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Source: Ministry of Tourism, Census 2011, Aranca Research
Policy support
Fourth largest sector in terms of FDIinflows
Rapid urbanisation bodes well for thesector
Indias construction market is expected to
be the worlds third largest by 2020
FDI in the sector is estimated to grow toUSD25 billion in 10 years
The number of Indians living in urbanareas will increase from the current 377
million to about 600 million by 2031
India construction market is expected tomore than double to USD649.5 billion by
2020 from USD360 billion in 2010
4
25
FY2012 FY2022
FDI Inflows (USD billion)
CAGR: 20.1%
377
600
2011 2031
Urbanisation (in millions)
CAGR: 2.4%
360.0
649.5
2010 2020
Construction Market
CAGR: 6.1%
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The engineering sector is delicensed;100 per cent FDI is allowed in thesector
Due to policy support, there wascumulative FDI of USD14.0 billion intothe sector over April 2000 February2012, making up 8.6 per cent of totalFDI into the country in that period
Growing demand
Source: BMI (Business Monitor International), Department of Industrial Policy and Promotion, Aranca Research
Notes: FDI - Foreign Direct Investment; 2020E - Estimate for 2020
Growing demand
Demand for residential propertieshas surged due to increasedurbanisation and rising householdincome
Growing economy driving demand
for commercial and retail space
Attractive opportunities
Growing requirements ofspace from sectors such aseducation and healthcare
Growth in tourism providing
opportunities in the hospitalitysector
Policy support
Allocation of USD2.8 billion for ruralhousing for FY14 budget
The government has allowed FDI ofup to 100 per cent in developmentprojects for townships andsettlements
Increasing Investments
FDI in real estate of more thanUSD21.8 billion between April
2000 and November 2012
During April 2012January 2013,the real estate sector accountedfor 8.8 per cent of total FDI inflowsinto India
201011
Marketsize:
USD55.6billion
2020E
Marketsize:
USD180billion
AdvantageIndia
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Fragmented market with few large players
Absorption rate of new residential units across six key cities toincrease at a CAGR of 7 per cent to 251 million sq ft in the nexttwo years
Real estate sector
Commercial space
Retail space
Hospitality space
SEZs
Few players with presence across India
Of a total supply of 607 million sq ft of office space planned in 10
major cities, around 229 million sq ft would come up during 201214
FDI in multi- brand retail to boost demand
Fragmented market with few national players
Of a total planned supply of 81 million sq ft across major cities,around 44 million sq ft would come up during 201214
A competitive market with many players
Over 121,000 hotel rooms in the country as of 2011 The hotel industry grew 13 per cent during 201112
The government has formally approved 577 SEZs*
Majority of the SEZs are in the IT/ ITeS sector
Residential space
Source: Cushman and Wakefield, Knight Frank, CRISIL, Aranca Research
Notes: SEZ - Special Economic Zone. IT - Information Technology, ITeS - Information Technology Enabled Services, * - As of March 2013
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Market size of real estate in India (USD billion)Real estate contributes about 5 per cent to IndiasGDP
The total revenue generated in FY11 stood at USD66.8billion
Source:BMI, Aranca ResearchNote: CAGR - Compounded Annual Growth Rate
50.153.3
55.6
66.8
FY08 FY09 FY10 FY11
CAGR: 10.0%
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Source: Ministry of Housing and Urban Poverty Alleviation,
RBI, CRISIL, Aranca ResearchNote: E - Estimates
Urban-rural housing shortage (million)The urban housing shortage is estimated at 18.8 million in2012
The housing shortage in rural India stood at 47.4 million asof 2012
The housing shortage in urban and rural India will bearound 21.7 and 19.7 million units respectively in 2014
Significant increase in real estate activity in cities likeIndore, Raipur, Ahmadabad, Jaipur and other two-tier cities;this has opened new avenues of growth for the sector
15 18
2519 21 19 22
3430
27 2726
47
20
2001 2005 2007 2008 2010 2012 2014E
Urban Rural
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Scenario
Key drivers
Notable Trends
