India Office

www.cbre.co.in First Quarter 2012

Economic Overview India's economic growth slowed down to around 6.1% in the quarter ending December 2011, registering its slowest pace in more than three years. This was largely a consequence of slowing industrial growth, stagnating investment activity and weak global economic conditions. The Central Government in its Economic Survey for the Union Budget 2012-13 estimated India's economic growth to be around 6.9% for 2011-12, lower than its previous estimates of 7-7.5%, while expecting a recovery in 2012-13 to around 7.6%. The budget proposals indicated a strong impetus to affordable housing and infrastructure. By enabling foreign funding, supporting flagship schemes and nodal organizations, the Government has aimed at propelling growth in these two sectors, in order to stimulate the economy to a higher growth trajectory. The Reserve Bank of India (RBI) implemented a reduction in the Cash Reserve Ratio (CRR) by 125 bps in the present quarter, which is likely to ease liquidity in the economy and provide a roadmap for reduction in interest rates. This is likely to impact demand and promote construction activity in real estate and infrastructure sector. A downside of the budget proposals has been the proposed increase in service tax and excise duty on construction materials, which is likely to lead to an increase in input costs for real estate projects.

Demand Office space demand slowed down significantly in the first quarter, with around 4.1 million sq ft of office space getting absorbed across the leading cities in the country, compared to almost 6.5 million sq ft in the previous quarter. NCR (National Capital Region), Mumbai, Chennai and Bangalore were the leading cities; accounting for more than 70% of the entire space getting absorbed in the country. Supply Supply continued to overtake demand in the first quarter of 2012, with almost 5.9 million sq ft of office space being added across the leading cities of the country. The new supply was largely concentrated in NCR, Bangalore, Mumbai and Chennai, comprising almost 90% of the entire quantum added in the present quarter. Indicator Trends Accumulation of stock across most office micro-markets led to values coming under some downward pressure in Q1 2012. Mumbai witnessed decline in rental values in few micro-markets like Nariman Point and Lower Parel, mainly due to sluggish demand levels. It is anticipated that supply dynamics will continue to dictate rental movement in the coming quarters, with values in the CBD being largely stable and those in suburbs slipping downwards.

Quick Stats
Rental Movement from last Quarter

National Capital Region

CBD Secondary Market

Mumbai
CBD Alternate Business District

Bangalore
CBD Peripheral Business District

Chennai
CBD Peripheral Business District

Hyderabad
CBD Surburban Areas

Pune
CBD Peripheral Business District

Kolkata
CBD Peripheral Business District

2012, CBRE, Inc.

Outlook Most leading office destinations are expected to witness a strong supply pipeline, which might widen the demand-supply gap, thereby impacting rental growth negatively. However, prime corporate office space in the CBDs of most of the major centers is not expected to be impacted as adversely and values here should remain stable. The IT SEZ segment might lose its attractiveness amongst occupiers due to continuing lack of clarity on tax related incentives. Growth in the non-SEZ office segment would depend upon the growth levels in the new economy verticals like pharmaceuticals, manufacturing, biotech, telecommunications, along with the IT/BPO/KPO services. Expansion (as well as consolidation) plans in these verticals would provide new opportunities to developers and off-take some of the surplus stock.

transactions in Jasola were small-mid size in nature and largely concentrated in a couple of developments only. Rental values across all micro-markets in the SBD maintained stability compared to the previous quarter. Gurgaon continued to be the focus micro-market for corporate occupiers in the Delhi-NCR region. Close to 0.1 million sq ft of commercial space and 1.56 million sq ft of IT/SEZ space was added to the micro-market during the review period. SEZ projects witnessed space take-up of about 0.13 million sq ft, while almost 0.22 million sq ft of commercial and approx. 0.19 million sq ft of IT-ITeS space was absorbed in the present quarter. Compared to the previous quarter, rental values remained stable. The Noida micro-market continued to attract tenants looking for cost effective options compared to the other prime markets in the region. Approx. 0.1 million sq ft of SEZ space was absorbed, while another 0.1 million sq ft was pre-committed in developments along the Noida - Greater Noida Expressway. The commercial and IT-ITeS segments also matched pace with an uptake of about 77, 000 sq ft and 0.15 million sq ft of space take-up, respectively. Vacancy levels continued to tread high; rental values were largely stable across most micro-markets. Major Leasing Transactions
Tenant Mercer UHG Ingersoll Rand Yatra.Com Rei Agro Building Unitech SEZ 3C Oxygen SEZ DLF 5A Unitech Cyberpark DLF Southcourt Location Noida Noida Gurgaon Gurgaon Saket Approx. size (in sq ft) 100,000 100,000 50,000 25,000 20,000

