Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
TABLE OF CONTENTS
Bengaluru... 34-51
Ahmedabad... 16-33
Chennai... 52-67
Connecting
People
All India... 04-15
& Property,
Perfectly.
Hyderabad... 68-85
Mumbai... 96-113
NCR... 114-131
Kolkata... 86-95
Pune... 132-149
3
RESEARCH INDIA REAL ESTATE
3%
INDIA YoY increase in sales
during H1 2018
• The Indian residential market lower prices and holding off new
volumes have been spiralling down launches to alleviate mounting financial
and breaching new lows in terms of stress. There has also been a more
supply and sales for practically every concerted effort by this community to
successive year in this decade. An decrease ticket sizes by constricting
Both sales and investor frenzy in the early part of this unit sizes and reducing prices in
decade inspired a prolonged focus response to the market’s demands.
launches have grown of developers in launching lifestyle
• This redirected focus of developers on
over the past 18 projects targeted at the premium
increasingly launching and re-pricing
segment at progressively higher prices.
projects at lower ticket-sizes, that cater
months and are at their These prices eventually reached
to the needs of the bulk of the home-
unsustainable levels causing end-user
buyers, has been paying dividends.
highest level since demand to crack and price growth to
RESIDENTIAL MARKET taper down and head into negative
46%
the demonetisation territory as end-users and investors
alike stayed away from the market over
period at approximately the past 3 years.
4 5
RESEARCH INDIA REAL ESTATE
17%
housing sector have also been aimed 140000
of the extent of carpet area to 160
at boosting housing supply for the
square metres for MIG – I and 200
low and mid-income segments, and
square metres for MIG – II.
improving affordability of the home-
buyer. • The current QTS level stands
YoY drop in unsold inventory levels marginally lower at 11.3 quarters at the
• While these measures have helped
end of H1 2018, ame as the previous 120000
home-buyer sentiment, they have
year; however one must also consider
irrevocably changed the business
the entire time taken by a developer
of real estate for the developer. The
from launch to the complete sale of
developers’ community is coming to
a project that is considered the life
terms with these unprecedented events
cycle of a project from the developer’s
and just beginning to stabilise and find
perspective. The project life cycle for 100000
its footing.
the 8 cities under review has increased
No. of Units
• This period of stabilisation, right-sizing from 24.4 to 27.4 quarters which shows
and right-pricing of new residential that in H1 2018, it takes more time for a
product and improving home- developer to exit a project compared to
buyer sentiment due to increased a year ago. All cities show a worsening
transparency have culminated in a trend based on this parameter, with the 80000
45% YoY growth in units launched exception of Hyderabad and Chennai
6 7
RESEARCH INDIA REAL ESTATE
RESIDENTIAL
• Weighted average prices have fallen
an average of 3% across cities with PROJECT LIFE CYCLE
Mumbai seeing the most decline at
9% YoY. Hyderabad saw prices move
up 8% due to record sales during this
40
38
LAUNCHES AND SALES
period, most of which took place in the
36
higher priced, ready to move in stock.
34 Launches (housing units) Sales (housing units) % Change (YOY)
This effectively also caused unsold
inventory levels in Hyderabad to fall 32
44% YoY, the highest among all cities 30
under coverage. 28
26
• During the last four years, the growth
in residential prices in most of the top 24
forward. KOLKATA
AHMEDABAD
CONSUMER PRICE INFLATION ABOVE REAL ESTATE PRICE
GROWTH FOR MOST MARKETS 35,974
128%
14,100
H1 2018 78%
135 32,412 H1 2018
3,706
1.0%
16,451 44%
-6% H1 2018
130 MUMBAI
CPI 8,313
5%
PUNE
125
HYDERABAD HYDERABAD
120 15,556
BENGALURU 11%
H1 2018
6,523
8%
115 NCR 25,802 H1 2018
22%
MUMBAI 8,585
-3%
110 BENGALURU
CHENNAI
PUNE CHENNAI
105
KOLKATA
8%
100
AHMEDABAD
95
Q1-2013
Q2-2013
Q3-2013
Q4-2013
Q1-2014
Q2-2014
Q3-2014
Q4-2014
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
Q1-2018
Q2-2018
157,907 17.4
(-12%)
45,908
21 (4,265)
[0%] [2%]
NCR NCR
39,054 12.2
20,119 7.1 (-0.2%)
35,446
12.6
(-37%) 30,354 (3,293)
10.1 (2,820) [-8%] [-3%]
[2%] [0%]
KOLKATA
KOLKATA
AHMEDABAD AHMEDABAD
27,448 3.3
119,526 8 (-32%) 78,933
(-14%) 12.3 (7,333) 48,007
15.4 [-9%] [-5%] (4,660)
[-5%] [-1%] 43,185
(4,012)
MUMBAI MUMBAI [8%] [5%]
50,881
(4,727)
[-2%] [3%]
10.7 48,567
98,866 (4,512)
(-13%) BENGALURU 22,579 5.7 BENGALURU [-4%] [0%]
12.6
(-20%)
CHENNAI 14.5 CHENNAI
All maps are for representational purpose not to scale All maps are for representational purpose not to scale
10 11
RESEARCH INDIA REAL ESTATE
H1 2017
1.5
mn sq m
1.0
5%
0.5
0.0
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H1 2018
Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
YoY Growth in rental levels during
Source: Knight Frank Research
H1 2018
17%
16%
2017 2018
16%
15%
New completions mn sq m (mn sq ft) 1.7 (18.2) -10% 14% BFSI 20% 18%
13%
12%
12%
12%
12%
Transactions mn sq m (mn sq ft) 2.0 (21.5) 12% IT/ITES 33% 28%
10%
Weighted average rental in 779 (72) 5% 8% Manufacturing 18% 14%
`/sq m/month (`/sq ft/month) 6%
4% Other Services 29% 40%
Stock mn sq m (mn sq ft) 60.4 (650) -
2%
Note: BFSI includes BFSI support services
Vacancy (%) 12.1% - 0%
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Note- 1 square meter (sq m) = 10.764 square feet (sq ft) Source: Knight Frank Research
Source: Knight Frank Research • The Indian office space market saw 2.0 the lowest vacancy levels among all 28% of the transacted volume during
The Indian office space mn sq m (21.7 mn sq ft) of transactions markets, the Bengaluru office market H1 2018 compared to the 33% in the
market saw 2.0 mn sq • Supply of quality office space has been the bane of the Indian office space market registering a healthy 13% growth YoY
hile 1.7 mn sq m (18.2) mn sq ft) of
saw rentals vault by a remarkable 17%
thanks largely to corporates taking up
previous period.
in recent years as occupiers have been hard pressed to find viable options across • The share of the Other Services
m (21.7 mn sq ft) of markets. A steady demand scenario in the face of consistently low supply volumes has office space came online during the space in the higher priced CBD and
sector has been consistently growing
pushed down vacancy levels from 19.4% in H1 2013 to 12.1% in H1 2018. same period. The highest spurt in Off-CBD business districts. Companies
and has eclipsed that of the IT/ITeS
transactions registering a transactions was experienced by the have also been entering en masse
sector during H1 2018 by taking up
• Consistently falling since H1 2013, the vacancy level is close to its decadal low. The Pune office market that grew at 118% into pre-commitments to lock in prime
healthy 13% growth YoY lack of fresh office space is most visible in the IT/ITeS sector dominated markets of YoY, primarily due to a 0.1 mn sq m (1.1 office space in this extremely supply
40% of the in the recently concluded
period on the back of increased take-
Bengaluru, Pune and Hyderabad that currently have single digit vacancy levels at 3.5%, mn sq ft) lease inked by a BFSI sector constrained market.
while 1.7 mn sq m (18.2 5.7% and 6.8% respectively while Chennai stands precariously poised at 11%. major during H1 2018.
up by ecommerce and co-working
• The IT/ITeS sector share in transactions companies.
mn sq ft) of office space • Office space development has traditionally lost out to residential development due • Strong transactions growth also has increasingly been showing signs
• The co-working sector took up 0.3 mn
to the much longer gestation period that an office property requires to stabilize spurred rentals during the period that of weakening in recent periods due
sq m (2.8 mn sq ft), which translates
came online during the and achieve its full market valuation. Comparatively, a residential developer can grew at a robust 5% YoY during H1 to macro headwinds in the form of a
to a significant 32% of the space
look forward to exit from his investment over a much shorter time horizon. Even 2018. Led by the Bengaluru office slowdown in spending as well as an
same period. private equity investors have been more inclined to acquire stabilized assets as an market, all markets with the exception inclination to insource by the USA and
transacted by the other services sector
overwhelming 89% of their investments have been routed toward the acquisition of or 13% of the total space transacted
of Mumbai experienced healthy growth several European countries. Losing
already matured assets. during H1 2018.
in rentals during the period. With ground since H2 2016, it accounted for
12 13
RESEARCH INDIA REAL ESTATE
NCR NCR
AHMEDABAD
AHMEDABAD
0.41 (4.4) 0.27 (2.9) 0.25 (2.7) 0.36 (3.9) 1,169 -8%
710 8%
(109)
-42% -7% 54% 118% -5% (66)
4.8%
MUMBAI MUMBAI
0% 13%
0.11 (1.2) 0.16 (1.8) 754 17%
619 4%
BENGALURU (70) BENGALURU
CHENNAI 10% -9% 11% CHENNAI (57)
0.9%
All maps are for representational purpose not to scale All maps are for representational purpose not to scale
14 15
RESEARCH INDIA REAL ESTATE
52%
AHMEDABAD Drop in sales in H1 2018, from the
peak levels during H1 2011.
• “This time around there have been very both by Ahmedabad Municipal
few new launches. Advertisements Corporation (AMC) and Ahmedabad
of new projects that used to be in Urban Development Authority (AUDA),
your face, in the past, is missing this has been made available online. This
time around,” stated one of the major initiative is facing teething problems.
players in the city’s real estate market. One, the major stakeholders in the city
The spark is missing with regards new went to the extent of stating that ever
launched units in the city in H1 2018. since passing of plans has been made
The drop in new • New launches in H1 2018 were a mere
online, no developer has been able to
get the necessary approvals. These 2
1,323 units, which is 29% less than
launches has more the number of units in H1 2017. The
issues we believe is a passing phase
and things should get sorted out soon.
to do with the market numbers do paint a sorry figure but
the drop in new launches has more • The western part of the city continued
RESIDENTIAL MARKET trying to adjust to the
95%
to do with the market trying to adjust to remain the hotbed for new launches
to the new policies rather than any in the city. Of the total launches, in
new policies rather than fundamental flaw in the market. H1 2018, close to 60% happened in
West Ahmedabad. During H1 2018
any fundamental flaw in • There are a couple of reasons that
could be attributed to the drop in
locationsalong Sindhu Bhavan Road,
Drop in new launches in H1 2018, from the Bopal Ambli Road saw action. Further
peak levels during H1 2018 the market. new launches in the city. First, under
South Bopal and Sela remained
RERA the time taken to launch a
one of the preferred locations in
project has increased considerably.
West Ahmedabad. North and East
Further, passing of project plans,
16 17
RESEARCH INDIA REAL ESTATE
Ahmedabad, which are comparatively also be utilised for affordable housing 7.1 in H1 2018. At present, the city has
affordable markets in the city, are schemes. more than 20,000 unsold units, which
the other areas that witnessed new are in various stages of construction. AHMEDABAD MARKET ACTIVITY
• While there is not much to cheer about
launches in H1 2018.
new launches, sales remained steady • East Ahmedabad is one of the better
• A major chunk of the new units in H1 2018 compared to H1 2017. In performing markets in the city, which
10000 Launches Sales Wt. Avg. Price (RHS) 30000
launched in H1 2018 have been in the fact, sales in H1 2018 increased by 2% attests the homebuyers’ affinity
29,816
29,816
29,816
29,816
affordable housing segment. 71% of over H1 2017. Prospective homebuyers towards affordable houses. This micro
the units launched in the city were who were in a wait-and-watch mode market has a low QTS of 6.5 and its
priced below `5 mn. Further, close to have moved in and this, to a great age of inventory is 9.6. Affordable
29,684
40% of the new launches in the city extent, had managed to push up sales pricing coupled with easy access to
9000
were priced below `2.5 mn. The major marginally in H1 2018. major employment hubs and integrated
reason for the bulk of new launches, development has helped this micro
• Due to subdued market conditions,
in the affordable housing segment, in market in attracting homebuyers.
homebuyers were expecting a
the city, is the government’s initiative
reduction in prices. This however, has • In H1 2018, North Ahmedabad has the
29,386
to make the land available for such 8000 29500
not happened. In fact, prices have highest level of inventory. This however,
projects.
largely remained stable in H1 2018, and should not be much of a concern
• The government’s initiative is apparent compared to H1 2018 have moved up because its QTS is only 7.5 and the
in the General Development Control marginally. Most importantly, the dust age of inventory is only 9.0. This micro
Regulations, 2021, which came out around policy initiatives like the Real market along with East Ahmedabad
7000
in late 2014. In order to enhance the Estate (Development and Regulation) has emerged as a major hub for
supply of affordable housing, a new Act, 2016 (RERA) and the Goods and affordable housing projects and as
residential zone for affordable houses Services Tax (GST) has settled, which already indicated earlier is a favourite
(Residential Affordable Housing Zone) has emboldened homebuyers to go among homebuyers.
was identified within a one-km-wide head and arrive at the “BUY” decision. 6000 29000
• Like North Ahmedabad, the western
stretch on the outer side of SP Ring
• The affinity of homebuyers towards part of the city too has a high level of
Road covering 76 sq km of area.
affordable housing projects is very unsold inventory but in the recent past
This overlay zone shall be applicable
No. of Units
evident in Ahmedabad. Markets of this micro market has witnessed a lot
only for development of affordable
East and North Ahmedabad, which are of traction. It is a preferred location for
`/ sq m
housing with unit sizes up to 80 sq m. 5000
largely considered hubs for affordable people working in GIDC Sanand and
Apart from this, the area cleared by
housing projects, witnessed close to companies located along SG Highway.
38 mill closures in Ahmedabad will
56% of the sales in H1 2018.
28,376
years has been a favourite among
launches in the city were homebuyers, especially from those
with white-collar jobs. Of the total
priced below ` 2.5 mn. sales in the city, the share of West 3000
Ahmedabad in H1 2018 was 28%,
The major reason for the which is the same as in H1 2017.
29%
rate on home loans are still low.
land available for such • The low level of new launches and
steady sales has had a bearing on the
projects. quarters to sell (QTS) and the existing
0
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
27500
18 19
KHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
RESEARCH INDIA REAL ESTATE
LILAPUR
ZUNDAL KARAI
LAPKAMAN
TRAGAD
LIMBADIA
AMIYAPUR
SUGHAD
RESIDENTIAL
MEDRA
CHANDKHEDA
KOTARPUR
SANTEJA
BHAT
GOTA 250 ENASAN
-74% Launches (housing units) Sales (housing units) % Change (YOY)
GIDC NARODA
H1 2018
MEGHANI
NARANPURA
NAGAR
EAST
MEMNAGAR KRISHNANAGAR
THALTEJ DUBESHWAR
795 NIKOL
KATHWADA Markets of East and
870%
NAVRANGPUR
H1 2018
0 North Ahmedabad, which
2,231 -100%
BOPAL
BODAKDEV 3%
H1 2018
BAPUNAGAR
are largely considered
SHAHPUR 478
WEST -17%
ODHAV hubs for affordable
BHUVALDI
KUBADTHAL
02%
INDUSTRIAL
housing projects,
GIDC ESTATE
SPRING VALLEY CENTRAL INDUSTRIAL
AREA ODHAV
KHADIA
NIYOJAN NAGAR
MAHADEV
0
-100%
H1 2018 RAMOL
SARKHEJ GAM 857 ISANPUR MEMADPUR
24%
CHALODA BHAVDA
GIDC BAKROL BURNI
SINGARVA
VATVA
SOUTH GERATNAGAR
SANATHAL VATVA
NAROLGAM
CENTRAL Paldi, Vasna, Navrangpura, Maninagar, Dudheshwar, Ambawadi
VINZOL UNDREL
DHAMATVANA
VANZAR
EAST Naroda, Vastral, Nikol, Kathwada Road, Odhav
ASLALI
20 21
GAMDI
KHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
RESEARCH INDIA REAL ESTATE
LILAPUR
ZUNDAL KARAI
LAPKAMAN
TRAGAD
LIMBADIA
AMIYAPUR
SUGHAD
RESIDENTIAL
MEDRA
CHANDKHEDA
KOTARPUR
SANTEJA
BHAT
GOTA ENASAN
6.7 Unsold inventory (YoY growth) QTS (in quarters) Age of inventory (in quarters)
5,834 GIDC NARODA
(-41%)
9.0 NOBLE NAGAR
CHANDLODIA SABARMATI
HANSOL BILASIYA
VAHELAL
NORTH
VIJAY NAGAR 4,828 6.5
CHANAKYAPURI
(-39%)
NAVA NARODA 9.6
SOLA VILLAGE
MEGHANI
NARANPURA
NAGAR
EAST
MEMNAGAR KRISHNANAGAR
THALTEJ DUBESHWAR
KATHWADA
5,030 7.6 NIKOL
NAVRANGPUR
(-47%)
11.6 1,408 7.5
BODAKDEV
(-37%)
BOPAL
7.6 BAPUNAGAR
37%
SHAHPUR
KUBADTHAL
WEST ODHAV BHUVALDI
INDUSTRIAL
GIDC ESTATE
SPRING VALLEY CENTRAL INDUSTRIAL
AREA ODHAV
KHADIA
NIYOJAN NAGAR
SHERKOTDA
Drop in unsold inventory in H1 2018
KANBHA
BAGODARA
compared to H1 2017
HELA
KUJAD
VASNA
VEJALPUR-2 AMRAIWADI
MAHADEV
3,018 7.9
RAMOL
SARKHEJ GAM (35%)
11.5
ISANPUR MEMADPUR
CHALODA
SINGARVA
GIDC BAKROL BURNI The western part of the
BHAVDA
VATVA
SOUTH
city too has a high level
GERATNAGAR
SANATHAL VATVA
PIPLAJ
of unsold inventory
but in the recent past
NAROLGAM
VINZOL UNDREL
VANCH
has witnessed a lot of
LAXMIPUR HATHIJAN
traction.