A localised, fragmented market presentsopportunities for consolidationFew large, pan-India players such as DLF andUnitech
Rapid urbanisationRise in the number of nuclear familiesEasy availability of financeRepatriation of NRIs and HNIs
Demand to grow at a CAGR of 19 per centbetween 2010 and 2014 - 40 per cent of this fromTier 1 citiesAt 3x to 4x, demand-supply gap is highest in thelow and mid income segments
Increase in real estate projects in two-tier andthree-tier cities
Scenario
Key drivers
NotableTrends
Demand projections across top 7 cities (000 units)
350 410
500
600
710
2010 2011 2012 2013 2014
Demand analysis of top 7 cities (000 units) 2010-14
830 800
300
220 180 160 160
Mumbai
NCR
Pune
Bengaluru
Chennai
Kolkata
Hyderabad
Source: Cushman & Wakefield, Aranca ResearchNotes: NRI - Non-resident Indian; HNI - High Net-worth Individual
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Demand projections across top 7 cities (million sq ft)
Source: Cushman & Wakefield, Aranca ResearchNotes: MNC - Multinational Corporation, BFSI - Banking, Financial and Insurance Services;
CBD - Central Business District, SBD - Special Business District, NCR - National Capital Region
Scenario
Key drivers
Notable Trends
Few large developers with a pan-India presencedominate the marketOperating model has shifted from sales to a lease-and-maintenance
Rapid growth in services sectors: IT/ITeS, BFSIand TelecomRising demand from MNCsDemand for office space in Tier 2 cities
Mumbai, NCR and Bengaluru account for 46 percent of total office space demand in IndiaDemand growth projected to be the highest in Tier2 cities such as Kolkata and Chennai during 2010-14Business activity shifting from CBDs to SBDs, Tier1 to Tier 2 cities
Scenario
Key drivers
NotableTrends
3336 39
42 44
2010 2011 2012 2013 2014
Demand analysis of top 7 cities (million sq ft) 2010-14
39 38 36
30 2522
10
Bengaluru
Mumbai
NCR
Chennai
Hyderabad
Pune
Kolkata
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Demand projections across top 7 cities (million sq ft)
Source: Cushman & Wakefield, Aranca Research
Notable Trends
Currently, retail accounts for a small portion of theIndian real estate marketOrganised retailers are few, and the organisedretail space is mostly developed byresidential/office space developers
Booming consumerism in IndiaOrganised retail sector growing 25-30 per centannuallyEntry of MNC retailers
NCR accounts for about 30 per cent of the totalmall supplyAbout 53 per cent of demand for total mall space inIndia expected to come from top seven citiesDemand for retail space on high streets is quitehigh, as well Increase in FDI limit for multi-brandretail will lead to significantly higher demand forretail space
Scenario
Key drivers
Notable Trends
Scenario
Key drivers
NotableTrends
3
4 5
7
10
2010 2011 2012 2013 2014
Demand analysis of top 7 cities (million sq ft) 2010-14
87
6
32 2 2
Bengaluru
Mumbai
NCR
Kolkata
Pune
Hyderabad
Chennai
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Source: Knight Frank India, Aranca ResearchNotes: FSI - Floor Space Index
NCR and Mumbai are by far the biggest hospitalitymarkets in India, followed by Bengaluru,Hyderabad and ChennaiBesides hotels, the hospitality market comprisesserviced apartments and convention centres
A robust domestic tourism industryThe increasingly global nature of Indianbusinesses boosting business travelTax incentives for hotels and higher FSI
Serviced apartments appear particularly attractivewithin the hospitality spaceGovernment initiatives to promote tourism in Tier 2and Tier 3 cities is generating significant demandfor hotels in such cities, especially for budgethotels
Scenario
Key drivers
Notable Trends
Scenario
Key drivers
NotableTrends
Demand projections (no of rooms)
Demand analysis of top 7 cities (no of rooms) 2010-14
32,660 35,50338,789
43,828
2010 2011 2012 2013
10,519 10,519
4,821 3,945 3,506 2,630
1,315
NCR
Mumbai
Hyderabad
Bengaluru
Chennai
Pune
Kolkata
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Growth drivers
Growth in tourism
Epidemologicalchanges
Policy supportEasier financing
Growing economy
Urbanisation
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Real GDP growth rates of major economiesThe Indian economy experienced robust growth in the pastdecade and is expected to be one of the fastest growingeconomies in the coming years
Demand for commercial property is being driven by thecountryseconomic growth
