar Construction, CSC Builders, Brigade Group, etc. The following table indicates details pertaining to major projects in Bangalore that are under the affordable category.


Table 3.5 Inventory and Details of Affordable Housing Projects in Bangalore

Unit Size (sq. ft.) Project Name Developer Location Launch

Year

Launch Price

(INR per sq. ft.)

Expected Completion Year 1-BHK 2-BHK 3-BHK 4-

BHK

Units

(Nos.)

Status Absorption

Rate

Price

(INR per sq. ft.)

Welworth City Provident Housing Doddaballapur Road 2009 1750 2013 -- 845 -896 1075 - 1920 -- 3,360 Under Const. 35% 1,850

South Scape Concorde Group Electronic City Phase II 2010 2,100 2012 -- 840-940 1080 -1231 -- 156 Under Const. 15% 2,100

Pride Horozon Pride Group Bannerghatta -Jigini Rd. 2010 1700 2012 -- 550 880 -- 176 Under Const. 10% 1,850

9Platinum City Indian Builders Corp.

HMT Main Road 2006 1,500 2010 800 1112 - 1214 2541 - 2635 3462 2,500 Completed 80% 3,200

Thyme Park IVR Prime Urban Jigani 2007 1,600 Na -- Na Na -- 450 Completed 100% 2,000

Green Wood Jana Priya Hesaraghatta Road 2009 1,400 2011 -- 895-1105 1240-1365 -- 356 Under Const. 35% 1,745

Willow Mahaveer Kengeri 2007 1,800 2008 -- 795-1010 1260 1370 -- 280 Completed 100% 2100

The Commune Golden Gate Kanakapura Road 2009 2100 2011 -- 900-1120 Nil -- 2500 Under Const. 40% 3,000

Hyde Park Nitesh Estates Bannerghatta Road 2009 1950 2011 -- 1100 1350 -- 250 Under Const. 70% 3,200

Evergreens Ozone Group Off Sarjapur Road 2009 2300 2011 -- 902-927 1206 -- 912 Under Const. 6% 3,200

North City HM Constructions Off Doddaballapur Rd. 2010 2360 2011 700 910 1255 -- 630 Under Const. 25% 2,500

Capital HM Constructions Marathalli 2010 2750 2013 758 968 1238-1387 -- 900 Planned 5% 2,850

Shriram Shruthi Shriram Properties Jalahalli 2010 1950 2012 -- 650 1140 -- 832 Under Const. 20% 2,150

Shriram Surabhi Shriram Properties Off Kanakapura Road 2009 2100 2011 -- 843 - 900 Nil -- 552 Under Const. 30% 2,350

Shriram Smrithi Shriram Properties Attibele - Sarjapur Rd. 2009 1890 2011 630 -720 855 1090 -- 890 Under Const. 20% 2050

Century Indus Century Group Rajarajeshwari Nagar 2010 2450 2012 -- 878 - 950 1200 - 1700 -- 490 Under Const. 20% 2,650

Janaadhar Shubha

Janaadhar Const. Attibele - Anekal Rd. 2010 1300 2012 400 615 -- -- 1140 Under Const. 50% 1,327


9 Note: There are few projects developed by prominent developers in Bangalore, where the projects are highlights as affordable housing during launch period. Still these projects are priced at high cost than the normal affordable housing projects in the micro-market.


A major foray into the affordable housing segment in Bangalore was witnessed during 2009 which saw the supply of approximately 9,960 dwelling units in that category. Till 2010, a total launch of 16,374 (cumulative supply)

dwellings units is expected in Bangalore City. The average launch price per year is indicated in the graph. The launch price has shown an annual increase to the tune of 20% from 2009 to 2010. The average launch rates for affordable category housing in 2010 are INR 2,218 per sq. ft. which is 15% higher than the launch rate of INR 1,850 per sq. ft. in 2009. The average absorption rate of affordable housing is approximately 36%. The present pricing per sq. ft. for projects under affordable category housing varies from INR 1,327 per sq. ft. to INR 3200 per sq. ft. The size of a 1-BHK format in the affordable segment varies from 630 sq. ft. to 800 sq. ft. while a 2-BHK format has area ranging from 550 sq. ft. to 1,214 sq. ft. 3-BHK formats have area ranging from 880 sq. ft. to 2635 sq. ft. Apart from the existing affordable housing project there are few prominent developers, who are planning large scale affordable housing projects in Bangalore ranging from 500 to 5,000 units at unit cost of INR 2.0 to 3.0 million. Prominent among them are Usha Breco Realty, Godrej Properties, Tata Housing Development, CSC Realty, Ozone Group, Ashoka Group and Brigade Group. The Ashoka Group is planning for LIG housing with 5,000 units in Bangalore in collaboration with HUDCO, DHIFC and Mahindra Housing. It is expected that the above said projects might get launched in the forth coming year (2011). Cost Rationalization The affordable projects have various ways in which cost rationalization is carried out to offer the benefit to the buyers. This varies from providing the common amenities, lower built up area per unit, varying the technical specification as compared to the general residential projects across the city.

Average Launch Rates of Affordable Projects across

Bangalore

15001700

1,927 2,087

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2006 2007 2008 2009 2010

Year

INR per sq.ft

Average Unit Size and Average Pricing

668

905

1408

0

500

1000

1500

1 BHK 2 BHK 3 BHK

Format

Area in Sq.ft

0

1000000

2000000

3000000

4000000

Pricing in INR

Average Unit Size (sq.ft) Average Pricing per Unit (INR)

Cumulative Supply and Growth Rate of Supply in Affordable

Houses, Bangalore

0

5000

10000

15000

20000

2006 2007 2008 2009 2010Year

No.of Units

0.0%

100.0%

200.0%

300.0%

Growth Rate

(Percentage)

Cumulative Supply Growth Rate


Common Amenities Most affordable projects in general have common amenities like landscaped spaces, primary school; play area for children, healthcare centre with trained medical professionals, convenience shopping centre and round-the-clock security. Welworth city - an affordable project by Provident Group which is under construction on Yelahanka-Doddaballapura road boasts of additional facilities such as Jacuzzi, billiards and cards room, swimming pool, table tennis, basketball post, jogging park etc. Size Rationalization Typically the maximum supply in city is of 2-BHK followed by 3-BHK and very few of 4-BHK. Supply of 1-BHK or studio units in city have been minimal. Following table provides size variation of different typology of apartment units in conventional and affordable housing projects in the city. Table 3.6: Size Variation in Conventional and Affordable Housing Projects in Bangalore

Unit Type Conventional Project Affordable Project

Studio 450 sq. ft. (Rarely provided) 250 sq. ft.

1-BHK 600 sq. ft.-850sq. ft. (Rarely provided) 400 sq. ft. to 450 sq. ft.

2-BHK 1100 sq. ft. to 1300 sq. ft. 600 sq. ft. to 850 sq. ft.

