India Real Estate January June 2017 4796 PDF

RESEARCH
INDIA REAL ESTATE
INDIA REAL ESTATE

RESIDENTIAL AND OFFICE -
JANUARY - JUNE 2017
AHMEDABAD | BENGALURU | CHENNAI | HYDERABAD | KOLKATA | MUMBAI | NCR | PUNE

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RESEARCH INDIA REAL ESTATE
Connecting
TABLE OF CONTENTS
ALL INDIA 18
People AHMEDABAD 28
BENGALURU 38
& Property,
CHENNAI 52
HYDERABAD 68
Perfectly.
KOLKATA 80
MUMBAI 94
NCR 110
PUNE 128
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FOREWORD
CHURNING POINT it would trigger some momentary sector is an undeniable reality. Indian Rupee has been a top performing
disturbances but augur well for the industry currency among its market peers over the
There is ample heartburn across the in the long term. Among the various The regulation is set to bring a sea change past couple of years.
industry in the wake of the new regulatory economic policies of the Narendra Modi- in the realty landscape of the country by
environment. Widespread anxiety whipped led government, this will be one of the most attracting new investors and customers. The strong fundamentals, robust economic
up by the implementation of the Real important milestones. growth, political stability, controlled
Estate (Regulations and Development) Act, It will give long pending protection to inflation and the lower interest rate regime
2016 and the recently rolled out Goods GST would be extremely beneficial for the interests of the end-consumers and have improved Indias chances of a
and Services Act (GST) reflects in the the logistics sector. With a wave of new give a substantial fillip to the confidence sovereign ratings upgrade within the next 2
transaction books. infrastructure taking shape in the forms of of various stakeholders including fund years. Albeit, the recent loan wave-offs can
ports, roads and rail networks, the new tax providers such as banks, other financial be a cause of concern.
SHISHIR BAIJAL New launches have dried up, home sales regime would draw massive investments institutions and private equity funds.
CHAIRMAN AND MANAGING DIRECTOR have slipped and piles of unsold stock are Considering the benign inflation numbers
which would potentially transform the look
evident. But at the same time there have The sector would also transform into a we hope that the Reserve Bank of India
and feel of the warehousing industry.
been some positive takeaways which will more organised and transparent place (RBI) to adopt a growth-inducing dovish
augur well for the sector in the long-term. The impact of GST on real estate would under this regime. We have seen in the monetary policy.
There is an indisputable switch towards be primarily tax neutral but loaded with past that regulators have brought in more
efficiency and transparency in telecom, A growing economy would signal healthy
A
building affordable homes. Co-working gains for the affordable housing sector. The
n overhaul entrenched deep insurance and financial sectors. The consumption across all genres of the
space providers are emerging as the new finance ministry has made it very clear that
beneath the usual look and feel of information pertaining to the real estate Indian real estate. With tamed inflation,
big ticket players in the occupier market. there should be no additional tax burden
imagination is taking shape in the sector will be available in a systematic uptick in industry sentiments and a good
And, the logistic sector is attracting million- on consumers. It would also add another
Indian real estate sector. manner leading to easy accessibility and monsoon forecast the need of the hour is
dollar investments. strategic push to affordable housing
which in turn will drive the recovery of the transparency. to embrace a monetary policy that propels
Metro cities are bustling with massive
In a nutshell, the Indian real estate residential sector. growth.
beehive-like infrastructure work, affordable The governments push towards affordable
sector is probably grappling with the
homes shaping a new skyline, investments housing, banks cutting down home
fear of the unknown. We experienced a The intention of GST is to bring in
worth millions of dollars pouring in loan interest rates and uptick in buyers
similar dilemma in the recent past when efficiency in the entire tax system, the
from sovereign funds and a significant sentiments would collectively revive the
demonetisation crippled growth. But implementation of which will see lot of
section of fringe players are on the edge much-ailing sector.
six months on, the sector is looking up teething issues. But eventually it will pave
engulfed by a new order of reforms driving
towards a bright future. the way for an extremely efficient tax
consolidation in the industry.
system for the country.
Meanwhile the initial concerns from GOING FORWARD
Secondly, the RERA Act has drummed
geopolitical uncertainties such as the US TRUMP CARDS up buyers confidence back in the sector. India is perhaps the only bright spots
polls, BREXIT and other crucial elections in
We have already seen the spontaneous among emerging markets in the world
Europe have also faded away. First, the much awaited roll out of the
action by the Maharashtra regulator or the today. The International Monetary Funds
Goods and Services Tax (GST) would
With all economic indicators in the pink of MahaRERA. Even as other states struggle recent World Economic Outlook has
be the single largest tax reform post-
health the need of the hour is to embrace a to bring out their respective versions of the predicted an envious growth rate of more
independence. Much like the initial
monetary policy that propels growth. central act the new order in the housing than 7% for the country. In addition the
heartburns caused by demonetisation
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assets like bonds, commercial assets of the currency has appreciated against the investors to invest in this sector.
private developers and REITs in emerging U.S. dollar; which further substantiates
markets. The increase in interest rates in the the strong macros. In addition to the
developed markets has also caused their improving macros, a slew of policy reforms ARE INVESTORS RESPONDING?
domestic currency to strengthen and assets taking place in the country have wooed
The governments emphasis on housing
in emerging markets have started becoming foreign investors back to its shores. The
and its efforts to mitigate the risks in
cheaper from the investment perspective. new government has implemented several
the real estate sector by introduction
As these emerging markets develop and reforms to streamline and formalise the
of RERA has not gone unnoticed by
grow, over a period of 10-15 years their economy across all sectors. The recent
foreign institutional investors and also
currency would strengthen against the roll out of the Goods and Services Tax
the sovereign and pension funds. A large
currencies of developed markets and hence (GST) Act could be the corner stone in this
number of these investors and funds have
at the time of exit, the long term investors endeavour.
made changes to the portfolio allocation
would not only gain from appreciation in
strategy allowing investment exposure to
assets but also gain from movement in
Indian real estate. The pension and private
exchange rate. The strong fundamentals, robust economic
equity funds are investing in commercial
growth, political stability, controlled inflation
assets (office spaces and malls) and also in
and the lower interest rate regime have
under-construction residential properties.
INDIA: RESURGENCE OF THE GEM OF improved Indias chances of a sovereign
Players such as Qatar Holdings, CPPIB,
EMERGING MARKETS ratings upgrade within the next 2 years
Blackstone, Ivanhoe Cambridge, APG and
However, the recent loan wave-offs can be
Post the financial crisis in 2008 developing Xander are readying blueprints for long-
major cause of concern for deferring the
countries like Brazil, Russia, India, China term investments in the realty segment. Not
upgrade.
and South Africa (BRICS) among others just foreign investors even the domestic
INDIAN REALTY:
played a crucial role in driving the global investors are raising funds to invest in this
economy forward. But over the period of sector.
INDIAN REAL ESTATE:
time unaddressed structural problems
A NEW PARADIGM ON ANVIL
AN UNDERRATED
coupled with high currency volatility in
these markets forced investors to move Real estate has been a key driver for the
their money back to developed markets. economy. However, poor transparency
GOLDMINE. While Brazil, Russia and South Africa were