Source: IMF, Aranca Research
0%
2%
4%
6%
8%
10%
12%
2010 2011 2012F 2013F 2014F 2015F 2016F 2017F
China
India
Advanced economies
Emerging and developing economies
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Population breakup of India (million)The increasing urban population is expected to cross 600million by 2031
Urbanisation and growing household income is drivingdemand for residential real estate and growth in the retailsector
Source: Indian Census, Knight Frank,
Mckinsey estimates, Aranca ResearchNote: E - Estimate
220 290
377
600
856 1,040
1,210
1,470
1991 2001 2011 2030E
Urban Population Total Population
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Foreign tourists arriving in India (million)In 2012, 6.6 million foreign tourists are estimated to havearrived in India
The number of foreign tourists arriving in India expanded ata CAGR of 5.3 per cent during 200712
Source: Ministry of Tourism, Aranca Research
4.4 5.15.3 5.2
5.86.3
6.6
2006 2007 2008 2009 2010 2011 2012
CAGR: 5.3%
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Foreign exchange earnings from tourism in India(USD billion)
India is estimated to have earned about USD17.7 billionfrom the tourism sector in 2012
The growing inflows from tourists is expected to provide afillip to the hospitality sector
Source: Ministry of Tourism, Aranca ResearchNote: H1 2012 - Figures up to 2012 (Jan-June )
8.6
10.7 11.7 11.4
14.2
16.6
17.7
2006 2007 2008 2009 2010 2011 2012
CAGR: 10.6%
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FDI in real estate as a per cent of total FDI in IndiaTotal FDI in the real estate sector during April 2000January 2013 stood at around USD22 billion
Currently, real estate and construction accounts for over 22per cent of total FDI, up from less than 4 per cent in 2006
Source: Dept of Industrial Policy & Promotion, Aranca Research
2.7 %
6.3 % 7.1 %
7.4 %
11.1 %
0.7 %
3.0 %
8.9 %
10.3 %11.0 %
2006 2007 2008 2009 2010
Construction activities Real estate
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Source: Cushman & Wakefield, Venture Intelligence, Aranca Research
Major acquisitions in real sector in IndiaThere have been 110 deals in the real estate spacebetween 2001 and the first half of 2011
The biggest disclosed deal was the acquisition of DLFAssetsshares by Caraf Builders for USD696 million
Target AcquirerValue(USD
million)Year
Caraf Builders DLF Assets ltd 696.5 2009
Cowtown LandDvlp Pvt Ltd
Lodha Group 513.6 2011
Compact Disc filmcity
Jeff Morgan 320 2011
Oceanus RealEstate
Warburg Pincus 318 2011
IndiabullsProperties Pvt Ltd
Indiabulls PropertyInvest Trust
223.1 2012
Embassy Property Blackstone 200 2012
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Source: Grant Thornton, Venture Intelligence, Aranca Research
Top 5 PE deals in Indian real estate sector in 2012Of the 43 private equity (PE) investments witnessed in thesector during 2012, 35 had an announced value of USD1.14billion
In terms of volume, residential projects accounted for 65 percent of overall investments in the sector during 2012, whilecommercial projects accounted for 16 per cent
Foreign funds constituted almost 80 per cent of totalinvestments in the sector compared with 50 per cent in 2011
Mumbai continued to remain the hotspot for PEinvestments, followed by Bengaluru and NCR
A shift in trend is evident from the fact that the maximumnumber of PE deals in the year were executed throughSpecial Purpose Vehicles (SPV) as against via both entityand SPV modes in the previous year
Another major trend evident in recent times is the increasingfocus of private PE players on high-end and luxury projects
Investor InvesteeInvestment(USD million)
BlackstoneManyataEmbassy
Business Park
160.0
APG and Group ofinvestors
GodrejProperties
140.8
Government of SingaporeInvestment Corporation(GIC)
GodrejProperties
98.2
Morgan Stanley Real
Estate Investment
Supertech 91.4
Baring Private EquityPartners India
Bangalore-based RMZ Corp
91.4
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For updated information, please visit www.ibef.org
Share of SEZ exports in total exports of India100 per cent FDI permitted in real estate projects withinSpecial Economic Zone (SEZ)
100 per cent FDI permitted for developing townships withinSEZs with residential areas, markets, playgrounds, clubs,recreation centers, etc.