3-BHK 1500 sq. ft. to 2000 sq. ft. 1000 sq. ft. to 1150 sq. ft. (Rarely provided)

4-BHK 1850 sq. ft. to 2400 sq. ft. Not provided

Price Variation For many developers, positioning their project under ‘affordable housing’ was a necessity to face the challenges of downturn in the overall real estate market. There are quite a few organizations that are catering to the affordable housing segment in Bangalore. Most of the supply till year 2007 were targeting workforce under IT-ITES segment, which were priced above INR 5 million. Recent downturn, which also affected the IT-ITES sector, has forced many developers to look at affordable housing segment in an effort to revive the housing demand. Employees under ITES (BPO) and PSUs received this concept well and made purchases under these projects. With the improved IT-ITES sector performance, many IT-ITES professionals are evaluating affordable housing as an investment proposition due to low entry investment requirement and potential appreciation due to increasing demand as the target segment band-width is significantly high. Most of these projects offer unit price ranging between INR 1.5-2.5 million where unit sizes are as low as 400 sq. ft. and average of sub-1,000 sq. ft. The size of format, technology of construction and location are key parameters, which are primarily focused under affordable housing project. In general, the affordable housing projects are built in large volumes with the best technology to minimize the cost factor. The primary cost-cutting for the developer or builder is through land as the plots are bought at very low costs in outskirts. In terms of facilities, even though the flats are small, the facilities like clubhouse, swimming pool, etc are the same as premium houses. This also brings down the cost as the project size is large and the same facilities are shared by more number of people. Within the affordable housing project, there are few existing and proposed project in Bangalore which are marketed at INR 0.64 million, targeting the auto rickshaw drivers, construction workers etc who have total household income of INR 12,000-25,000 per month, but live in slums or poor houses. The following table provides list of affordable housing projects along with unit size and cost per unit in Bangalore.


Table 3.7: List of Affordable Housing Projects in Bangalore

Project Name Developer Location Unit Size (sq. ft.)

Total Unit Cost (INR Million)

Welworth City Provident Housing Doddaballapur Road 845-1920 2.28 - 2.36

South Scape Concorde Group Electronic City Phase II 840-1231 2.10 - 2.70

Pride Horozon Pride Group Bannerghatta -Jigini Rd. 550-880 1.21 - 2.15

Platinum City Indian Builders Corp. HMT Main Road 800-3462 3.49 - 4.13

Green Wood Jana Priya Hesaraghatta Road 895-1365 2.25 - 2.73

Willow Mahaveer Kengeri 795-1370 2.11 - 3.30

The Commune Golden Gate Kanakapura Road 900-1120 On hold- Going to re-launch on March 2011

Hyde Park Nitesh Estates Bannerghatta Road 1100-1350 3.50 - 4.50

Evergreens Ozone Group Off Sarjapur Road 902-1206 2.80 - 3.80

North City HM Constructions Off Doddaballapur Rd. 700-1255 2.64 - 3.24

Capital HM Constructions Marathalli 758-1387 2.20 - 3.70

Shriram Shruthi Shriram Properties Jalahalli 650-1140 2.30 - 3.30

Shriram Surabhi Shriram Properties Off Kanakapura Road 843-900 2.75

Shriram Smrithi Shriram Properties Attibele - Sarjapur Rd. 630-1090 2.70 - 3.80

Century Indus Century Group Rajarajeshwari Nagar 878-1700 3.06 - 5.80

Janaadhar Shubha Janaadhar Const. Attibele - Anekal Rd. 400-615 0.64

Note: By 1st Q, 2011 Janaadhar Shubha is planning for revise the total unit cost to INR 705,000. It is to be noted that, presently phase-I of the project is under construction with 1-BHK format. It is expected that Phase-II of the project will have 1 & 2 BHK format. Unit cost mentioned above is based on basic price alone. There are other charges like car parking, statutory taxes, registration, stamp duty, deposits to civic authorities, etc., which are payable over & above the basic price. Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010

VBHC is offering Studio unit at INR 0.68 million, 1-BHK unit at INR 0.88 million and 2-BHK unit at INR 1.28 million, inclusive of base price, car parking, and all other charges like statutory taxes, registration, stamp duty, deposits to civic authorities, etc. at present on the Project Site. It is noteworthy that the present pricing of VBHC is not only competitive but also the least among other competing projects offering products under affordable/budget apartment segment. The table below indicates the variation in the cost for an average size of unit type between the general type project and an affordable project in Bangalore city. Following table provides cost/price variation of different typology of apartment units in conventional and affordable housing projects in the city. Table 3.8: Cost/Price Variation in Conventional and Affordable Housing Projects in Bangalore

Unit Type Conventional Project (Unit Cost in INR Million)

Affordable Project (Unit Cost in INR Million)

Studio 0.85 - 1.35 0.35 - 0.50

1-BHK 1.25 - 1.95 0.60 - 0.80


Unit Type Conventional Project (Unit Cost in INR Million)

Affordable Project (Unit Cost in INR Million)

2-BHK 2.30 - 3.60 0.90 -1.20

3-BHK 3.05 - 4.80 1.50 - 2.00

4-BHK 4.20 - 6.60 NA

Technical Specifications The quality of construction is of utmost importance while marketing it as ‘affordable’ since the home seekers in India are conscious of the investment in housing that they make. This kind of investment is typically considered for life-time and they would not compromise on the quality and specifications of the materials used. Table 3.9: Typical Specifications in Affordable Housing Projects in Bangalore

Particulars Description

Flooring � Living/dining, bedrooms/ attached balconies, kitchen/utility - Vitrified tiles/granite/Italian marble

� Toilets- Designer antiskid tiles for flooring and dado up to 7 feet height.

� Kitchen: Chamfered Black Granite top.

� Corridors: Sadarahalli granite flooring

� Staircase: Sadarahalli stone- 20 mm for tread and 10mm for risers.

� Balcony/ Utility: Ceramic antiskid tiles.

Walls � All Interior wall faces - Plastered, smoothly finished and painted with Oil Bound Distemper Exterior- Two Coats of exterior emulsion paint.

Fixtures and Fittings

� Doors - Hard wood frame with polished HDF/DF door shutter with good quality hinges bolts / locks and handles, Internal surface of toilet doors painted.

� Windows - Powder coated aluminum 2 track sliding windows.

Plumbing / Sanitary Fittings

� Attached Toilets to the Bed Room - white EWS, Wash Basin of medium size.

Electricity and Electrical Fittings

� Generator: Generator Backup for common areas and 500 watts for each flat.

� Quality cables / wiring through PVC conduits concealed in walls and ceilings. Light points, fan / exhaust points, power points, call bell point, telephone points, TV points and AC point in master bed room. And provision of dummy A/C points for other Bed rooms. The electrical room will have panel boards, meters, etc.

TV/Telephone Points

� One outlet for TV& Telephone in the Living area and in all the Bedrooms. Provision for cable TV connection.

Security � Gated campus with Security cabin

Water supply, Sewerage and Sanitation

� Water Supply: Water Supply from Water Treatment Plant.

� Sanitation: Underground drainage with Sewerage Treatment Plant (STP)

Other � Groceries, Laundry and children play areas

The following map presents broad geographical locations of upcoming affordable housing projects in Bangalore


Map 3.3: Locations of Affordable Housing Projects in Bangalore City

3.4 CONCLUSION Yield Rates Typically yield rate of residential projects in Bangalore range from 3-4%. Established micro-markets offer about 4% yield rate, which may go up to 5% in select SBD micro-markets. Most of the suburban and developing micro-markets typically offer 3-4%. Future Outlook Residential activity is high in suburban and peripheral areas due to proximity to IT-ITES commercial areas and also availability of land parcel for development. After almost a year of lull due to the economic downturn, the real estate sector in the Bangalore is slowly


picking up and is all set to focus on the middle and upper middle segments, where it envisages huge potential. Customizing their offerings, builders are keen to capture these segments, which are witnessing increasing demand. Affordable housing developments came into foray during the recession period wherein the buyers of mid and higher mid segment dried out during the phase. Many innovative methods were arrived at to make projects affordable. The cost effectiveness were brought about in many ways like locations far away from city where land costs are much lower, alternate specifications, technologies which brought down the construction time period which saved on costs, reduced built up areas for the typologies, introduction of studio and one-BHK units etc. Year 2010 has also witnessed return of premium projects wherein the emphasis and differentiators are showcased as green buildings, buildings with carbon credits etc which are emerging as the new marketing mantra for developers. Amenities offered by the high end projects include clubhouse, swimming pool, landscaped parks, children’s play area, CCTVs, security etc. Emphasis is high on specifications and materials used.