seriously affected by collapse in commodity
prices and political instability, weak
in the sector and dwindling consumer
confidence had put the industry under strain
in the past 3 to 4 years.
government, policy paralysis and worsening
The recent introduction of the Real Estate
fiscal metrics crippled Indias growth story.
(Regulation and Development) Act, 2016
- BY NIBODH SHETTY As these emerging
has pumped in a new lease of life into
markets develop and
the sector. The is expected to weed out
FLASHBACK The unemployment rate in major But the tables have turned. With a stable grow, over a period of
unorganised players from the industry
economies, particularly the US, has come government having comfortable majority in
After nearly a decade-long era crippled and whip up buyers confidence bringing 10-15 years their
below to its pre-recession levels and wage parliament, the confidence has returned.
with economic and political uncertainty the buoyancy back into the sector. currency would
growth has finally started picking up. The India has now become one of the fastest
global economy has stabilised and showing
improving job prospects accompanied growing economies in the world and would strengthen against the
healthy signs of recuperation. A reflection currencies of developed
with higher wage growth poses a threat of retain that status for the foreseeable future.
of the resurrected economic environment The subsequent stride in re-engineering
inflation rising rapidly. Since the nominal Although China was the only performing
momentum back into the sector was the
markets and hence at the
came across in the International Monetary
domestic returns on savings instruments emerging market until recently, today time of exit, the long term
Funds latest World Economic Outlook governments push towards affordable
in these economies are low, the inflation it faces imminent threat from high debt
(WEO). housing. By giving it infrastructure status investors would not only
adjusted real returns would be lower and and excess capacities. It has also been
the government would attract private gain from appreciation in
in many cases negligible possibly even downgraded by Moodys.
developers towards these projects. At the assets but also gain from
sub-zero. This is making their pension
The projections indicate that the global same time home loan sops and interest
and sovereign funds as well as domestic movement in exchange
GDP would grow above 3.5% per annum subsidies under the Pradhan Mantri
investors look for assets abroad which India on the other hand is projected to grow
Awas Yojna would fire up the demand for
rate.
over the next 5 years. In the wake of the
can deliver higher inflation adjusted real at the rate of more than 7% according
changing scenario the era of low interest these homes. The expected increase in
returns. A large number of such investors to the IMFs world economic outlook
rates and loose monetary policies in transparency due to implementation of
have modified their portfolio allocation forecast. Its economic robustness is also
developed economies is fading away with RERA and formalisation of sector with the
strategies to allow increase in exposures substantiated by the performance of its
Central Banks increasing interest rates in implementation of GST, the sector would
to emerging markets which give potential currency. The Indian Rupee has been a top
anticipation of higher inflation in developed aid the sector in getting access to variety of
for higher returns despite subjecting the performing currency amongst its emerging
countries such as U.S and Canada. formal sources of finance.These reforms will
portfolio to higher risk. The pension funds market peers over the past 2 years. The
go a long way in enticing the institutional
prefer to invest in regular income generating volatility in the currency has reduced and
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SUMMARY OF RECENT SELECT INVESTMENTS BY GLOBAL INVESTORS INTO INDIA REAL ESTATE SOME OF THE RECENT FUND RAISES/INVESTMENTS INCLUDE-
DATE INVESTOR INVESTMENT FUND/ DEAL DETAILS DATE INVESTOR INVESTMENT FUND/ DEAL DETAILS
COMPANY (TARGET) COMPANY (TARGET)
June 2017 KKR Lodha Group $100 million equity investment 2017 Piramal Finance Ltd. Piramal Enterprise Piramal Finance plans to invest $171 million into real estate develop-
er Embassy Groups projects
June 2017 Qatar Holding Affordable Housing Fund Invested $250 million in Arthveda Fund Management
Pvt. Ltds new Affordable Housing Fund 2017 Kotak Realty Fund Kotak Mahindra Bank Raising $250 million ($100 million in latest tranche and $150 million
in earlier tranche) to invest in affordable housing projects across the
May 2017 Xander and APG IT SEZ in Chennai Bought an information technology (IT) special
country
economic zone (SEZ) in south Chennai for
around $350 million 2016 Motilal Oswal Real Motilal Oswal Group ` 800 crore in tranche III
Estate ` 500 crore in tranche II
May 2017 GIC DLF Cyber City Developers Ltd (DCCDL) 40% stake in DLF Cyber City Developers Ltd (DCCDL)
Plans to invest in projects of reputed developers across major metros
the commercial arm of DLF for `12,000 crore
2016 Indiabulls Real Estate Indiabulls Asset Manage- Raised `1,400 crore in its third commercial real estate private equity
Apr 2017 Canada Pension Plan Phoenix Mills subsidiary $250 million in multiple tranches into the Island Star
Fund ment Company fund
Investment Board Mall a subsidiary of Phoenix Mills
2016 Milestone Capital Advi- Milestone Capital Advisors Plans to raise INR 1,400 crore in its third commercial real estate
Feb 2017 Dalian Wanda Industrial park in Haryana Plans to invest $12 billion to develop an industrial
sors Ltd Ltd private equity fund
township project in Haryana
2016 IDFC Alternatives IDFC Ltd Plans to raise $300 million to invest in Indian real estate sector
Feb 2017 Ivanhoe Cambridge Private equity fund jointly floated by $250 million fund to invest in metro cities- metro cities
them and Piramal Enterprises Ltd - Mumbai Metropolitan Region, Delhi-National Capital Source: http://economictimes.indiatimes.com/industry/banking/finance/idfc-alternatives-to-raise-rs-2000-crore-real-estate-fund/articleshow/52825410.cms
http://www.dnaindia.com/business/report-ivca-successfully-hosted-its-second-real-estate-and-infrastructure-2477120
Region, Bangalore, Pune, and Chennai.
http://economictimes.indiatimes.com/industry/banking/finance/idfc-alternatives-to-raise-rs-2000-crore-real-estate-fund/articleshow/52825410.cms
Nov 2016 APG Asset Management Joint venture formed $450 million to buy retail real estate in India
GREEN SHOOTS OF RECOVERY next wave of growth. Right from buying of generally the leading indicator of how the
and Virtuous Retail (VR) land, funding of projects to delivery of the sector is going to perform in the near future.
The past 3-4 years have been an extremely
final product to the buyer, the entire process The reality index has outperformed the
Jan 2017 Abu Dhabi Investment Lake Shore India Tie up with Lake Shore India to pump capital into their stressful period for the Indian real estate
is going to witness a drastic change. market over the past year. The government
with markets being subdued in terms of
Authority (ADIA) retail properties has realized the potential of this sector to
launches and sales across major metros. Despite subdued financial performance
create jobs and also drive the GDP growth
May 2016 GIC Viviana Mall Bought 50% stake in Viviana Mall in Thane, on the However, this year is expected to be the of the realty companies over the past few
of the country. Hence it has been trying its
year of inflection with new regulations years, the share price of the companies and
outskirts of Mumbai, for over `1,000 crore best to revive the sector. It would be just
coming into place. These regulations and also the BSE Realty index has outperformed
a matter of time before this sector realizes
Source: http://www.business-standard.com/article/specials/global-pension-funds-chase-indian-infra-for-better-returns-117040600014_1.html reforms would herald the industry into its the market. The share performance is
and starts delivering on its full potential.
http://www.thehindubusinessline.com/news/real-estate/sovereign-pension-funds-look-to-build-on-indian-realty/article9567895.ece
TABLE: PERFORMANCE OF BSE REALITY INDEX BSE SENSEX
155.1
152.7
180
160
126.8
123.1
122.3
127
122.3
122
119.5
112.8
113.5
140
100.7
105.1
105.2
100
Source: Knight Frank Research

120
123.2
118.4
118.4
112.5
114.7
111.8
111.4
110.3
110.8
100
107.4
105.7
104.2
100.6
100.2
100
80
60
40
SENSEX REALITY INDEX
20
0
01/04/2016 01/05/2016 01/06/2016 01/07/2016 01/08/2016 01/09/2016 01/10/2016 01/11/2016 01/12/2016 01/01/2017 01/02/2017 01/03/2017 01/04/2017 01/05/2017 01/06/2017
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According to estimates,
the shortage in urban
housing is around 1.9
crore (19 million) units
and 95% of this shortage
PUSH TO is in the affordable

housing segment. In a
AFFORDABLE
bid to bridge this huge
gap between demand
and supply of housing,
HOUSING the Government of India

launched the Housing
for All by 2022 initiative
in June 2015.
- BY PANKAJ ANUP TOPPO
S 1
ince the turn of this century, the country has been through a couple housing projects. To make these projects cities while for the rest of the country,
attractive 100% deduction for profits was including the peripheral areas of metros,
of cycles of bust and boom in the real estate sector. During these
allowed. These projects needed to be 60 square metres will apply. Under the
cycles there have been many who have been able to realise their CREATING A CONDUCIVE approved between June 2016 and March revised guidelines, the project needs to
dream of having a roof over their head but still there is a huge section ENVIRONMENT. 2019 and had to be completed within three be completed within a period of five years
The Housing for All by 2022 initiative years of approval. Minimum Alternate Tax from the date of getting the approval. The
of the population who is not that fortunate. According to estimates, the
by the Government of India has been one will be applicable on such projects. In period of getting the approval however,
shortage in urban housing is around 1.9 crore (19 million) units and 95% the Union Budget 201718 proposals, the stands unchanged, i.e. approvals need to
of its major focus areas. The first major
of this shortage is in the affordable housing segment. In a bid to bridge push by the government to the affordable guidelines for affordable housing projects be received between June 2016 and March
housing sector came in the Union Budget were further sharpened and were made 2019. The most important boost that the
this huge gap between demand and supply of housing, the Government of
201617 proposals, where it laid down the more practical. The dimensions of the Union Budget 201718 proposals gave to
India launched the Housing for All by 2022 initiative in June 2015. Among
95%
guidelines that housing projects need to housing units were changed. Instead of a the affordable housing segment was that it
other objectives to fulfil this initiative was to provide affordable housing qualify to be categorised as an affordable built-up area of 30 and 60 square metres, granted it an infrastructure status. This had
housing project. As per the budget the carpet area of 30 and 60 square metres been one of the long-standing demands
in partnership with public and private developers. Since the launch of
proposals, housing projects in which flats will be considered for a housing project to of the sector. This initiative would give
the housing for all initiative, the government has come up with various qualify as an affordable housing project. banks more elbow room to provide loans
with built-up area of up to 30 square metres
policies that would help to create a conducive environment so that private Shortage is in the affordable in the four metro cities and 60 sq metres Also, the 30 square meters will apply only for houses in this segment at a much more
in other cities will qualify as affordable in case of municipal limits of the four metro competitive rate.
developers can make their foray in this field. housing segment.
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In affordable housing projects two The Goods and Services Tax (GST), which
parameters play a very important role in came into effect from 1 July 2017 has also
the success of a projectthe pricing of the been giving nightmares to the players from
project and second its timely completion. the supply side as well as to homebuyers.
At present even in affordable housing The general perception was that under
projects there have been instances of GST, the tax would go up from 5.50%
projects not being completed on time. To (service tax plus VAT) up to 12%. To dispel
ensure that this anomaly (of delay in timely such fears, the government has made it
completion) in the real estate sector is clear that the tax incidence is likely to go
removed, the government implemented the down rather than up under GST and that Response from the
Real Estate (Regulation and Development) the developer should pass on the benefits developers. During our
Act (RERA), 2016 in full letter and spirit to the consumer. This in turn means that field surveys in the Mumbai
from 1 May 2017. Among other things, prices could further decrease under GST, Metropolitan Region
as per the provisions of this Act, players or in other words affordable housing could
(MMR), Delhi NCR and
from the supply side will have to complete become just more affordable.
their projects within the time they specify,
Bengaluru, it was observed
to the relevant Authority, when applying that the affordable housing
scheme has received a
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for registration of their housing project.
Since housing projects where more than very good response. In the
eight apartments are developed, for the MMR, affordable housing
purposes of selling, will be covered under RESPONSE FROM THE BANKING projects have already
RERA, affordable housing projects will SECTOR.
automatically come under the purview of
started taking shape.
the new legislation as they are typically In a move that will give further fillip to the XRBIA Chembur Central
large-scale projects. This will further affordable housing segment, banks and by XRBIA and Crystal
financial institutions have started to cut
ensure that the players operating in the Group, in Mumbai, is one
affordable housing space complete their the interest rate on home loans. The public
such example. Ruparel
projects within the stipulated time. To sector giant, State Bank of India, cut the
interest rate on its home loan by 25 basis Realtys affordable housing
ensure that developers can do this in an
efficient manner, the government needs to points for loans up to `30 lakh for new project in Kandivali West is
further make sure that there are processes homebuyers. As a result of this rate cut, the another example.
in place that will provide approvals in an applicable rate for new home borrowers for
a loan up to `30 lakh is 8.35%. Following
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efficient manner. like the ones mentioned above, are yet to a structural shift from the supply side. We
the rate cut by the State Bank of India,
be visible on the ground in markets like can expect affordable housing projects to
other leading players in the home loan
Delhi NCR and Bengaluru but during our come up within metro cities and in urban
The Pradhan Mantri Awas Yojyna (PMAY) space like ICICI Bank and HDFC too RESPONSE FROM THE field visits, it was noted that a number of agglomerations like Thane in the MMR
introduced in June 2015 is another initiative followed suit. ICICI Bank reduced its home DEVELOPERS. leading developers have plans to realign and in Gurugam and Noida in Delhi NCR.
by the government that will give a boost to loan rates by 30 basis points for loans
During our field surveys in the Mumbai their business objectives and build more However, an affordable housing project is
affordable housing. It is an interest subsidy up to `30 lakh. After this rate reduction,
Metropolitan Region (MMR), Delhi NCR modest, affordable apartments. The plans a volume game, the major challenge for
scheme called Credit Linked Subsidy the effective rate for a salaried woman
and Bengaluru, it was observed that the are still in the initial stages and a few the Government of India will be to facilitate
Scheme (CLSS) for purchase/construction/ is 8.30% and 8.40% for others. Housing
affordable housing scheme has received affordable housing projects are expected in providing suitable land parcels and that
extension/improvement of house catering Finance major, HDFC, too reduced its We can expect affordable
a very good response. In the MMR, to be launched in the forthcoming months. too at a competitive price for the project to
to the economically weaker sections, interest rates on home loans up to housing projcts to come
affordable housing projects have already be financially viable. It also goes without
`30 lakh to 8.35% for women and 8.40%
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lower income groups and the middle up within metro cities and started taking shape. XRBIA Chembur saying, the importance of having systems
income group. Under this scheme housing for others. With banking giving the
necessary push to the affordable housing
urban agglomerations like Central by XRBIA and Crystal Group, in in place that will help in getting approvals
loans of up to Rs 9 lakh and Rs 12 lakh
Thane in the MMR and in Mumbai, is one such example. Ruparel in an efficient manner.
segment, others players in this space
will now get interest subvention of 4% and CONCLUSION.
should take a cue and reduce their rates Gurugram and Noida in Realtys affordable housing project
3%. This scheme should give a boost to
in Kandivali West is another example. As result of the above mentioned push
housing projects in the peripheral as well. Delhi NCR.
Instances of affordable housing schemes, towards affordable housing, we will witness
areas of metros.
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CO-WORKING
SPACES IN INDIA
THE DAWN OF A NEW ERA
- BY SANGEETA SHARMA DUTTA
India is at the cusp of a co-working revolution employee, most of which pointed towards a address in a commercial district located of start-ups and SMEs, buoyed by
better work environment to achieve greater 1520 km away. Like most commodities the governments concerted efforts to
with several large players spread across
heights. The past few decades, therefore, in present times, workplaces, too, have create a sustainable eco-system for
the country. Some of the major co-working were devoted to an evolution in the come to be redefined as space that could entrepreneurs in the country. On their part,
spaces are run by firms like WeWork, workplace, observing significant structural be accessed anytime and from anywhere, the entrepreneursa large number of them
change in office space, right from space providing Just-In-Time services with the being millennialsbelieve in harbouring
Office Pass, Awfis, myHQ, Altf Coworking,
utilisation to placement of equipment help of technology. While this forms just global aspirations and the mantra adopted
CoWrks, Bangalore Alpha Lab, Garge, BHIVE and automation. With newer business one aspect of co-working, the concept of by their start-ups reflect their staggeringly
Workspace, Bombay Connect, Co Life, avenues opening up, office space design co-working spaces essentially involves ambitious mindset that was not prevalent
continued to evolve at an incessant pace, groups of start-ups, creative consultants, till a few years back. This provides a
91 Springboard, Investopad and Innov8,
covering not only its structural facet but freelancers and small and medium perfect platform for co-working business
amongst others. also involving aspects such as recreation enterprises (SMEs) who share workspace centres to cater to the office space needs
facilities and digitalisation of the office. and breakthrough ideas, enhance of these growth-seeking start-ups. Thus,
their business horizon and gain a fresh with the increasing number of start-ups
In the age of millennials where disruption is the order of
standpoint on their own businesses by the and freelance professionals in the country,
the day, office space has come a long way since it was It comes as no surprise that with the dint of sharing workspaces. there is a palpable demand for co-working
conceptualised as a place of work, with ungainly desks quantum of ground covered in office space spaces in metro cities that had hitherto
and chairs comprising the set up. Over the years, various design and development, a workplace been lying untapped.
researches endeavoured to map the productivity of an today has ceased to be a single, fixed India, today, is witnessing a proliferation
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lease out their entire area, or a large part of