India Office
First Quarter 2012

The National Capital Region

The CBD of Connaught Place and its surrounding areas witnessed some infusion of supply with close to 12,000 sq ft being released in the micro-market. This new supply is expected to be absorbed by corporates looking to expand/relocate within the CBD. The CBD is also expected to witness substantial supply increment towards end of the year, which is likely to generate interest amongst prospective occupiers. The otherwise sparse supply stream indicates that the CBD shall continue to command a premium over other office destinations in the region. Absorption gained momentum as compared to the previous quarter and stood at approx. 28,400 sq ft. Rental values maintained stability and vacancy was at a low of 2-3%. The SBD of Saket, Jasola and Nehru Place did not witness any fresh supply this quarter. While transaction activity was limited in Nehru Place, occupier interest picked up in Jasola and Saket; most occupiers looked to drive bargains and negotiate favorable terms. The Saket micro-market observed absorption to the tune of approx. 55,000 sq ft in DLF South Court and precommitments of 16,000 sq ft in MGF Metropolis. Jasola on the other hand witnessed absorption of about 42,000 sq ft of grade A office stock. Most of the

Page 2
2012, CBRE, Inc.

Rental Market Indicators

Sub-market
CBD (Connaught Place) Grade A CBD (Connaught Place) Grade B Secondary market (Nehru Place) Grade A Secondary market (Jasola) Grade A Secondary market ( Saket) Grade A Gurgaon Grade A Commercial Gurgaon Grade A (IT) NOIDA Grade A (IT/IT SEZ)

Outlook
Average Rent in December 11
(INR/sq ft/month) 270

Average Rent in Mar 12

(INR/sq ft/month) 270

155

155

190

190

115

115

160

160

Despite global economic pressures, the office market in Delhi-NCR is on a stable footing and none of the prominent micro-markets observed a dip in rental values. Rentals have consolidated on the back of consistent occupier activity, primarily in Delhi. However, an oversupply situation in Gurgaon and Noida may exert pressures on values as occupiers look towards striking bargains to leverage the weak market sentiment. IT occupiers are expected to drive demand levels across most micro-markets in the region.

India Office

88

88

59

59

Mumbai
During the review period, the Central Business District (CBD) of Nariman Point witnessed limited transaction activity. Only a marginal absorption of approx. 10,000 sq ft was observed. The micro-market did not witness the addition of any fresh supply in the present quarter and vacancy remained stable. In the coming few quarters, vacancy in this micro-market is slated to rise from the current estimated 6-7%. Due to sluggish absorption, rental values witnessed a marginal decline during this quarter. Approximately 0.2 million sq ft of Grade-A office space became available in the Extended Business District (EBD) of Lower Parel in the present quarter. Absorption of about 0.18 million sq ft of office space was witnessed, which led to a decline in vacancy levels. The micro-markets of Worli and Prabhadevi witnessed a marginal correction of about 1-3% in rental values. The decline was largely due to low levels of transaction activity in the market, with occupiers focused upon locations like BKC and Lower Parel. There was no new addition of office supply to the existing stock. Whilst absorption was recorded at a minimal 20,000 sq ft, vacancy was estimated in the range of 9-10%. The Alternate Business District (ABD) of Bandra Kurla Complex (BKC) continued to remain a preferred location for corporate occupiers looking for expansion. The current quarter witnessed space take
Page 3
2012, CBRE, Inc.