VISALPUR BADODRA
ASLALI
22 23
GAMDI
KHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
RESEARCH INDIA REAL ESTATE
LILAPUR
ZUNDAL KARAI
LAPKAMAN
MOTERA
TRAGAD
36,598-38,697 LIMBADIA
AMIYAPUR
(3,400-3,595)
[0%] [0%]
SUGHAD
RESIDENTIAL PRICING
MEDRA
CHANDKHEDA
KOTARPUR
H1 2018
NIGAM NAGAR RAIPUR
RAKANPUR
OGNAJ
RANASAN
SANTEJA
CHANDKEDA
GOTA
28,525-30,247 BHAT
ENASAN
(2,650-2,810) Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft)
GIDC NARODA
[1%] [0%]
NOBLE NAGAR 12 month change (YOY) 6 month change (YOY)
CHANDLODIA SABARMATI
HANSOL BILASIYA
VAHELAL
NORTH
VIJAY NAGAR NIKOL
CHANAKYAPURI
21,528-23,304
NAVA NARODA (2,000-2,165)
SOLA VILLAGE
[0%] [0%]
MEGHANI
NARANPURA
NAVRANGPURA NAGAR
EAST
KRISHNANAGAR
MEMNAGAR 57,049-59,923
(5300-5567)
THALTEJ
[0%] [0%] DUBESHWAR
KATHWADA
NIKOL
BOPAL NAVRANGPUR
34,445-36,544
(3,200-3,395)
BODAKDEV
[1%] 1%] AMBAVADI VASTRAL
BOPAL 61,355-61,969 BAPUNAGAR
21,528-22,981
SHAHPUR
(5700-5850) (2,000-2,135) KUBADTHAL
WEST [1%] [0%] ODHAV BHUVALDI
[1%]INDUSTRIAL
[0%]
PRAHLAD NAGAR GIDC ESTATE
SPRING VALLEY 58,987-60,171 CENTRAL INDUSTRIAL
AREA ODHAV
KHADIA
(5,480-5,590)
NIYOJAN NAGAR
[1%] [1%]
SHERKOTDA KANBHA
BAGODARA
HELA
KUJAD
VASNA
VEJALPUR-2 AMRAIWADI
MAHADEV
ASLALI CIRCLE
13,778-14,574
(1,280-1,354) RAMOL
SARKHEJ GAM [0%] [0%]
ISANPUR MEMADPUR
CHALODA BHAVDA
GIDC BAKROL BURNI
SINGARVA
VATVA
SOUTH GERATNAGAR
SANATHAL VATVA
VATVA
Due to subdued market
PIPLAJ
15,608-17,018
(1,450-1,581) conditions, homebuyers
NAROLGAM
[1%] [2%]
VINZOL were expecting a
UNDREL
DHAMATVANA
VANZAR
reduction in prices.
VANCH
LAXMIPUR HATHIJAN
This has however, not
happened.
VISALPUR BADODRA
ASLALI
24 25
GAMDI
RESEARCH INDIA REAL ESTATE
3.0
2.5
mn sq m
2.0
1.5
1.0
59%
Drop in transactions in H1 2018
0.5
0.0
H1 2015 H2 2015 H1 2016
Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
H2 2016 H1 2017 H2 2017 H1 2018
59%
Drop in new completions in H1
compared to H1 2017 2018 compared to H1 2017
30%
24.6%
25%
23.7%
AHMEDABAD MARKET SNAPSHOT
22.1%
20.1%
19.6%
20%
PARAMETER H1 2018 CHANGE YOY
15%
New completions mn sq m (mn sq ft) 0.08(0.9) -59%
10%
The Ahmedabad office Transactions mn sq m (mn sq ft) 0.04(0.4) -59%
5%
market witnessed office Weighted average rental in 452 (42) 6%
`/sq m/month (`/sq ft/month)
space transaction of 0%
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 Major part of the new
Stock mn sq m (mn sq ft) 1.8 (19.4) 9%
0.04 mn sq m (0.47 mn Source: Knight Frank Research
supply that got added to
Vacancy (%) 24.63
sq ft) in H1 2018, which • The steep fall in the amount of office
space transacted in H1 2018 can
compared to 0.2 mn sq m (2.2 mn sq ft)
in H1 2017. During H1 2018, new office
the stock came in CBD
Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
is 59% lower than the Source: Knight Frank Research
be attributed to the fact, that there completions were completed in only 12 West along SG Highway,
were no large transactions. The projects, largely in the central business
space transacted in H1 • The Ahmedabad office market witnessed office space transaction of 0.04 mn sq m largest transaction was that of Claris district (CBD) and CBD West. Corporate Road, off CG
(0.47 mn sq ft) in H1 2018, which is 59% lower than the space transacted in H1 2017. Lifesciences, which took up 0.01 mn
2017. While it is indeed While it is indeed a substantial fall in office space transaction, it needs to be looked at sq m (0.1 mn sq ft) of office space.
• Major part of the new supply that got
added to the stock came in CBD West
Road, Drive In Road and
with a pinch of salt. The next largest transaction to happen
a substantial fall in office in H1 2018 was that of Home Credit,
along SG Highway, Corporate Road, off Science City Road. Close
• H1 2017 witnessed a new record, in the amount of office space transacted in CG Road, Drive In Road and Science
which took up 0.006 mn sq m (0.065
space transaction, it needs Ahmedabad. For the first time office space transaction, in the city, touched 0.11 mn sq
mn sq ft) of space.
City Road. Close to 86% of the new to 86% of the new supply
m (1.14 mn sq ft). When compared to H1 2016, the fall in transacted office space in H1 supply came up along these locations.
to be looked at with 2018 is 37%. • New completions on the other hand The balance 14% came up at Ellis came up along these
witnessed a dip of 59% in H1 2018 Bridge.
a pinch of salt. • This is a worrying factor because office space transaction in the second half of the year
compared to H1 2017. During H1 locations.
typically falls compared to the first half. This has been the trend since 2016. If this same
2018, only 0.08 mn sq m (0.9 mn sq
trend continues in 2018, then it certainly is a cause of worry.
ft) of office space entered the market
26 27
RESEARCH INDIA REAL ESTATE
9%
Ahmedabad. The other micro market
H1 2017.
that could be a star of the future is
• Unlike other real estate markets, like Sindhu Bhavan Road. Even though
Bengaluru and Hyderabad, the office this micro market witnessed only
market in Ahmedabad is not driven one large transaction, its share in the H1 2018
Increase in office stock in H1 2018 by the IT/ITeS sector. The Banking, total transacted space stood at 22%.
compared to H1 2017 Financial services and Insurance (BFSI) This area is fast becoming one of the
sector had been the major driver for most preferred locations for occupiers
office space in the city till H2 2017. This and residential developments, which
has however, changed in H1 2018. The certainly augurs well for this micro
major driver for office space in the city market.
in H1 2018 is the Other Services sector.
• Even though the office market in
Its share in the total transacted office H1 H1
Ahmedabad is in its infancy, among Industry
space, in the city, has increased from 2017 2018
the early signs of this market steadily
19% in H1 2017 to 43% in H1 2018.
The interesting part is that co-working
growing is that rentals are firming up BFSI 48% 24%
both in CBD West and the peripheral
space, which is making its presence
felt in more mature markets, also made
business district (PBD). Lack of quality IT/ITES 15% 10%
office space is creating an upward
its entry in Ahmedabad, in H1 2018.
pressure on rentals in the city. Manufacturing 18% 23%
While there is only one transaction
Unlike other real estate for co-working space in the city, the • Though the office market in the city is
Other Services 19% 43%
markets, like Bengaluru important point is that a beginning has considered to be in its nascent stage,
been made. there are a couple of transactions Note: BFSI includes BFSI support services
28 29
KHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
RESEARCH INDIA REAL ESTATE
LILAPUR
ZUNDAL KARAI
SUGHAD
OFFICE
MEDRA
CHANDKHEDA
PBD KOTARPUR
TRANSACTIONS H1 2018
NIGAM NAGAR RAIPUR
RAKANPUR
OGNAJ
RANASAN
SANTEJA
BHAT
GOTA ENASAN
Transactions mn sq m (mn sq ft) YoY change
GIDC NARODA
NOBLE NAGAR
CHANDLODIA SABARMATI
HANSOL BILASIYA
VAHELAL
VIJAY NAGAR
CHANAKYAPURI
NAVA NARODA
SOLA VILLAGE
MEGHANI
NARANPURA
NAGAR
MEMNAGAR KRISHNANAGAR
THALTEJ DUBESHWAR
32%
KATHWADA
(0.0042)
NAVRANGPUR
NIKOL
100% -57%
BODAKDEV
BOPAL BAPUNAGAR
SHAHPUR
KUBADTHAL Within CBD West, the share of office
CBD CBD WEST ODHAV BHUVALDI
space transacted along SG Highway
INDUSTRIAL
GIDC ESTATE
SPRING VALLEY INDUSTRIAL
AREA ODHAV
KHADIA
NIYOJAN NAGAR
SHERKOTDA KANBHA
BAGODARA
HELA
KUJAD
VASNA
VEJALPUR-2 AMRAIWADI
MAHADEV
CHALODA
space within the city.
BHAVDA
GIDC BAKROL BURNI
SINGARVA
SANATHAL
VATVA
GERATNAGAR Of the total transacted
VATVA
VANCH
one of the most preferred
LAXMIPUR HATHIJAN
business districts
in the city.
VISALPUR BADODRA
HIRAPUR
ASLALI
30 31
GAMDI
KHORAJ AMBAPUR
DANTALI
VALAD
KHODIYAR
RESEARCH INDIA REAL ESTATE
LILAPUR
ZUNDAL KARAI
LAPKAMAN
TRAGAD
431-484 5% LIMBADIA
AMIYAPUR
(40–45)
0% SUGHAD
OFFICE RENTAL
MEDRA
CHANDKHEDA
PBD KOTARPUR
H1 2018
NIGAM NAGAR RAIPUR
RAKANPUR
OGNAJ
RANASAN
SANTEJA
BHAT
GOTA ENASAN Rental value range in H1 2018 in `/sq m/month (`/sq ft/month) 12 month change 6 month change
GIDC NARODA
NOBLE NAGAR
CHANDLODIA SABARMATI
HANSOL BILASIYA
VAHELAL
VIJAY NAGAR
CHANAKYAPURI
NAVA NARODA
SOLA VILLAGE
MEGHANI
NARANPURA
NAGAR
MEMNAGAR KRISHNANAGAR
THALTEJ DUBESHWAR
06%
KATHWADA
NIKOL
431-538 5%
377-484
NAVRANGPUR
0%
(40–50)
(35–45) 3%
BODAKDEV 0%
BOPAL BAPUNAGAR
SHAHPUR Increase rentals in H1 2018
KUBADTHAL
compared to H1 2017
CBD CBD WEST ODHAV BHUVALDI
INDUSTRIAL
GIDC ESTATE
SPRING VALLEY INDUSTRIAL
AREA ODHAV
KHADIA
NIYOJAN NAGAR
SHERKOTDA KANBHA
BAGODARA
HELA
KUJAD
VASNA
VEJALPUR-2 AMRAIWADI
MAHADEV
RAMOL
SARKHEJ GAM
ISANPUR MEMADPUR
Even though the office
CHALODA
GIDC BAKROL BURNI
market in Ahmedabad is
BHAVDA
SINGARVA
VATVA
SANATHAL VATVA
GERATNAGAR
in its infancy, among the
PIPLAJ early signs of this market
NAROLGAM
steadily growing is that
VINZOL UNDREL
VANZAR
DHAMATVANA
rentals are firming up
VANCH both in CBD West and the
LAXMIPUR HATHIJAN
peripheral business district
(PBD).
VISALPUR BADODRA
HIRAPUR
ASLALI
32 33
GAMDI
RESEARCH INDIA REAL ESTATE
07%
BENGALURU Drop in Sales in H1 2018, from the
levels during H2 2015
• With residential launches and sales recover from its previous low but also
both having bottomed out in H2 witnessed a 22% year-on-year (YoY)
Post the implementation 2017, Bengaluru’s residential market growth with nearly 25,802 units sold.
of the Karnataka Real witnessed a remarkable comeback in Comparing the healthy sales volume
H1 2018 on both parameters. Post the in H1 2018 with the same in H1 2016,
Estate (Regulation and implementation of the Karnataka Real presents a 2% sales drop. Though
Development) Rules, 2017 Estate (Regulation and Development) not a positive trend, during this period
Rules, 2017 in July 2017, the operating Bengaluru’s residential segment
in July 2017, the operating model of residential real estate traversed through sequential periods
model of residential development is fast undergoing a of declining sales volume in the light of
transformation with visible signs of market slowdown followed by policy
real estate development consolidation amongst developers changes intermittently and can be seen
is fast undergoing a and development management recovering in 2018.
gaining popularity. Due to the Real
transformation with visible Estate (Regulation and Development)
RESIDENTIAL MARKET
13%
signs of consolidation Act, 2016 (RERA) enactment, the
opportunities available for dispute
amongst developers and resolution has brought the fence sitters
development management back who are once again instilling trust
in Grade A developers.
Year-on-Year drop in unsold gaining popularity.
inventory in H1 2018
• H1 2018 can aptly be regarded as
the period of sales rebound, as
not only did the residential market
34 35
RESEARCH INDIA REAL ESTATE
• Pent-up demand from end-users for • During H1 2018, a marketing blitzkrieg Road, Sarjapur Road and Attibele.
quality projects has translated into has been unleashed on Bengaluru’s
• The implementation of the nationwide BENGALURU MARKET ACTIVITY
heightened sales volume in selected residential segment with developers
scheme of PMAY and according
projects on Sarjapur Road, Kanakpura competing aggressively to highlight
infrastructure status to the affordable
Road, Thanisandra, Kannur and RERA compliancy, availability of
sector has attracted a lot of private
Devanahalli. With the right mix of occupation certificate (OC), PMAY 30,000 Launches Sales Wt. Avg. Price (RHS) 52,500
equity (PE) funding for this sector,
52,205
developer credibility and affordability, eligibility and ready-to-move-in
which is expected to continue growing.
units in these locations have witnessed projects to gain a larger market share,
Of the total new launches in Bengaluru
better sales traction in H1 2018. Of the especially of the ` 40–75 lakhs pricing
52,000
in H1 2018, 60% catered to the ` 25–50
total sales volume in H1 2018, South segment.
lakh bracket.
Bengaluru accounted for 48% of the 27,000
• Many have upped the ante by throwing
whole pie, followed by North Bengaluru • Developers are in no hurry to reduce 52,000
in waiver of parking charges, clubhouse
51,721
at 20%. the base selling prices, as affordable
fees, infrastructure charges and
and RERA registered projects are
• The demand-side intervention GST. Free wardrobes, kitchen, vanity,
yielding good end-user response.
facilitated by the government’s multiple zero maintenance costs, assured 24,000
51,451
Aggressive marketing strategies and
relaxations for projects under Pradhan rentals and No Pre-EMI schemes are
residential projects nearing completion
Mantri Awas Yojana (PMAY), such as in vogue and are being used to lure
are helping the developers win the 51,500
interest rate subsidies and second homebuyers. Innovative marketing
confidence of end-users. In the light
time increase of the extent of carpet strategies such as home exchange
of improving market health, weighted
area to 160 square metres for MIG – I plans, homefests showcasing OC 21,000
average residential prices remained
and 200 square metres for MIG – II, received projects and price discovery
stagnant with only 2% YoY marginal dip
has enabled more MIG end-users methods, which were earlier unheard
50,881
coming to fore in H1 2018.
to qualify for interest rate subsidy of, have been successful in winning the
51,000
benefits. Simultaneously, the dust buyers’ trust in a recovering market. • Though sales have picked up
has settled on the aftermath of RERA momentum and new project launches 18,000
• The buoyancy in sales volume coupled
implementation giving a fillip to sales have also commenced, a growing
with RERA compliance processes
of RERA registered projects, as all concern amongst Non-Banking
largely being streamlined at the
No. of Units
micro markets reported sales growth Financial Companies (NBFCs) cannot
developers’ end has encouraged many
solidifying in H1 2018. As a result, the be ignored as several developers’
developers to foray afresh in the market 15,000 50,500
unsold inventory reduced by 13% YoY loans are in distress and possibility
and bring to life plans of launching
to 98,866 units during this period. of defaults and pile up of incremental
projects, which were forever simmering
costs for refinancing can mar the
`/ sq m
on the backburner. For the first time
prospects for many residential players.
in the past 18 months, new residential
The sector is not out of the woods yet
12,000
The implementation of launches strengthened as 15,556
units were launched in H1 2018. This
as the financial health of developers is
50,000
50,052
vital for execution and delivery.
the nationwide scheme represents a 11% YoY growth.
49,396
buyers, it is the under-construction 6,000
projects that are struggling to attract
this sector, which is buyers impacting the overall city’s QTS
expected to continue leading it to rise continuously.
49,000
growing. Of the total new • The western micro market, which has
3,000
historically witnessed fewer launches,
launches in Bengaluru in emerged a surprise frontrunner noting
36%
H1 2018, 60% catered a 142% YoY growth in launches as
few projects with large number of
to the ` 25–50 lakh units were launched. New launches 0 48,500
bracket also increased by 30% YoY in South H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Bengaluru with many new projects
Source: Knight Frank Research
Drop in launches in H1 2018 from
being concentrated on Kanakpura
the levels during H1 2016
36 37
RESEARCH BEML LAYOUT INDIA REAL ESTATE
RK HEGDE
1,858 NAGAR
-53%
H1 2018
5,238
SAHAKARA
NAGAR
27%
RESIDENTIAL
NORTH
ASHWATH
NAGAR
HEBBAL
Launches (housing units) Sales (housing units) % Change (YOY)
YESHWANTHPUR
KALYAN
NAGAR BATTARAHALLI
JAYBHAMNAGAR
SHIVA NAGAR
RAGAVENDRA BANASWADI
NAGAR
MALLESWARAM
4,762
142% MAHADEVAPURA
2,890 CV RAMAN
volume in H1 2018,
NAGAR
58%
0 891 WHITEFIELD
WEST 0%
H1 2018
-54% South Bengaluru
VIJAYANAGAR NEW H1 2018
77
THIPPASANDRA
30%
60%
5,135 accounted for 48% of
1%
ADUGODI
BANASHANKARI
KADUBEESANAHALLI
KORAMANGALA
KENGERI
SATELLITE TOWN
JAYANAGAR
ITTAMADU
BTM
LAYOUT
J.P.
NAGAR HSR
LAYOUT
DODDAKANNELLI
KENGERI
CENTRAL MG Road, Lavelle Road, Langford Town, Vittal Mallya Road, Richmond Road
8,045 HONGASANDRA
30%
H1 2018 EAST Whitefield, Old Airport Road, Old Madras Road, KR Puram, Marathahalli
12,462
23% WEST Malleswaram, Rajajinagar, Yeshwantpur, Tumkur Road, Vijayanagar
Koramangala, Sarjapur Road, Jayanagar, JP Nagar, HSR Layout, Kanakpura Road, Bannerghatta
SOUTH
Road
38 39
RESEARCH BEML LAYOUT INDIA REAL ESTATE
RK HEGDE
NAGAR
21,420 11.6
(-16%) SAHAKARA
NAGAR
13.5
RESIDENTIAL
NORTH
ASHWATH
NAGAR
HEBBAL
Unsold inventory (YoY growth) QTS (in quarters) Age of inventory (in quarters)
YESHWANTHPUR
KALYAN
NAGAR BATTARAHALLI
JAYBHAMNAGAR
SHIVA NAGAR
RAGAVENDRA BANASWADI
NAGAR
MALLESWARAM
15%
11.0 CV RAMAN
NAGAR
WHITEFIELD
WEST
300 8.6 8.7
VIJAYANAGAR NEW
21,231
(23%) THIPPASANDRA
(-12%)
14.4 12.9 Annual decline in unsold units in
VARTHUR KODI South Bengaluru during H1 2018
ADUGODI
BANASHANKARI
KADUBEESANAHALLI
KORAMANGALA
KENGERI
SATELLITE TOWN
ITTAMADU
JAYANAGAR Though projects nearing
BTM
LAYOUT
completion and under
J.P.