4 PROJECT SITE ANALYSIS AND APPLICABLE

DCR

4.1 LOCATION OF THE PROJECT SITE The Project Site admeasures an area of about 19.90 acres, is located towards the southern quadrant of city and is located at a distance of about 5 km off Hosur Main Road (NH-7), Bangalore. The Project Site is located under the jurisdiction of Bangalore Metropolitan Regional Development (BMRDA), under Anekal Planning Authority (APA), revenue administration of Byagadadenahalli village, Kasaba (Anekal), which forms a part of the Anekal Taluk. Map 4.1: Location of Project Site with respect to the City

Following table provides distances of the important locations / landmarks from the Project Site: Table 4.1: Distance of the Project Site from Important Landmarks in the Bangalore

Location / Landmark Distance from Project Site (km)

MG Road (CBD) 28.0

International Airport at Devanahalli (BIAL) 61.0


Location / Landmark Distance from Project Site (km)

Bangalore City Railway Station (Majestic) 30.0

Hosur Road 5.0

Jigani Bannerghatta Main road 8.0

Electronic City 11.0

Peripheral Ring Road (Proposed) 10.0

NICE Road 13.0

Outer Ring Road (Silk Board Junction) 20.0

4.2 PROJECT SITE DESCRIPTION AND ITS SURROUNDINGS The Project Site is strategically located along Chandapura Anekal Main Road, covering an area of about 19.90 acres (i.e. 866,837 sq. ft.) and is categorized under residential landuse as per the Landuse Plan of BMRDA. The Project Site is located under the jurisdiction of BMRDA, under the APA, revenue administration of Byagadadenahalli village, Kasaba (Anekal), which forms a part of the Anekal Taluk. Presently real estate development along Chandapura Anekal Main Road is at slower pace when compared to other growth corridors of the southern suburbs of Bangalore. However, it is expected that, the existing, proposed urban infrastructure facilities and civic amenities will improve the entire scenario of the region. The Project Site has two access roads, wherein the primary access is through Chandapura Anekal Main Road, which is about 30 m wide (Right of Way). This road connects the Hosur Road (NH-7) at a distance of 5 km from the Project Site. While the secondary access road is a kutcha village road with the width of 7 m, connects Byagadadenahalli Village in the south of the Project Site. Site Attributes The Project Site is fairly regular in shape and has a frontage of approximately 150 m on the eastern side, towards the Chandapura Anekal Main Road and 410 m on the western side. In the case of physical infrastructure, the Project Site has power lines, water supply and drainage & sewerage facilities. Some of the salient features of the Project Site are summarized in the table below: Table 4.2: Salient Features of Project Site

Area 19.90 acres (i.e. 866,837 sq. ft. approximately)

Access Chandapura Anekal Main Road

Existing Access Road Access is through two approach roads namely the Chandapura Anekal Main Road and Byagadadenahalli Village road which is on eastern and western side of the Project Site with the width of 30.0 m and 7.0 m.

Shape Fairly regular in shape

Visibility Visible from the approach road (Chandapura Anekal Main Road) and secondary access road

Contiguity Contiguous in nature

Topography Flat terrain

Frontage The property has frontage of Approx. 150 m on the eastern side, towards Chandapura Anekal Main Road and 410 m on western side.


Land use Residential Use (As informed by VBHC)

Following table presents the boundary/edge conditions of the Project Site. Table 4.3: Immediate Surroundings of Project Site

North MGB Subha Enclave, R.K Farms and Sai Prashanth Enclave

South Private Properties, Byagadadenahalli Village and Aryan Grand Residency

West 7 m wide approach road, private properties and Divya Jyothi Layout

East 30 m wide approach road, Alliance Business Academy and Eden Gardens

Following table presents the infrastructure status of the Project Site.

Power Power facility available within the premises

Telecommunication Telecommunication facility available within the premises

Water Supply & Sewerage

Water supply is available within the premises

Photographs below present some of the features of the Project Site and its surroundings:

Approach Road - Towards Anekal Town Approach Road- Towards Chandapura Circle

Construction at Project Site View of Model Flat at Project Site


Vacant Land Parcel in the North of Project Site Granite Factory- Diagonally

Main Entrance of the Project Site SUBH Enclave Project in

Entrance for Brindhavan, Kemp City Project along Chandapura Anekal Main Road

JR Green Park Maedows along Chandapura Anekal Main Road

View of Sai Prashanth Enclave Project along Chandapura Anekal Main Road

View of Surya City Project along Chandapura Anekal Main Road


Google map below shows the location of the Project Site and its surroundings. Map 4.2: Location of the Project Site and its Surroundings


4.3 CATCHMENT ASSESSMENT In order to carryout an in-depth assessment, it is important to identify and delineate different catchments for the Project site. The catchment area has been delineated after conducting a reconnaissance survey of the Project site neighborhood to assess the extent of movement of people using the existing major markets. The catchment is defined by the travel time taken or the travel distance to reach the project site. Catchment Delineation Primary catchment spreads to an extent of 6 km distance towards north, northeast and south, covering areas Hosur Road, part of Jigani Bommasandra Industrial area and Anekal, while the secondary catchment area spreads to an extent of 6 to 12 km distance from the Project Site towards north till NICE Corridor. A good catchment with good proportion of SEC-A & B population provides a good platform for any real estate development in general and retail & healthcare in particular. The project site lies is in Southern suburbs of Bangalore along Chandapura Anekal Main Road. The main driving factor for Hosur Road and its surrounding areas is Electronic City, which is one of the IT hubs of Bangalore City. Apart from Electronic City Bommasandra and Veerasandra Industrial Estate is also acting like a catalyst for residential development along this region. The micro-market scan is detailed below for both primary catchment and secondary catchment for residential development. The below table present the details of primary and secondary catchment of Project Site. Table 4.4: Catchment Details of the Project Site

Primary Catchment Chandrapura, Anakal, Iggaluru, Marasur, Haragadde, Neraluru, Yadavanahalli, Kambalipura, Kunimadivala, Sidihosakote and Attibele

Secondary Catchment Electronic City Phase I & II, Dodda Thoguru, Chika Nagamangala, Hebbagodi, Begur, Singasandra, Bommasandra & Veerasandra Industrial Area, Jigani, Kylasana Halli, Bande Nallasandra Village and part of Bannerghatta and Begur


The real estate development along Chandapura Anekal Main Road has grown at a slower pace when compared to other growth corridors of the southern suburbs of Bangalore. This micro-market has more serviced plots sold within gated communities. These projects developed are more from investing perspective since most projects launched during 2007 are yet to witness any construction on those site that have been sold long back. The expressway on Hosur Road which got operational during 1st quarter 2010 resulted in improved interest of office seekers in Electronic city and also an improvement in residential in the surrounding areas. There has been an upward swing of activities in the area with launch of