it, to companies that can act somewhat as
anchor tenants, thereby helping them get
START-UPS AND SMES STAND TO SAVE
a fixed-income stream.
15-20%
by working in a co-working space,
Going forward, with the advent of major co-
working players in India and an increasing
number of such facilities coming up across
cities to cater to the demand of start-
while enjoying the benefits of a fully ups and SMEs, the co-working sector is
functional, plug-and-play modern expected to thrive and could prove to be a
workplace.
significant disruptor on Indias commercial
real estate market. Currently, NCR and
Mumbai figure prominently on the seat
availability front, followed by cities such as
Bangalore and Kolkata. Mumbai accounts
for a substantial amount of trasactions as
well. However, at present, the segment is at
a nascent stage and not all the co-working
operators are likely to be able to hold their
of seats, based on business needs. Awfis is the first company in this space to seat per month in a co-working centre
own in the long run, owing to their inability
Companies can also base their key project have introduced a mobile app that enables in a region like NCR is in the range of
Besides companies, people such as to mitigate the risks in their business
teams out of co-working places in order to users to find and book office and meeting `10,00015,000 in central business district
business nomads, expats or those models or have enough stronghold in
let them be located close to their clients. spaces on a real time basis in its centres (CBD) Delhi and `12,50015,000 in CBD
travelling to the country for a limited period non-prime markets. This would expectedly
While co-working business centres provide across the country. Besides its own Gurugram. With prime rentals in Gurugram
are amongst those preferring to work out result in consolidation among co-working
a viable model for corporates looking for managed co-working spaces, Awfis also averaging `250 per sq ft per month, an
of co-working spaces. Till a few years ago, operators and the market would be divided
flexibility in work locations, companies offers a large repository of listed third-party office space of 700 sq ft, housing 10
they would have opted to work from coffee amongst a handful of large players.
are slowly realising that collaborative work meeting rooms in hotels in various cities. employees, would amount to a whopping
shops.
spaces where conversation and ideas can Another co-working player, myHQ, offers a `75,000 per month. In contrast, 10 seats in
flow freely and encourage an environment mobile app that lets one book a corner in a co-working centre would cost `150,000
of gainful ideas can improve employee cafes, restaurants and hotels. As opposed per month. Besides, the tenant opting
There are several benefits to be had
productivity as well. to a conventional co-working model, myHQ for co-working space does not have to
from working in co-working set-ups.
converts unused spaces into work areas. worry about heavy overhead expenditures
For one, start-ups get flexible working India is at the cusp of a co-working
Recently, Sequoia India options at affordable rents, as they offer revolution with several large players spread
Additionally, one could even avail discounts or comply towards formalities such as
invested ` 130 crore seats at cheaper rentals in an office- across the country. Some of the major
on food and beverages at the pub or caf providing security deposits, payment of Of late, several developers,
chosen. Meanwhile, WeWork plans to brokerage and even furnishing the office. too, are planning on
in co-working space like environment. The companies are co-working spaces are run by firms like
expand through an operating agreement Thus, ease of working in such pocket-
start-up, Awfis, while offered an organised and synergised WeWork, Office Pass, Awfis, myHQ, Altf starting their own co-
with Embassy Group, who will be providing friendly and hassle-free set-ups has
WeWork, the US-based working environment along with business Coworking, CoWrks, Bangalore Alpha
the capital and will handle the real estate increased the popularity of co-working
working offices to provide
networking opportunities with the other Lab, Garge, BHIVE Workspace, Bombay
shared office space and construction aspects of the American space amongst start-ups and small incubation spaces, or
members. Start-ups and SMEs stand to Connect, Co Life, 91 Springboard,
leader, entered India company. Approximately 6 mn sq ft is businesses. divide large floor plates
save as much as 1520% by working in Investopad and Innov8, amongst others.
last year and signed a co-working space, while enjoying the
planned to be built over the next five years
Despite the demand for co-working space,
for smaller occupants. On
in Bangalore, Mumbai and the National an average, the cost per
an agreement with benefits of a fully functional, plug-and- there are several challenges that have to
Capital Region (NCR).
the Embassy Group play modern workplace. Moreover, the Recently, Sequoia India invested ` 130 be tackled; for instance changing the seat per month in a region
to develop a facility co-working business model also provides crore in co-working space start-up, Awfis, conventional mindset of a client who would like NCR is in the range of
access to a number of shared amenities while WeWork, the US-based shared office want to book a meeting room based on
in Bengaluru at an Of late, several developers, too, are `10,00015,000 in central
and services such as conference rooms, space leader, entered India last year and the touch and feel factor rather than an
estimated investment of planning on starting their own co-working business district (CBD)
Wi-Fi connection, refreshments and signed an agreement with the Embassy app. Further, owing to the inherent risks
$100 million. recreational space, as well as the flexibility Group to develop a facility in Bengaluru at
offices to provide incubation spaces,
involved in the sector, a few operators
Delhi and ` 12,50015,000
or divide large floor plates for smaller in CBD Gurugram.
to scale up or decrease the number an estimated investment of $100 million. strive to mitigate the risk by preferring to
occupants. On an average, the cost per
16
17
FIGURE -2
HALF-YEARLY LAUNCHES IN THE TOP EIGHT CITIES
H1 2016 H2 2016 H1 2017
30000
25000
Number of units
20000
15000
10000
5000 After the initial

dilemma regarding
0
MUMBAI NCR BENGALURU PUNE CHENNAI HYDERABAD KOLKATA AHMEDABAD
the implementation
of the RERA, largely
all stakeholders have
reconciled to the fact that
FIGURE -3
HALF-YEARLY SALES IN THE TOP EIGHT CITIES RERA will be a reality
ALL INDIA H1 2016
40000
H2 2016 H1 2017
sooner than later. With
developers re-directing
FIGURE -1
efforts from launches to
HALF-YEARLY LAUNCHES AND SALES TREND
IN THE TOP EIGHT CITIES 35000
RERA compliance, pace of
RESIDENTIAL launches was lower in
LAUNCHES SALES
30000
180,000
H1 2017
Number of units
25000
160,000
20000
140,000 15000
After the tumultuous H2 2016 when all stakeholders have reconciled to