Exports from SEZs registered a yoy growth of 15.39 percent in 201112 and accounted for 30.6 per cent of totalexports during AprilDecember 2012
Industry players, including realtors and property analysts,are rooting for the creation of "special residential zones"(SRZs), along the lines of SEZs
Minimum land requirement has been brought down from1000 hectares to 500 hectares for multi-product SEZ and forsector-specific SEZs to 50 hectares Source: Ministry of Commerce and Industry, Aranca Research
* - April 2012 to December 2012
10% 12%26% 28% 25% 31%
90% 88%74% 72% 75% 69%
FY08 FY09 FY10 FY11 FY12 FY13*
SEZ Exports Other
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For updated information, please visit www.ibef.org
Ease in housingfinances
Additional deduction of up to USD1,841 on interests payable on home loans of up toUSD46,032 announced in the Union Budget 201314
To liberalise scheme of interest subversion of 1 per cent on home loan by including loansof up to USD31,250 for houses that cost up to USD52,080
Housing for
economically weakersections
Allocation of USD1.1 billion for Rural Housing Fund in FY14 budget
Allocation of USD0.37 billion for Urban Housing Fund in FY14 budget to bridge the hugeshortage of housing in certain urban areas
FDI
The government has allowed FDI of up to 100 per cent in development projects fortownships and settlements
FDI of up to 100 per cent is allowed in the hotel and tourism sector through the automaticroute
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Source: Company website, Aranca Research,
Notes: sq. ft. - Square Feet
1940 1950 1980 1990 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Development of 22 Urban
colonies
Developed 3000 acre
DLF City in Gurgaon
Focuses on IT Parks and
next generation malls
Building Indias largest mall
in Gurgaon
Market capitalisation of
USD7.2 billion
Largest real estate companywith revenues of
USD1.4 billion (FY13)
Ventures intograde A office
spaces
Alliance with
HiltonInternational
Commenceddevelopment ofDLF Cyber City,
Gurgaon
FY13USD1.4billion
turnover
Net land bank of348 million sq. feet
FY06USD238million
turnover
Founded byChaudhary
RaghavendraSingh
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Distribution of ongoing projects by area(as of December 2012)
Key Facts
Started its first project in Mumbai in 1991
National real estate developer with presence across12 cities
Differentiated joint development business modelresulted in a debt-equity ratio of less than one
The current potential developable area stands at82.2* million sq ft
Ranked one of Indias top 10 builders byConstruction World Architect & Builder Awards,2011
Consolidated total income of USD173.1 million inFY13
Five new projects with 4.3 mn sqft of saleable areaadded to portfolio in FY13 YTD
Source: Company website, Aranca Research* As on December 31, 2012
81.6%
18.4%
Residential
Commercial
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Profit before taxes (USD million)Revenues (USD million)
56.5
40.3 44.6
99.1
160.6173.1
FY08 FY09 FY10 FY11 FY12 FY13
Source: Company website, Aranca Research
CAGR: 32.8%
28.626.0
18.122.2
32.1
51.8
FY08 FY09 FY10 FY11 FY12 FY13
CAGR: 19.6%
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Real estate demand in education sector(seven top cities)
The entry of major private players in the education sectorhas created vast opportunities for the real estate sector
The top seven cities i.e. Hyderabad, Bengaluru, Mumbai,Delhi, Pune, Chennai and Kolkata are likely to account for70 per cent of total demand for real estate in the educationsector
Source: Cushman and Wakefiled, Aranca Research
14
14.5
15
15.5
16
2010
2011F
2012F
2013F
2014F
Area (million square feet)
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Incremental demand across seven major cities(million sq ft)
NCR is expected to have the highest incremental demandfrom the education sector
The rising young population of India is expected to drive thisspace
Source: Cushman and Wakefiled, Aranca ResearchNotes: NCR - National Capital Region
01
2
3
4NCR
Mumbai
Pune
ChennaiKolkata
Bengaluru
Hyderabad
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Healthcare
The healthcare sector is estimated to grow at an annual rate of 15 per cent to USD100billion by 2015
India is expected to need additional 937,000 beds by 2015 India still needs to add 3 million hospital beds to meet the global average of three for every