39

39

Rental Value Trends

Capital Value Trends

First Quarter 2012 Fourth Quarter 2008

up of approximately 35,000 sq ft; vacancy dropped from 5% in the previous quarter to about 4% in the present quarter. On account of limited supply, rental values displayed an upward movement in the range of 1-2% on a q-o-q basis.
India Office
First Quarter 2012

Rental Market Indicators

Sub-market
CBD (Nariman Point, Fort, Cuffe Parade) Grade A CBD (Nariman Point, Fort, Cuffe Parade) Grade B EBD ( Lower Parel) Grade A EBD (Worli, Prabhadevi) Grade A ABD (Bandra Kurla Complex, Kalina) Grade A ABD (Bandra Kurla Complex, Kalina) Grade B SBD (Andheri, Vile Parle, Jogeshwari) Grade A SBD (Andheri, Vile Parle, Jogeshwari) Grade B PBD (Malad, Goregaon) Grade A (IT) PBD (Powai,Vikhroli) Grade A (IT) PBD (Thane, New Mumbai) Grade A (IT/IT SEZ)

Average Rent in Mar 12

(INR/sq ft/month)

Average Rent in December 11

(INR/sq ft/month)

290 240 150 265 300 250 125 95 95 90 60

300 250 155 270 295 245 125 90 95 90 60

Limited leasing activity was witnessed in the Secondary Business District (SBD) of Andheri, Ville Parle and Jogeshwari. Almost 0.6 million sq ft of fresh Grade A supply was released into this micromarket; absorption was recorded at around 20,000 sq ft. Approximately 45,000 sq ft of IT space was absorbed in the Peripheral Business District (PBD) of Powai and Vikhroli during the review period. Navi Mumbai and Thane witnessed absorption of 0.33 million sq ft of IT space during this quarter. Vacancy rate dropped from 10% in the last quarter to approximately 7% in this quarter. Rental values remained largely stable in the present quarter. Major Leasing Transactions
Tenant Bristol Myers Squibb Investec British Petroleum Building Indiabulls Finance Centre The Capital Maker Maxity Micro market EBD ABD ABD Approx. size (in sq ft) 40,000 8,000 7,500

Rental Value Trends

Page 4
2012, CBRE, Inc.

Capital Value Trends

Bannerghatta Road witnessed significant number of transactions in the built-to-suit format for large IT firms expanding their presence in the city. There were no significant project completions in this micro-market during the quarter. Rental values also remained stable compared to the previous quarter. The Peripheral Business District (PBD) of Whitefield continued to be a priority destination for corporate occupiers, with absorption of around 0.18 million sq ft being reported in the present quarter, leading to a marginal dip in vacancy rates as compared to the previous quarter. Whitefield did not witness any supply during the review period, while Electronic City witnessed supply of about 0.30 million sq ft during this quarter. Absorption level remained unchanged in Electronics City while rental values were stable over the last quarter. The Sarjapur Outer Ring Road (ORR) continued to remain in focus amongst corporate occupiers, as well as developers, with supply of around 0.80 million sq ft witnessed in this quarter. Absorption of around 0.18 million sq ft was witnessed, rental values remained stable compared to the previous quarter. The North Bangalore micro-market witnessed supply of around 0.45 million sq ft, while absorption of about 0.10 million sq ft was recorded during the review period. Rental values increased marginally during the quarter due to limited availability of grade A office space in this region. This micro-market is currently being evaluated by large corporates as a significant quantum of office space is expected to be added to this market in the near future. Major Leasing Transactions
Tenant SunGard Indegene Redhat Polycom SanDisk Times Inc Ixia Building Umiya Business Bay Manyata Tech Park IBC Knowledge Park Brigade Summit Bagmane Tech Park RMZ Nxt Umiya Business Bay Location Sarjapur ORR North Bangalore Bannerghatta Road Whitefield CV Raman Nagar Whitefield Sarjapur ORR Approx. size (in sq ft) 90,000 83,000 45,000 41,260 41,000 35,000 30,000

India Office

Market Outlook The commercial office demand is expected to decline in the coming few months, largely due to cost constraints amongst key occupiers. However, demand for smaller offices in grade A project should remain buoyant due to the rationalization of rental values in a few micro-markets.

Bangalore
The Central Business District (CBD) of MG Road, Richmond Road, Residency Road and Ulsoor Road witnessed absorption of around 40,500 sq ft of office space, primarily in the form of mid-sized transactions, in the first quarter of 2012. Corporates continued to remain focused on properties in the peripheral and suburban business districts due to the minimal availability of grade A space in the CBD. Supply of around 26,000 sq ft was witnessed in this micromarket while rental values remained stable when compared to the previous quarter. The Extended Business District (EBD) of Indira Nagar, Koramangala, Inner Ring Road, and CV Raman Nagar did not observe significant project completions in this quarter. Absorption of around 43,000 sq ft was witnessed, while rental values remained largely stable in the present quarter. Absorption of around 45,000 sq ft was witnessed in the South Bangalore micro-market of Bannergatta Road, JP Nagar, Jayanagar and Mysore Road.