10000
Number of units
the demonetisation needle punctured the fact that RERA will be a reality 120,000
the market pulling down residential sooner than later. With developers 5000
sales and launches by 46% and 23% re-directing efforts from launches to 100,000
respectively, H1 2017 has ushered as RERA compliance, pace of launches 0

an eventful period. was lower in H1 2017. 80,000
The first two months of H1 2017 In the backdrop of these landmark
60,000
saw consumers and the industry as events this performance has also
a whole grapple with the aftermath been dictated by the developers particularly the residential market latest set of numbers indicate that the country declined by 41% to 62,738
of demonetisation. While activity baggage of unsold inventory, which 40,000 has come with governments focused share of less than `2.5 mn ticket size units in H1 2017 compared to 1,07,120
encouragingly picked up in March and until a year ago was mainly in the under attention to the affordable housing housing that had risen from 17% in H1 units in H1 2016. The decline was 9%
April, May 1 earmarked the dawn of construction category. However, now 20,000 segment. Over the last year the 2016 to 20% in H2 2016, has further compared to the demonetisation period
the single largest change in history of ready for possession apartments government has announced a series of jumped in the latest H1 2017 period of H2 2016 when 68,702 units were
Indian real estate industry through are also available across markets. 0 measures to revive a fresh lease of life to 36%. The category of housing launched. Ahmedabad and NCR wore
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
the implementation of the Real Estate With ready projects kept outside the into this segment of market. valued at less than INR 5 mn is now as the worst hit with launches falling by
(Regulation and Development) Act ambit of RERA, developers have been much as 71% across the top 8 cities, 79% and 73% respectively.
We believe that the focus on affordable
2016. focusing heavily on sales of their ready substantially higher than the 52% share
Source: Knight Frank Research housing is a structural change and With consumers opening up to the
possession stock. in H1 2016.
After the initial dilemma regarding the Note: The top eight cities are Mumbai, NCR, the supply side response to this focus confidence infused by RERA and
implementation of the RERA, largely The impetus to the realty market Bengaluru, Pune, Chennai, Hyderabad, area implies that it is going to be a With this backdrop, residential a slew of government measures
Kolkata and Ahmedabad sustainable theme going forward. The launches in the top eight cities of the towards affordable housing, sales
18
19
decline was not as severe as noticed to its peak of in H2 2014. However, the TICKET-SIZE SPLIT OF LAUNCHED
in launches. Sales during H1 2017 numbers are lower mainly on account of UNITS IN THE TOP EIGHT CITIES OFFICE MARKET
declined by 11% to 1,20,756 units in the shrinking market size.
H1 2017 compared to 1,35,016 units H1 2016 H2 2016 H1 2017
With the baggage of unsold inventory Office market fundamentals across the
in H1 2016. Sequentially, however, the FIGURE -2
and the state of the residential property <2.5 mn 17% 20% 36% country remain tight with vacancy levels
sales are 11% better compared to the OFFICE SPACE STOCK AND OCCUPIED
market, weighted average property 2.5-5 mn 35% 39% 35% hitting new lows for the 11th straight STOCK AS OF JUNE 2017
demonetisation period of H2 2016 when
price has stagnated. Developers in period as the supply crunch shows little STOCK OCCUPIED STOCK
1,09,159 units were sold. 5-7.5 mn 22% 20% 15%
most markets have been forthcoming in sign of abating with any meaningful 160
Unsold inventory levels at 5,96,044 offering freebies and discount for sales 7.5-10 mn 10% 11% 6% impact.
units in H1 2017 are 10% lower than closure.
10-20 mn 10% 6% 8% The supply crunch that has hamstrung 140
6,60,239 units in H1 2016 and are
consistently trending lower compared >20 mn 5% 4% 1% the market and macro headwinds in
the form of the slowdown in the IT/
120
FIGURE -6 FIGURE -4 ITeS spending by Europe and USA has
COMPARISON OF CITY-WISE PRICE LEVELS TICKET-SIZE SPLIT OF LAUNCHED UNITS IN H1 2017
(WT. AVG. PRICE TREND) weighed down office space demand
and caused a 10% decline YoY in 100
>`20
The abject lack of fresh
mn sq ft
<`2.5mn `2.5-5mn `5-7.5mn `7.5-10mn `10-20mn
10000
transaction levels during H1 2017 com-
100% pared to a 13% growth in the previous 80 office space is most
reference period.
90% visible in the IT/ITeS sector
9000
80% The 10% decline in transaction levels 60 dominated markets of
translates to 18.1 mn sq ft of office
70%
space being taken up across the six
Bengaluru, Pune and
Number of units
60% office space markets during H1 2017.

40
Hyderabad that currently
8000
50%
A similar 5% decline in supply saw have single digit vacancy
17.9 mn sq ft come online in the same 20
40%
period.
levels at 4%, 8% and 9%
7000 30%
0
respectively.
MUMBAI
NCR
BENGALURU
PUNE
CHENNAI
HYDERABAD
20%
10% FIGURE -1
HALF-YEARLY NEW COMPLETION, TRANSACTIONS
6000
0% AND VACANCY LEVEL (TOP SIX CITIES) Source: Knight Frank Research
` per sq ft

NEW COMPLETION TRANSACTIONS
FIGURE -3
VACANCY (RHS)
Source: Knight Frank Research CITY-WISE NEW COMPLETION, TRANSACTIONS AND
VACANCY LEVEL DURING H1 2017
5000 25 20%
NEW COMPLETION TRANSACTIONS
VACANCY (RHS)
18.5%
FIGURE -5
10 25%
CITY-WISE QTS VS AGE OF UNSOLD INVENTORY ANALYSIS
22%
20 9
17.5%
4000
18%
20 8 20%
18%
16.7%
mn sq ft
AGE OF UNSOLD INVENTORY IN QUARTERS
15 7
3000
15.6%
mn sq ft
16% 6 15%
15.1%
15
11%
10 5
2000
9%
8%
4 10%
13.3%
14%
10 5 3
4%
12.4%
1000
2 5%
1
0 12%
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H1 2017
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H2 2016
0 5
5 10 15 20 0 0%
MUMBAI
NCR
BENGALURU
PUNE
CHENNAI
HYDERABAD
QTS
MUMBAI NCR BENGALURU PUNE Source: Knight Frank Research
CHENNAI HYDERABAD
Source: Knight Frank Research Note: The size of the bubble indicates the quantum of unsold inventory. QTS is the quarter to Note: The top six cities are Mumbai, NCR, Source: Knight Frank Research
sell unsold inventory Bengaluru, Pune, Chennai and Hyderabad
20
21
FIGURE -4
SECTOR-WISE TRANSACTION
SECTOR-WISE TRANSACTION SPLIT DURING H1 2017
SPLIT (TOP SIX CITIES)
IT/ITeS BFSI (Including support service) MANUFACTURING OTHER SERVICES
H1 H2 H1
100%
INDUSTRY
2016 2016 2017
90%
BFSI 12% 13% 12%
80%
IT/ITeS 43% 49% 39%
70%
Manufacturing 16% 17% 18%
60%
Other Services 30% 21% 31%
50%
40%
30%
20%
10%
0%
MUMBAI NCR BENGALURU PUNE CHENNAI HYDERABAD
Consistently falling since H1 2012, the

vacancy level now stands at 12% that
0.5 mn sq ft of office space during H1
2017.
A WAVE OF INSTITUTIONAL
is the lowest level in recent recorded
history. The abject lack of fresh office
space is most visible in the IT/ITeS
In terms of deal size, Pune recorded
the largest deals, marginally edging out
FUNDS EYE INDIAN SHORES
Bengaluru, with the average deal size in
sector dominated markets of Bengaluru,
the city amounting to nearly 48,000 sq
FIGURE -5 Pune and Hyderabad that currently have - BY YASHWIN BANGERA
ft in H1 2017. Chennai and Hyderabad
DEAL SIZE ANALYSIS single digit vacancy levels at 4%, 8%
witnessed the smallest average deal
and 9% respectively.
H1 2016 H1 2017
sizes at 23,000 sq ft and 18,500 sq ft,
D
60000
The IT/ITeS sector share in transactions respectively. eveloped markets in the West have and productive economies. Asia has thus trade and commerce. Similarly, RERA will
has been showing signs of weakening been progressively becoming been attracting increasing capital from help investors and end users navigate the
Average rental values across these
in recent periods but it continues to de-globalised as they experienced investment banks, private equity funds and traditionally dark annals of the real estate
six cities grew at 7% YOY during H2
be the largest driver of office space increasing competition from the developing other financial institutions. Recognising industry.
2016. While Mumbai saw flat YoY rental
in India, accounting for nearly 40% of world. This is a clearly observable the structural shift in Indias economic and
growth, Hyderabad and Bengaluru
the transactions during H1 2017. This phenomenon as the world watches political landscape, foreign capital has
experienced the strongest rental growth
was followed by Other Services sector, Great being taken out of Britain and the been vying to find avenues to invest in this Massive infrastructure projects such as the
40000 at 14% and 8% YoY respectively.
which includes sectors such as consult- hawkish Trump regime policy on work countrys potential growth. Dedicated Freight Corridor (DFC) and the
ing, media, telecom and infrastructure, visas for immigrants.. The protectionist Delhi-Mumbai Industrial Corridor (DMIC)
sq ft
at 28%. measures are purely symptomatic of hold the promise of seamlessly connecting
a much broader economic malaise Sweeping structural reforms such as the the thus far remote corners of the country
Co-working spaces as a trend is emerg-
characterised by the fact that products introduction of the Goods and Services to its existing and future manufacturing and
ing as we see firms taking up space in
and services from developed economies Tax (GST) Act 2017 and the implementation distribution hubs, much like the coast-to-
Bengaluru, Pune and NCR. The concept
20000 are continuously losing ground to those of the Real Estate (Regulation and coast highways and inter-city railroads
of co-working spaces essentially
originating in competitive Asian economies. Development) Act, 2016 (RERA) showcase on which America built the foundation
involves groups of start-ups, creative
the political will of the current regime to of its economy. The DFC and DMIC will
consultants, freelancers and Small and
promote the ease of doing business and involve the construction of almost 9,500
Medium Enterprises (SMEs) who share
As developed economies struggle to hold increase transparency in the massive km of railroads crisscrossing the length
workspace and break through ideas,
their ground in this post-Global Financial Indian real estate sector. The erstwhile and breadth of the country and the
expand their business horizon and gain
0 Crisis (GFC) structural shift, their Asian cumbersome tax web that the GST creation of eight investment regions that
a fresh standpoint on their own busi-
MUMBAI
NCR
BENGALURU
PUNE
CHENNAI
HYDERABAD
counterparts have been flourishing as would replace, created huge compliance will easily prove to be among the largest
nesses by dint of sharing workspaces.
economic realities slowly and surely direct complications and proved to be needless infrastructure initiatives in the world today.
Across the top 6 cities, such co-working
global capital toward the more efficient hindrances to the smooth functioning of Their creation would spawn the need for
space providers have taken up around
22
23
$
3.41bn
In The first quarter of 2017 saw a massive
USD3.41 bn enter the market.
massive real estate development as Residential and commercial office spaces