NAGAR HSR
LAYOUT
RERA continue to lure
KUMARASWAMY
LAYOUT buyers, it is the under-
DODDAKANNELLI
construction projects that
KENGERI
HONGASANDRA
46,109 11.1
(-15%)
are struggling to attract
12.4
buyers impacting the
KUMARASWAMY
SOUTH overall city’s QTS leading
LAYOUT
it to rise continuously.
40 41
YELAHANKA
43,000–70,000
RESEARCH (4,000–6,500) BEML LAYOUT INDIA REAL ESTATE
[-13%] [-9%]
RK HEGDE
NAGAR
TUMKUR ROAD
32,300–64,600 SAHAKARA
NAGAR THANISANDRA
RESIDENTIAL PRICING
(3,000–6,000) 32,300–86,100
[-1%] [-5%] (3,000–8,000)
[-5%] [0%]
NORTH
H1 2018
JALAHALLI
ASHWATH
HEBBAL NAGAR
53,800–107,600 HENNUR
YESHWANTPUR (5,000–10,000) 37,700–80,700
62,400–113,000 [1%] [3%]HEBBAL (3,500–7,500))
[-8%] [-3%] Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft)
(5,800–10,500)
[-6%] [-1%]
YESHWANTHPUR
KALYAN
12 month change (YOY) 6 month change (YOY)
MALLESWARAM NAGAR BATTARAHALLI
JAYBHAMNAGAR
86,100–150,700
(8,000–14,000)
K.R. PURAM SHIVA NAGAR
[-1%] [-2%]
43,000–70,000
WEST
(4,000–6,500)
RAGAVENDRA BANASWADI [-2%] [0%]
NAGAR
WHITEFIELD
43,000–75,300
MALLESWARAM
(4,000–7,000)
RAJAJI NGAR [-15%] [-8%]
75,300–161,500
(7,000–15,000)
[-2%] [-3%]RAJAJINAGAR
BASAVESHWARA
MAHADEVAPURA
NAGAR
15%
VIJAYANAGAR NEW
THIPPASANDRA
MARATHAHALLI
43,000–75,300 VARTHUR KODI
(4,000–7,000)
CENTRAL [-5%] [-8%]
MARATHAHALLI
CHAMRAJPET VILLAGE
KORAMANGALA
KENGERI
SATELLITE TOWN
JAYANAGAR
ITTAMADU
BTM
LAYOUT
SARJAPUR ROAD
43,000–80,700
(4,000–7,500)
J.P. [-4%] [-4%]
Aggressive marketing
NAGAR HSR
LAYOUT
KUMARASWAMY
LAYOUT
KENGERI DODDAKANNELLI
strategies and
HONGASANDRA residential projects
nearing completion are
helping the developers
SOUTH
KUMARASWAMY
LAYOUT
win the confidence of
end-users.
All maps are for representational purpose not to scale KANAKPURA ROAD BANNERGHATTA ROAD ELECTRONICS CITY
43,000–75,300 32,300–75,300 37,700–59,200
(4,000–7,000) (3,000–7,000) (3,500–5,500)
42 [-14%] [-10%] 43
[7%] [9%] [-15%] [-13%]
RESEARCH INDIA REAL ESTATE
0.5
0.4
mn sq m
0.3
0.2
33%
0.1
0.0
BENGALURU MARKET SNAPSHOT H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Bengaluru’s share in H1 2018 Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
leasing across top seven cities
PARAMETER H1 2018 CHANGE YOY
Source: Knight Frank Research
New completions mn sq m (mn sq ft) 0.34 (3.7) 0% • The central business district and Off has dropped to 38% of the total
central locations (CBD and Off CBD,) leasing volume in H1 2018. While the
Transactions mn sq m (mn sq ft) 0.61 (6.5) 13% garnered the second highest share challenges posed by the global political
in Bengaluru’s leasing with a 16% environment still loom large for Indian
Weighted average rental in 754.55 (70.1) 17%
`/sq m/month (`/sq ft/month)
share, with co-working operators IT companies, new technological
Co-working operators
and IT/ITeS comprising majority of innovations in the form of big data
44 45
RESEARCH INDIA REAL ESTATE
10%
8%
8%
8%
7%
6%
6%
H1 2017
4%
4%
3.5%
3%
2%
3.5%
0%
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
H1 2018
Vacancy in H1 2018
of the total leasing volume of the co- • Infusion of limited supply in the past
working category respectively during 12 months has fostered rental growth
this period. across many micro markets leading
to a 17% YoY upswing in weighted
• In the backdrop of transformation of
average rentals at the city level in H1
India’s Banking, Financial services and
2018. Acute shortage of quality spaces
Insurance (BFSI) sector, its share in H1 H1
in CBD & Off CBD and ORR led to a
Unlike H2 2017, when Bengaluru office space consumption
17% and 15% YoY rental growth in both
Industry
2017 2018
jumped from 9% of total leasing in H1
these micro markets, respectively.
the average deal size in 2017 to 13% in H1 2018. As technology BFSI 9% 13%
penetration in the BFSI sector is • A robust pre-commitments pipeline,
Bengaluru had shrunk by increasing, newer companies and job strong foothold of IT/ITeS giants, IT/ITES 57% 38%
roles are being created to prepare new emerging sectors’ rapid office
37% YoY, H1 2018 noted a the sector for a technological shift in space consumption, heightened Manufacturing 8% 8%
the coming years, which has started interest in the city’s CBD will keep the
relatively lesser 12% YoY reflecting in the BFSI sector’s office occupier demand strongly glued to
BUSINESS DISTRICT CLASSIFICATION Other Services 26% 41%
decline in average deal space leasing in Bengaluru already. Bengaluru. Developers should focus
on constructing large tracts of new BUSINESS DISTRICT MICROMARKETS
Note: BFSI includes BFSI support services
46 47
RESEARCH BEML LAYOUT INDIA REAL ESTATE
RK HEGDE
73% SAHAKARA
NAGAR
OFFICE
TRANSACTIONS H1 2018
PBD NORTH
JALAHALLI
ASHWATH
NAGAR
HEBBAL
Transactions mn sq m (mn sq ft) YoY change
YESHWANTHPUR
KALYAN
NAGAR BATTARAHALLI
JAYBHAMNAGAR
SHIVA NAGAR
RAGAVENDRA BANASWADI
NAGAR
0.09 (0.89)
MALLESWARAM 0.07 (0.65)
-32% 4%
RAJAJINAGAR MAHADEVAPURA
BASAVESHWARA
NAGAR
SBD CV RAMAN
PBD EAST
NAGAR
VARTHUR KODI
0.27 (2.73)
10%
ADUGODI
Buoyed by demand from
BANASHANKARI
KADUBEESANAHALLI
IT/ITeS and co-working
ORR
operators, Outer Ring Road
KORAMANGALA
KENGERI
(ORR) as a micro market
continued to outperform the
SATELLITE TOWN
JAYANAGAR
ITTAMADU
BTM
J.P.
NAGAR HSR
LAYOUT
of Bengaluru’s total leasing
KUMARASWAMY
LAYOUT
volume. It is interesting to
KENGERI DODDAKANNELLI note that the average deal
HONGASANDRA size for all transactions
concluded in ORR alone
admeasures nearly 8,732 sq
m (94,000 sq ft), indicative
KUMARASWAMY 0.06 (0.63)
LAYOUT
of large office formats
68% dominating occupier interest
in this belt.
All maps are for representational purpose not to scale
PBD SOUTH
48 49
RESEARCH BEML LAYOUT INDIA REAL ESTATE
RK HEGDE
NAGAR
SAHAKARA
NAGAR
OFFICE RENTAL
H1 2018
JALAHALLI
ASHWATH
NAGAR
HEBBAL Rental value range in H1 2018 in `/sq m/month (`/sq ft/month) 12 month change 6 month change
YESHWANTHPUR
KALYAN
NAGAR BATTARAHALLI
JAYBHAMNAGAR
SHIVA NAGAR
RAGAVENDRA BANASWADI
NAGAR
MALLESWARAM
3% 430-590 17%
650-1,020
(40–55)
(60–95)
7% 0%
RAJAJINAGAR MAHADEVAPURA
BASAVESHWARA
17%
NAGAR
SBD CV RAMAN
PBD EAST
NAGAR
WHITEFIELD
800-1,560 17%
(75–145) VIJAYANAGAR NEW
7% THIPPASANDRA
YoY increase in weighted average
rentals across the city.
VARTHUR KODI
700-970 15%
(65–90)
BANASHANKARI
ADUGODI
0% KADUBEESANAHALLI
Infusion of limited supply
in the past 12 months has
ORR KORAMANGALA fostered rental growth
KENGERI
SATELLITE TOWN
JAYANAGAR
across many micro
ITTAMADU
BTM
LAYOUT markets leading to a 17%
YoY upswing in weighted
J.P.
NAGAR HSR
LAYOUT average rentals at the city
level in H1 2018. Acute
KUMARASWAMY
LAYOUT
KENGERI DODDAKANNELLI
shortage of quality spaces
in CBD & Off CBD and
HONGASANDRA
50 51
RESEARCH INDIA REAL ESTATE
CHENNAI
• 2017 was a volatile year for the Chennai • The implementation of RERA and
real estate market with the first half the launch of buyer-friendly schemes
showing some promise of a recovery such as the Pradhan Mantri Awas
while the second half broke new lows Yojana in 2017 have not yet boosted,
in terms of sales and supply numbers. significantly. Factors such as the falling
The current year has begun on a prices and the current bleak investment
similar note with H1 2018 seeing the outlook for real estate, due to prevailing
highest number of units launched in a high prices and ticket sizes, have had
single period during the past 3 years a much greater impact on demand.
and the persistent drop in sales was The unstable employment scenario,
largely muted as well, compared to the especially in the IT sector, has also
preceding period. hurt sentiments and encouraged
The 6,520 units launched • This significant ramp up in supply and
the deferment of the homebuyer’s
purchase decision.
RESIDENTIAL MARKET
28%
in H1 2018 were the shoring up of demand is heartening
for the Chennai real estate market that
highest number of has been bogged down by the ongoing
slowdown in the country. Additionally,
launches in the past 3 its own issues ranging from political
decline in launches from H1 2011 uncertainty, building collapses (due to
years flouting development norms) and the
near catastrophic floods have beaten
down the market over the past 3 years.
52 53
RESEARCH INDIA REAL ESTATE
50,591
new low for the market.
• The Chennai residential market now
9000
• The larger supply at lower prices also effectively holds approximately 6
saw buyer interest increase during the quarters of inventory compared to
50500
period and stemmed the fall in sales the 7 quarters held previously, which
from 14% YoY during H2 2017 to just is indicative of an improving state of
50,179
3% YoY during the current period. the market. The age of this unsold 8000
inventory has also held steady over
• While both supply and sales for
the same period at approximately 14
50,213
the Chennai residential market saw
quarters as the older inventory that
increased activity, they still represent a
is closer to possession finds many 50000
77% and 44% drop, respectively, from
more buyers compared to the recently 7000
peak levels during H1 2011.
launched units.
• While the number of units launched
• Massive structural changes ranging
increased, developers continued to
from the demonetisation drive to the
49,470
focus on offloading existing inventories
GST Act and RERA have irrevocably 6000
during H1 2018 by re-launching old
altered the fabric of the market.
products at lower prices and smaller 49500
Homebuyer interest has been observed
configurations, wherever possible, to
to rise with falling prices and lower
No. of Units
entice the buyer by bringing down the
ticket sizes. The pace at which
ticket size. This has resulted in a 4%
`/ sq m
developers align themselves to the 5000
YoY reduction in the average asking
new regulatory norms and launch new
prices in the Chennai residential real
products in the right ticket sizes that
estate market and a further 10–15%
appeal to the homebuyer’s interests,
reduction on the negotiating table for 49000
will determine the trajectory of the
the aggressive buyer.
market going forward. 4000
• Casagrand was the most active
developer by far and accounted for
48,782
nearly a third of the units launched and
48,706
nearly all the 363 units launched in the
Central Chennai micro market, during 3000
48,567
48500
H1 2018.
The larger supply
• Further to the elevated sales and
at lower prices also supply numbers during the period,
many developers reported a 2000
stemmed the fall in progressive increase in enquiries
during the second quarter of the
sales from 14% YoY year. Home loan approvals as well, 48000
have been steady if not increasing,
during H2 2017 to just according to major retail banks in the 1000
54 55
Natham
Vazhuthalambedu
Jameelabad
Verkadu Acharapallam
lapuram Arasur
Kollanur
Kavaraipettai Karungali
Kattur
Perumbedu
Peruvayal
RESIDENTIAL
Sengarai
Arani
Uthukkottai Nelvoy Kalanji
Tir
Senganimedu
u pa
thi Ro
ad
SH-51 Kaniyambakkam
812
Thandalam
Katchur 488%
Goonipalayam Velakapuram Vadamadurai Thatchoor
H1 2018
492 Minjur
Mamandoor
Kannigaipair
Jaganathapuram
29%
Seemapuram
Launches (housing units) Sales (housing units) % Change (YOY)
Vengal
Thirukkandalam
Nambakkam Meyyur
Cholavaram
NORTH CHENNAI
Thirunilai Vallur
Guruvoyal
14
S H-1
Velliyur Nallur
Poondi
Redhills Vichoor
Melanur Koduvalli
Pandeswaram SH
-1
11
Pullarambakkam
Koyambakkam Morai
New Vellanur
Pattaraiperumbudur Ikkadu Pakkam
Kilambakkam
SH
11
-
TIRUVALLUR
363
Pattabiram 177%
Videiyur 1,979 H1 2018
Thiruvur 13%
Perumalpattu H1 2018
AVADI 578
-26%
1,990 Anna Nagar
Panambakkam
Koppur
10%
CENTRAL CHENNAI
The South and West
Senji
10%
Nayapakkam
Sengadu
Mangadu
SH-10
mangalam Somangalam 9
Amarambedu
Sogandi Vadamangalam
Pondur
Keeranallur
Pallur
Medavakkam
Selaiyur
Manimangalam
Araneri Vallam
3,369
r
Kunnam -16%
Vallakkottai
H1 2018
Vengambakkam
Madurapakkam
Salamangalam 5,525
dham -6%
Kandigai
Tenneri Sethupet
Mambakkam
Oragadam
Potheri
SOUTH CHENNAI
Vengadamangalam
Siruseri
MICRO-MARKET CLASSIFICATION
0
12
H-
Sirukundram
Edamachi Kavithandalam
kulam
CHENGALPATTU
Source: Knight Frank Research
Senneri
Meyyur
Pattipulam
All maps are for representational purpose not to scale
Pulipakkam Porunthavakkam Manampathy
Karunguzhipallam
Mamandur
56 Manamathy
57
Thandarai
MAHABALIPURAM
Natham
Vazhuthalambedu
Jameelabad
Verkadu Acharapallam
lapuram Arasur
Kollanur
Kavaraipettai Karungali
Kattur
Perumbedu
Peruvayal
RESIDENTIAL
Sengarai
Arani
Uthukkottai Nelvoy Kalanji
Tir
Senganimedu
u pa
thi Ro
ad
SH-51 Kaniyambakkam
Goonipalayam
Katchur
Velakapuram Vadamadurai Thatchoor 1,279 8.6
Mamandoor (-6%)
Kannigaipair
Jaganathapuram Minjur 6.8
Seemapuram
Unsold inventory (YoY growth) QTS (in quarters) Age of inventory (in quarters)
Vengal
Thirukkandalam
Nambakkam Meyyur
Cholavaram
NORTH CHENNAI
Thirunilai Vallur
Guruvoyal
14
S H-1
Velliyur Nallur
Poondi
Redhills Vichoor
Melanur Koduvalli
Pandeswaram SH
-1
11
Pullarambakkam
Koyambakkam Morai
New Vellanur
Pattaraiperumbudur Ikkadu Pakkam
Kilambakkam
SH
11
-
TIRUVALLUR
Pattabiram
1,201 3.4
Videiyur
Thiruvur
6,614 6.3 (-21%)
Perumalpattu AVADI 13.8
(-22%)
Panambakkam
15.4 Anna Nagar
level continues to
Illuppur
Narasingapuram
20%
Nayapakkam
Sengadu
Mangadu
drop despite growth
in launches as sales
Thandalam Adyar
Kallambedu Ulundai
Malayambakkam
SRIPERUMBUDUR
Pennalur Thirumudivakkam
outstrip supply during YoY drop in unsold inventory level
Pallavaram
during H1 2018
mangalam Somangalam
SH-10
9 H1 2018
Amarambedu
Sogandi Vadamangalam
Pondur
Keeranallur
Pallur
Medavakkam
Selaiyur
Manimangalam
Araneri Vallam
r
Kunnam
Vallakkottai 13,485 5.6
Vengambakkam
(-20%) Madurapakkam
dham
Salamangalam
14.9
Kandigai
Tenneri Sethupet
Kelambakkam Kovalam
valur Maraimalai
Thalimangalam Nagar Kannivakkam Thiruvidandhai
Velichi
Karambur
Singaperumal
Villiambakkam Koil
apuram Kalvoy
Ammapettai
Thaiyur
Pinayur
Thiruporur
Hanumanthapuram Nemmeli
Anjur
Sirukundram
Edamachi Kavithandalam
kulam
CHENGALPATTU
Senneri
Meyyur
Pattipulam
All maps are for representational purpose not to scale
Pulipakkam Porunthavakkam Manampathy
Karunguzhipallam
Mamandur
58 Manamathy
59
Thandarai
MAHABALIPURAM
Natham
Vazhuthalambedu
Jameelabad
Verkadu Acharapallam
lapuram Arasur
Kollanur
Kavaraipettai Karungali
Kattur
Perumbedu
Peruvayal
RESIDENTIAL PRICING
Sengarai
Arani
Uthukkottai Nelvoy Kalanji
Tir
Senganimedu
u pa
thi Ro
ad
SH-51 Kaniyambakkam
H1 2018
Pennalurpet Chinnambedu
Thandalam
Katchur
Goonipalayam Velakapuram Vadamadurai Thatchoor
Mamandoor
Kannigaipair KOLATHUR
Jaganathapuram Minjur
44,000–58,100 Seemapuram
(4,100–5,400) Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft) 12 month change (YOY) 6 month change (YOY)
Vengal
Thirukkandalam
Nambakkam Meyyur [-3%] [-2%] NORTH CHENNAI
Cholavaram Thirunilai Vallur
Guruvoyal
14
S H-1
Velliyur Nallur
Poondi PERAMBUR
Melanur Koduvalli Redhills Vichoor
61,400–70,000
Pandeswaram SH
(5,700–6,500)
-1
11 [-4%] [-3%]
Pullarambakkam
Koyambakkam Morai
New Vellanur
Pattaraiperumbudur Ikkadu Pakkam
Kilambakkam
SH
11
-
TIRUVALLUR
Pattabiram
ANNA NAGAR
Videiyur
110,800–125,000
Thiruvur KILPAUK
PORUR AVADI (10,200–11,600)
Perumalpattu
151,000–167,000
54,900–61,400 [-3%]
Nagar [-2%]
(14,000–15,500) Anna
Panambakkam (5,100–5,700) [-2%] [-1%]
Koppur [-4%] [-2%] CENTRAL CHENNAI
Senji Nemam
Koyambedu
WEST CHENNAI
Thirumazhisai
Erayamangalam
Illuppur
Nayapakkam
Narasingapuram
MOGAPPAIR
64,600–72,100
Buying interest was
Sengadu
(6,000–6,700)
Mangadu
SRIPERUMBUDUR
Pennalur Thirumudivakkam
Pallavaram
closer to completion and
4%
mangalam
Amarambedu
Somangalam
SH-10
9
significantly more so
Sogandi Vadamangalam
Keeranallur
Pondur
in the more affordably-
Pallur PERUMBAKKAM Medavakkam
Araneri Vallam
Manimangalam
43,000–48,400
(4,000–4,500)
Selaiyur priced properties priced
YoY decline in prices
[-5%] [-2%]
r
Kunnam
Vallakkottai
during H1 2018 between `2.5 mn
Vengambakkam
dham
Salamangalam
Madurapakkam
to `4 mn
Kandigai
Tenneri Sethupet
apuram Kalvoy
Ammapettai
Thaiyur
Pinayur
Thiruporur
Hanumanthapuram Nemmeli
Anjur
Sirukundram
Edamachi Kavithandalam
kulam
CHENGALPATTU
Senneri
Meyyur
Pattipulam
All maps are for representational purpose not to scale
Pulipakkam Porunthavakkam Manampathy
Karunguzhipallam
Mamandur
60 Manamathy
61
Thandarai
MAHABALIPURAM
RESEARCH INDIA REAL ESTATE
25%
22.5%
OFFICE MARKET
19.3%
20%
16.7%
12.4%
15%
11.0%
CHENNAI MARKET SNAPSHOT H1 2017
11.0%
10.1%
10%
PARAMETER H1 2018 CHANGE YOY
11%
0%
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Weighted average rental in 619 (57.5) 4.5%
Source: Knight Frank Research
`/sq m/month (`/sq ft/month)
• The IT/ITeS sector that has been the to more than half of the 0.04 mn sq m
Stock mn sq m (mn sq ft) 6.61 (71.1) - largest consumer of office space in (0.39 mn sq ft) space transacted by this H1 2018
Vacancy levels remain steady in H1
the city, is currently undergoing a sector.