Map 4.3: Catchment Delineation Map for Project Site

Neighborhood Analysis - Catchment Profiling Hosur Main Road is one of the important commercial spines of Bangalore. The presence of Electronics City has induced development of many commercial complexes and IT parks in the form of campus and stand alone developments. This has exaggerated the real estate development in the primary and secondary catchment of the micro market. The primary catchment of the project site, Especially the Chandapura Anekal micro market is mainly into residential development and most of the developments are into residential plotted development. Initially, this micro market was into a residential layout but in recent past, apartment developments are emerging in this region, which were consider as secondary home or weekend destination for the end user. But as of now, there are very few habitation in the primary catchment. In terms of social index, the primary catchment has a mix of upper middle, middle and lower income group households. Majority of the plotted development were been developed by the local player. Whereas in the secondary catchment has witnessed a mix of residential development by Grade-A & B and C developers in the form of apartments, villas and plots. The existing residing population in secondary catchment is a mix of white collared, blue collared employees and agrarian community since the area is in the suburbs and close to Electronic City. With the increased urban activities and work profiles the area is fast developing in terms of residential development. The existing developments in the secondary catchment have brought in larger percentage of middle income and upper income group population. The rental values in the area surroundings are about INR 6,000- 15,000 for a 2 and 2.5-BHK house indicating the earning capacity of the residing population. Though the Project Site is located at a distance of about 5 km off Hosur Road, Immediate surrounding of the Project Site does not have large-scale real estate development and adequate social infrastructure like health facilities, entertainment & leisure activities, etc. It is expected that the completion of proposed SEZ projects such as Biocon, HCL Technologies Ltd and Karnataka Biotechnology and Information Technology (KBITS) covering an area of about 220.39 acres will induce real estate development in the primary


and secondary catchment of the Project Site. In addition the completion of Peripheral Ring Road (PRR) will also act as catalyst and also improve the overall connectivity of the region, resulting in price appreciation in residential market and land price. The following table summarizes the key characteristics and features of the population residing in the primary and secondary catchment on the basis of their income and demographic profile. Table 4.5: Key Demographic and Socio-Economic Features of the Primary and Secondary Catchment

Location Neighborhood Characteristics

Chandapura Anekal Main Road

Very few habitations has witnessed in this region. This is presently acting as secondary home for the end-users. Residential area comprising a mix of upper middle, middle and low income group with low purchasing power.

Electronic City - Phase I & II

Area predominantly catering to the commercial (office / corporate) sector under IT-ITES segment, comprises working population residing in the secondary catchment

Begur Residential area comprising a mix of upper middle, middle and low income group with low purchasing power.

Bommasandra and Veerasandra Industrial Area

Area predominantly catering to the Industrial sector under comprises working population residing in the primary and secondary catchment.

Bannerghatta Road

Upper income and middle income group population working in the IT industry with higher level of disposable income and lifestyle aspirations. Consumerist community.

4.4 SWOT ANALYSIS FOR THE PROJECT SITE SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis has been done for the Project Site based on location, infrastructure, linkages, frontage and potential usage and is presented below: Table 4.6: SWOT Analysis for the Project Site

Strengths

� Location is on Chandapura Anekal Main Road - easy access of public transport

� Site is contiguous with excellent frontage and visibility

� Two main approach roads towards east and west

� Good Access road - 30 m wide road

Weaknesses

� Large distance from city CBD and also the site is located 5.0 km off Hosur Road

� The immediate surrounding lacks social infrastructure which can be addressed through project amenities

� Social index of the region is poor presently

Opportunities

� Proximity to Electronic City, proposed SEZ projects, Jigni Industrial areas offers captive demand for the proposed development on the Project Site.

� The size of Project Site explores possible options for large-scale integrated real estate development.

� Surya city and many plotted developments have already created visibility of the area for home-seekers

Threats

� Competition from other newly launched projects like Janaadhar Shubha, Shriram Smrithi, Pride Horizon and Concorde South Scape which are focusing on affordable category of apartments.


4.5 APPLICABLE DEVELOPMENT CONTROLS AND REGULATIONS Following are the applicable development controls and regulations (DCR) for the Project Site. The Project Site forms part of the BMRDA jurisdiction, under APA, revenue administration of Byagadadenahalli Village, Kasaba (Anekal), which forms a part of the Anekal Taluk. In the absence of a Master Plan for Anekal Local Planning Authority (LPA) the Zoning Regulation prepared by BMRDA is applicable. As per BMRDA regulations, the Project Site is classified as residential use and lies in Zone ‘C’ - sparsely developed zone of the planning area. Map 4.4: Landuse Map showing Project Site

The Project Site is under ‘Residential Zone’ admeasuring an area of about 19.90 acres. Following are the applicable DCR for the Project Site as per the BMRDA regulation.

Table 4.7: Applicable DCR for Project Site

Sl. Particulars Description Unit

1 Landuse Residential Zone

2 Total Plot Area 19.90 Acres

3 Total Plot Area 866,837 sq. ft.

4 Permissible Floor Area Ratio (FAR) 2.5 value

5 Area to be earmarked for Parks & Open Spaces (Mandatory) 25 %

6 Plot Area to be considered for calculation of FAR 75 %

7 Total Permissible Built-up Area 1,625,320 sq. ft.

Note: For group housing 25% of the total area be reserved for civic amenities, parks and open spaces, subject to a minimum of 15% for parks and open space.


5 REAL ESTATE MICRO-MARKET REVIEW

5.1 GENERAL The Project Site located is located on Chandapura Anekal Main Road. The main driving factor for the real estate development in the region is the Electronic City followed by Bommasandra Industrial area. Major driver for the development has been IT and ITES related developments and demand for commercial/office space. The area has witnessed one of the highest supplies of real estate space in the commercial / office sub-sector and residential sub-sector. Large malls and hypermarkets have been opened in the recent past and several large malls like Ascendas Mall are under construction. Electronic City is part of the Bangalore Southern Peripheral micro-market, which comprises of areas between Silk Board along Hosur Road up to Electronic City, which is one of the developing zones across Bangalore. Following table provides a brief overview of the characteristics of the micro-market of the Project Site. Table 5.1: Characteristics of the Micro-Market of the Project Site

Micro Market Characteristics

� Primarily covers areas around Hosur Road and Electronic City.

� Surrounded by numerous Grade A commercial developments which form a key catchment for potential home buyers

� The new elevated expressway has improved the connectivity of this micro-market to Bangalore City

Schools Ebenezer International School, Treamis World School, St Francis De-Sales School

Social Infrastructure

Hospitals Narayana Hrudayalaya, Bangalore Children’s Hospital and Agarwal Eye Hospital are the reputed hospitals near the micro-market

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010 At present, the micro-market has predominantly commercial spaces (IT&ITES) and warehouses followed by recent development of residential supply that have emerged in and around Electronic City. Following table provides an overview of the prevailing market situation in the micro-market of the Project Site across core real estate sectors. Table 5.2: Overview of the Micro-Market Situation under Residential Sub-Sector

Location Select Projects Supply Average Indicative Pricing

Hosur Road, Electronic City

Concorde Manhattan, Ajmera Infinity, Ittina Mahaveer and Salarpuria Symphony

Apartment:

Total: 11,702 units

Completed: 3,094 units

Under Construction: 7,292 units

Planned: 1,316 units

Apartment:

INR 2,500-3,200 per sq. ft.

(Grade-A)

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010 Based on the instructions received from VBHC, the Project Site is proposed to be used to develop a residential development with villa and apartment typology. Accordingly, this chapter presents the real estate micro-market trends focusing residential sub-sector in general and villa & apartment typology in particular. Till a few years ago, residential real estate market along Hosur Road was mainly characterized by plotted developments by local players. The stretch along Hosur Road, within Bangalore City limits, stretches from Silk Board Junction at one end to Hosur Toll


Gate (Tamil Nadu Border) at the other end. Area surrounding the Silk Board Junction, constituting the secondary catchment of the Project Site, comprises of high-end residential developments mainly characterized by independent bungalows and apartment developments. Plotted layouts by local players dominated the residential typology along Hosur Road. There are also a few apartment projects located along Hosur Road and in the immediate surroundings of Electronics City Phase-I & II. Some select examples of large apartment complexes and villa developments by private developers are Concorde Manhattan, Ajmera Infinity, Ittina Mahaveer, Sobha Saffron, etc.