First Quarter 2012

Page 5
2012, CBRE, Inc.

Rental Market Indicators

Sub-market
CBD (MG Road, Residency Road) Grade A CBD (MG Road, Residency Road) Grade B EBD (Koramangala, Indiranagar) Grade A EBD (Koramangala, Indiranagar) Grade B Outer Ring Road (ORR) Grade A Outer Ring Road (ORR) Grade B PBD (Whitefield, Electronic City) Grade A South Bangalore Grade A North Bangalore Grade A Industrial Grade

Average Rent in Mar 12

(INR/sq ft/month) 95 70 75 60 47 43 30 44 55 23

Average Rent in December 11

(INR/sq ft/month) 95 70 75 60 48 43 30 44 54 23

Market Outlook Bulk of the new office supply was added to the SEZ developments located in the city suburbs. However some prime office developments are also expected to come on line this year on ORR and in North Bangalore. Rental values are expected to remain stable or appreciate marginally over the next few quarters. The city is witnessing a number of infrastructure developments such as signal free access from Sarjapur ORR to the Airport, Mass Rapid Transit System Metro which will enhance connectivity within the city and elevated expressway along the Bellary Road, again to the Airport in Bangalore. These projects would enhance connectivity from city centre to the peripheral markets which is expected to augment the demand for office developments in the North and South-East locations of the city.

India Office
First Quarter 2012

Rental Value Trends

Chennai
The Central Business District (CBD) encompassing areas of Anna Salai, T Nagar, RK Salai, Alwarpet, Nungambakkam witnessed a dip in demand for office space with negligible absorption of around 0.09 million sq ft being reported in the present quarter, largely in smaller and medium format office spaces. However, due to negligible supply addition rental values firmed up by about 2-3% on a q-o-q basis. The Off / Non CBD micro-market of MRC Nagar, Guindy and Taramani witnessed stagnation in market activity when compared to the previous quarter. Absorption was recorded at around 0.16 million sq ft. However rental values witnessed a marginal increase of 4-5% on a q-o-q basis, primarily due to low supply pressures when compared to the suburban micromarkets. A nominal supply of 0.08 million sq ft was released; vacancy level was in the range of 3 - 4%. The Suburban Business District (SBD) including areas such as Velachery, Perungudi, Mount Poonamallee Road witnessed maximum activity during this quarter with an absorption of almost 0.32 million sq ft being reported, compared to around 0.25 million sq ft in the previous quarter. On the supply side,
Page 6
2012, CBRE, Inc.

Capital Value Trends

no significant additions were witnessed during the review period. Rental values increased by about 5-8% on a q-o-q basis; vacancy level was around 7 - 8% in the present quarter. The Peripheral Business District (PBD) of Perungalathur, Sholinganallur, Siruseri, Ambattur and GST Road witnessed minimal activity with absorption of only around 0.08 million sq ft, compared to around 0.45 million sq ft in the previous quarter. The region witnessed an addition of around 0.72 million sq ft of fresh IT space, the only major supply addition in the city during the review period. Supply pressures and stagnating demand led to a downward pressure being created on rental values and a steep increment in vacancy levels to around 1820% in the present quarter. Major Leasing Transactions
Tenant Barclays BNY Amazon Mitsubishi Building DLF DLF SP Infocity Prestige Palladium Location Manappakkam Manappakkam Perungudi Greams Road Approx. size (in sq ft) 63,000 50,000 180,000 12,000

Rental Market Indicators

Sub-market
CBD (Anna Salai, Nungambakkam, RK Salai, T Nagar, Egmore, Alwarpet) Grade A CBD (Anna Salai, Nungambakkam, RK Salai, T Nagar, Egmore, Alwarpet) Grade B Off CBD ( Guindy, Kiplauk, Taramani, Adyar, Anna Nagar) Grade A (Non IT / IT) Suburban Business District (Velachery, Perungudi, Mount Poonamallee Road) Grade A (Non IT) Suburban Business District (Velachery, Perungudi, Mount Poonamallee Road) Grade A (IT) Suburban Business District (Velachery, Perungudi, Mount Poonamallee Road) Grade A (IT SEZ) Peripheral Business District (Perungalathur, Sholinganallur, Siruseri, Ambattur, GST Road) Grade A (IT) Peripheral Business District (Perungalathur, Sholinganallur, Siruseri, Ambattur, GST Road) Grade A (IT SEZ)

Average Rent in Mar 12

(INR/sq ft/month) 66

Average Rent in December 11

(INR/sq ft/month) 64

India Office

52

50

48

46

42

40

38

35

48

48

24

24

29

29

Rental Value Trends

First Quarter 2012

Page 7
2012, CBRE, Inc.