2018 compared to H1 2017
Vacancy (%) 11% - slowdown in growth and the effects are
• The 2 suburban business districts
apparent in its consistently reducing
Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
(SBDs) accounted for 63% of the
share of the total transactions pie.
Source: Knight Frank Research transaction activity during H1 2018
• H1 2018 saw the IT/ITeS sector take as most of the stock that has come
• The Chennai office space market that has been reeling under an acute supply crunch up only 0.04 mn sq m (0.47 mn sq ft), online since H2 2017 has been in these
over the past 3 years finally saw some respite with 0.11 mn sq m (1.2 mn sq ft) coming which translates to 27% of the total business districts. This firmly reiterates H1 H1
Industry
online during H1 2018. space transacted during H1 2018, a the case for the SBDs being the most 2017 2018
significant and steady drop from the sought after office locations despite
• The fact that the city saw just 0.42 mn sq m (4.5 mn sq ft) of supply since H1 2015,
43% during H2 2016. their comparatively higher priced
BFSI 16% 23%
compared to the 1.4 mn sq m (14.6 mn sq ft) of transaction volume, had pushed down
supply.
vacancy levels from 22.5% in H1 2015 to 10.2% H2 2017. The 0.11 mn sq m (1.2 mn • However, the BFSI and Other Services IT/ITES 37% 27%
sq ft) delivered during H1 2018 are the highest in any half-year period since 2015 and Sector have consistently taken up an • The peripheral business district (PBD)
edged the vacancy curve up marginally to 11%. increasing amount of space over the OMR and Grand Southern Trunk Road Manufacturing 23% 17%
past 18 months and vastly increased (GST) business district that cornered
• The transaction volumes during H1 2018 were subdued during the period and fell
their share in total transactions during the largest share of the transacted Other Services 24% 34%
almost 9% year-on-year (YoY) compared to the healthy 10% growth in supply.
an analysis period, filling up the volume till H1 2017 by virtue of having Note: BFSI includes BFSI support services
vacuum left by the IT/ITeS sector, to an a substantially larger and lower priced
CHENNAI OFFICE MARKET ACTIVITY extent. stock of vacant office space, only
attracted 24% of the transacted volume
H1 2018 saw the IT/ • The Other Services Sector accounted
during H1 2018.
AVERAGE DEAL SIZE
0.40 for almost 0.06 mn sq m (0.6 mn sq AND NUMBER OF DEALS
New Completions Transactions
ITeS sector take up only ft) of the total office space transacted • The sustained decline in vacancy levels
0.35
0.04 mn sq m (0.47 mn
during H1 2018, thanks largely to the
consulting major Accenture’s massive
along with a steady interest by lessors
looking to consolidate or expand their
2,044 (22,004)
0.30 Average Deal Size in sq m (sq ft)
lease of 0.02 mn sq m (0.18 mn sq real estate footprint within the city,
sq ft), which translates 0.25 ft) lease in Gateway office parks at has kept rental growth strong at 4.5% H1 2017
Number of Deals
transacted during H1 0.15 • Notwithstanding the comparative
SBD locations such as Perungudi,
Guindy and Taramani continue to
2018, a significant and 0.10
scarcity of large format office spaces
required by the back offices of
witness above-average rental growth, 1,891 (20,355)
particularly as vacancy levels are still Average Deal Size in sq m (sq ft)
BFSI sector companies, the current
steady drop from the 0.05
analysis period saw its share increase
as low as 6% in the SBD and 11%
H1 2018
in the SBD OMR. Weighted average
43% during H2 2016 0.00
substantially due to three large leases
rentals now stand at `619/sq m/month 86
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 being taken up by D&B TransUnion,
(`57.5/sq ft/month) for the Chennai Number of Deals
Note- 1 square meter (sq m) = 10.764 square feet (sq ft) Barclays Bank and Citibank amounting
Source: Knight Frank Research office space market.
62 63
Natham
Vazhuthalambedu
Jameelabad
Verkadu Acharapallam
Arasur
Kollanur
Kavaraipettai Karungali
Kattur
Perumbedu
Peruvayal
OFFICE
Sengarai
Arani
Uthukkottai Nelvoy Kalanji
Tir
Senganimedu
u pa
thi Ro
ad
SH-51 Kaniyambakkam
TRANSACTIONS H1 2018
Chinnambedu
Thandalam
tchur
Velakapuram Vadamadurai Thatchoor
Mamandoor
Kannigaipair Minjur
Jaganathapuram
Seemapuram
Transactions mn sq m (mn sq ft) YoY change
Vengal
Thirukkandalam
Meyyur
Cholavaram Thirunilai Vallur
Guruvoyal
14
S H-1
Velliyur Nallur
oondi
Redhills Vichoor
Melanur Koduvalli
Pandeswaram SH
-1
11
Pullarambakkam
Koyambakkam Morai
New Vellanur
Ikkadu Pakkam
Kilambakkam
0.002 (0.02)
SH
11
-
ALLUR
0.02 (0.22)
Pattabiram
-83%
Thiruvur -26%
Perumalpattu AVADI
PBD – AMBATTUR
Anna Nagar
The Chennai office space
CBD AND OFF-CBD
market that has been
Koppur
Nemam
Koyambedu
0.06 (0.67)
Thirumazhisai
61%
Nayapakkam
Sengadu
Mangadu supply crunch over the
10%
Thandalam Adyar past 3 years finally saw
undai
Malayambakkam
SBD some respite with 0.11
Pennalur Thirumudivakkam
SRIPERUMBUDUR Pallavaram
Somangalam
SH-10
9
0.04 (0.42) mn sq m (1.2 mn sq ft)
Amarambedu YoY growth in office space
Vadamangalam
Pondur
-6% coming online during H1 supply during H1 2018
Pallur
Selaiyur
Medavakkam
2018
Manimangalam
Araneri Vallam
SBD - OMR
nnam
Vallakkottai
Vengambakkam
Madurapakkam
Salamangalam
Kandigai
Sethupet
Ezhichur
Kayarambedu
Nallambakkam Polacheri 0.04 (0.42)
Kelambakkam-33% Kovalam
Maraimalai
Thalimangalam Nagar Kannivakkam Thiruvidandhai
Velichi
Karambur
Singaperumal
Villiambakkam Koil
Kalvoy
PBD-OMR & GST
Ammapettai
Thaiyur
nayur
Thiruporur
Hanumanthapuram Nemmeli
Anjur
Sirukundram
hi Kavithandalam
CHENGALPATTU
Senneri
Meyyur
Pattipulam
All maps are for representational purpose not to scale
kkam Porunthavakkam Manampathy
Karunguzhipallam
Mamandur
64 Manamathy
65
Thandarai
MAHABALIPURAM
Natham
Vazhuthalambedu
Jameelabad
Verkadu Acharapallam
Arasur
Kollanur
Kavaraipettai Karungali
Kattur
Perumbedu
Peruvayal
OFFICE RENTAL
Sengarai
Arani
Uthukkottai Nelvoy Kalanji
Tir
Senganimedu
u pa
thi Ro
ad
SH-51 Kaniyambakkam
Chinnambedu
Thandalam
tchur
Thatchoor
Velakapuram Vadamadurai
Rental value range in H1 2018 in `/sq m/month (`/sq ft/month) 12 month change 6 month change
Mamandoor
Kannigaipair Minjur
Jaganathapuram
Seemapuram
Vengal
Thirukkandalam
Meyyur
Cholavaram Thirunilai Vallur
Guruvoyal
14
S H-1
Velliyur Nallur
oondi
Redhills Vichoor
Melanur Koduvalli
Pandeswaram SH
-1
11
Pullarambakkam
Koyambakkam Morai
New Vellanur
Ikkadu Pakkam
Kilambakkam
SH
11
The sustained decline
-
ALLUR
301–377
3%
Pattabiram
4%
Thiruvur
(28–35)
1% 700–1,023 in vacancy levels along
(65–95)
1%
with a steady interest
Perumalpattu AVADI
Anna Nagar
PBD – AMBATTUR
Koppur CBD AND OFF-CBD by lessors looking to
Nemam
Koyambedu
4.5%
galam
Illuppur
Thirumazhisai
consolidate or expand
Narasingapuram
538–818 5%
Sengadu
Nayapakkam
Mangadu (50–76) their real estate
3%
Thandalam Adyar
footprint within the city,
YoY increase in rental growth
has kept rental growth
undai
Malayambakkam
SBD
strong
Pennalur Thirumudivakkam
SRIPERUMBUDUR Pallavaram
SH-10
Amarambedu
Somangalam 9
560–969 6%
Vadamangalam
(52–90)
Pondur
4%
Pallur
Medavakkam
Selaiyur
Manimangalam
Araneri Vallam
SBD - OMR
nnam
Vallakkottai
Vengambakkam
Madurapakkam
Salamangalam
Kandigai
Sethupet
Kalvoy
PBD-OMR & GST
Ammapettai
Thaiyur
nayur
Thiruporur
Hanumanthapuram Nemmeli
Anjur
Sirukundram
hi Kavithandalam
CHENGALPATTU
Senneri
Meyyur
Pattipulam
kkam Porunthavakkam Manampathy
Karunguzhipallam
Mamandur
66 Manamathy
67
Thandarai
MAHABALIPURAM
RESEARCH INDIA REAL ESTATE
17%
HYDERABAD Drop in sales in H1 2018, from the
peak levels in H1 2017
69%
its RERA rules in the fag end of July get the RERA registration for the same,
the necessary body to 2017, the necessary body to implement which we hope, will happen very soon,”
those rules was not appointed till stated a developer. The RERA website
implement those rules the end of 2017. The absence of the for Telangana is expected to be up and
was not appointed till the necessary body to implement RERA running from 1 August 2018.
Drop in new launches in rules in the state put the brakes on new
• As a result, new launches in H1 2018
H1 2018, from the peak levels end of 2017. launches in the city, almost bringing it
witnessed a major spike compared
during H1 2011 to a halt. In January 2018, however, the
to the same period last year. New
state appointed the RERA Appellate
launches in H1 2018 were 44% higher
68 69
RESEARCH INDIA REAL ESTATE
than in H1 2017. West Hyderabad • Sales in H1 2018 were 5% up reduced in H1 2018 compared to
continued to be in the thick of action compared to H1 2017. During our H1 2017. In H1 2017, the QTS was
during H1 2018. Of the total launches, field surveys, it was apparent that 6 quarters and now it stands at 3.4 HYDERABAD MARKET ACTIVITY
in H1 2018, 71% happened in West there was a clear preference, among quarters.
Hyderabad. Some of the micro markets homebuyers, for ready-to-move-in
• The markets of the north and south are
which were in the thick of action, during units or those housing units where 9000 Launches Sales Wt. Avg. Price (RHS) 44000
however, under pressure as their QTS
H1 2018, are Nallagandla, Narsingi, the possession was within the next
43,185
and age of inventory is very high. The
Kokapet and Serilingampally. Ameerpet 6 months. Further, housing units by
age of inventory of the west is also high
in Central Hyderabad also witnessed a reputed developers too were being
but it has a healthy sales velocity. The
couple of launches. preferred by the homebuyers.
high sales velocity could be attributed
• While new launches in H1 2018, is • Despite the setback to new launches to the fact that it is the preferred market 8000
42875
a major improvement over H1 2017, in 2017, sales have largely been steady in the city. A high sales velocity in the
the number of units launched is still in Hyderabad. Post bifurcation of the east could be an indication of a certain
below 4,000 units. It is worth noting state, sales in Hyderabad, have for section of homebuyers looking for
that Hyderabad, post bifurcation of the first time crossed 8,000 units. H1 more affordable options.
the state, used to consistently witness 2018 witnessed sales of 8,313 units, 7000
• Due to a clear mismatch between
launch of more than 5,000 units every 6 which is 5% more than H1 2017. The
demand and supply of housing units, 41750
months. steady sales of residential units, is a
in the city, prices have started to firm
direct result of the good performance
• A noticeable trend with regards new up. In H1 2018, prices moved up by
of the commercial space in the city. “It
launches is the fact that of the total 8% compared to H1 2017. Ready-to-
normally takes about 2 years for the
launches close to 47% of the units move in homes continue to command a 6000
41,129
results of the good performance of
launched were in the price bracket of premium and so do housing units at a
the commercial space to show in the
`7.5–10 mn. Further, during H1 2018 good location from reputed developers. 40625
39,934
residential property market,” opined a
none of the housing units launched
39,934
developer during one of the meetings. • The mismatch created in demand and
were priced below `2.5 mn. A few units
supply, because of new launches, is
catering largely to the luxury segment • The western part of the city continued
further expected to push up prices in 5000
were also launched in the western part to hold sway even with regards sales
No. of Units
Hyderabad in the coming days.
of the city. 3% of the units launched of housing units in the city. Of the total
38,966
were priced between `20–40 mn. sales in H1 2018, 69% happened in 39500
38,858
western Hyderabad. West Hyderabad’s
proximity to office locations like
`/ sq m
Financial District, Madhapur, 4000
Gachibowli and Kondapur coupled
with good infrastructure have been the
major pull factors for homebuyers. 38375
A noticeable trend with
37,767
• The share of sales of East and North
regards new launches is Hyderabad, which are the more
3000
44%
preceding quarters in order to arrive
priced below ` 2.5 mn. at the QTS number for that particular
quarter. A lower QTS indicates a 0 35000
healthier market. H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
• With drastic reduction in launches Increase in new launches in H1 Source: Knight Frank Research
and steady sales, the QTS has further 2018 compared to H1 2017
70 71
RESEARCH INDIA REAL ESTATE
110
RESIDENTIAL
-61%
H1 2018
827
HMR NORTH
Quthbullapur
Madinaguda
Kukatpally
Serilingampally
2,628
27%
H1 2018 397
540%
Kondapur
5,766 H1 2018
6%
629
2%
HMR WEST Hitec City
Begumpet
Madhapur
Gachibowli HMR CENTRAL West Hyderabad’s
Ameerpet
proximity to office locations
150
like Financial District,
Jubliee Hills
138%
Nanakramguda
H1 2018
Manikonda
Banjara
Hills
466
-5%
Madhapur, Gachibowli and
69%
Kokapet Uppal
Kondapur coupled with
HMR EAST
good infrastructure have
been the major pull factors
Share of West Hyderbad in the
for homebuyers. overall sales, in H1 2018
L B Nagar
421
325%
H1 2018
625
11%
HMR SOUTH
Rajendra Nagar
MICRO-MARKET LOCATIONS
72 73
RESEARCH INDIA REAL ESTATE
5.1
RESIDENTIAL
2,099
(-48%)
22.1
HMR NORTH
UNSOLD INVENTORY H1 2018
Unsold inventory (YoY growth) QTS (in quarters) Age of inventory (in quarters)
Quthbullapur
Madinaguda
Kukatpally
Serilingampally
7,397 2.9
Kondapur
(-44%)
16.9 788 2.8 The markets of the
(-44%)
14.9 north and south are
HMR WEST Hitec City
Madhapur
Begumpet
under pressure as
Gachibowli HMR CENTRAL
their QTS and age of
Ameerpet
L B Nagar
1,704 6.8
(-43%)
21.2
HMR SOUTH
Rajendra Nagar
44%
Shamshabad
74 75
RESEARCH INDIA REAL ESTATE
KOMPALLY
31,216-32,744
(2,900-3,042)
[4%] [3%] SAINIKPURI
29,063-30,828
(2,700-2,864)
RESIDENTIAL PRICING
[3%] [3%]
HMR NORTH
H1 2018
Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft)
Quthbullapur
Madinaguda
Kukatpally
Serilingampally
MANIKONDA Ameerpet
46,285-48,266
(4,300-4,484) BANJARA HILLS
Jubliee Hills
NACHARAM
Nanakramguda [10%] [5%] 108,716-11,2807 37,136-40204
(10,100-10,480) (3,450-3,735)
Manikonda [2%] [0%]
Banjara
[8%] [6%]
Hills
Kokapet Uppal
Due to a clear
HMR EAST
KOKAPET mismatch between
44,132-49,977
(4,100-4,643)
[11%] [4%]
demand and supply of
L.B.NAGAR housing units, in the
39,105-39,934
(3540-3710)
[5%] [3%]
city, prices have started
L B Nagar
to firm up.
HMR SOUTH
Rajendra Nagar
RAJENDRA NAGAR
51,667-53,820
(4,800-5,000)
SHAMSHABAD [3%] [3%]
29,063-29623
(2,700-2,752)
[1%] [3%]
08%
Shamshabad
76 77
RESEARCH INDIA REAL ESTATE
3.0
2.5
mn sq m
2.0
1.5
1.0
14%
Drop in new completions in H1
0.5
0.0
H1 2015 H2 2015 H1 2016
Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
H2 2016 H1 2017 H2 2017 H1 2018
15%
Increase in transacted space in H1
2018 compared to H1 2017 Source: Knight Frank Research 2017 compared to H1 2018
14% less than the office space that was at 23%. Even within this particular
HYDERABAD MARKET SNAPSHOT
added to the stock, in H1 2017. category, 25% space was taken up by
companies in the co-working space.
PARAMETER H1 2018 CHANGE YOY • There has been a marginal increase
in vacancy, in H1 2018 compared to • After the Other Services sector, the
New completions mn sq m (mn sq ft) 0.16 (1.7) -14% H1 2017 but it still remains in the low manufacturing sector has been the
single digits. Vacancy levels in the city other major gainer in H1 2018. Its share
Transactions mn sq m (mn sq ft) 0.25 (2.7) 15% have moved up marginally from 5.16% in the total transacted office space, in
in H1 2017 to 6.76% in the H1 2018. In the city, stood at 15%, compared to 5%
Weighted average rental in 570 (53) 8%
fact low vacancy is one of the biggest in H1 2017.