factories, office spaces, residential A few notable mentions of have been the staple for institutional
units, malls and warehouses will need recently concluded deals and equity entering the real estate market and
to come up to house the working
investment pledges made in recent forays into alternative real estate
populations of these cities. These property types, such as warehousing, by
infrastructure projects along with the
the Indian real estate space
players such as Embassy, CPPIB and DP
Massive infrastructure Make in India and the Invest in India include: World showcase the increasing appetite
projects such as the initiatives of the government will set the of institutional investors. The Indian real
$1
Dedicated Freight Indian economy on course to become a estate sector attracted $5.7 bn of global
manufacturing powerhouse and enable capital flows in 2016 and just the first
Corridor (DFC) and bn
it to attract global investments to fast- quarter of 2017 saw a massive $3.41 bn
the Delhi-Mumbai 1 bn investment by KKR Asset Finance
track its economic evolution. enter the market. Such aggressive capital
Pvt. Ltd in residential projects in
Industrial Corridor Investment banks and
Bengaluru, Gurugram and Chennai commitments and the propagation of
(DMIC) hold the investment structures Such aggressive private equity funds
promise of seamlessly Investment banks and private equity
DP Worlds $1 bn pledge to tap into capital commitments and the propagation such as Blackstone,
connecting the thus funds such as Blackstone, KKR, JP
opportunities arising in the Indian of investment structures such as REITs KKR, JP Morgan
Morgan and Morgan Stanley, pension and InvITs in tandem with the relaxation of
far remote corners logistics infrastructure space and Morgan Stanley,
funds such as the Canada Pension the FDI policy, will greatly increase market
$0.75
of the country to its Plan Investment Board and logistics pension funds such as
depth and attract further investments in the
existing and future moguls such as DP World, have already bn the Canada Pension
Indian economy in times to come.
manufacturing and forayed into the commercial, residential $0.75 bn Infrastructure Investment Trust Plan Investment Board
distribution hubs, and warehousing space in India. (InvIT) public issue by IRB Infrastructure and logistics moguls
$2
much like the coast- The opportunity and need for further
such as DP World,
development is immense, as just the bn
to-coast highways have already forayed
city of New York has more office space GICs nearly $2 bn acquisition of DLFs
and inter-city railroads than the whole of India and according into the commercial,
40% stake in DLF Cybercity Developers
on which America to various estimates, we currently face residential and
Ltd., which owns and operates its
built the foundation of a shortfall of 18 mn to 23 mn housing leased commercial office spaces warehousing space in
its economy. units. India.
24
25
A LOOK AT THE PAST. COMING TO THE PRESENT DAY.

Despite the staid nature of the city, it has Moving further west, on the SG Highway
been gradually expanding over the years. is ISCON Crossroad, which presently
As regards the modern beginnings of the is considered to be the city centre of
city, Ahmedabad got its first textile mill in Ahmedabad. To further add value to
1859 courtesy Shri Ranchhodlal Chhotalal. this landmark in Ahmedabad, the top
Since then, many textile mills have sprung residential locations of Bodakdev,
up in Ahmedabad and the city was often Vastrapur, Prahlad Nagar and Thaltej
being referred to as the Manchester of the are close by. The capital values in these
East. Giants like Reliance industries and regions hover around `50006,000 per
Arvind Limited too established their bases sq ft. Most of the micro markets are on
in Ahmedabad. Most of these mills came either side of the SG Highway. While
up in the eastern part of the city. Even micro markets along the SG highway have
today there are mills belonging to Arvind become prime area for offices, residential
that are functional in Ahmedabad. This to developments are mostly coming up in
a great extent defines the character of the the area between the SG Highway and
residential development in this part of the Outer Ring Road. In some cases, like in
city. Even today, this part of the city caters the case of Bopal developments have also
SHIFTING POWER largely to the affordable segment where

capital values hover around `1,800`2,200
spilled beyond the Outer Ring Road on the
western side of Ahmedabad.
CENTRES IN
per sq ft. Most of these affordable housing
units are coming up in the micro markets
of Ramol, Vastral, Narol, Vatva, Nikol and THE OUTLOOK.
AHMEDABADS REAL
along the Naroda Dehgam Road.
While micro markets in the north such
as the Airport Road, Anand Nagar,
ESTATE MARKET
Chanakyapuri, Chand Kheda, Chandlodia,
The western part of the city however,
Gota, Hansol, Vaishnodevi Circle too will
catered to a very different class of gentry.
continue to grow courtesy their locations
The city originally came up around the
sandwiched between Ahmedabad and
banks of the Sabarmati River and around
Gandhinagar the city growth on the
- BY PANKAJ ANUP TOPPO Kalupur, which also houses the citys main
western will remain unabated for a while.
railway station. The main business centres
The real estate market in Ahmedabad before demonetisation, new launches in the The prime reason for this is that the
in this part of the town came up around
is very boring, quipped one of the past six months have nose-dived. Due to Sanand GIDC has been promoted by the
Ashram Road and CG Road, which later
stakeholders of the Ahmedabad real estate lack of clarity on policies like RERA, new State Government of Gujarat for a while
started moving towards the 132-ft Ring
and has received good response from the
market. Another prominent developer launches have considerably slowed down While micro markets Road. As Ahmedabad began to grow, the
explained this very point further. Unlike since January, opined one developer. At a corporate sector. Most experts to whom
along the SG highway Indian Space and Research Organisation
bigger real estate markets like Delhi macro level however, the real estate market we spoke were of the view that Sanand will
have become prime area (ISRO) set up its Space Applications Centre
continue to be the pull factor for the city.
NCR and Mumbai, the Ahmedabad real in Ahmedabad has been slowly spreading in the city, in 1972. A road was made
for offices, residential The areas to look for going forward are
estate market is very stable. There are its wings across the city, more so towards which even in the present day is called
not too many ups and downs, stated its western side. developments are the micro markets between SG Highway
Satellite Road that provided connectivity
the developer. The real estate market in mostly coming up in the to the 132-ft Ring Road. People employed
and Outer Highway and micro markets like
Bopal beyond Outer Ring Road. The capital
Ahmedabad maybe dull and boring but area between the SG at the Space Applications Centre and
it too was exposed to the vagaries of values in Bopal are still around `2,800
Highway and Outer Ring especially those who were not from
policy interventions. Like other real estate 3,000 per sq ft.
Road. In some cases, Ahmedabad started residing along the
markets of the country, the impact of ISRO establishment. Thus, this area
like in the case of Bopal
demonetisation was visible even in the real inherited a cosmopolitan character.
estate market of Ahmedabad but things developments have also
Named Satellite this neihourhood was the
have started to return to the days before spilled beyond the Outer first development to have come up outside
demonetisation happened in India. While Ring Road on the western the 132-ft Ring Road.
sales have certainly moved to the levels side of Ahmedabad.
26
27
launched has been the lowest

FIGURE -2
in Ahmedabad developers have MICRO-MARKET SPLIT OF LAUNCHED UNITS
responded in a strong manner to
the governments initiative towards H1 2016 H2 2016 H1 2017
affordable housing. Of the total units

launched in H1 2017, 57% were 60%
launched in the sub ` 2.5 mn price
55%
51%
category. If the price bar is raised
8,809 5,200 1,874
to sub ` 5 mn, then of the total units 50%
46%
launched, 75% were launched in this UNITS UNITS UNITS
45%
price category.
40%
40% H1 2016 H2 2016 H1 2017
After hitting a low of 7,400 units in the
demonetisation-induced H2 2016 sales 35%
30%
picked up in H1 2017. This was possible
27%
30%
because of availability of ready to move
23%
25%
in homes as developers were in a rush
18%
to complete their under construction
17%
17%
20%
projects before RERA came into force
15%
from May 1. Sales went up by 7% in
10%
10%
H1 2017 compared to H2 2016 but it is 10%
still lower by 7% than the same period
4%
5%
2%
2%
2%
last year.
0%
CENTRAL EAST NORTH SOUTH WEST
AHMEDABAD 2. MARKET SPLIT OF