5.2 RESIDENTIAL SUB-SECTOR - APARTMENTS Inventory, Supply and Stock There are total of about 57 apartment projects constituting all grades (Grade-A, B & C) in the primary and secondary catchment of the project site. Out of which 19 projects are completed (100% absorption) and rest of the projects are under various stages of construction. Apart from the ongoing constructions there are 6 projects which are under planning stage with a proposed supply of 1,316 units. It is expected that the proposed supply will be launched by the end of 2010 and it will be in pace with the market by 2012. The tables below provide the breakup of stock with respect to the available vacancy. The fully absorbed projects are accounted to understand the penetration of grade of developers in the market. The projects with vacancy are the right indicators for immediate absorption potential and the price range in the market. These projects are also the immediate competing ones for any new proposed development based on the vacancy levels. Table 5.3: Grade-wise Supply of Residential Apartment Units in Micro-Market with 100% Absorption

Typology No of Projects No of Units Average Price (INR per sq. ft.)

Grade A 3 228 2,567

Grade B 6 507 2,176

Grade C 10 677 2,245

Total 19 1,412 2,272

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010 There are 38 projects which have vacancy and these projects are under-construction stage. The details are as follows: Table 5.4: Grade-wise Supply of Residential Apartment Units Micro-Market with Vacancy

Typology No. of Projects Units (Nos.) Average Absorption Rate

Average Pricing (INR pet sq. ft.)

Grade A 6 3,074 62% 2,976

Grade B 14 4,966 66% 2,525

Grade C 18 2,250 57% 2,150

Total 38 10,290 63% 2,600

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010 Year 2006-08 witnessed launch of largest number of apartment units in the micro-market. The subsequent years witnessed good amount of supply while year 2010 witnessed launch of very few projects. Key advantages of this micro-market are its proximity to the


work areas within Electronic City, excellent connectivity and competitive pricing compared to the Outer Ring Road and other stretches in Bangalore City. The overall absorption is 63% in the micro-market. The table below presents historic market trends for residential apartments in the micro-market in terms of supply, absorption and vacancy. Table 5.5: Historic Market Trends for Residential Apartment Developments in the Micro-Market of the Project Site

Particulars 2005 2006 2007 2008 2009 2010 Total

Supply 72 1,973 2,661 1,594 2,495 1,873 10,668

No of Projects 1 11 15 11 10 9 57

Absorption 100% 90% 89% 73% 41% 39% 68%

Vacancy 0% 10% 11% 27% 59% 61% 28%

Sold Units 72 1775 2368 1163 1022 730 7,133

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010 Capital Values Average capital value for apartment in the micro market is about INR 2,600 per sq. ft. depending on location, project and specifications. The price range of Grade-A developments in the micro-market is witnessed to be between INR 2,600-3,200 per sq. ft. Grade- B & C projects have price band of INR 1,850- 3,350 per sq.ft and INR 1,372- 2,800 per sq. ft. respectively.

Residential Apartment- Average Price (INR per sq.ft)

1800

2000

2400

29002700

28502800

0

500

1000

1500

2000

2500

3000

3500

2004 2005 2006 2007 2008 2009 2010

Year

Ave

rag

e C

ap

ita

l P

ric

e (

INR

pe

r s

q.f

t)

The micro market has witnessed a CAGR of 8% since 2004 when many projects were launched in comparison to the present launch prices. The early years witnessed an increase of almost 15-16% increase in the launch price annually since the base number was low. The subsequent year 2008 had an increase of only 12% owning to the fact that not many Grade-A projects were launched unlike in other micro-markets. Also years 2008 and 2009 were affected due to the economic recession which had a direct impact on real estate in the city. There was a downturn in the pricing and the area witnessed lowering of price by about 4-5% in comparison to its immediate predecessor year. This correction is very low compared to many other micro-markets which did witness almost 10-15% price correction. Year 2010 has started on positive note with an increase of almost 7% in the pricing when compared to the previous year.


Absorption The overall absorption of all projects is about 68 percent. There has been a huge supply in the market launched in the present year which is yet to witness more bookings going forward. The absorption is rated fairly satisfactory in the present market situation. The chart below presents supply and absorption trends of apartments in the micro-market.

Supply Vs Absorption

72

18732495159426611973

100%90% 89%

73%

39%41%

0

500

1000

1500

2000

2500

3000

2005 2006 2007 2008 2009 2010

Year

Nu

mb

er

of

Resid

en

tial U

nit

s

0%

20%

40%

60%

80%

100%

120%

Absorption (%)

Inventory and details of prominent residential apartment developments in the micro-market of the Project Site is given in Annexure - 1.

5.3 RESIDENTIAL SUB-SECTOR - AFFORDABLE HOUSING Supply and Absorption Trends The affordable housing segment has been discussed earlier in the report. The suburban areas of Hosur Road stretch which had easy accessibility especially to Electronic city and Bommasandra Industrial area, competitive land prices (near Anekal and Chandapura circle) made the location suitable for launch of this segment of housing apart from the plotted developments which commenced in early 2006, The primary and secondary catchment of the Project Site, have about 5 projects with a total supply of 2,812 units (excluding VBHC Project on the Project Site) that were marketed as affordable in the micro-market at the time of launch. However with the time period the rates escalated and since the unit sizes were also as in other normal projects the unit cost has become out of the affordable bracket. The unit size of affordable housing projects is observed to range from 400 sq. ft. to 1350 sq. ft. The launch price of these projects was in the range of INR 1,300 to 2,100 per sq. ft. With the rise of popularity of these projects and good absorption, the capital values have also witnessed increase and it is to a tune of about 10% on an average. The pricing indicated is the quoted base pricing of apartments. Other charges like car parking, deposits, statutory levies and taxes are collected additionally. These other charges vary 15-25% of the apartment pricing depending on the size of development, developer profile and amenities provided in the development.


Annexure - 2 presents the projects that were launched as affordable housing segment in the micro-market of the Project Site. Maps containing geographic distribution of prominent residential projects in the micro-market of the Project Site are presented in Annexure - 3.


6 CONCLUSIONS AND RECOMMENDATIONS

6.1 FUTURE OUTLOOK FOR THE MICRO-MARKET As stated earlier, the micro-market of the Project Site comprises areas in and around the Electronic City and Bommasandra Industrial area. Hosur Road is the main growth corridor for the micro-market of the Project Site. Hosur Road is the part of NH-7, which connects the Bangalore City and Hosur in Tamil Nadu. Hosur Road has been witnessing developments due to high commercial activity ever since KEONICS Electronic City Phase 1 (spread over 332 acres) planned during 1976- 1980. The first Software Technology Parks of India (STPI) was set up in Electronics City in 1981-85 and now prominent companies like Infosys, Wipro, Siemens, Motorola have their operations in the campus developments within the Electronic City. KIADB acquired additional 320 acres as part of the Electronics City - Phase 2 & Phase 3 development. The land was allocated to various IT/ITES, Biotech and other related industries. Development of Electronics City has induced development of many commercial complexes and IT parks along Hosur Main Road, translating the micro-market of the Project Site into one of the economic hubs of the city. These commercial developments gradually generated substantial demand for the residential sub-sector in the micro-market, which eventually led to construction of various apartment projects. In-terms of physical growth potentials, the micro-market of the Project Site enjoys growth drivers similar to that of Bannerghatta Road, Sarjapur Road, Marathalli Sarjapur Outer Ring Road, Kanakapura Main Road and Whitefield, which have been witnessing significant growth in terms real estate development primarily driven by IT-ITES related development. All these locations lie on the South, Southeast and Eastern quadrant of the Bangalore City in the close proximity of IT&ITES and industrial development.

Looking at the historic growth evolution of locations like Bannerghatta Road, Sarjapur Road, Marathalli Sarjapur Outer Ring Road, Kanakapura Main Road, over last 4-5 years, Hosur Road and the areas within the micro-market of the Project Site is expected to undergo similar evolution and transformation over next 2-3 years. With the operation of the Elevated Expressway connecting Silk Board Junction and the Electronics City, the travel time from the city (Silk Board Junction) has reduced from 45-50 minutes to just 10 minutes. With this improved connectivity and other infrastructure initiatives of the Government and development agencies in the city like Peripheral Ring Road, the micro-market is expected to have excellent connectivity from different parts of the city over next 2-3 years.