`/sq m/month (`/sq ft/month)
challenges for Hyderabad as occupier
• The share of Banking, Financial
interest continues to be on the rise and
Stock mn sq m (mn sq ft) 5.78 (62.26) 5% services and Insurance (BFSI)
there is not enough supply to meet the
The fact that the city same. Vacancy levels in markets like
companies has fallen in H1 2018 to 7%
Vacancy (%) 6.76 compared to 21% in H1 2017.
Madhapur, HITECH City, Gachibowli
has witnessed healthy and Nanakramguda area as low as • The average deal size in H1 2018 was
Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
Companies in the other
transaction of office space Source: Knight Frank Research 2–4%. reported to be 2,079 sq m (22,377 sq
ft), which is 20% higher than in H1
• The Hyderabad office market witnessed a 15% uptick in office transaction in H1 2018 • Another visible trend in Hyderabad is service sector picked up
in the first half of the year, compared to the same period in H1 2017. The city, in H1 2018, witnessed office space that companies have now started to
2017.
transaction of 0.25 mn sq m (2.69 mn sq ft) compared to H1 2017 when 0.22 mn sq m develop their own campus. • H1 2018 witnessed 120 deals, which is 43% of the office space
chances are very high that (2.33 mn sq ft) of office space was transacted in Hyderabad. marginally lower than H1 2017, which
• The IT/ITeS sector has traditionally transacted in H1 2018,
2018 may turn out to be • The amount of office space transacted in H1 2018 is only 2% less compared to the dominated the office transaction pie
had recorded 126 deals. The marginal
fall in the number of deals and the rise
record office space transaction witnessed in the city in the first half of the year. in Hyderabad. However, in H1 2018, which is significantly higher
another good year for the Hyderabad witnessed the highest office space transaction in the first half of the year in the share of the IT/ITeS sector has
in average deal size can be attributed
2016 when 0.26 mn sq m (2.75 mn sq ft) of office space was transacted in the city. The fallen to 36%. This is largely due to
to companies like Amazon, S&P Global
than their share in H1
office market, as office fact that the city has witnessed healthy transaction of office space in the first half of the unavailability of good quality office
and ShoreIT taking up large amount of
space in the city. 2017. Within this particular
space transactions typically the year, chances are very high that 2018 may turn out to be another good year for the space with large floorplates, which are
• Even though the share of the suburban
office market, as office space transactions typically gather further steam in the second preferred by the companies in the IT/
category 25% space was
gather further steam in the half of the year. Considering that Hyderabad is slowly turning out to be one of the ITeS sector. In H1 2018, the largest business district (SBD), in the total
preferred cities, in the country, by occupiers, the same trend in all likelihood is expected amount of space was taken up by office space transacted, in the city, has
taken by companies in the
second half of the year. to be maintained in the second half of 2018. companies from the Other Services fallen by 19% compared to H1 2017, it
• As has been the case in the city, in the last couple of years, even in H1 2018 new
sector. Companies in this sector picked continues to garner the largest share co-working space.
up 43% of the office space transacted of office space in the city, even though
completions were unable to keep pace with the demand for office space. During H1
in H1 2018, which is significantly higher by a whisker. In H1 2018, SBD just
2018, 0.16 mn sq m (1.73 mn sq ft) of office supply made its way into the market. This is
than in H1 2017, when their share stood about managed to beat the peripheral
78 79
RESEARCH INDIA REAL ESTATE
10%
8.2%
8%
7.6%
6.8%
6.5%
5.9%
6%
5.2%
H1 2017
5.1%
4%
2%
43%
0%
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
H1 2018
Share of PBD West in the total business district (PBD) West as the • PBD East, which typically accounts
transacted office space in H1 2018 most preferred business district in for a miniscule share of the transacted
Hyderabad. SBD accounted for 43.36% office space, in the city, did not see
of the transacted office space in the any transactions in H1 2018. In H1
city while PBD’s share was 42.71%. 2017, it accounted for only 3% of the
transacted space of the city and did
• It must be noted that till the very recent
not see transactions in H2 2017. It is
past SBD used to account for the lion’s H1 H1
another indication that the western part Industry
share of transacted office space in the 2017 2018
of the city continues to be the preferred
city. For example, in the H1 2017, the
location for occupiers.
share of SBD was 62% and in H2 2017 BFSI 21% 7%
the figure stood at 71%. The share of • Lack of vacant office stock coupled
PDB West on the other remained in with steady demand has pushed IT/ITES 51% 36%
the mid-20s. In H1 2017, the share of the weighted average rentals in the
PBD West was 23% and in H2 2017, Hyderabad office market to `570/sq m/ Manufacturing 5% 15%
its share stood at 24%. As mentioned month ( `53 per sq ft per month) at the
earlier, in H1 2018, its share increased end of H1 2018, a growth of 4% year- Other Services 23% 43%
astronomically to 42.71%. The share on-year (YoY). Note: BFSI includes BFSI support services
of PBD West increasing by leaps and
• H1 2018 witnessed rentals move up
bounds can be attributed to availability
across micro markets compared to H1
The share of PBD West of quality office space at a competitive
2017. The upward movement in rentals AVERAGE DEAL SIZE
cost. This trend is also an indication
can be gauged from the fact that BUSINESS DISTRICT CLASSIFICATION AND NUMBER OF DEALS
increasing by leaps of drying up of quality office space in
rentals in Madhapur in SBD witnessed
SBD.
and bounds can be • Within PBD West, Gachibowli emerged
few transactions at `700/sq m/month
(`65 per sq ft per month). Rentals in
BUSINESS DISTRICT MICROMARKETS 1,720 (18,516)
Average Deal Size in sq m (sq ft)
attributed to availability as the most preferred micro market
accounting for 60% of the transacted
Gachibowli, in PBD West, too reached
`700/sq m/month (`65 per sq ft per
Banjara Hills, Jubilee Hills, Begumpet, Ameerpet,
H1 2017
CBD & off CBD Somajiguda, Himayat Nagar, Raj Bhavan Road,
of quality office space at space in the business district. month). Elsewhere, in Nanakramguda
there was a transaction at `700/sq m/
Punjagutta
126
• Going forward it is expected that office Number of Deals
a competitive cost. This space will further expand in the west,
month (`65 per sq ft per month).
SBD
Madhapur, Manikonda, Kukatpally, Raidurg,
Kothaguda
trend is also an indication thereby increasing the attractiveness
of micro markets like Kokapet, Narsingi
2,079 (22,377)
Gachibowli, Kokapet, Nanakramguda, Average Deal Size in sq m (sq ft)
of drying up of quality and Puppalguda. In fact, companies PBD West
Nanakramguda, Serilingampally,
have already started moving their H1 2018
office space in SBD. offices to Kokapet. Of the total PBD East Uppal, Pocharam
120
transacted office space in H1 2018, in
Number of Deals
PBD West, 29% happened in Kokapet.
Source: Knight Frank Research
80 81
RESEARCH INDIA REAL ESTATE
OFFICE
TRANSACTIONS H1 2018
Transactions mn sq m (mn sq ft) YoY change
0.10 (1.2)
Madinaguda
19% Quthbullapur
Kukatpally
Serilingampally
SBD
Kondapur
- (-)
0.10 (1.1) 100%
115% Hitec City
Begumpet
Madhapur
Gachibowli PBD EAST
0.03 (0.37)
PBD WEST Ameerpet
29%
60%
Jubliee Hills
Nanakramguda
Banjara
Manikonda
Hills CBD AND OFF-CBD
Kokapet Uppal
L B Nagar
Gachibowli emerged as
the most preferred micro
market accounting for the
lions share of transacted
Shamshabad
82 83
RESEARCH INDIA REAL ESTATE
OFFICE RENTAL
H1 2018
Rental value range in H1 2018 in `/sq m/month (`/sq ft/month) 12 month change 6 month change
560-667
9%
(52-62) Quthbullapur
Madinaguda
3% Kukatpally
Serilingampally
SBD
Kondapur
269-323
3%
(25–30)
517-570
8% 0%
(48–53) Hitec City
4% Begumpet
Madhapur
Gachibowli PBD EAST
08%
Ameerpet
(40–47)
Jubliee Hills 4%
Nanakramguda
Banjara
Manikonda
Hills CBD AND OFF-CBD
Increase in rentals in H1 2018
Uppal
Kokapet compared to H1 2017
L B Nagar
H1 2018 witnessed
rentals move up across
micro markets compared
to H1 2017. The upward
Rajendra Nagar
m/month (` 65 per sq ft
per month).
84 85
RESEARCH INDIA REAL ESTATE
42%
KOLKATA Decline in sales in H1 2018 over
levels during H1 2015
47%
the office market in the city lags far
user sentiment towards behind Hyderabad where average
passed on to them, residential sales
have remained subdued.
absorption trends between 2014-2017
residential property indicate 0.48 mn sq m (5.19 mn sq • During H1 2018, residential sales noted
purchase is at an all-time ft) leasing volume annually. Even for a 19% year-on-year (YoY) decline and
Decline in launches in H1 2018 Pune Metropolitan Region, with half stood at 6,591 units. Homebuyers
from levels during H1 2015
low. the population of Kolkata, the average have largely stayed away from
annual leasing recorded during this under-construction properties in the
period is 0.43 mn sq m (4.57 mn sq ft). expectation of a price correction in the
86 87
RESEARCH INDIA REAL ESTATE
coming months. From its peak in H1 Kolkata. In H1 2018, unsold inventory nowhere close to the levels witnessed
2015, sales have plummeted by 42% remained stagnant over H1 2017. The in H1 2015.
due to market slowdown aggravated in fact that unsold inventory levels have KOLKATA MARKET ACTIVITY
• During H1 2018, South Kolkata
the wake of multiple regulatory reforms not shrunk even marginally in the past
accounted for 27% share in new
starting from demonetisation. year signal the stress in the market and
launches. Though South Kolkata
have only led to an increase in the age 14,000 Launches Sales Wt. Avg. Price (RHS) 39,000
• Of the total sales volume, South accounted for 32% share of new
of inventory to 12.6 quarters at the end
Kolkata accounted for 33% share as launches in H1 2017, the number
of H1 2018.
far off peripherals such as Baruipur, of units launched in H1 2018 have
Sonarpur, Garia and Narendrapur have • The unsold stock lying in the market declined by 45% YoY. Joka in South
38,481
38,449
witnessed good sales traction due to has also impacted the quarters to sell Kolkata has particularly emerged as
12,600
the affordable price tag of the projects. (QTS), which has inched up from 10.6 the flavour of the season for developers
38,500
Affordable housing in these belts has quarters in H1 2017 to 12.2 quarters in who are exploring future development
38,427
witnessed a shot in the arm with the H1 2018. The current age of inventory possibilities in this locality due to
nationwide implementation of Pradhan and QTS present an alarming picture, the upcoming metro connectivity via
Mantri Awas Yojana (PMAY). as the prolonged project lifecycle now Joka-Esplanade link. Many leading 11,200
38,050
stands at more than 6 years. Not a developers are aggressively expanding
• Bucking the trend in H1 2017, when
healthy scenario, as other cities have footprint in this location to take
Rajarhat accounted for 32% of total 38,000
started showing signs of revival in the advantage of low real estate prices
sales volume, the share of this micro
wake of a structural shift brought about before the Metro arrives.
market reduced to 23% of total sales in
by the implementation of the Real 9,800
H1 2018. Rajarhat has lost its top slot • Compared to H1 2017, Rajarhat
Estate (Regulation and Development)
in Kolkata’s residential sales volume witnessed a humungous 93% annual
Act, 2016 (RERA).
for the second time in the past 15 drop in new launches in H1 2018, which
37,620
months with a substantial 38% drop in • South Kolkata accounted for the can be attributed to availability of large 37,500
the past one year itself. Despite being maximum share of unsold inventory unsold inventory and slow progress 8,400
the most sought after micro market in with 36% unsold units. Due to infusion on metro construction for the Airport-
Kolkata and a planned township, the of many large-sized township projects, Garia link that passes through Rajarhat.
overall slump in the market is creeping the unsold units in this micro market
No. of Units
• In June 2018, the West Bengal state
into Rajarhat with sales slowing down surpass many others. With a 25% share
government announced the enactment
despite strong fundamentals. in unsold units, Rajarhat still presents 7,000 37,000
of the Housing Industry Regulatory
a better picture as sales momentum
• Low sales volume has only worsened Authority in the state. However,
has slowed down but the micro market
`/ sq m
the unsold inventory situation in the establishment of the regulatory
36,543
remains attractive due to its physical
authority, appointment of personnel
and social infrastructure and planned
and physical kick-start of operations
development. 5,600
of the newly created body are yet to
36,500
• Low sales velocity and piling unsold take place. The definition of ‘’force
During H1 2018, inventory has forced developers to majeure’’ and ‘’garage’’ under HIRA
35,446
and have made their products cheaper residential market and bring the
have largely stayed for customers. homebuyers back.
88 89
RESEARCH INDIA REAL ESTATE
Baluhati North
Dumdum
WEST
256
-93%
H1 2018
Naora 0 1,516
0%
-38% Bucking the trend in H1
H1 2018
66
-29%
2017, when Rajarhat
Shalimar RAJARHAT
accounted for 32% of total
35%
CENTRAL
sales volume, the share of
this micro market reduced
to 23% of total sales in H1 YoY decline in launches in
H1 2018 in Kolkata
2018.
959
40%
H1 2018
1,726 989
-45% -3%
H1 2018
2,175 EAST
-12%
CENTRAL Park Street, Rawdon Street, AJC Bose Road, Minto Park, Elgin Road
Mukundapur
EAST Kankurgachi, Beliaghata, Salt Lake, Narkeldanga, Keshtopur, EM Bypass (eastern parts)
Baghajatin
NORTH Baguiati, Uttadanga, Jessore Road, Shyambazar, Lake Town, BT Road, VIP Road
Thakurpukur Garia
WEST Howrah, BBD Bagh
All maps are for representational purpose not to scale Source: Knight Frank Research
Rajpur
90 91
Sonarpur
RESEARCH INDIA REAL ESTATE
Baluhati North
Dumdum
WEST
Naora
391
(4%)
8.7
9,764
(33%)
10.9
CENTRAL
Rajpur
92 93
Sonarpur
JESSORE ROAD
37,700-57,000
RESEARCH (3,500–5,300) INDIA REAL ESTATE
Baluhati
[-11%] [-9%]
North
Dumdum
MADHYAMGRAM
26,900-35,000
(2,500–3,250)
RESIDENTIAL PRICING
B.T.ROAD
[-2%] [3%]
32,300-43,000
Subhas Nagar
(3,000–4,000)
H1 2018
[-9%] [-7%]
Belur
Rajarhat
Gopalpur Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft)
NORTH
12 month change (YOY) 6 month change (YOY)
WEST
NEW TOWN
43,000-74,300
RAWDON STREET (4,000-6,900)
107,600- 209,900 [-4%] [9%]
(10,000–19,500)
[0%] [0%]
The weighted average
RAJARHAT residential prices have
Naora
PARK STREET undergone a correction of
129,200–215,300
(12,000–20,000) 8% YoY, as discounts on
[-6%] [-6%]
NARENDRAPUR EAST
SOUTH 27,400-48,400
(2,550–4,500)
[1%] [4%]
Mukundapur
8%
Baghajatin
Naktala
Rajpur
94 95
Sonarpur
RESEARCH INDIA REAL ESTATE
Quarters to sell 8 -
• Mumbai saw a significant jump in new a significant rise in the overall launches the RERA registration window to get
launches, at 35,974 units, recording for Mumbai in Q2 2018 and in H1 their projects registered. As a result,
a growth of 128% year-on-year (YoY). 2018 overall. A similar momentum of the market took a downturn again
The following reasons can be attributed launches can be expected in H2 2018 and new launches took a hit resulting
to this significant rise: temporary and H1 2019, as many developers in poor launch numbers for H1 2017
lifting of the construction ban in are expediting the process of taking overall. Comparing those numbers to
Brihanmumbai Municipal Corporation approvals of new project launches the H1 2018 launches has resulted in a
(BMC) region, low base effect created and preparing a launch pipeline for whopping 128% (YoY) growth.
by the disturbances of demonetisation, the next 6–12 months. The developers
• Mumbai real estate is widely known
Real Estate (Regulation and fear that when this window of reprieve
MUMBAI
for its sky-high prices, also the
Development) Act, 2016 (RERA), Goods shuts down, it is likely that the ban
disconnect for the purchasing power
and Services Tax (GST), developers would be enforced again. Considering
of the homebuyers and the house
launching smaller units with lower ticket the past track record of the action
value. A significant portion of the
size to cater to market demand and on the dumping ground issue and
populace is salaried and for most of
large-scale affordable housing projects unavailability of a land parcel within
them owning a house remains a distant
being undertaken in the peripheral city limits, the issue is likely to persist
dream. In response to this disconnect,
suburbs. over a longer period. This in effect will
developers are now launching smaller-
impact approvals for new launches.
• The Bombay High Court had ordered a size units to be able to bring down the
stay on construction of new buildings • Low base effect during H1 2017, ticket size. This way, houses become
in the BMC region (Mumbai city) in created by disturbances of affordable for the populace and
March 2016 owing to the growing demonetisation, RERA and GST, was developers benefit from the increased
The launches in H1 2018 unscrupulous dumping hazard. The the other major reason for the jump in number of transactions. Launch of
ban was imposed to address the over- new project launches during H1 2018. the Housing for All by 2022 scheme
were higher on account saturation of the city’s landfills due H1 2017 witnessed a major lull as far has given a further boost to projects
to construction debris. This verdict as launches are concerned. Q1 2017 with smaller ticket sizes, as the eligible
of: the temporary lifting of affected all new launches in the BMC was reeling under the effects of the consumers can now avail the various
region resulting in a significant slump in high value currency demonetisation incentives offered under this scheme.
construction ban in BMC limits, the overall launch numbers for Mumbai policy of November 2016 and this is
RESIDENTIAL MARKET during the ensuing period. In March reflected in the very poor number of
• The Pradhan Mantri Awas Yojana
low base of H1 2017 and large 2018, the country’s Supreme Court launches in that period. In Q2 2017,
(PMAY) has brought the affordable
housing product on most developers’
scale project launches in the lifted the ban for a period of 6 months, as the market was recovering slowly,
agenda. Consequently, many projects
giving a breather to the developer come mid-April RERA fears gripped the
have been launched with smaller
affordable segments in the community. Consequently, to maximise market. Developers were not allowed
ticket sizes and at lower prices in the
the benefit of this temporary relief, to sell flats in their under-construction
suburbs so that the buyers purchasing
peripheral markets. developers have been launching projects without RERA registration.
a flat in that project are eligible for
projects rampantly. This has resulted in Most developers waited till the end of
the benefits under the PMAY scheme.