RESIDENTIAL LAUNCHES
The lack of available spaces in south

and high capital values In central
The lions share of new launches in Ahmedabad did not infuse much
the last six months happened in North confidence in developers to come up
RESIDENTIAL Ahmedabad which has locations with new projects in these two micro
such as Chandkheda, Gota, Motera markets.
1. AHMEDABAD RESIDENTIAL FIGURE -1
and Ognaj. With prices in west and
MARKET LAUNCHES, SALES AHMEDABAD MARKET TRENDS - HALF-YEARLY
central Ahmedabad breaching the
AND PRICE TRENDS
LAUNCHES SALES WT. AVG. PRICE (RHS) homebuyers affordability level, north TICKET-SIZE SPLIT ANALYSIS
12000 3000
Ahmedabad has emerged as the most OF LAUNCHED UNITS
New launches in Ahmedabad hit a preferred destination for mid-segment
new low in H1 2017. Between January 11000
housing. During H1 2017, more than H1 2016 H2 2016 H1 2017
and June 2017 only 1,874 new
2770
2770
70% of the new launches in this market

2758
10000 <2.5 mn 28.94% 29.78% 56.51%

2730
housing units were launched. Lack of 2800

were below the ticket size of `5 mn.
9000 2.5-5 mn 41.73% 42.72% 22.15%
With prices in west and
clarity, especially on The Real Estate
2645
2635
(Regulation & Development) Act, 2016 8000

After north, east Ahmedabad central Ahmedabad
5-7.5 mn 15.32% 18.50% 15.26%
2551
witnessed the maximum launches. At

Number of units
(RERA) was the single most important 2600 breaching the homebuyers
factor which held back developers from
7000 least 41% of the new launches that 7.5-10 mn 5.45% 6.32% 3.68%
happened in the last six months were affordability level, north
` \sq ft
launching new projects. 6000

10-20 mn 7.54% 2.41% 2.40%
in east Ahmedabad. Most of these Ahmedabad has emerged
Compared to H1 2016, new launches 5000
2400 launches happened in Naroda and >20 mn 1.02% 0.28%
were down by 79% in H1 2017. When as the most preferred
4000 along the Naroda-Dehgam Road.
compared to H2 2016 new launches Source: Knight Frank Research destination for mid-
were down by 64% between January 3000 Of the total units launched between
2200 January and June 2017 the percentage Developers have responded positively
segment housing. During
and June 2017. Going forward, once 2000
there is clarity on RERA and systems share of units launched in south, west to the governments focus on H1 2017, more than 70%
1000 and central Ahmedabad came down to affordable housing in Ahmedabad.
are put in place for its efficient of the new launches in this
implementation launches should pick 0 2000
single digits. While west is a promising
Between January and June 2017, market were below the
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
up. The interim head for the RERA in market, the prevaing lull in this part of
Ahmedabad had largely been
Gujarat was appointed on 1 June 2017. the market is transient in nature. ticket size of `5 mn.
an affordable market, especially
Even though the number of units Source: Knight Frank Research with regards to new launches that
28
29
happened in the city. Of the total units

FIGURE -3 MICRO-MARKET LOCATIONS
that were launched in Ahmedabad MICRO-MARKET SPLIT OF SALES
between January and June 2017, close
Central Paldi, Vasna, Navrangpura, Maninagar, Dudheshwar, Ambawadi
to 79% happened in the sub ` 5 mn H1 2016 H2 2016 H1 2017
ticket size. East Naroda, Vastral, Nikol, Kathwada Road, Odhav
35%
What sets H1 2017 apart from the North Gota, New Ranip, Tragad, Chandkheda, Motera
32%
32%
previous six months is the fact that
South Narol, Vatva, Vinzol, Hathijan
30%
30%
housing units launched in the sub `
28%
30%
27%
2.5 mn almost doubled. Also, in H1 West S. G. Highway, Prahlad Nagar, Bopal, Thaltej, Science City Road
25%
2017 the lions share of new launches
25%
happened in the sub ` 2.5 mn price
AHMEDABAD MICRO-MARKET MAP
22%
SA BA
bracket. Ganpatpura Jamiatpura
20% Shantigram Gujarat International
RM
17%
Pore Raysan ATI Finance Tec-City
Adalaj R
Karoli
IV
3. MICRO-MARKET WISE Vadsar Jaspur
Pirojpur
ER
15%
13%
RESIDENTIAL SALES
12%
Khoraj Ambapur
Dantali Na Valad
rm
Khodiyar ad
9%
9%
Thol aM
From the new launches From the new launches between Jan-
10%
Lilapur ain
8%
Khatraj Zundal Ca Karai
7%
uary and June 2017 the definite move nal
between January and June Thol
n al Lapkaman
Ca Tragad Limbadia
towards affordable housing is crystal 5% h Amiyapur
2017 the definite move c
an Sughad
clear but the same is not apparent in Sanawad Br Medra
towards affordable housing sales during the same period. The silver o lka CHANDKHEDA
0% Adhana Nasmed Dh Nigam Nagar Kotarpur Raip
lining however, is that the homebuyers Rakanpur Ognaj
is crystal clear but the same CENTRAL EAST NORTH SOUTH WEST Ranasan
too have started showing their affinity Santeja Gujarat Science City Cinema
WAY
is not apparent in sales towards affordable housing projects. GOTA Bhat Enasan
HIGH
Source: Knight Frank Research Vayana Motera Stadium
Gidc Naroda
during the same period. The micro markets of east and north LEGEND Noble Nagar
GAR
CHANDLODIA Sabarmati
OAD
Major Landmark Bilasiya
which are largely affordable compared Hansol
The silver lining however,
HINA
Sabarmati
NG R
Hospital
to other parts of the city contributed to Unali Sardar Vallabhbhai Patel
Gujarat
GAND
Hotel CHANAKYAPURI Vijay Nagar
is that the homebuyers too
I
InternationalAirport
EL R
a little over 50% of the total sales. RanchardaCinema
Science City Nava Naroda
Sola Village
PAT
Sabarmati RS
HEJ -
Chekhla
have started showing their Educational Institute Sardar Patel Meghani
Calico Museum
DAR
Sales activity continued to remain Naranpura Stadium
SARK
Airport
Sabarmatiof Textiles Nagar Auto World
affinity towards affordable Palodia Krishnanagar
SAR
robust in west Ahmedabad. This micro Bus Stand Memnagar Ashram Museum
M ROAD
Railway Station Thaltej Dubeshwar
ING
housing projects. markets proximity to GIDC Sanand has
City Boundary Thaltej Gam Nikol Kathwada
TR
Navrangpur Kirti Stambh
ASHRA
increased its attractiveness. Its share in
2F
Expressway
13
the total sales, increased from 22% in 8,556 7,400 7,941 Manipur Highway
Bopal
Bodakdev Ashram
Shahpur
Bapunagar
H2 2016 to 27% in H1 2017. Compared Ring Road Road Shahpur
Ghuma Odhav Bhuvald
Major Road
to H1 2016 the share of west Ahmed- UNITS UNITS UNITS Sidi Saiyyed Mosque Gidc Industrial
Godhavi Dh Spring Valley
Industrial Odhav
Rail Line Khadia
abad increased to 27% in H1 2017 from o Niyojan Nagar Madalpur Swaminarayan Mandir Estate
lk Shapath 5
17%. H1 2016 H2 2016 H1 2017 a Br
Metro/Station
BRTS Phase 1 (West) Bagodara Sherkotda Area Kanb
an Rabari
ch Shela
BRTS Phase 1 (East) Paldi Colony
Kaneti Ca Vasna Vastral K
n BRTS Phase 2 Vejalpur-2 Anjall Amraiwadi
al Vastral Gam
River Vasna Mahadev
Lakes/Ponds
Makaraba Juhapura APMC Nagar
Vegetation
Cadila AD
Ramol
Sarkhej Gam Isanpur RO Memadpur
Sanand Healthcare DA
- NARO
Chaloda NARO
L
Gidc Bakrol Bu
Singarva
Vatva Geratnagar
Sanathal Vatva
Piplaj AH
Narolgam ME
Kolat DA
B
Vinzol AD
- V Dhamatvana
Vanzar AD
D
OD
OA
GR Vanch AR
AE
Pipan RIN XP
Laxmipur TEL Hathijan Y
AR PA
SARD
Dholka Branch
Visalpur Badodra
Moraiya Hirapur
Aslali
Changadar
Gamdi
ER Nandej
Canal
Tajpur RIV Devdi

TI
A
Modasar Chosar Raska

RM
SABA
Sari Kasindra Barejadi

Jetalpur
30
31
Matoda Giramtha
4. AHMEDABAD MARKET 5. PRICE MOVEMENT

HEALTH IN H1 2017 The market has just
about started to pick up
easy access to the major employment The market has just about started to
The quarters to sell (QTS) unsold FIGURE -4
QUARTERS TO SELL (QTS) UNSOLD hubs and integrated development have pick after demonetisation had pulled after demonetisation.
inventory is the number of quarters INVENTORY ANALYSIS
required to exhaust the existing unsold helped these markets in attracting things back. At the macro level prices At the macro level
AHMEDABAD
homebuyers over the last few years. remained at the same level as it was
inventory in the market. The existing 20
prices remained at the
19 in H2 2016. Capital values of both
unsold inventory is divided by the
18 Even though West Ahmedabad has
premium and budget projects saw a same level as it was in
average sales velocity of the preceding the highest QTS and age of inventory
eight quarters in order to arrive at the
17
tepid growth of only 2%. Once clarity H2 2017. Capital values
16 among micro markets, off late it has
comes on issues like RERA and GST
QTS number for that particular quarter. 15 witnessed a lot of traction. The city of both premium and
the market should pick in Ahmedabad
A lower QTS indicates a healthier 14
13
too is expanding towards the west,
which should give some fillip to prices budget projects
market. which augurs well for this micro market.
NO OF QUARTERS
12 as well. saw a tepid growth of

The new low in number of new 11
The growing importance of Sanand
GIDC should work in favour of West only 2%.
launches and a healthy growth rate 10
in sales have had a bearing on the 9 Ahmedabad.