Further, the micro-market has good social infrastructure such as healthcare, schools, recreation (resorts) and general retail when compared to other development corridors in the city. This is also expected to offer competitive advantage for the micro-market over other developing micro-markets in the city for residential development. Considering the growth of commercial activities in the region and also the proposed 4 SEZs projects namely; Biocon, WIPRO, HCL Technologies and Karnataka Biotechnology and Information Technology (KBITS), covering about 89.19 hectares (220.39 acres) will further augment economic drivers of this micro-market, which is expected to have positive impact in terms of demand growth and price appreciation for the real estate products over next 2-3 years.


6.2 ACHIEVABLE CAPITAL VALUE FOR THE PROPOSED APARTMENT

DEVELOPMENT Proposed residential apartment units on the Project Site have been evaluated with respect to the detailed market assessment carried out within the micro-market pertaining to similar developments. Prevalent price range for conventional as well as affordable housing segment has been considered for determining the ‘average benchmark price’ for the proposed residential apartment development on the Project Site. The ‘average benchmark price’ determined above is considered for potential price adjustments for various attributes like location, accessibility, developers’ profile, size of the development, product offering, present project status, site attributes, etc. among others, to determine ‘achievable pricing’ for the proposed residential apartment development on the Project Site. The price adjustments have been carried out in terms of premium and/or discount on attributes of the Project Site with respect to the competing projects in the micro-market. The table below presents various premium and discount factors considered in the assessment and rationale for the same. Table 6.1: Attributes and Rationale for Premium and Discount Factors used for Price Adjustment

Attributes / Parameters Rationale

Location Location in terms of how the Project Site is positioned in the macro & micro level with respect to its neighboring developments, its socio-economic profile of the catchments, its connectivity, economic drivers and proximity to the major landmark developments, etc.

Accessibility Accessibility in terms of how the Project Site is accessible from major commuting corridors of the city, travel time, ease of traffic etc.

Size of Development Any large development has the potential to have more amenities, better community size, and better quality of environment. Such sizeable development, can command a premium on the villa price for various facilities provided within the gated community.

Availability of Unit Options

Availability of the units on primary sales from the developer

Support Facilities /Amenities

The support facilities and amenities of each project have been studied and compared with the proposed project to understand where the proposed development stands vis-à-vis the other projects in the market.

Developer Profile The track record of the developer/ promoter, quality of construction and delivery capability

Like Developments in the Micro Market

Similar developments in the micro market helps in establishing the occupier perception for that particular type of development in the micro market.

Proximity to Physical / Social Infrastructure

Good physical and social infrastructure is a necessary requirement for a comfortable living. The degree of variance depends on typology of facilities.

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010 As detailed in the previous chapter, there are 5 projects under affordable housing segment in the micro-market, bringing total supply of 2,812 units. Average present price of these projects range between INR 1700-1800 per sq. ft. Building specifications and amenities play a vital role in marketing residential products in Bangalore. The decision making of the end-users largely depend on superior building specifications, comparable to the buildings of Grade A developers in the city and level of civic amenities provided within the residential development. Considering both building


specifications and level of amenities provided/envisaged, Janaadhar Shubha may not be a comparable to the building specifications and level of amenities provided/envisaged in VBHC Project. Excluding Janaadhar Shubha, the micro-market has 4 projects under affordable housing segment, bringing total supply of 1,672 units. Average present price (on weighted average basis) of these projects range between INR 2,000-2,100 per sq. ft. Accordingly, INR 2,000 per sq. ft. is considered as the ‘average benchmark price’ for the micro-market of the Project Site. Based on the assumptions as mentioned above and price adjustments, Jones Lang LaSalle is of the opinion that the achievable pricing for the residential apartment on the Project Site will be INR 2,000 per sq. ft (applied over the saleable/super built-up area). This achievable pricing is for a residential apartment product for affordable housing project for apartment development. It may be noted that the above achievable pricing is as on the date of assessment (October 2010) and the indicated price is only the base price for the unit saleable area of the apartment. Other charges like parking, club membership, deposits payable to civic authorities, etc. are chargeable over and above the base price. Details of such charges are covered in Page 45 of this report. In the case of year wise price increase, Hosur Road micro market has an average CAGR of 7% per annum in residential apartment projects whereas, Bangalore City has CAGR of 13%. Considering the factors like city average appreciation, Hosur Road micro market average price appreciation, proposed IT&ITES commercial development, improved / proposed urban infrastructure projects towards the micro-market and future outlook, a CAGR of 10% is considered for future projection. The details pertaining to the same are mentioned in the table below: Table 6.2: Projected Base Price for the Proposed Apartments on the Project Site

Year Projected Capital Value (INR per sq. ft.)


Price Increase over Previous Year (INR per sq. ft.)

2010 2,000

2011 2,200 10% 200

2012 2,420 10% 220

2013 2,662 10% 242

Note: Please note that the above projected pricing is for a residential apartment product under affordable housing segment. It may be noted that the above achievable pricing is only the base price for the unit saleable area of the apartment. Other charges like parking, club membership, deposits payable to civic authorities, etc. are chargeable over and above the base price. Details of such charges are covered in Page 45 of this report.

6.3 ACHIEVABLE RENTALS FOR THE PROPOSED APARTMENT DEVELOPMENT The achievable rentals for the proposed development on the Project Site is determined by carrying out appropriate price adjustments on the average rentals of similar residential projects in the micro-market of the Project Site. The table below summarizes prevailing rentals in some of the sub-markets within the micro-market of the Project Site for a typical 2-BHK unit. Table 6.3: Prevailing Rentals in Primary and Secondary Catchment of Project Site


1. Chanadapur Anekal Surrounding (Surya City)

2,500 to 3,000 600 to 700

2. Jigini Road 3,000 to 4,500 800 to 1,000

3. Electronic City 6,000 to 11,000 1,000 to 1,400



4. Begur Road 5,500 to 7,000 1,000 to 1,200

5. BTM Layout 10,000 to 15,000 1,000 to 1,200


Based on the assumptions as mentioned above and price adjustments, the Consultants are of the opinion that the achievable rental value for a 2-BHK apartment unit will be INR 3,300 per month. In addition, the tenant is expected to pay for Maintenance Charges as determined by the Resident Welfare Association of the Project Site. There is no rental trend available for the apartments in the micro-market. Considering the fact that the market typically maintains the capital value & rental value gap, average annual increase of 10% (same as capital values) is considered for projecting the rentals for future. The table below presents project rental values for the proposed apartment development (2-BHK unit) on the Project Site. Table 6.4: Projected Rentals for the Proposed Apartment on the Project Site for 2-BHK Apartment Unit