Capital Value Trends

HITEC City, Kondapur and Gachibowli remained the most active micro-market in terms of transaction activity in the present quarter. On the demand side, the micro-market witnessed a surge in the number of inquiries for office space in the Madhapur, Kondapur and Gachibowli micro-markets. The total absorption witnessed in this quarter was around 0.33 million sq ft. On the supply front, there has been no fresh addition to the office stock. Rental values remained largely stable compared to the previous quarter, primarily due to availability of significant supply of secondary space in the micro-market. Vacancy levels witnessed a marginal decline as compared to the previous quarter. The Extended IT Corridor comprising the areas of Raidurg, Manikonda and Nanakramguda witnessed absorption of 0.07 million sq ft of office space in the first quarter of 2012. On the supply side there were no new additions to the office stock. Rental values remained constant as compared to the last quarter. Office leasing activity in the Peripheral Business District (PBD) comprising areas of Uppal, Pocharam and Shamshabad witnessed interest from office space occupiers, driven by the availability of ready supply of grade A commercial space. The Eastern micro-markets of Uppal and Pocharam witnessed a significant increase in the demand for office space with around 0.16 million sq ft of absorption in this quarter by prominent occupiers. Rentals continued to remain stable, with a marginal decrease in vacancy rates. The Southern part of the city witnessed an increase in the number of inquiries for large scale consolidation/ campus requirements. Rental levels have also remained largely stable in this region.

India Office

Market Outlook Overall market sentiment continues to remain positive which is expected to translate into healthy absorption over the coming few quarters. The SEZ segment should continue to witness supply addition, thereby being a major contributor to the office market in the city. IT and back-office operations are expected to continue to remain major contributors to office demand and transaction activity. Rental values are expected to remain largely stable across most micro-markets over the coming few quarters.

Hyderabad
The Central Business District (CBD) comprising of Begumpet, Somajiguda and parts of Banjara Hills (Road No 1,2,10, 12) did not witness any significant increase in absorption levels in Q1, 2012. Rental values were stable when compared to the previous quarter. There were no additions to the office stock in this micro-market and vacancy remained largely unchanged. The Secondary Business District (SBD) of Ameerpet, Himayatnagar, Sarojini Devi Road, parts of Banjara Hills and Jubilee Hills continued to experience limited activity levels. There was no significant supply addition, while absorption of commercial space was also negligible. Vacancy and rental values maintained stability when compared to the previous quarter.
First Quarter 2012

Major Leasing Transactions

Tenant Infotech Global Data Quislex Prokarma Building NSL Arena Krishe Sapphire DHFLVC Silicon Towers Divyasree Orion Location Uppal Madhapur, IT corridor Kondapur, IT Corridor Raidurg Approx. size (in sq ft) 63,000 45,000 25,000 20,000

The IT Corridor comprising areas of Madhapur,

Page 8
2012, CBRE, Inc.

Rental Market Indicators

Sub-market
CBD (Begumpet/Rajbhavan Road, Banjara Hills (Road No. 1,2,10,12) Grade A CBD (Begumpet/Rajbhavan Road, Banjara Hills (Road No. 1,2,10,12) Grade B Secondary Business District (Parts of Banjara Hills, Jubilee Hills) Grade A Secondary Business District (Parts of Banjara Hills, Jubilee Hills) Grade B Secondary Business District (Ameerpet, Himayatnagar, Sarojini Devi Road) Grade A Secondary Business District (Ameerpet, Himayatnagar, Sarojini Devi Road) Grade B IT Corridor (HITEC City, Madhapur, Kondapur, Gachibowli) Grade A IT Corridor (HITEC City, Madhapur, Kondapur, Gachibowli) Grade B Extended IT Corridor (Nanakramguda, Raidurg, Manikonda) Grade A Extended IT Corridor (Nanakramguda, Raidurg, Manikonda) Grade A PBD (Shamshabad, Pocharam, Uppal) Grade A

Capital Value Trends

Average Rent in December 11
(INR/sq ft/month) 46

Average Rent in Mar 12

(INR/sq ft/month) 46

India Office

45

45

45

45

44

44

Market Outlook Hyderabad is expected to witness a significant increase in the demand for office space over the next few months. However, with a substantial volume of fresh addition to the existing office stock, rental values are expected to remain stable at the prevailing levels. The IT Corridor and Extended IT Corridor are expected to remain the most active micro-markets for office leasing activity.