8
quarters to sell (QTS) the existing
7
unsold inventory. As a result the QTS
6
has come down from 8.6 in H2 2016 to 5
7.7 in H1 2017. At present the city has 4
PRICE MOVEMENT IN SELECT LOCATIONS
more than 32,000 units in various stages 3
of construction that remain unsold. The 2
unsold inventory in Ahmedabad is less 1

0 LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH
than two years old which just about
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17
manages to catch up with the average (`/SQ FT) CHANGE CHANGE

construction time.
Source: Knight Frank Research Ambawadi Central 5,500 - 7,500 0% 0%
Central Ahmedabad is the best
Navrangpura Central 5,500 - 7,500 0% 0%
performing market. It has the lowest
QTS and the age of inventory. East Mani Nagar Central 3,500 - 6,000 3% 0%
Ahmedabad remains a consistent
Paldi Central 4,500 - 6,200 3% 0%
performing market in the city with the
lowest level of quarters to sell of unsold Naroda East 2,000 - 3,000 0% 0%
inventory and this is closely followed by Vastral East 1,900 - 2,500 1% 0%
north Ahmedabad. Affordable pricing,
Nikol East 1,850 - 2,500 1% 2%
FIGURE -5 Prahlad Nagar West 5,000 - 6,500 0% 0%
MICRO-MARKET-WISE QTS VS AGE OF INVENTORY
Satellite West 5,500 - 7,200 0% 0%
CENTRAL EAST WEST NORTH SOUTH
Thaltej West 5,000 - 6,000 0% 0%
14
Vastrapur West 5,000 - 6,200 0% 0%
Bopal West 3,500 - 4,800 0% 0%
11 Chandkheda North 2,500 - 3,200 1% 0%
Motera North 2,800 - 3,600 0% 0%

UNSOLD
MICRO-MARKET
INVENTORY Gota North 2,800 - 3,600 0% 0%
8
Central 2,380 Source: Knight Frank Research
East 8,275
5
North 10,158
South 2,366
2 West 9,756
5 8 11 14 17 20
QTS Ahmedabad 32,934
Note: The size of the bubble indicates the quantum of unsold inventory Source: Knight Frank Research
32
33
BANGALORE METRO this year the much awaited north-south

corridor was rolled out. It would now be
possible to traverse a distance of 24 km
Ring Road (ORR) Metro and is proposed
to have 13 stations encompassing major
stations such as Silk Board, HSR Layout,
AN INFRASTRUCTURE from the north-west part of the city to the Bellandur, Kadubeesanahalli, Marathahalli, This concluding
southern region in 45 minutes, a boon for Mahadevapura and K.R. Puram. As per the section of Phase 1
both regions as the roadways between timeline set by BMRCL, the second phase added 12 km to the
BEHEMOTH IN THE WAITING

them are riddled with severe traffic shall be completed by December 2020.
operational network
bottlenecks. The line towards the southern It is estimated that after its completion,
with the new line
part of the city passes through some of Bangalore Metro would transport an
the preferred residential neighbourhoods average of 10 lakh commuters per day. now connecting the
of Bengaluru housing large population and southern part of the
would expectedly account for a higher city with seamless
ridership. As per Bangalore Metro Rail The impact of an infrastructure project access to Chickpet,
Corporations (BMRCL) estimates, the such as the metro rail is enormously
KR Market, National
daily ridership is expected to reach 5 lakhs powerful and comprehensive, affecting not
only a citys real estate and commercial
College, Lalbagh,
from the current 1.8 lakhs along the entire
stretch of Bangalore Metro Phase 1. proposition but also its population density South End Circle,
and employment generation. Accessibility Jayanagar, RV Road,
through the metro leads to creating Banashankari,
With the first phase of the metro office hubs and producing jobs, which JP Nagar and
completed, the second phase has become in turn aids in improving the demand for
Yelachenahalli
the cynosure of all eyes today. Phase 2 residential property of select residential
spans a length of 72 km and is expected neighbourhoods, while providing a boost
(erstwhile Puttenahalli).
to add 61 stations to the network. It to the commercial sector of the region
includes the extension of the four Phase simultaneously. Also, reduced commuting
1 corridors, as well as the construction time owing to the metro has been observed
of two new lines. Further, a new 18-km- to enhance the potential of a micro market
long line connecting Silk Board with K.R. exponentially. As a result, micro markets
Puram has been included, categorised as along the metro line witness steep rise in
Phase 2A. The line will be called the Outer real estate values, coupled with hectic new
I
t was on June 17, 2017 that a long South End Circle, Jayanagar, RV Road,
awaited milestone was achieved in Banashankari, JP Nagar and Yelachenahalli
Bengalurus timeline. The city witnessed (erstwhile Puttenahalli).
the completion of the 42.3-km-long first
42.3km
phase of the Bangalore Metro, as the
last leg of its Green Line was flagged off As an overview, Bangalore Metro Phase 1
by the President of India, thus closing a stretches from Mysore Road in the west to
10Lakh
chapter that was scheduled to have been Baiyappanahalli in the east a distance of
completed six years ago in 2011. This 18.2 km and from Nagasandra on Tumkur
concluding section of Phase 1 added 12 Road in the north-west to Yelachenahalli on
Completion of the first phase of the
km to the operational network with the new Kanakapura Road in the south, a 24-km-
Bangalore Metro
line now connecting the southern part of long stretch While last year witnessed the
the city with seamless access to Chickpet, launch of the east-west corridor, garnering After its completion, Bangalore
much recognition in the western suburbs, Metro would transport an average
KR Market, National College, Lalbagh,
of 10 lakh commuters per day.
34
35
developments in the adjacent vacant land in residential real estate. Already these
parcels, as developers strive to capitalise TO DODDABALLAPUR micro-markets have been witnessing a
on the profit implications of large-scale proliferation of mid-end and affordable
developments resulting from additional TO NELAMANGALA housing projects, adding to the residential
TO
TO CHIKKABALLAPUR
FSI, if applicable. For investors, the return stock on a yearly basis. It is expected that
TU
BANGALORE INTERNATIONAL METRO PHASE I
EXHIBITION CENTRE
M
on investment is sizeable, given that metro connectivity would aid in easing
K
U
R
homebuyers are willing to pay a premium METRO PHASE II the unsold inventory situation in such
KEMPEGOWDA
for residential properties located close to INTERNATIONAL AIRPORT NICE ROAD
locations, particularly in South Bengaluru,
NAGASANDRA
public transit systems like the metro. which had witnessed a glut in supply in the
OUTER RING ROAD recent years but was facing a low sales
NAGWARA SOUTHERN RAILWAY LINE traction owing to lack of infrastructure.
For many, Bangalore Metro is the beacon On the other hand, Phase 2A is expected
of hope. It is envisaged as a key player to smoothen out the traffic issues faced
that would inter-connect different parts by office occupiers along the ORR. At
of the city seamlessly and decongest the present, work along the Bangalore Metro
citys choked road network. While Phase Phase 2 has been going on unobstructed;
1 of the metro largely covers the city WHITEFIELD the extensions of Phase 1 observing more
centre and the suburban neighbourhoods, traction. While there is still a long way
NICE ROAD
BAIYAPPANAHALLI
the four extension lines under Phase 2 TO BANGARPET to go, an infrastructure behemoth such
are expected to optimise the operations as the Bangalore Metro, which harbours
of Phase 1. Work from Mysore Road to enormous advantages, the wait for its
Kengeri and Yelachenahalli to Anjanapura completion is expected to be worth the
Township up to the NICE Road Crossing is pain.
going on at a rapid pace and BMRCL plans CITY RLY STATION
to open these two sections by the end of
OUTER RING ROAD

2018. The line between Baiyappanahalli
and Whitefield, eagerly awaited by the IT
community, is expected to be ready for
operations by the end of 2020. Further,
the two new lines under Phase 2 (north-
south corridor of NagwaraGottigere and
southern line of RV RoadBommasandra)
traverse through some of the densest and
traffic-congested areas of the city, housing
key IT hubs, and will seek to unclog the
bottlenecks in order to support the growth MYSORE ROAD
of the IT sector.
With Phase 2 of the Bangalore Metro Going forward,

covering fast-growing micro markets PUTTENAHALLI
peripheral micro markets
like Bommasandra and Electronics City such as Chandapura,
KENGERI
in the south and Nagawara towards the Hosa Road and Hulimavu
north, there is immense scope to unlock TO MYSORE
in the south, Kengeri
the potential of these locations as well
and Nayandahalli in the
as other neighbouring ones. Going
forward, peripheral micro markets such west, and Thanisandra
as Chandapura, Hosa Road and Hulimavu in the north are likely
in the south, Kengeri and Nayandahalli in GOTTIGERE to witness substantial
ANJANAPURA
NICE ROAD
the west, and Thanisandra in the north
BOMMASANDRA TO ANEKAL
growth in residential real
are likely to witness substantial growth
estate.
36
37
sales. H1 2017 witnessed an increase FIGURE -2

of 5% in new launches and 4% in sales MICRO-MARKET SPLIT OF LAUNCHED UNITS
over the figures in H2 2016.
H1 2016 H2 2016 H1 2017
On a Year-Over-Year (YOY) basis, the 60%
city is still far behind the numbers
55%
observed in H1 2016. The number of
new launches in H1 2017 lagged behind
47%
50%
those of H1 2016 by a significant 42%, 24,281 13,395 14,026
44%
42%
45%
while for sales it was 19%, during the
same period. 40% UNITS UNITS UNITS
While the tightening of new launches 35% H1 2016 H2 2016 H1 2017
31%
28%
is partly attributable to the quantum of
27%
30%
unsold inventory build-up in the market,
22%
25%
factors such as insecurity regarding
18%
the RERA policy implementation and 20%
demonetisation, to some extent, played
14%
14%
15%
major roles in the slowdown.
9%
10%
On the other hand, the citys sales
4%
volume continues to be in a relatively 5%
0%
0%
0%
better position although it has failed 0%
to recover the momentum it had CENTRAL EAST NORTH SOUTH WEST
achieved in H1 2016. Buyers interest
has been gradually picking up post-
BENGALURU
demonetisation and while the actual
purchase rate has been low, enquiries
have risen positively. 2. MARKET SPLIT OF
In a bid to offload their unsold inventory
and cash in on GST that permits credit
for taxes paid on input costs such as
RESIDENTIAL MARKET cement and steel, which would bring
As in the previous periods, the
southern zone of the city accounted
down prices, city developers have
1. BENGALURU RESIDENTIAL FIGURE -1 for the largest share in the total Bengaluru till recently was
launched several schemes to attract
MARKET LAUNCHES, SALES BENGALURU MARKET TRENDS - HALF-YEARLY
number of new launches in H1 2017,
AND PRICE TRENDS
maximum buyers. While some of recognized as one of the
primarily in peripheral locations such
them have reduced the prices of their
LAUNCHES SALES WT. AVG. PRICE (RHS)
as Electronics City, Chandapura and most resilient residential
projects, others are offering freebies
4850
40000 4900
markets in the country.
4831
The residential market of Bengaluru Sarjapur. The region continues to be

such as free modular kitchens and
4805
has seen a drastic change in its favoured by both the local populace
Today, the market is
4780
35000
electrical fittings worth lakhs.
dynamics in the past two and half 4800 as well as the expatriate population
years. Until recently recognized as Meanwhile, weighted average prices employed with the IT sector. reeling under pressure
one of the most resilient residential 30000 remained by and large stagnant, and is striving to keep
4650
4700 North Bengaluru, which in recent years

markets in the country, today, the witnessing a mere increase of 1% in H1
has been characterised by factors afloat amidst constricting
4585
2017 compared to H1 2016.