2010 3,300

2011 3,630 10% 330

2012 3,993 10% 363

2013 4,392 10% 399


Since there are no instances of renting of 1-BHK apartment units in the micro-market, the rentals for 1-BHK apartment units is calculated based on the yield rate (ratio of annual rental value to capital value expressed in percentage). As stated earlier, typically yield rate of residential projects in Bangalore range from 3-4%. Established micro-markets offer about 4% yield rate, which may go up to 5% in select SBD micro-markets. Most of the suburban and developing micro-markets typically offer 3-4%. Considering the saleable area of different type of apartment units proposed in the Project Site and the recommended achievable capital value & rental value for the Project Site, yield rate for the apartment units proposed in the Project Site is calculated. 2-BHK apartment units proposed in the Project Site have carpet area ranging between 481-500 sq. ft. and super built-up area ranging between 620-640 sq. ft. Considering achievable capital value of INR 2,000 per sq. ft. as recommended above, the total average capital value of a 2-BHK apartment unit in the Project Site works out to INR 1,260,000 per apartment unit. Considering achievable rental value of INR 3,300 per month, the annual rental value works out INR 39,600 per 2-BHK apartment unit. Accordingly, the yield rate for a 2-BHK apartment unit works out to 3.14%, which is well within the typical yield rate range for residential apartments in the city (i.e. 3-4%). 1-BHK apartment units proposed in the Project Site have carpet area ranging between 340-360 sq. ft. and super built-up area ranging between 456-476 sq. ft. Considering achievable capital value of INR 2,000 per sq. ft. as recommended above, the total average capital value of a 1-BHK apartment unit in the Project Site works out to INR 932,000 per apartment unit. Considering the yield rate of 3.14% as worked out for 2-BHK apartment unit in the Project Site, the achievable rental value for a 1-BHK apartment unit works out to INR 2,441 per month, rounded off to INR 2,450 per month. Considering annual


appreciation of 10%, the table below presents project rental values for the proposed apartment development (1-BHK unit) on the Project Site. Table 6.5: Projected Rentals for the Proposed Apartment on the Project Site for 1-BHK Apartment Unit




2010 2,450

2011 2,695 10% 245

2012 2,965 10% 270

2013 3,261 10% 296


Considering the achievable capital value of INR 2,000 per sq. ft. as recommended above, rental value at average yield of 3-4% per annum and capital appreciation of about 10-12% year-on-year, the gross yield over 5 years will be in the range of 12-15%. Any increase in price appreciation over years than estimated, due to various growth potentials of the micro-market highlighted above, will have significant upside in the returns to a purchaser.

DISCLAIMER This Report has been authored by Jones Lang LaSalle acting on the instructions of VBHC. Jones Lang LaSalle was instructed by VBHC to provide an independent, expert assessment of the marketability of the Project being developed by VBHC as ‘Vaibhava’ situated near Electronics City, Bangalore. This Report has been formulated by Jones Lang LaSalle independent of any inputs (other than information specifically sought for) from VBHC and VBHC has not in any manner influenced the findings of this Report. The prospective purchaser may however note that VBHC has paid JLL professional fees for the formulation of this Report. Notwithstanding the foregoing, this Report should be treated as additional information and not be taken as a substitute for comprehensive due diligence to be exercised by a prospective purchaser including visiting the project site and evaluating the suitability of the Project to their specific needs, their ability to meet the financial commitment either through purchase or through loan servicing and the availability of third party financing. It is specifically noted that while the Report contains certain views regarding the possible marketability of the Project in the future, prospective purchasers are encouraged to evaluate the Project based on their personal requirements rather than from the perspective of future real estate price appreciation. This Report does not constitute any commitment whatsoever from VBHC and shall not give rise to any claims whatsoever from any prospective purchaser regarding the veracity or otherwise of this Report. This Report is provided for information only. This Report shall not constitute formal advice rendered directly to the prospective purchaser.


7 ANNEXURE

7.1 ANNEXURE - 1: INVENTORY AND DETAILS OF SELECT RESIDENTIAL PROJECTS IN THE MICRO-MARKET OF THE

PROJECT SITE

Dwelling Size (sq. ft.) Sl. No.

Projects Name Developer Name Location Project Launch Year

Project Status Expected Completion

Year

Units Price (INR per sq. ft.)

Absorption Rate

Min. Max.

1. Greenwoods Elite Group Basapura Road 2006 Completed 2009 120 2,500 100% 1,200 1,521

2. Green Sleeves Total Environment Singasandra 2006 Completed 2007 44 2,700 100% 957 1,690

3. Gardenia Gopalan Electronic City Phase-I 2008 Completed 2010 64 2,600 100% 1,260 1,760

4. Symphony Salarpuria Group Hosur Road 2006 Completed 2010 298 3,100 95% 1,270 2,595

5. Equinox SJR Electronic City Phase-I 2008 Completed 2010 310 2,600 70% 1,210 1,700

6. Midway City Concorde Group Basapura Road 2007 Completed 2011 244 3,000 85% 1,248 2,043

7. Ajmera Infinity Ajmera Electronic City 2007 Under Construction 2011 1060 2,800 90% 1,057 2,607

8. Hydel Park Nitesh Estates Bannerghatta Road 2009 Under Construction 2011 250 3,200 70% -- --

9. Evergreens Ozone Group Off Sarjapur Road 2009 Under Construction 2011 912 3,200 6% -- --

10. Sowpernika Hoysala Begur Rd 2006 Completed 2009 48 2,300 100% 1,065 1,760

11. Gardenia Phase-2 RS Developers Hosur Road 2005 Completed 2008 72 2,400 100% 1,246 1,818

12. Royal Legend Royal Retreat Homes Off Hosur Road 2008 Completed 2010 296 3,150 80% 1,275 1,863

13. Shebang Jain Farms Hosur Road 2007 Completed 2010 70 2,100 100% 1,230 1,735

14. ND Ascent ND Developers Hosur Road 2007 Completed 2010 48 2,400 80% 1,054 1,722

15. Vascon Venus Vascon Construction Hosur Road 2006 Completed 2010 77 2,400 100% 1,095 1,630

16. Vertica Goel Ganga Group Electronic City 2007 Under Construction 2011 298 2,600 80% 950 1,750

17. Mahavir Ittina Group Electronic City, Phase I 2006 Under Construction 2010 900 2,100 80% 589 1,350

18. Serene Sumadhura Manipal County Road 2007 Under Construction 2010 160 2,050 100% 1100 1,550





Year


Absorption Rate

Min. Max.

19. Kristal Axinite Kristal Hosur Road 2008 Under Construction 2010 64 3,350 80% 1035 1,486

20. Royal Citadel Arattukulam Dev. Singasandra 2010 Under Construction 2012 108 2,200 60% 1244 1,539

21. Pride Pristine Pride Group Off Hosur Road 2008 Under Construction 2011 340 2,100 65% 905 1,850

22. Rosebay V Maks Builders Off Hosur Road 2008 Under Construction 2010 80 2,000 100% 1026 1,359

23. Prince City Times Estates Off Hosur Road 2009 Under Construction 2012 330 1,850 25% 1070 1,575

24. Aakruti Amity Aakruti Nirmiti Limited Off Hosur Road 2008 Under Construction 2011 176 2,250 60% 1140 2,075

25. Royal Manor Arattukulam Dev. Off Hosur Road 2010 Under Construction 2011 64 2,650 75% 639 1,821

26. Smondoville Patel Realty Electronic City 2009 Under Construction 2012 1339 2,950 60% 360 1,350

27. Duo Symphony Duo Associates Hosur Road 2010 Planned -- 438 -- -- -- --

28. Shine Radiant Group Begur Road 2010 Planned 2012 500 -- -- -- --

29. Reshan Radiant Group Begur Road 2010 Planned -- 65 -- -- 925 1,530

30. Pearls Definer Electronic City 2008 Completed 2009 16 2,200 100% 1555 NA

31. Paras Mallige Paras Builders Electronic City 2007 Completed 2009 75 2,100 100% 944 1,484

32. Phoenix Orchid Phoenix Manipal County Road 2006 Completed 2007 20 2,200 100% 1300 2,300

33. Sa Maliabu Enclave SA Group Manipal County Road 2006 Completed 2008 162 2,100 100% 1275 2,560

34. Sneha Residency Sneha Developers Basapura Road 2007 Completed 2009 44 2,300 100% 1175 1,615

35. Vensa Residency Venkata Sai Manipal County Road 2006 Completed 2007 32 2,250 100% 1221 1,950

36. Daaliya Daadys Builders Off Hosur Road 2008 Completed 2009 40 2,400 90% 929 2,556

37. Shanthi Nivas GR Construction Manipal County Road 2007 Completed 2009 40 2,500 100% 2335 2,650

38. Samrudhi Sapthagiri Dev. Off Hosur Road 2008 Completed 2010 32 -- -- 1000 1,350

39. Nisarga Keerthana Nisarga Builders Off Hosur Road 2008 Completed 2010 176 2,400 60% 750 1,800

40. Moon Mist Axis Concept Const. Electronic City 2007 Completed 2009 56 2,100 100% 550 1,350

41. Daadys Olive Daadys Builders Hosur Road 2007 Completed 2009 88 2,250 90% 1,094 1,483





Year


Absorption Rate

Min. Max.