96 97
RESEARCH INDIA REAL ESTATE
Some of these projects had more construction projects sans RERA • As the market is reeling under
than 1,000 units and therefore, have registration. As a result, like launches, pressure, there has been a constant
significantly contributed to the surge even the sales numbers for H1 2017 focus by developers to make the MMR MARKET ACTIVITY
in overall Mumbai launches. Some were lower compared to H1 2016. process of purchase less strenuous
of the noteworthy launches include Despite a stable period, devoid of any on buyers. Developers are offering a
Neptune group’s project Ramrajya in such disturbances, H1 2018 sales grew host of discounts such as – developer 40,000 Launches Sales Wt. Avg. Price (RHS) 90,000
Kalyan, Wadhwa’s Wise City in Panvel, by a meagre 1% YoY. There was a slew subvention schemes, bank subvention
new launches by Lodha in Thane and of price benefit led project marketing schemes, flexi-payment options (5:95,
Ruparel Realty’s Optima in Kandivali. activities along with reduction in base 20:40:40, 20:80 payment schemes),
87,404
87,114
prices, which together cemented the smaller-sized apartments to reduce
• Flexi-payment options and bank
sales numbers of H1 2018. Else, the the overall ticket size, free appliances,
86,588
loan schemes are riding high on
86,047
numbers could have been worse. gifts, other indirect discounts like 35,000
the affordable housing wave. Home
86,047
absorbing – GST, clubhouse charges,
loan schemes like 5:95 require • A major contributor to this marginal 1%
maintenance charges, floor rise
that customers pay only 5% while YoY growth in sales is the increased
premium and stamp duty charges.
booking a house and the remaining number of new launches, especially in
Such discounts are the order of the day
95% at the time of possession. In the the affordable housing segment. Many
and is found in almost every project
interim period, the bank would make new launches offered lower prices
in the MMR region. There are few 30,000 85,000
construction-linked payments to the compared to the prevailing prices in
instances where reputed developers
developer and the developer would the catchment even as they lure end-
83,071
are offering flexi-payment options
service the interest on the home loan. users with a plethora of amenities. To
even for OC-ready projects, which was
This way the consumer can buy a fit into the consumer’s budget, lower
unimaginable a few years ago.
house at a small token amount, avoid apartment sizes, resulting in smaller
the EMI-burden and continue to stay ticket size, became a mainstay. Such • Earlier, the discounts were offered only
25,000
on rent. The banks will have more apartments witnessed significant to buyers who could negotiate very
loans on their books and the developer interest from buyers. Additionally, well, but now these discounts have
No. of Units
will receive construction finance at a government incentives under PMAY, become the order of the day. Most of
cheaper rate than usual – a win-win subvention schemes and flexi-payment the discounts are indirect discounts,
situation for all. Such schemes are options have made home-buying as developers refrain from reducing
78,933
well-suited for salaried employees who attractive for lower ticket size projects. the quoted prices and do not want to
20,000 80,000
wish to purchase a lower ticket size admit that they have reduced prices.
• More than 70% of the total sales
product in the peripheral markets. As However, there are also instances
volume came from the low to mid-
customers are responding to lower where the quoted prices have also
segment markets like Peripheral
ticket size projects in the peripheral been reduced. The weighted average
Central Suburbs, Peripheral Western
markets, they have fuelled the need of prices for the city is down by 9% YoY.
`/ sq m
Suburbs, Thane and Navi Mumbai. The
such projects.
highest sales were observed in the • The unsold inventory count for MMR 15,000
• Unlike launches, the sales numbers Peripheral Central Suburbs with sales stands at 119,526 units as of H1 2018.
of the Mumbai residential market still of 9,200 units out of the total 35,974 In H1 2018, quarters-to-sell (QTS) for
depict the lull of H1 2017. While sales units sold in H1 2018 in MMR. the Mumbai market was 8 quarters
have gone up compared to last year, (or 2 years) and the age of inventory
• As per our field visits and interaction
the growth is negligible at 1% YoY. was 15.4 quarters or close to 4 years.
with stakeholders, in the premium
The sales in H1 2018 are lower than This implies that the unsold inventory 10,000 75,000
markets, buyers are opting to make
the sales in H1 2016, a period when has been in the market for 4 years
the purchase only in Occupation
the real estate market of MMR was and will take another 2 years to sell.
Certificate (OC) received projects.
showing very early signs of revival. This While the QTS has declined over the
This helps them avoid the 12% GST,
marginal growth cannot be interpreted past few years, this decline has not
which adds up to a significant amount
as the market is out of the doldrums. come on back of rising sales, but due
for luxury and premium residences.
to significant decline in launches, 5,000
• Like launches, when we compare As a result, it makes sense for the
which indicates that the market health
the sales of H1 2018 with the sales buyers to postpone their purchase
has been weak. The launches have
numbers of H1 2017, we should till the project is complete, as GST is
constantly lagged the sales since H2
consider the disruptions due to not applicable on OC-ready projects.
2014 and as the periods progressed,
demonetisation and RERA. The sales This trend is also common for mid-
the gap between launches and sales
in the first 2 months of H1 2017 were segment apartments, as the buyers are
kept on increasing till H2 2017. This led 0 70,000
affected due to the demonetisation looking to avoid the 12% GST burden, H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
to the decline in QTS.
hangover and towards mid-April till invariably forcing the developers
end of H1 2017, developers were to offer a lower price on under- Source: Knight Frank Research
98 99
KAMAN ROAD
5,750
RESEARCH -7% INDIA REAL ESTATE
H1 2018
BHAYANDAR
6,921
20%
KHARBAO
BHIWANDI
ROAD
AMBIVALI
RESIDENTIAL
DAHISAR
RAILWAY
LAUNCHES AND SALES
SHAHAD
KALYAN JN
Launches (housing units) Sales (housing units) % Change (YOY)
BORIVALI
5,640
RAILWAY 315% THAKURLI R S
PUNE LIN K
H1 2018
DOMBIVLI
3,185 KOPAR
ULHASNAGAR
14% KOPAR
ROAD R S
KANDIVALI
THANE
KALWA R S
4,469
MALAD R S THANE
MUMBRA DATIWLI R S
DIVA
55%
H1 2018
8,200
A strong momentum in launches
4,686 2633%
72%
GOREGAON
MULUND R S
H1 2018 can also be expected in H2 2018
9,200
WESTERN SUBURBS NAHUR
AIROLI R S -37% and H1 2019 as a large number
BHANDUP R S
PERIPHERAL CENTRAL SUBURBS
of developers are expediting the
process of taking approvals of new
RABALE
JOGESHWARI R S
KANJURMARG R S
2,600
months. The developers fear that
I
TR
AS
-3%
when this window of reprieve comes
SH
UR
BAH A D
LAL
SANTA CRUZ
KHAR LOKMANYA
SANPADA
4,555
TERMINUS VASHI
RAILWAY
enforced again.
GOVANDI JUINAGAR R S
BANDRA
CHUNNABHATTI 249% NAVADE ROAD R S
MANKHURD
H1 2018
SION R S
MAHIM
JUNCTION NAVI MUMBAI
N AV I M U M B A I
5,060
71%
GURU TEGH KALAMBOLI R S
BAHADUR NAGAR R S NERUL R S
MATUNGA
1,170 ROAD R S
MATUNGA R S
SEAWOODS KHARGHAR R S
964% - DARAVE
MICRO-MARKET LOCATIONS
DADAR
H1 2018
DADAR BELAPUR CBD
MANSAROVAR
565 CENTRAL MUMBAI Dadar, Lower Parel, Mahalaxmi, Worli, PrabhadevI
PAREL
6% ELPHINSTONE
ROAD R S KHANDESHWAR
LOWER PAREL R S
MUMBAI
REAY ROAD CENTRAL SUBURBS Sion, Chembur, Wadala, Kurla, Ghatkopar, Vikhroli, Bhandup, Mulund
CENTRAL MUMBAI
CURREY
ROAD R S
PANVEL
CHINCHPOKLI R S NAVI MUMBAI Vashi, Nerul, Belapur, Kharghar, Airoli, Panvel, Ulwe, Sanpada
MUMBAI
MAHALAKSHMI
290 MUMBAI
REAY ROAD
MUMBAIBYCULLA
290%
CENTRAL LOCAL
PERIPHERAL CENTRAL SUBURBS Kalyan, Kalwa, Dombivli, Ambernath, Bhiwandi, Mumbra, Karjat
CHIKHALE R S
H1 2018 DOCKYARD
ROAD
GRANT ROAD
195 BY SANDHURST
ROAD
PERIPHERAL WESTERN SUBURBS Vasai, Virar, Boisar, Palghar, Bhayandar, Nalasopara
261%
MASJID
CHARNI
ROAD
BUNDER R S
SOUTH MUMBAI Malabar, Hill, Napean Sea Road, Walkeshwar, Altamount Road, Colaba
SOMATANE
SOUTH MUMBAI
M
AHA
CHHATRAPATI
SHIVAJI TERMINUS
RSHI
WESTERN SUBURBS Bandra, Andheri, Goregaon, Kandivali, Borivali, Santacruz, Vile Parle
All maps are for representational purpose not to scale Source: Knight Frank Research
100 101
RASAYANI
KAMAN ROAD
BHIWANDI
ROAD
RESIDENTIAL
AMBIVALI
DAHISAR
RAILWAY
UNSOLD INVENTORY H1 2018
SHAHAD
KALYAN JN
Unsold inventory (YoY growth) QTS (in quarters) Age of inventory (in quarters)
BORIVALI
RAILWAY
14,152 9.7 THAKURLI R S
PUNE LIN K
(7%) DOMBIVLI
12.3
ULHASNAGAR
KOPAR
KOPAR
ROAD R S
KANDIVALI
THANE
KALWA R S
MUMBRA
AIROLI R S
(-28%)
14.0 20.4 quarters and 20.3
WESTERN SUBURBS
quarters respectively. The
NAHUR
BHANDUP R S
PERIPHERAL CENTRAL SUBURBS
JOGESHWARI R S
RABALE existing unsold inventory in
KANJURMARG R S
Central Mumbai has been
languishing for over 5 years
ANDHERI
GHANSOLI R S
VIKROLI R S
UR
BAH A D
LAL
SANTA CRUZ
MUMBAI
VIDYAVIHAR
CENTRAL SUBURBS TURBHE R S
TALOJE
PANCHNAND R S
assuming no new stock is
KHAR
ROAD R S KURLA
JUNCTION
LOKMANYA
TILAK SANPADA
RS launched in that period.
BANDRA TILAK NAGAR CHEMBUR
TERMINUS VASHI
RAILWAY
GOVANDI JUINAGAR R S
BANDRA
CHUNNABHATTI NAVADE ROAD R S
MANKHURD
SION R S
MAHIM
JUNCTION N AV I M U M B A I
GURU TEGH
BAHADUR NAGAR R S NERUL R S 21,337 11.3 KALAMBOLI R S
MATUNGA
ROAD R S NAVI MUMBAI
MATUNGA R S (-13%)
20.4
SEAWOODS KHARGHAR R S
16.5
4,780
- DARAVE
DADAR
DADAR BELAPUR CBD
(12%) MANSAROVAR
PAREL
20.3
ELPHINSTONE KHANDESHWAR
ROAD R S
MUMBAI
LOWER PAREL R S REAY ROAD
CENTRAL MUMBAI
CURREY
ROAD R S
PANVEL
CHINCHPOKLI R S
MUMBAI
MAHALAKSHMI
MUMBAI
REAY ROAD
MUMBAIBYCULLA
1,024 CENTRAL LOCAL 13.7 CHIKHALE R S
DOCKYARD
ROAD
(-13%)
GRANT ROAD
19.7
BY SANDHURST
ROAD
-14%
MASJID
CHARNI BUNDER R S SOMATANE
ROAD
SOUTH MUMBAI
M
AHA
CHHATRAPATI
SHIVAJI TERMINUS
RSHI
CHURCHGATE
JASAI R S
102 103
RASAYANI
VIRAR KAMAN ROAD
47,362-59,202
(4,500–5,500)
RESEARCH [-6%] [-4%] INDIA REAL ESTATE
MIRA ROAD BHAYANDAR
59,202-78,577
(5,500–7,300)
[-8%] [-5%] KHARBAO
DAHISAR
MIRA ROAD
96,876-118,404
(9,000–11,000)
[-4%] [-2%]
GHODBUNDER ROAD
64,584-107,640
(6,000–10,000) BHIWANDI
ROAD
AMBIVALI
RESIDENTIAL PRICING
H1 2018
[-7%] [-3%]
DAHISAR
RAILWAY
SHAHAD
BORIVALI KALYAN JN
Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft)
118,404-161,460
BORIVALI
NAUPADA DOMBIVALI
RAILWAY
(11,000–15,000) 150,696-193,752 THAKURLI R S
48,438-64,584 PUNE LIN K
(14,000–18,000) 12 month change (YOY) 6 month change (YOY)
[-4%] [-2%] (4,500–6,000)
DOMBIVLI
ULHASNAGAR
[-3%] [-3%] [-7%] [-6%]
KOPAR
KOPAR
ROAD R S
GOREGAONKANDIVALI
139,932-161,460 THANE
KALWA R S
(13,000–15,000)
[-6%] [-3%]
MALAD R S
MULUND MUMBRA DATIWLI R S
THANE
115,174-150,696 DIVA
ANDHERI (10,700–14,000)
POWAI
161,460-236,808
(15,000–22,000)
156,078-215,280 MULUND R S
[-8%] [-5%] Earlier, the discounts were
(14,500–20,000)
[-2%] [-1%]
GOREGAON
[0%] [0%]
AIROLI R S
offered only for buyers
WESTERN SUBURBS
who could negotiate
NAHUR
BHANDUP R S
PERIPHERAL CENTRAL SUBURBS
JOGESHWARI R S
RABALE
BADLAPUR very well, but now these
29,063-37,674
KANJURMARG R S
(2,700–3,500) discounts have become
[-10%] [-10%]
ANDHERI
GHATKOPAR VIKROLI R S
GHANSOLI R S the order of the day.
129,168-236,808
VILE
(12,000–22,000) Most of the discounts are
PARLE R S [0%] [0%]
indirect discounts,
I
TR
AS
SH
UR
B AH A D
BANDRA WEST LAL
WORLI
SANTA CRUZ
430,560-645,840 VIDYAVIHAR
VASHI TALOJE as developers refrain
(40,000–60,000) M U M B A I CENTRAL SUBURBS 107,640-161,460 PANCHNAND R S
TURBHE R S
3,33,684-5,92,020
(31,000–55,000) ROAD R S
KHAR [0%] [0%]
KURLA
JUNCTION
LOKMANYA
TILAK
(10,000–15,000)
SANPADA
[-1%] [-1%]
RS
from reducing the quoted
[-1%] [-1%] TERMINUS
BANDRA TILAK NAGAR CHEMBUR
KHARGHAR
prices.
VASHI
GOVANDI
RAILWAY
JUINAGAR R S
72,119-96,876
BANDRA
CHUNNABHATTI (6,700–9,000) NAVADE ROAD R S
SION R S
MANKHURD [-4%] [-3%]
MAHIM
JUNCTION N AV I M U M B A I
GURU TEGH KALAMBOLI R S
BAHADUR NAGAR R S NERUL R S
MATUNGA
ROAD R S NAVI MUMBAI
MATUNGA R S
SEAWOODS KHARGHAR R S
- DARAVE
DADAR
DADAR BELAPUR CBD
MANSAROVAR
PAREL
ELPHINSTONE KHANDESHWAR
ROAD R S
MUMBAI
LOWER PAREL R S REAY ROAD PANVEL
CENTRAL MUMBAI
CURREY
ROAD R S 40,903-69,966 PANVEL
(4,000–6,500)
MUMBAI LOWER PAREL
CHINCHPOKLI R S
MAHALAKSHMI [-10%] [-8%]
269,100-387,504
MUMBAI
REAY ROAD
TARDEO MUMBAIBYCULLA (25,000–36,000)
CENTRAL LOCAL CHIKHALE R S
430,560-645,840 [-1%] [-1%]
DOCKYARD
ROAD
(40,000–60,000)
GRANT ROAD
BY SANDHURST
ROAD
-9%
[0%] [0%]
MASJID
CHARNI BUNDER R S SOMATANE
ROAD
SOUTH MUMBAI
M
AHA
CHHATRAPATI
SHIVAJI TERMINUS
RSHI
CHURCHGATE
JASAI R S
104 105
RASAYANI
RESEARCH INDIA REAL ESTATE
0.5
0.4
-7%
mn sq m
0.3
-42%
0.1
0.0
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
YoY change in new completions in Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
H1 2018 Source: Knight Frank Research
who constituted to around 30% of the • The rental growth across micro
had vacancy levels of • In H1 2018, transactions were lower by 7% YoY. Even though Mumbai had vacancy
transactions by other services sector in markets increased at a lower rate, as
levels of 21.5%, the shortage of good quality office space supply was one of the
21.5%, the shortage of primary reasons for lower transaction volumes in H1 2018. H12018. the demand from occupiers in this half
of the year was not as strong as what
• Over the past 12 months, intense
good quality office space • Occupiers are going slow on their consolidation and relocation plans, as they are not
able to find office space in good quality buildings that matches their requirements. But expansion by co-working operators
had been witnessed in H2 2017, leading
to high vacancy levels. Amongst
such as WeWork, Regus, Coworks,
supply was one of the this latent demand would reflect in the transaction volumes of the next 12–18 months.
Spaces and many more has changed
all micro markets, Central Mumbai
• The markets of the suburban business district SBD West, PBD and SBD Central recorded the highest rental growth
primary reasons for lower garnered 81% share of the transactions in H1 2018 and their shares were 33%, 30%
the landscape of flexible office space
of 5% YoY. The erstwhile CBDs and
formats in the city. The presence of
off-CBD areas like Nariman Point, Fort,
transaction volumes in H1 and 19%, respectively. many co-working operators is also
Ballard Estate, etc. witnessed negative
giving a chic makeover to office
growth in rentals as these business
2018. buildings and attracting new-age
districts have lost their appeal to the
tenants, a trend we expect to continue.
106 107
RESEARCH INDIA REAL ESTATE
H1 2017
H1 H1
Industry
2017 2018
IT/ITES 9% 7%
21.9%
21.6%
130
19.6%
20%
108 109
KAMAN ROAD
BHAYANDAR
KHARBAO
MIRA ROAD
BHIWANDI
ROAD
AMBIVALI
OFFICE
DAHISAR
RAILWAY
TRANSACTIONS H1 2018
SHAHAD
KALYAN JN
Transactions mn sq m (mn sq ft) YoY change
BORIVALI
RAILWAY THAKURLI R S
PUNE LIN K
DOMBIVLI
ULHASNAGAR
KOPAR
KOPAR
ROAD R S
KANDIVALI
KALWA R S
MUMBRA DATIWLI R S
MALAD R S
0.09 (0.94)
THANE
DIVA
-2% MULUND R S
GOREGAON
0.05 (0.55)
NAHUR
AIROLI R S
SBD WEST
BHANDUP R S 57%
JOGESHWARI R S
0.08 (0.86)
RABALE
KANJURMARG R S
-1%
ANDHERI
SBD CENTRAL
GHANSOLI R S
VIKROLI R S
VILE
PARLE R S
PBD
0.03 (0.27)
I
TR
AS
SH
UR
BAH A D
-11%
LAL
SANTA CRUZ
VIDYAVIHAR TALOJE
PANCHNAND R S
MUMBAI TURBHE R S
KHAR LOKMANYA
TILAK SANPADA
ROAD R S KURLA RS
JUNCTION
BANDRA TILAK NAGAR CHEMBUR
TERMINUS
BANDRA
BKC& OFF-BKC
GOVANDI
VASHI
RAILWAY
JUINAGAR R S
The share of other services
CHUNNABHATTI NAVADE ROAD R S
SION R S
MANKHURD
sector increased from
0.02 (0.18)
MAHIM
JUNCTION N AV I M U M B A I
GURU TEGH
BAHADUR NAGAR R S NERUL R S
KALAMBOLI R S 42% of the transactions
-45%
MATUNGA
ROAD R S
transactions in H1 2018.