25

25

26

26

37

37

27

27

Pune
34 34

28

28

25

25

Rental Value Trends

Around 0.1 million sq ft of commercial office space was released in the Central Business District (CBD) of MG Road, Koregaon Park, Bund Garden, Kalyani Nagar, Dhole Patil, FC Road and JM Road. Absorption was recorded at around 0.08 million sq ft, which included two big ticket transactions by Tata Teleservices and MWH Global. Rental values for grade A commercial projects witnessed an increment of almost 4-5% over the previous quarter, while rental values for IT space observed an increase of 11-12% on a q-o-q basis. Infrastructure growth, proximity to key catchment areas and attractive rental values ensured that the Off CBD micro-market of Viman Nagar, Magarpatta, Aundh, Baner, Shanker Seth Road, S.B Road and Nagar Road remained a priority office destination for most occupiers. The micro-market witnessed enhanced level of enquiries with absorption recorded at around 0.15 million sq ft. About 0.1 million sq ft of office space came on-line in this micro-market in the present
Page 9
2012, CBRE, Inc.

First Quarter 2012

quarter. While rental values for commercial stock were largely stable, those for IT space rose marginally by 45% as compared to the previous quarter. The Peripheral Business District (PBD) of Hinjewadi, Kharadi, Hadapsar, Talawade and Kharadi witnessed an addition of 0.3 million sq ft of IT supply in the present quarter. Absorption remained muted with close to 18,500 sq ft being transacted. Consistent occupier interest ensured that rental values maintained stability during the present quarter. Major Leasing Transactions
Tenant MWH Icertis Solutions Tata Teleservices Terra Data Saba Software B&V Building Brand View Amar Megaplex Metropole Magarpatta SEZ Muttha Towers Commerzone Location CBD Off CBD CBD Off CBD Off CBD Off CBD Approx. size (in sq ft) 55,000 23,000 22,000 22,000 22,000 52,000

Rental Value Trends

India Office
First Quarter 2012

Capital Value Trends

Rental Market Indicators

Sub-market
CBD (Shivaji Nagar, Bund Garden Road, Koregaon Park, MG Road, Dhole Patil) Grade A CBD (Shivaji Nagar, Bund Garden Road, Koregaon Park, MG Road, Dhole Patil) Grade B Off CBD (Magarpatta, Aundh, Baner, Shankar Seth Road, Viman Nagar, Nagar Road) Grade A Off CBD (Magarpatta, Aundh, Baner, Shankar Seth Road, Viman Nagar, Nagar Road) Grade B PBD (Hinjewadi, Kharadi, Hadapsar, Talwade) Grade A IT/IT SEZ PBD (Hinjewadi, Kharadi, Hadapsar, Talwade) Grade B

Average Rent in Mar 12

Average Rent in December 11

(INR/sq ft/month) (INR/sq ft/month)

Market Outlook Office demand is expected to witness an increase in the coming few months. An increase in demand for SEZ space coupled with limited supply is likely to result in rental appreciation along the Eastern Corridor. However supply pressure is expected to remain high across most micro-markets, with almost 4 - 5 million sq ft of space lined up for completion by the end of 2012.