42. GR Shree Nivas GR Construction Manipal County Road 2007 Completed 2009 88 2,300 100% 1,275 2,560

43. Nandanam Krishna Projects Electronic City 2007 Completed 2010 160 2,375 85% 1,275 1,524

44. Greenwoods RS Developers Hosur Road 2007 Completed 2010 70 2,300 90% 1,375 2,053

45. Ziggurat Vijetha Developer Basapura Road 2006 Completed 2009 144 2,430 100% 1,257 1,780

46. Eco Sphere Genesis Realtors Electronic City, Phase I 2007 Completed 2010 160 2,300 80% 1,294 2,550

47. Daddys Elixir Daadys Builders Huskur Gate 2009 Under Construction 2011 167 2,,200 75% 880 1,390

48. SRK Silicana SRK Electronic City 2006 Under Construction 2010 128 2,800 95% 1,280 1,791

49. Aryan Orchid Aryan Hometec Off Hosur Road 2009 Under Construction 2011 96 1,372 50% 792 1,132

50. Paras Maitri Paras Group after Thali Restaurant 2010 Under Construction 2012 180 1,900 20% 922 1,400

51. Nisarga Sarovar Nisarga Builders Anekal Road 2009 Under Construction 2012 290 1,500 25% 750 1,950

52. Sai Palace BSR Constructions Off Begur Road 2009 Under Construction 2010 64 2,300 65% 1,150 1,561

53. Sri Tirumala Vintage Tirumala Const. Basapura Main road 2010 Under Construction 2012 90 2,000 25% 1,089 1,719

54. Altavisha Shanders Const. Electronic City 2010 Under Construction 2012 196 2,600 40% 1,250 2,590

55. Pine Tree BlueValley Properties Electronic City 2009 Planned 2011 84 -- -- 890 2,200

56. Cherry Tree BlueValley Properties Hosur Road 2009 Planned 2011 125 -- -- 890 2,200

57. Redwood Radiant Group Begur Road 2010 Planned 2012 104 -- -- 635 1,520

Note: The pricing indicated is the quoted base pricing of apartments. Other charges like car parking, deposits, statutory levies and taxes are collected additionally. These other charges vary better 15-25% of the apartment pricing depending on the size of development, developer and amenities provided Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; October 2010


7.2 ANNEXURE - 2: INVENTORY AND DETAILS OF SELECT RESIDENTIAL PROJECTS UNDER AFFORDABLE HOUSING

SEGMENT IN THE MICRO-MARKET OF THE PROJECT SITE

Unit Size (sq. ft.) Sl. No.

Project Name Developer Location Launch

Year

Launch Price

(INR per sq. ft.)

Expected Completion Year 1-BHK 2-BHK 3-BHK 4-BHK

Units

(Nos.)

Status Absorption

Rate

Present Price

(INR per sq. ft.)

1. South Scape Concorde Group Electronic City Phase II

2010 2,100 2012 -- 840-940 1080 -1231

-- 156 Under Const. 15% 2,100

2. Pride Horizon Pride Group Bannerghatta -Jigini Rd.

2010 1700 2012 -- 550 880 -- 176 Under Const. 10% 1,850

3. Thyme Park IVR Prime Urban Jigani 2007 1,600 Na -- Na Na -- 450 Completed 100% 2,000

4. Shriram Smrithi Shriram Properties Attibele - Sarjapur Rd.

2009 1890 2011 630 -720

855 1090 -- 890 Under Const. 20% 2,050

5. Janaadhar Shubha Janaadhar Const. Attibele - Anekal Rd. 2009 1300 2012 400 615 -- -- 1140 Under Const. 50% 1,327



7.3 ANNEXURE - 3: GEOGRAPHIC DISTRIBUTION OF SELECT RESIDENTIAL PROJECTS IN THE MICRO-MARKET OF THE

PROJECT SITE Prominent Residential Developments in the Micro-Market of the Project Site


Prominent Residential Developments in the Chandapur Anekal Micro-Market of the Project Site


ABOUT THE AUTHORS OF THIS REPORT Jones Lang LaSalle, the Indian operations of Jones Lang LaSalle (NYSE: JLL), is the only real estate money management and services firm named to FORTUNE magazine's "100 Best Companies to Work For" and Forbes magazine's "400 Best Big Companies". It is the premiere and largest real estate Services Company in India, with an extensive geographic footprint across ten cities (Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad, Kolkata, Kochi, Chandigarh and Coimbatore) and staff strength of over 3,000. The company provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, consultancy, transactions, project and development services, integrated facility management, property management, capital markets, residential, hotels and retail advisory. For further information, please visit www.joneslanglassale.co.in. The report is authored by the Strategic Consulting Unit of Bangalore comprising following key professionals

Girish K. S. MRICS

Girish is a Local Director at Jones Lang LaSalle and heads the Strategic Consulting in Karnataka, Andhra Pradesh and Kerala (South India) and based out of Bangalore. He has over 12 years of professional experience related to planning and architecture. He has been involved in various assignments related to real estate management, valuation, feasibility studies, urban planning, urban development and management, urban infrastructure, poverty alleviation, urban reforms, urban (municipal) finance, environmental infrastructure and private sector participation, in various disciplines from team member to project manager. He was awarded Gold Medal as the Best Student in Master of Planning.

Girish has been working on several real estate development assignments involving feasibility studies, valuation and best use option studies for various clients. His key Client accounts include leading developers, financial institutions / real estate funds, corporates and others. He is involved in several development advisory services, feasibility studies, strategic advisory services and valuation advisory services. In addition, he is been advising various Government Departments / PSUs on the real estate development related activities.

Deepa Hurali

Deepa is an Associate Director at Jones Lang LaSalle and in-charge Strategic Consulting Operations at Bangalore and based out of Bangalore. She has over 11 years of professional experience related to planning and architecture. She was one of the core members of the working group of prestigious Bangalore Agenda Task Force - a public private participative initiative of Government of Karnataka in 2000 and was involved in the capacity of full-time consultant implementing various projects under BATF umbrella. During this tenure she worked on urban sanitation projects, public-private initiatives, transportation related projects, city beautification related projects such as redevelopment initiatives etc.

Deepa has been involved in various assignments related to real estate management and delivered many prestigious projects for variety of end users like investors, developers, government stakeholders, etc. She has ventured into analysis of various other sectors like MICE industry, Leisure & Entertainment, Hospitality, Luxury markets apart from the core sectors of residential, commercial and retail markets. She has been part of various valuations and market assessment mandates and coordinated various pan-India assignments.

Y. Umakanth

Umakanth is a Manager at Jones Lang LaSalle heads the Strategic Consulting and based out of Bangalore. He has over 9 years of relevant professional experience related to planning and architecture. He has been involved in various assignments related to real estate management, and other development sector projects.

Umakanth has been working on several real estate development assignments involving feasibility studies, valuation and best use option studies for various clients. He has worked for many prestigious projects with private and Government sectors funded by international funding agencies like ADB, World Bank, USAID, etc.

Final Report

Documents

rental values

electronic city

assessment of capital

market research

profile of bangalore

ub city

proposed development

city snapshot