MANSAROVAR
PAREL
CENTRAL MUMBAI
ELPHINSTONE
ROAD R S KHANDESHWAR
LOWER PAREL R S
MUMBAI
REAY ROAD
This rise was driven by
CURREY
ROAD R S
CHINCHPOKLI R S
PANVEL
the increasing demand
MUMBAI
MAHALAKSHMI
MUMBAIBYCULLA
MUMBAI
REAY ROAD from co-working players
CENTRAL LOCAL CHIKHALE R S
GRANT ROAD
0.007 (0.08) DOCKYARD
ROAD
who constituted to around
BY SANDHURST
ROAD
CHARNI
-73% MASJID
BUNDER R S SOMATANE 30% of the transactions by
ROAD
CHHATRAPATI
SHIVAJI TERMINUS
RSHI
2018.
CHURCHGATE
CBD & OFF-CBD JASAI R S
110 111
RASAYANI
KAMAN ROAD
BHAYANDAR
KHARBAO
MIRA ROAD
BHIWANDI
ROAD
AMBIVALI
OFFICE RENTAL
DAHISAR
RAILWAY
H1 2018
SHAHAD
BORIVALI
RAILWAY THAKURLI R S
PUNE LIN K
DOMBIVLI
ULHASNAGAR
KOPAR
KOPAR
ROAD R S
KANDIVALI
KALWA R S
MUMBRA DATIWLI R S
MALAD R S THANE
DIVA
861–1,507 4%
(80–140) MULUND R S
GOREGAON
2%
AIROLI R S
NAHUR
JOGESHWARI R S 2% RABALE
538–969 1%
-5%
KANJURMARG R S
(50–90)
0%
ANDHERI
SBD CENTRAL
GHANSOLI R S
VIKROLI R S
PBD
VILE
PARLE R S YoY change in rents in CBD &
I
TR
Off-CBD
AS
2%
SH
2,368–3,552 UR
BAH A D
LAL
SANTA CRUZ (220–330)
0%VIDYAVIHAR
TALOJE
PANCHNAND R S
MUMBAI TURBHE R S
KHAR LOKMANYA
TILAK SANPADA
ROAD R S KURLA RS
JUNCTION
BANDRA TILAK NAGAR CHEMBUR
TERMINUS
BKC& OFF-BKC VASHI
RAILWAY
GOVANDI JUINAGAR R S
BANDRA
CHUNNABHATTI NAVADE ROAD R S
MANKHURD
SION R S
MAHIM
JUNCTION N AV I M U M B A I
GURU TEGH
BAHADUR NAGAR R S
1,830–2,153
MATUNGA
5% NERUL R S
KALAMBOLI R S
ROAD R S
(170 –200)
MATUNGA R S
SEAWOODS KHARGHAR R S
DADAR 3% - DARAVE
PAREL
CENTRAL MUMBAI
ELPHINSTONE
ROAD R S KHANDESHWAR
MUMBAI
LOWER PAREL R S REAY ROAD
CURREY
ROAD R S
PANVEL
5%
CHINCHPOKLI R S
MUMBAI
MAHALAKSHMI
MUMBAI
REAY ROAD
MUMBAIBYCULLA
CENTRAL LOCAL CHIKHALE R S
DOCKYARD
ROAD
GRANT ROAD
1,722–2,691 -5%
BY SANDHURST
ROAD
CHHATRAPATI
SHIVAJI TERMINUS
RSHI
CHURCHGATE
CBD & OFF-CBD JASAI R S
112 113
RASAYANI
RESEARCH INDIA REAL ESTATE
Quarters to sell 17 0%
NCR
With the attraction
towards ready to move
90%
Increase in new supply from the
structural change in
the Indian Real Estate • The first half of 2018 has started on a demonization, implementation of Real
positive note for the NCR residential Estate (Regulation and Development)
market becoming a market. New launches that were on a Act, 2016, and the Goods and Services
downward spiral since 2010 reached tax (GST) have adversely affected the
reality, developers are their nadir in 2017. In the first half of new project launches in NCR.
2018, the market seems to be coming
cautious in launching out of the woods. New launches in H1
RESIDENTIAL MARKET 2018 have gone up by 90% compared
5%
new projects and to the same period last year.
114 115
RESEARCH INDIA REAL ESTATE
• Gurugram contributed significantly to for the delivery of the project. This • Slow sales coupled by lean new
the new launches in NCR in H1 2018, proposition is made more lucrative with launches has consequently brought
yet again taking up 47% of the overall the implementation of GST, which is down the unsold inventory by 12% in NCR MARKET ACTIVITY
pie. Notable developers were seen to applicable only on under-construction H1 2018 compared to the same period
launch projects in Sector 33, 106, 65 projects. in 2017. The unsold inventory stands at
and 77 in Gurugram. The first half of approximately 157,907 units as of June 40,000 Launches Sales Wt. Avg. Price (RHS) 50,000
• Demand in Greater Noida has always
2018 also saw new launches in Noida 2018. Greater Noida and Gurugram
been on the back of an affordable
49,281
and Greater Noida, along the Noida account for approximately 63% of the
option within the price bracket of `
Greater Expressway and in Greater unsold inventory in NCR followed by
2.5–5 mn. More than half of the total
Noida West, which saw negligible Ghaziabad and Noida.
inventory in Greater Noida falls within
launches in the same period in 2017.
this price bracket. Sales in Gurugram, • Gurugram saw a significant
35,000 49,000
• Demand for newly launched projects on the other hand, have been on the improvement in its quarters to sell in
in NCR has been moving at a snail’s back of availability of quality ready- H1 2018. The QTS of Gurugram has
pace and is almost in the same range to-move-in properties and also the gradually come down from 19 quarters
as in H1 2017. The first half of 2018 push to the affordable housing sector. in 2017 to 13 quarters in the first half of
48,553
saw 18,050 units being sold compared Our market survey suggests that 2018. The dominance of Gurugram as a
to 17,188 units in H1 2017, registering micro markets such as New Gurgaon, corporate hub, continued improvement
30,000 48,000
a YoY increase of 5%. The slow sales Golf Course Extension and Southern in infrastructure and the availability of
velocity suggests that the buyers are Peripheral Road, which were once seen ready-to-move-in residential options
still wary of the market dynamics and as uninhabitable due to lack of social are all contributing towards improving
even the stagnant prices have failed to and physical infrastructure, have slowly the sentiments for Gurugram. The
bring them back. Factors such as the started taking shape, thus attracting sustained office demand in the micro
46,777
sluggishness in the implementation the buyers especially the fence-sitting markets of NH-8, DLF CyberCity, and
25,000 47,000
of RERA in states of Haryana and end users. However, the micro market the upcoming IT SEZs on Golf Course
Uttar Pradesh for redressal unlike is still way below its sales volumes of Extension have also contributed to the
Maharashtra and continued delays in 2010–2011. facelift of Gurugram.
delivery of major infrastructure projects
45,908
• Demand in Noida remains dull in H1 • There has been no change in the
No. of Units
such as the Dwarka Expressway in
45,747
45,747
2018 and registers a YoY de-growth of weighted average prices in the NCR
Gurugram have led to the buyers
25%. In spite of a spurt in infrastructure residential market in H1 2018. The 20,000 46,000
holding on to their sentiments.
development, such as the metro prices that had seen a correction for
`/ sq m
• Our market survey with various connectivity, expressways and the second time in 2017 have remained
stakeholders suggest that only ready- entertainment options, residential sales muted, signaling the price resistance in
44,832
to-move-in projects are garnering in Noida have failed to inspire. This the market.
interest from buyers, as they safeguard stagnation in sales comes on the back
the buyer and gives him confidence of an inventory pile up and a correction 15,000 45,000
in the secondary market.
12%
quarters to sell at a constant since
projects in Sector 33, 2015.
116 117
RESEARCH INDIA REAL ESTATE
NARELA
AUCHANDI
RESIDENTIAL
LAUNCHES AND SALES
Launches (housing units) Sales (housing units) % Change (YOY)
ROHINI
AZADPUR
1,070
100%
H1 2018
ASHOK VIHAR SHAHDARA
3,245
-12%
0
0%
H1 2018 SAHIBABAD GHAZIABAD
GHAZIABAD
CHANDNI 26
CHOWK -77%
CONNAUGHT PLACE
DELHI
JANAKPURI
INDIA
NAJAFGARH GATE MAYUR VIHAR
DELHI
CANTONMENT
DWARKA
928
OKHLA
178%
H1 2018
Our market survey with
2,468
HAUZ KHAS GREATER -25% various stakeholders suggest
KAILASH
NOIDA
NOIDA
that only ready-to-move-
KAPASHERA 2,837 in projects are garnering
420%
H1 2018
DANKAUR
118 119
BALLABHGARH
RESEARCH INDIA REAL ESTATE
NARELA
AUCHANDI
RESIDENTIAL
UNSOLD INVENTORY H1 2018
Unsold inventory (YoY growth) QTS (in quarters) Age of inventory (in quarters)
ROHINI
AZADPUR
30,104 19
1,560 42
SAHIBABAD GHAZIABAD (1%)
GHAZIABAD
(1%) 21
CHANDNI 17
CHOWK
CONNAUGHT PLACE
DELHI Slow sales coupled by
JANAKPURI lean new launches has
INDIA
NAJAFGARH GATE MAYUR VIHAR
DELHI
consequently brought
CANTONMENT
PARI
CHOWK
GURUGRAM
GURGAON
RAJIV CHOWK
2,912 26
(-49%)
19
FARIDABAD
FARIDABAD
34%
Drop in unsold inventory levels in
All maps are for representational purpose not to scale Gurugram.
DANKAUR
120 121
BALLABHGARH
RESEARCH INDIA REAL ESTATE
NARELA
AUCHANDI
RESIDENTIAL PRICING
H1 2018
Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft) 12 month change (YOY) 6 month change (YOY)
ROHINI
SAHIBABAD GHAZIABAD
GHAZIABAD
CHANDNI
CHOWK
CONNAUGHT PLACE
DELHI
JANAKPURI
DWARKA INDIA
NAJAFGARH GATE MAYUR VIHAR
69,966 -96,876
(6,500–9,000) DELHI SECTOR 78
CANTONMENT
[-2%] [0%] 48,438 - 60,278
DWARKA (4,500–5,600)
[0%] [-2%]
GREATER KAILASH II
236,808 - 389,657OKHLA
(22,000–36,200)
[-2%] [0%]
HAUZ KHAS GREATER
KAILASH
SECTOR 4
NOIDANOIDA SECTOR 143 32,292 - 37,674
41,656 - 53,820 (3,000–3,500)
KAPASHERA
(3,870–5,000) [-3%] [0%]
[-2%] [0%]
SECTOR 92
39,826 - 48,438
(3,700–4,500)
[-5%] [0%] GREATER NOIDA
GREATER NOIDA
Having seen a price
correction in 2017,
PARI
CHOWK
GURUGRAM
GURGAON
SECTOR CHI V
the weighted average
RAJIV CHOWK
36,598 - 37,674
SECTOR 88
(3,400–3,500) prices remain muted
32,292 - 35,521
[-2%] [0%]
(3,000–3,300)
[-3%] [0%]
in H1 2018 signaling a
SECTOR 83
45,209 – 64,548 price resistance in the
(4,200–6,000) FARIDABAD
FARIDABAD
[2%] [0%] market.
SECTOR 75
All maps are for representational purpose not to scale
23,608 -32,292
(2,200–3,000) DANKAUR
122 [-5%] [0%] 123
BALLABHGARH
RESEARCH INDIA REAL ESTATE
0.5
0.4
mn sq m
0.3
0.2
102%
0.1
0.0
H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Increase in new supply compared Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
to H1 2017
20.7%
21.5%
20.6%
18.9%
New completions mn sq m (mn sq ft) 0.33 (3.6) 102%
17.7%
16.8%
20%
16.5%
Transactions mn sq m (mn sq ft) 0.32 (3.4) 7%
15%
Weighted average rental in 840 (78) 4%
`/sq m/month (`/sq ft/month)
10% Locations such as Golf
Stock mn sq m (mn sq ft) 13.9 (149.9)
5%
Course Road and Golf
Vacancy (%) 16.5%
124 125
RESEARCH INDIA REAL ESTATE
ft), rentals on GCER are in the range of Spacesworks and AltF in Gurugram.
` 484–807 per sq m (45–75 per sq ft) Co-working spaces or flexible work
SECTOR-WISE SPLIT OF TRANSACTIONS
for a good quality office space, thus spaces have contributed significantly to
enticing the occupiers. NCR’s office space demand since 2017.
The popularity of this office segment is
• Office leasing in Noida registered a
such that co-working space demand in
YoY 5% growth in H1 2018 compared
the first half of 2018 has surpassed the
to the same period in H1 2017.
annual tally of 2017. Our interactions
Large occupiers, such as Genpact,
with various stakeholders suggest that
Landis+Gyr, Conduent, were seen H1 2017
“CoWorking” as a trend will only gain
to prefer the Noida–Greater Noida
momentum in the coming times due to
Expressway and Sector 62 for setting
pressure on demand and the lack of
up operations. Noida has always
quality office supply.
been a preferred office market for IT
companies looking for cost effective • The average transacted space in H1
4%
rents, large campuses and good 2018 has increased to 3,023 sq m
connectivity for their workforce and (32,538 sq ft) compared to 2,536 sq
the city is faring well on all these m (27,301 sq ft) in the same period in
parameters. Latterly, the Noida– 2017. The market in the first half of the
Greater Noida belt has also been year was characterised by 105 deals, H1 2018
Increase in YoY weighted average chosen by industrial investors and of which 24 were above 4,645 sq m
rents in H1 2018. corporate giants, like Samsung, to (50,000 sq ft). Some of the large deals
expand their business footprints. in H1 2018 include WeWork, SpiceJet,
Ericsson and Sun Life Financials.
• Placing Noida on the world map,
Samsung Electronics has set up • The rental values have inched up in the
the world’s largest mobile factory in locations of Gurugram and Noida in H1
Noida with an investment of USD 727 2018 while being stable for the other
H1 H1
million. The 35-acre facility at Sector micro markets. The weighted average Industry
2017 2018
81 in Noida, Uttar Pradesh will help rental has increased from ` 807/sq m/
the South Korean tech giant to make month (75/sq ft/month) in H1 2017 to BFSI 3% 6%
mobile phones at a lower cost due ` 840/sq m/month (78/sq ft/month) in
to the scale. The new plant will help H1 2018. Though quality office space IT/ITES 21% 22%
Samsung double its manufacturing in the micro markets of DLF CyberCity
output from the current 68 million and Golf Course Road in Gurugram Manufacturing 34% 18%
Co-working dominated smartphones annually to 120 million witnessed a pressure on rentals
units a year. The company intends to due to limited supply and saw rental Other Services 42% 54%
leasing activity in NCR in adopt the “Make in India” campaign appreciation to the tune of 4–5%. BUSINESS DISTRICT CLASSIFICATION Note: BFSI includes BFSI support services
and export the smartphones globally.
H1 2018 with occupiers This development is expected to
BUSINESS DISTRICT MICROMARKETS
create a ripple effect and create
such as WeWork, CoWrks, approximately 15,000 local jobs.
AVERAGE DEAL SIZE
Connaught Place, Barakhamba Road, Kasturba Gandhi Marg AND NUMBER OF DEALS
CBD Delhi
Spacesworks and AltF • Demand from large IT/ITeS occupiers and Minto Road
126 127
RESEARCH INDIA REAL ESTATE
NARELA
AUCHANDI
OFFICE
TRANSACTIONS H1 2018
Transactions mn sq m (mn sq ft) YoY change
ROHINI
AZADPUR
25%
CBD
CONNAUGHT PLACE
JANAKPURI
INDIA
NAJAFGARH GATE MAYUR VIHAR
0.01 (0.10)
DELHI
CANTONMENT
Increase in YoY transacted space
in Gurugram in H1 2018.
DWARKA -78%
0.09 (0.97)
SBD DELHI
OKHLA
5%
HAUZ KHAS GREATER
KAILASH
NOIDANOIDA
KAPASHERA
Gurugram outperformed
0.21 (2.2) the other markets yet
25% GREATER NOIDA
again and took up a
considerable percentage
PARI
CHOWK
GURUGRAM
GURGAON (66%) of the total
RAJIV CHOWK
DANKAUR
128 129
BALLABHGARH
RESEARCH INDIA REAL ESTATE
NARELA
AUCHANDI
OFFICE RENTAL
H1 2018
Rental value range in H1 2018 in `/sq m/month (`/sq ft/month) 12 month change 6 month change
ROHINI
AZADPUR
2,303 - 3,767 0%
(214–350)
0% SAHIBABAD
GHAZIABAD
CHANDNI
CHOWK
CBD
CONNAUGHT PLACE
JANAKPURI
INDIA
NAJAFGARH GATE MAYUR VIHAR
DELHI
CANTONMENT
1,001 - 1,755 0%
DWARKA (93–163)
0% The rental values have
775 - 1,442 4%
(72–134) inched up in the locations
0% OKHLA
SBD DELHI
of Gurugram and Noida
HAUZ KHAS GREATER
KAILASH
FARIDABAD
appreciation to the tune of
FARIDABAD
4–5%.
DANKAUR
130 131
BALLABHGARH
RESEARCH INDIA REAL ESTATE
-6%
PUNE YoY change is sales
in H1 2018
• The Pune residential market witnessed • Affordability of apartments has been a
a strong growth in launches during problem across the major cities of India
H1 2018 after many years of subdued and Pune was no different. As a result,
launches. The launches grew 78% these new launches have come at a
year-on-year (YoY). lower price per square metre (or price
per square feet) and as the unit size of
• However, a point of caution, the strong
Pune market witnessed number of launches is that this growth
the apartments were smaller, it led to
a lower ticket size. As the residential
comes on the back of a low base of H1
strong growth in launches 2017. The first half of 2017 witnessed
market performance has been weak
over the past few years, there has been
during H1 2018 after a major lull, as far as launches are
concerned, as Q1 2017 was reeling
an increasing focus by developers to
make the process of purchase less
many years of subdued under the effects of the demonetisation
strenuous on buyers. Since the unit
policy of November 2016 and this
size of ongoing and ready-to-move-in
launches. However, a point reflected in the very poor number of
apartments cannot be changed, new
launches. In Q2 2017, as the market
of caution on the strong was recovering slowly, the Real Estate
launches are the only way to fulfil the
objective. Developers are hoping to
RESIDENTIAL MARKET (Regulation and Development) Act,
78%
launches number is that 2016 (RERA) fears gripped the market
benefit out of interest subsidy offered
under the PMAY scheme for affordable
around mid-April. As a result, post
this number looks large as May, the market took a downturn again
housing units to drive sales. Moreover,
affordable housing projects attract a
it comes on the back of a and launches took a hit. As a result,
lower GST rate of 8% against 12%, this
YoY growth in launches H1 2017 overall witnessed poor launch
is another incentive which developers
in H1 2018 low base of H1 2017. numbers. Comparing those launch
have taken cognisance of.
numbers to the existing ones presents
a very high 78% YoY growth.