68

65

50

50

46

46

38

38

Kolkata
35 34

27

27

The Central Business District (CBD) of Chowringhee, B.B.D Bag, Park Street and Camac Street witnessed limited transaction activity during the review period. No fresh supply was introduced in the micro-market and absorption stood at about 22,000 sq ft. Due to many cases consolidation and relocation to other locations by the occupants of this microPage 10
2012, CBRE, Inc.

market, vacancy levels increased to almost 10-12%. However, rental values for grade A facilities maintained stability compared to the previous quarter. The Secondary Business District (SBD) of EM Bypass, Kasba-Gariahat, Topsia and Sarat Bose Road witnessed enhanced activity levels during the current quarter. New supply in the SBD was to the tune of approx. 200,000 sq ft, while absorption was estimated at around 70,000 sq ft. Vacancy levels increased in Kasba to about 9-10%, on the back of new projects becoming operational. Rental values in the SBD have displayed an increment of 6-7% on a q-o-q basis, with capital values for grade A projects went up by about 13-14% on a q-o-q basis. The Peripheral micro-markets of Salt Lake and Rajarhat did not witness addition of any fresh supply during the quarter. However, the micro-market witnessed increased levels of absorption with almost around 250,000 sq ft of off-take during the present quarter. Rental values maintained stability across commercial and IT segments, with an increase of about 4-5% q-o-q being witnessed in the SEZ segment. Capital values also remained largely stable in the commercial and IT segment, with an increment of 910% q-o-q being witnessed in the SEZ segment.

Rental Market Indicators

Sub-market
CBD (Park Street, Camac Street, Theatre Road) Grade A Secondary Business District Grade A Peripheral Business District (Salt Lake, Rajarhat) (IT) Grade A Peripheral Business District (Salt Lake, Rajarhat) (IT SEZ) Grade A

Average Rent in Mar 12

(INR/sq ft/month) 120

Average Rent in December 11

(INR/sq ft/month) 120

India Office

80

75

50

50

37

35

Rental Value Trends

Major Leasing Transactions

Tenant Tata Motors SFK Bearing Titagarh Wagon Building Rene Building Haute Street S.B Tower Location SBD SBD CBD Approx. size (in sq ft) 50,000 8,000 3,000

Capital Value Trends

First Quarter 2012

Page 11
2012, CBRE, Inc.

Market Outlook The market has displayed steady activity for the past 2-3 quarters and the trend is likely to continue in the near future. Absorption activity will be largely driven by small to mid format transactions. On the supply front, the SBD is likely to witness supply addition as a couple of projects are slated to get operational by mid-2012.

INDIA OFFICES New Delhi CBRE South Asia Pvt. Ltd., Ground Floor, PTI Building 4, Parliament Street, New Delhi 110 001 T (91 11) 4249 0200 / 4239 0200 F (91 11) 2331 7670 Gurgaon CBRE South Asia Pvt. Ltd., 19th Floor, DLF Square, M Block, Jacaranda Marg, DLF City Phase II, Gurgaon 122002 T (91 124) 4659700 F (91 124) 4659800 Mumbai CBRE South Asia Pvt. Ltd., #202/203, 2nd Floor, Naman Centre, G-block, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051 T (91 22) 40690100 F (91 22) 26527655 Chennai CBRE South Asia Pvt. Ltd., 2C&D, Gee Gee Emerald 151, Village Road,Nungambakkam Chennai 600 034 T (91 44) 2821 4599 / 4571 / 4619 F (91 44) 2821 4607 Bengaluru CBRE South Asia Pvt. Ltd., Hulkul Brigade Centre Ground Floor, No. 82 Lavelle Road, Bengaluru 560 001 T (91 80) 40740000 F (91 80 ) 411 21239 Hyderabad CBRE South Asia Pvt. Ltd., 211, Maximus 2B, Mindspace Cyberabad, Survey No. : 64 (Part), APIIC Software Layout, Madhapur, Hyderabad - 500 081 T (91 40) 40335000 F (91 40) 40335050 Pune CBRE South Asia Pvt. Ltd., 704/705/706, 7th Floor Nucleus Church Road Pune - 411001 T (91 120) 26055437/367/397/40190100 F (91 120) 26055405 Kolkata CBRE South Asia Pvt. Ltd., Jindal Towers 2nd, Floor, Block B 21/1A/3 Darga Road Kolkata - 700017 T (91 33) 40190200 F (91 33) 40190230

India Office
First Quarter 2012

About CBRE Group, Inc. CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com. CBRE South Asia Pvt. Ltd. was the first independent international Real Estate consulting firm to set up office in the Indian sub continent in 1994. Since then the Indian operations have grown to a network of offices in all the major metropolitan cities. Today with over 2500 professionals, CBRE South Asia Pvt. Ltd. is one of the leading Real Estate consultants in the Indian subcontinent. Please visit our website at www.cbre.co.in.

We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction.

Page 12
2012, CBRE, Inc.