1,000 people
Senior citizen housing Emergence of nuclear families and growing urbanisation has given rise to severaltownships that are developed to take care of the elderly A number of senior citizen housing projects have been planned; the segment is expected
to grow significantly in future
Service apartments
Growth in the number of tourists has resulted in demand for service apartments This demand is likely to be on uptrend and presents opportunities for the unorganised
sector
Source: Fitch Ratings, Aranca Research
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Source: Ministry of Tourism, BMI, Aranca Research
Forecasts of foreign tourists arriving in India(million)
Foreign tourist arrivals are expected to increase at a CAGRof 11.7 per cent during 201215
The number of foreign tourists arriving in India by 2015 isanticipated to be over 9.2 million
6.6
7.9
8.5 9.2
2012 2013F 2014F 2015F
CAGR: 11.7%
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Source: BMI, Aranca ResearchNote: F stands for Forecasts
Forecasts of foreign exchange earnings fromtourism in India (USD billion)
Foreign exchange earnings from tourism is expected to riseat a CAGR of 4.1 per cent during 201215
Foreign exchange earned is forecast to cross USD19 billionin 2015
17.7
18.1
19.0
19.9
2012 2013F 2014F 2015F
CAGR: 4.1%
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Source: BMI, Cushman & Wakefield, Aranca Research
Note: F - Forecast
Capacity of hotels in India (000)The number of hotel rooms in India as of 2011 stood at121,000
50,000 new hotel rooms are expected to be added over thenext 45 years across Indiastop six cities
The number of hotel beds in the country is expected toincrease to 443,000 by 2015
98109 121 135
154
176 197210 241
262 295
339
392
443
2009 2010 2011 2012F 2013F 2014F 2015F
Number of hotel rooms Number of hotel beds
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Source: Jones Lang LaSalle, Aranca Research
Office market in Southern India (in million sq ft)The Southern Indian StatesAndhra Pradesh, Tamil Naduand Karnataka have been the major drivers of economicgrowth in India over the last decade. The three statestogether account for about 22 per cent of IndiasGDP
Nearly 45 per cent of Indiasoffice stock is represented bythese states; over 64 per cent of the countrysIT SEZs arehoused in this region
Office stock in the Southern cities is projected* to grow at aCAGR of 8 per cent between 2012 and 2016
0%
4%
8%
12%
16%
20%
0
5
10
15
20
25
2002 2004 2006 2008 2010 2012E 2014F 2016F
Supply Net absorption Vacancy Rate - RHS
Note: * - Projections by Jones Lang LaSalle
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Source: Jones Lang LaSalle, Aranca Research
Net absorption rate in Southern Indiasresidential market isonce again climbing up to pre-crisis peaks; during 1Q12, netabsorption rate stood at 15.1 per cent, compared to 17.8 percent in 1Q08
A growing migrant population due to increasing jobopportunities, together with healthy infrastructuredevelopment, is underpinning demand in the regions
residential real estate market
Residential market in Southern India(number of units)
0%
5%
10%
15%
20%
25%
0
5,000
10,000
15,000
20,000
25,000
1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12
New launches Net absorption Absorption rate - RHS
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BFSI: Banking, Financial Services and Insurance
CAGR: Compound Annual Growth Rate
CBD: Central Business District
FDI: Foreign Direct Investment
FSI: Floor Space Index
HNI: High Net-worth Individual
GOI: Government of India
INR: Indian Rupee
IT/ITeS: Information Technology/Information Technology enabled Services
MNC: Multinational Corporation
NRI: Non Resident Indian
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SBD: Special Business District
SEZ: Special Economic Zone
USD: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
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Year INR equivalent of one US$
2004-05 44.95
2005-06 44.28
2006-07 45.28
2007-08 40.24
2008-09 45.91
2009-10 47.41
2010-11 45.57
2011-12 47.94
2012-13 54.31
Exchange Rates (Fiscal Year)
Year INR equivalent of one US$
2005 45.55
2006 44.34
2007 39.45
2008 49.21
2009 46.76
2010 45.32
2011 45.64
2012 54.69
2013 54.45
Exchange Rates (Calendar Year)
Average for the year
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