132 133
RESEARCH INDIA REAL ESTATE
• During H1 2018, sales in Pune were under-construction buildings in the construction or ready projects.
lower by 6% YoY at 16,451 units. complex, the buyer is not even ready to
• Unsold inventory levels have come PUNE MARKET ACTIVITY
Pune market has been witnessing a have a look at the under-construction
down as new launches have lagged
slowdown in sales, as the buyers are property.
sales by a significant margin from
finding the existing prices to be high.
• On the pricing front, several developers H2 2014 to H2 2017. H1 2018 was no
The decline in sales is also attributable 30,000 Launches Sales Wt. Avg. Price (RHS) 53,000
have reduced the quoted prices for different, the new launches lagged the
to negative sentiment in the IT sector
52,318
their properties. The weighted average sales. The quarters-to-sell (QTS) for
52,318
due lower salary increments and poor
prices for Pune is down by 5% YoY. the Pune market was 3.3 in H1 2018.
job prospects. 52,500
However, a QTS of 3.3 should not
52,045
• In addition to the discount on quoted
• For under-construction properties, be interpreted as a sign of a healthy
51,871
prices, many developers have upped
buyers are reluctant to pay the 12% market. The Pune residential market
the ante by throwing in waivers
Goods and Services Tax (GST). As a has arrived at this QTS number on 52,000
like – block prices for the entire
consequence, a significant proportion account of significant contraction in
flat irrespective of floor, which also 25,000
of the sales is happening in Occupation launches over the past few years. The
includes maintenance and clubhouse
Certificate (OC) ready projects, leading launches have constantly lagged the 51,500
charges, various subvention plans, free
to the sales velocity in the under- sales since H2 2014 till H1 2018. This
appliances, GST waivers and a host
construction properties significantly led to decline in QTS. If we look at
of other indirect discounts. Pre-EMI
slowing down. Almost the entire the QTS in conjunction with the age
schemes are in vogue and are being 51,000
50.546
demand is driven by end-users. Real of inventory of 12.3 quarters, then the
used to lure homebuyers to make a site
estate investors are shying away from sum of the age of inventory and QTS
visit. The actual discount offered in the
investing in residential properties, as results in 15.6 quarters or 3.5 years.
market would be higher, as when the 20,000 50,500
they are not expecting any appreciation This implies that the existing unsold
buyer sits at the table for negotiation,
in prices. inventory has been languishing in the
the developer is more than happy to
market for more than 3 years and it will
• During the field visits and interactions negotiate on the pricing to ensure that 50,000
take almost another six months to sell.
with the stake holders, we observed the deal is closed.
No. of Units
that – in some of the projects where • The cheer in new launches does not
• Floor rise and preferential location
there is a combination of OC ready and translate into a similar story for sales
charges have become a thing of the 49,500
yet. Several sales support measures
past in the Pune market. Floor rise, if
during the period limited the decline 15,000
charged, is charged as a part of the
in sales. Clearly, the sector is not out
block deal. For example, floors 5–10 49,000
48,524
of the woods yet. Smaller developers
will have the same price irrespective
For under-construction
`/ sq m
are having a tough time managing
of the floor on which the purchase is
their cash flows post implementation
made. Flats on floors 11–15 will have
properties, buyers are
48,007
of RERA and are either selling their 48,500
a slightly higher price than the flats
projects or entering into a joint venture
reluctant to pay the 12% from floors 5 to 10, but the flat on the
(JV) with larger developers to complete
15th and 11th floor would be priced
the project. 10,000 48,000
Goods and Services Tax the same. Even the developers concur
with the view that without reduction in
(GST). As a consequence, prices even the current level of sales
would have been difficult to achieve. 47,500
a significant proportion of
• The western residential markets of
the sales is happening in Pune are gaining traction due to new
47,000
office space supply and occupiers
Occupation Certificate (OC) taking up space in those regions. The 5,000
rise in number of office occupiers is
ready projects, leading driving up demand for residential real 46,500
estate in that area as employees prefer
to the sales velocity in to purchase homes closer to office.
In the other markets of Pune, if the 46,000
the under-construction apartment is available at the right price
properties significantly and at a good location, it sells. This
has forced developers to introduce 0 45,500
slowing down. their new launches at lower prices and H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
smaller sizes at good locations, as it is
Source: Knight Frank Research
difficult to modify the existing under-
134 135
Nagar
Mohan
Nagar
Indira Nagar
1,995
32%
Chinchwad
Gaon H1 2018
3,451
-3%
NORTH
Sukhwani
Complex RESIDENTIAL
LAUNCHES AND SALES
Wakad Launches (housing units) Sales (housing units) % Change (YOY)
Lohegaon
Pimple Gurav
4,612
2,738 138%
11% H1 2018
H1 2018
Balewadi
3,886 Wagholi
4,759 -4%
1%
EAST
WEST Khadki Nagar
Baner
Sales contracted in
Pune
University
-16%
Pashan
313
Rajivgandhi
Nagar-12%
Slum
Koregaon Park Vadban
Koregaon
Park Annexe
marginal at 1%. The
Clover Park
CENTRAL View
Deccan
Gymkhana
Budhwar Peth
and south.
Bavdhan
Camp
Hadapsar
Kelewadi
Navi Peth
Chandani Lohiya Nagar
Chowk Kothrud
Swargate
Wanwadi
MICRO-MARKET LOCATIONS
4,331 CENTRAL Koregaon Park, Boat Club Road, Erandwane, Deccan, Kothrud, Model Colony
127%
H1 2018 EAST Viman Nagar, Kharadi, Wagholi, Hadapsar, Dhanori,
4,042
-16%
WEST Aundh, Baner, Wakad, Hinjewadi, Bavdhan, Pashan
Wadgaon
Budruk
Fule Market
Nanded
SOUTH NORTH Pimpri, Chinchwad, Moshi, Chikhali, Chakan, Talegaon
Handewadi
All maps are for representational purpose not to scale Source: Knight Frank Research
136 137
Nagar
Mohan
Nagar
Indira Nagar
NORTH
Sukhwani
Complex RESIDENTIAL
UNSOLD INVENTORY H1 2018
Wakad Unsold inventory (YoY growth) QTS (in quarters) Age of inventory (in quarters)
Lohegaon
Pimple Gurav
7,940 3.9
6,715 3.0
(-25%)
Balewadi (-37%) 13.6 Wagholi
11.0
EAST
WEST Khadki Nagar
Baner
Pune
University
Kharadi
866 5.7
Sutarwadi Pashan
(-22%)
Rajivgandhi 14.5
Nagar Slum
Koregaon Park Vadban
Koregaon
Clover Park Park Annexe
Shivajinagar CENTRAL View
Revenue Ghorpadi
Colony
Juna Bazar
Somnath Nagar
Bhoiali
Deccan
Gymkhana
Budhwar Peth
Bavdhan
Camp
Hadapsar
Kelewadi
Navi Peth
Chandani Lohiya Nagar
Chowk Kothrud
Swargate
Nanded
Fule Market
SOUTH
sales since H2 2014 till
Handewadi
H1 2018.
138 139
Nagar
Mohan
Nagar CHAKAN
Indira Nagar 32,292–36,598
RESEARCH (3,000–3,400) INDIA REAL ESTATE
CHIKHALI [-3%] [-2%]
37,674–44,132
MOSHI
(3,500–4,100)
39,827–46,285
[-2%] [-1%]
(3,700–4,300)
Chinchwad
Gaon [-5%] [-4%]
NORTH
Sukhwani
Complex RESIDENTIAL PRICING
H1 2018
Wakad
Price range in H1 2018 in `/sq m Price range in H1 2018 in (`/sq ft)
Lohegaon
EAST
WEST Khadki Nagar
In addition to the
HINJEWADIBaner
KHARADI
57,049–67,813
reduction in quoted prices
51,667–63,508 BANER ERANDWANE
AUNDH (5,300–6,300)
(4,800–5,900) 60,278–86,112
(5,600–8,000) 83,959–102,258
Pune
University 145,314–193,752
[-9%] [-1%] developers are offering a
[-10%] [-5%] (13,500–18,000) Kharadi
[-9%] [-4%] (7,800–9,500) BOAT CLUB ROAD
[-6%] [-1%] 156,078–209,898
[-1%] [-1%]
host of indirect discounts
(14,500–19,500) KOREGAON PARK
Sutarwadi Pashan
[-1%] [-1%] 139,932–182,988 in the form of GST waivers,
(13,000–17,000)
Rajivgandhi
Nagar Slum [-1%] [-1%]
Koregaon Park Vadban no-floor rise charges,
subvention plans, free club
Koregaon
Clover Park Park Annexe
Shivajinagar CENTRAL View
Revenue Ghorpadi
Hadapsar
Kelewadi
Navi Peth
Chandani Lohiya Nagar
Chowk Kothrud
Swargate
Wanwadi
KONDHWA
49,514–61,355
(4,600–5,700)
[-4%] [-3%]
UNDRI
41,980–51,667
-5%
Wadgaon (3,900–4,800)
Budruk
Fule Market
[-3%] [-2%]
Nanded
SOUTH
Handewadi
0.30
0.25
mn sq m
0.20
0.15
0.10
5.7%
Vacancy levels in Pune office
0.05
0.00
H1 2015 H2 2015 H1 2016
30%
15.0%
New completions mn sq m (mn sq ft) 0.25 (2.7) 54% services and Insurance
15%
11.0%
(BFSI) sector has
9.3%
Transactions mn sq m (mn sq ft) 0.36 (3.9) 118%
8.2%
7.9%
10%
5.7%
5.8%
Weighted average rental in 707 (66) 8% consistently taken up an
`/sq m/month (`/sq ft/month) 5%
The Pune office space increasing amount of space
Stock mn sq m (mn sq ft) 6.0 (64.7) - 0%
market has been reeling H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 over the past 18 months
Vacancy (%) 5.7% -
under an acute supply Source: Knight Frank Research
and vastly increased its
crunch over the past 3 Note- 1 square meter (sq m) = 10.764 square feet (sq ft)
Source: Knight Frank Research
• The IT/ITeS sector has been the largest the IT/ITeS sector, to an extent. The
share in total transactions
years with supply not • The Pune office space market has been reeling under an acute supply crunch over
the past 3 years with supply not keeping up with the demand. H1 2018 witnessed the
consumer of office space in the city. BFSI sector also dominated the pre-
during the analysis period,
H1 2018 saw the IT/ITeS sector take up commitment transactions space.
keeping up with the addition of 0.25 mn sq m (2.7 mn sq ft) of supply, but this was inadequate compared to only 0.11 mn sq m (1.1 mn sq ft), which
• The CBD & off-CBD, PBD East and filling up the vacuum
the transaction volumes in H1 2018. translates to 30% of the total space
PBD West markets witnessed the
demand. This demand- • The fact is that the city saw just 0.92 mn sq m (9.9 mn sq ft) of supply since H1 2015,
transacted during H1 2018, a significant
largest growth in transaction volumes.
left by the IT/ITeS sector,
and steady drop from the 60% during
compared to the 1.64 mn sq m (17.7 mn sq ft) of transaction volume. This demand-
supply gap had pushed supply gap had pushed down vacancy levels from 15% in H1 2015 to around 5.7% in H1
H1 2017. • The BFSI sector accounted for almost to an extent. The BFSI
0.14 mn sq m (1.5 mn sq ft) of the
down vacancy levels from 2018. The 0.25 mn sq m (2.7 mn sq ft) delivered during H1 2018 was the highest in any • The Banking, Financial services
total office space transacted during sector also dominated
half-year period, but it could not mitigate the pressure on vacancy levels. and Insurance (BFSI) sector has
H1 2018. The volumes were high on
15% in H1 2015 to around • The transaction volumes during H1 2018 outstripped the supply and rose by 118%
consistently taken up an increasing
account of a major pre-commitment
the precommitment
amount of space over the past 18
year-on-year (YoY) to 0.36 mn sq m (3.9 mn sq ft) compared to the healthy 54% growth
5.7% in H12018. in supply. The growth in transaction volumes was high as the volumes also included
months and vastly increased its share
deal by BFSI occupiers.
transactions space.
in total transactions during the analysis • The two peripheral business districts
pre-commitment (pre-lease) deals. The presence of large pre-commitments reflects the
period, filling up the vacuum left by accounted for 67% of the transaction
impact of supply shortage in the Pune office market.
142 143
RESEARCH INDIA REAL ESTATE
H1 2017
54%
YoY growth in new completions
H1 2018
H1 H1
Industry
2017 2018
Manufacturing 6% 11%
The sustained decline in
vacancy levels coupled Other Services 22% 19%
144 145
Nagar
Mohan
Nagar
Indira Nagar
Chinchwad
Gaon
Pimple Gurav
PBD EAST
Balewadi
0.068 (0.73) Wagholi
9%
Khadki Nagar
SBD EAST
0.022 (0.24)
Baner
11% Pune
University
Kharadi
Rajivgandhi
Nagar Slum
Koregaon Park Vadban
Koregaon
Clover Park Park Annexe
Shivajinagar View
Revenue
CBD AND OFF-CBD Ghorpadi
Colony
Juna Bazar
Somnath Nagar
Bhoiali
Deccan
Gymkhana
Budhwar Peth
Bavdhan
Camp
Hadapsar
Kelewadi
Navi Peth
Chandani Lohiya Nagar
Chowk Kothrud
Swargate
Wanwadi
Nanded
Fule Market of available supply and
Handewadi
lower rentals.
146 147
Nagar
Mohan
Nagar
Indira Nagar
Chinchwad
Gaon
4%
Sukhwani
Complex OFFICE RENTAL
431– 538
(40–50)
2% H1 2018
Wakad 484 – 861 7% Rental value range in H1 2018 in `/sq m/month (`/sq ft/month) 12 month change 6 month change
PBD WEST Lohegaon (45–80)
4%
Pimple Gurav
PBD EAST
Balewadi
538 – 1,023 9% Wagholi
(50–95)
6%
Khadki Nagar
SBD EAST
538–861 7%
Baner
(50–80)
6% Pune
7%
University
Kharadi
SBD WEST
807 - 1,184 6%
Sutarwadi Pashan (75-100)
Rajivgandhi
Nagar Slum
4% YoY rental growth in PBD East and
Koregaon Park Vadban
SBD West
Koregaon
Clover Park Park Annexe
Shivajinagar View
Revenue
CBD AND OFF-CBD Ghorpadi
Colony
Juna Bazar
Somnath Nagar
Bhoiali
Deccan
Gymkhana
Budhwar Peth
Bavdhan
Camp
Hadapsar
Kelewadi
Navi Peth
Chandani Lohiya Nagar
Chowk Kothrud
Swargate
Wanwadi
9%
Wadgaon
Budruk
Fule Market
Nanded
Handewadi
148 149
RESEARCH INDIA REAL ESTATE
GLOBALLY CONNECTED.
securing an industrial plot and trends, our team works with clients and international properties.
working with government agencies to build an entry strategy based on Working with corporates, MNCs
for approvals and documentation. the brand’s requirements, conducts and high-net-worth individuals,
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight location analysis and negotiates we offer comprehensive services
We offer the following services to
Frank has more than 15,000 people operating from 418 offices across 60 markets. The Group advises clients the best deal. From national chains to the buyers, sellers, tenants and
industrial parks, investors,
ranging from individual owners and buyers to major developers, investors and corporate tenants. to institutions and retailers of landlords.
3 PL companies, landlords and
international luxury goods, our
corporates: We offer the following services to
In India, Knight Frank is headquartered in Mumbai and has more than 1,000 experts across Bengaluru, Delhi, clients receive the widest range of
corporates, investors and individual
Pune, Hyderabad, Chennai, Kolkata and Ahmedabad. Backed by strong research and analytics, our experts transactional services for acquisition
buyers.
offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions or disposition of property.
Industrial
land acquisition
(residential, commercial, retail, hospitality, land & capital), facilities management and project management. We offer the following services to
Warehousing
retailers, high streets, developers Primary
Sale
For more information, visit www.knightfrank.co.in Industrial
asset disposal and schools:
Resale
Industrial
investment
Leasing
opportunities
Advisory
International
Property
Built-to-suit
facilities
Business Development
ADVISORY CAPITAL MARKETS OFFICE Second
Homes
Landlord
Representation
for Mall Owners
Supported by research and Our experts evaluate and structure Our team assists and advises
information experts, our consultants investments on behalf of high- tenants and landlords / property
work with government authorities, net-worth individuals, leading owners on leasing, acquisition
infrastructure companies, institutions, developers and private or disposition of property. We
developers, landlords, investors and equity funds. We provide acquisition assist corporates on location
occupiers to help them make the and divestment services for all selection, sourcing, financial
best use of their property. asset classes such as commercial, analysis, structuring transactions, FACILITIES & ASSET MANAGEMENT PROJECT MANAGEMENT
residential, hospitality, retail, and due diligence and negotiations.
We offer the following services
industrial entities. For landlords, we source tenants,
to developers, government We understand the complex requirements of facilities Our team of qualified architects, engineers and
market the project, structure the
projects, PE funds and industrial We offer the following services management and offer customised solutions backed construction professionals help clients with technical
transaction and manage all the
development corporations: to fund houses, developers, with international best practices to help our clients due diligence, audit management, programme
documentation.
corporates and developers: maximise operational efficiencies at optimum costs. We management and construction management
We offer the following services to lay strong emphasis on sustainability measures while services. Our Engineering, Procurement &
Valuation
corporate, landlords and investors: ensuring superior service delivery, quality and safe Construction (EPC) model provides a one-stop shop
Fundraising
working environments. for all services from start to close-out.
Development
consultancy
Land
transactions We offer the following services to corporates, We offer the following services to corporates,
Strategic
consultancy Space
Acquisition / Disposal
Core
Asset Sale developers, commercial property owners, residential developers, commercial property owners, residential
Government
and infrastructure Workspace
Consulting and retail properties: developments and retail enterprises:
Lease
Administration
Renegotiations
/ Re-gear Consultancy
Project
Management
Renewal
Management Facilities
Management EPC
– Design & Build
Commercial
Space / Project Asset
Management Other
Services
Marketing
150 151
RESEARCH INDIA REAL ESTATE
KEY CONTACTS
PUNE
Paramvir Singh Paul
Branch Director
paramvirsingh.paul@in.knightfrank.com
REPORT AUTHORS
152 153
COMMERCIAL BRIEFING
For the latest news, views and analysis
of the commercial property market, visit
knightfrankblog.com/commercial-briefing/
RESEARCH
Dr. Samantak Das
Chief Economist and
National Director – Research
samantak.das@in.knightfrank.com
PRESS OFFICE
Girish Shah
Executive Director –
Marketing & Corporate Communications
media@in.knightfrank.com
Knight Frank India Research provides development and strategic advisory to a wide range of
clients worldwide. We regularly produce detailed and informative research reports which
provide valuable insights on the real estate market. Our strength lies in analysing existing
trends and predicting future trends in the real estate sector from the data collected through
market surveys and interactions with real estate agents, developers, funds and other
stakeholders.