Number of units
market is reeling under pressure 25000

such as high land cost, low social conditions. However,
and is striving to keep afloat amidst 4600
The inclusion of Bengaluru in the infrastructure and relatively expensive
things have started looking
` \sq ft
constricting conditions. 20000

Smart City list is expected to have a
4473
property prices, strove to bounce back

The second half of last year 2016 (H2 4500 far reaching impact on the residential on the developers radar with a number up slightly in 2017 and
15000 market in the forthcoming years,
2016) was a particularly trying period of office projects becoming operational although the figures are
for the citys residential market with the as that would lead to improved in the region. It saw the share of new
10000
4400
infrastructure in the city. This would, in launches increase to 28% in H1 2017
still restrained, marginal
announcement of the demonetisation
measure that brought real estate turn, add to the overall attractiveness from 22% in H1 2016, although, as improvements were
4300 and brand image of Bengaluru as a
activities almost to a halt. 5000 compared to H2 2016, the share of new observed in the number of
residential market. launches was less.
However, things have started looking
0 4200
new launches and sales in
up slightly for Bengaluru this year and From accounting for a substantial share
H1 2017.
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H1 2014
although the figures are still restrained, of 27% in H1 2016, East Bengalurus
marginal improvements were observed share in the total number of new
in the number of new launches and Source: Knight Frank Research launches almost halved to 14% in H1
38
39
observed a significant chunk of new

FIGURE -3
BENGALURU MICRO-MARKET MAP
The southern zone of the launches taking place in the bracket MICRO-MARKET SPLIT OF SALES
` 2.5-5 Mn, a trend that was noted in Lingarajapura Byappanahalli
city accounted for the BSF CAMPUS

Bilijaji Sathnur
Madhugirihalli Dasanayakanahalli
Dwarka Nagar Chagaletty
H2 2016 as well. Till H1 2016, majority

Vasudevapura
H1 2016 H2 2016 H1 2017

Mavallipura Srinivasa
Kodagi Baba Nagar Chagalahatti
Thammarasanahalli Ramagondanahalli Vinayak Nagar Challamakunte
Thirumalapura Marenahalli
largest share in the total

Nagar
of the new launches were in the higher 60% Gurunath

Silvepura Jarakbandekaval
Puttanahalli Venkatala Chokkanahalli

Lake
number of new launches TORENAGASANDRA

Layout
ticket size bracket of ` 5-7.5 Mn.

Dodda
Byalakere Attur
Lake Yelahanka Maruthi
Kere Nagar
Puttanahalli
55%
Kasghattapura Kempanahalli Mittaganahalli Mitganahalli
Byalakere
YELAHANKA Srinivaspur
in H1 2017, primarily Notably, most of the new launches in Veersandra

Shringaripur
48%
Kumbharhalli Kalatammanahalli Nagenahalli
50%
Shamarajpura Bellahalli Kattugollahalli
47%
H1 2017 are in peripheral locations of
Bellahalli
in peripheral locations
Prakruthi Markandhaiha
Alur Nagar Kadusonnappanahalli
Medi Nagar
Lake Gandhi Doddenahalli Chikkasandra
Kempapura Agrahara
Nagar
the city with promise of infrastructure 45% Guniagrahara

Voderahalli
such as Electronics City,
40%
Aditya Nagar
Nehru
development in the near future.

Thirumenahalli
Soma Allalasandra Nagar Kannuru
Sasiveghatta Nagar Lake SDS Prakru
Gunduru
Marthi
40%
Lake
Chandapura and Sarjapur.

Nagar Ganigarahalli Vinayak
Lakshmipura
Nagar Vidyaranyapura Jakkur
Lake Chokkanahalli Gundur
This development comes as a Alur Soladevanahalli Chikkabanavara Vignana

Allalasandra
35%
The region continues to
Lake Hazrath Kendra Kammasandra
welcome trend, given the recent slew

Abbigere Shafi Colony Sampigehalli Chikkagubbi Kada
Lake Jakkuru
Agrahara
Chikkabanavara
29%
NTI
Layout
Abbigere Yashoda
be favoured by both the of governments initiatives to boost

Kuduregere Jakkur
30%
Nagar
27%
Airfield
RK HEGDE
Singapura
Thammenahalli Shirdi Sai
24%
NAGAR
KVP Nagar
the affordable housing sector, such as

Dodda
Nagar Maruthi
Gubbi
local populace as well as

Nagar Sivagiri
22%
Myadarahalli Kodigehalli Shabhari
25%
Jalahalli Township
Settihallikere East Rajiv Gandhi Nagar
Soundarya Phase 1
Athmavidya
according infrastructure status to this

Kuduregere Layout Nagar Srirampura
Colony Amrutahalli Nagar
19%
Lovedale
Chikkasandra Sneha
SAHAKARA
18%
Doddabommasandra Nagar Kothnur
the expatriate population

Chamundeswari Lake Narayanapura Narayanapura Bidrahalli
sector in the Union Budget with a host NAGAR

Jalahalli
20% Visveshwaraiah Layout
West
Layout Virupakshapura
Amrutahalli
Lake
Mesthri
Palya Bileshivale Vaderahalli
Kyalasanahalli
Rachenahalli
Lake
employed with the IT of tax incentives, provisioning buyer-

Aduru
Anchepalya Thanisandra
Ravetha BEL
Lake Kothanur
15% Nagar Tatanagar
Koti Mariyannapalya
Rampura
JALAHALLIHMT
Ravindra Sanjeevini
friendly clauses like on-time-delivery

Defence Hosahalli Sanchar
Nagar Khata Nagar
Colony Fortune Saraipalya Nagar
sector.
Nagar
9%
Estate Valley
9%
Anchepalya Santosh Geddalahalli
Hebbal
8%
Lake
10%
Bharath
in the RERA Act, lower home loan

Madavara Maheswari Nagar Maragondanahalli
Maruti
Rukmini
Nagar
Prashanth
Kempapura
Nagar
ASHWATH Kalkere
Lake
Hirandahalli
H
NAGARByrathikhane
Layout Nagar Hebbal Amani Lake
Nagar Jalahalli Lottegollahalli Lake Nagavara
Village Bahubali Lake Manayata
rates, as well as commissioning the Vidya Nagar Bhoopasandra Tech Park

Nagasandra Nagar Sundara
Shakti
5%
Margondanahalli
Farm Gokula Nagar Horamavu
Dasarahalli Extension Veerannapalya Agara K Channasandra
Tank Guddadahalli
nationwide scheme of Pradhan Mantri

Shivaganga Kithaganur
HEBBAL
Layout
0%
0%
0%
Chokkasandra MSR Sizzle Sai
Nagar Lake Habitat
Laxmi Pura Doddabidarakull Wipro Brindavan Sanjaynagar Hormavu Kanaka
0%
Lake Nagar
Awas Yojana (PMAY).

Layout Govindapura HBR Agara Lake Nagar
Vivekananda Layout Hennur
Doddabidrakallu Nagar Muniswara Kanaka Hallehalli
KG Nagar Nagar Bande
Lakshmipura Gopal Chola Chamundi
Srikantapura Nagar Nagar
Geddalahalli Kundamalli Nagar Hormavu Padmeshwari
Central East North South West Shivapura YESHWANTHPUR Rashad
Nagar
Kalkere
Jinkethimmanahalli Nagar
Narayanapura Peenya
Ganganagar
Shampura
KALYAN
Pampanagar Nanjappa
Reddy Devasandra
Dinnur
Ranka
Nagar NAGAR Varanasi
BATTARAHALLI
Colony Anandapura
Source: Knight Frank Research Tippenahalli
Yele Mallappa
2017. Locations such as Whitefield and

Hediyat Raghavendra
Shakthi Nagar Akshya Shetty Lake
Jal Vayu
3. MICRO-MARKET WISE
Nagar Nagar
Vihar Nagar
Ganapathy
Sena
Nagar Subedarpalya Ganga Nagar RT
Jenakal Ashok Vihar
Extension Nagar Kallumantapa Thambu
Gunjur witnessed a number of new

Siddeswara Dr. Ambedkar Ashwath Hosabasavanapura
Kaveri Nagar Muneshwara K R Puram Chetty Palya
Nagar Nagar
RESIDENTIAL SALES
Nagar Munisvara Hoysalanagar Lake
Nagar Mahalakshmi Dodda Nagar Dr. Ambedkar
Kanteerava Nagar Kacharakanahalli
Tigalarapalya Chamundi Nagar Shankar Layout Banaswadi Nagar
Nagar Nagar
launches.
Indira Venkateshpuram
Nandini Kodandarampura Puram Basavanapura
RAGAVENDRA Kalika Nagar

Sreenivas
Layout
Devara BANASWADI
NAGAR Rajarajeswari Sadashiva Jeevanahalli
Nagar Lingarajapuram Bhuvanagiri
Milk Sankey Nagar Munireddypalya Kariyana Palya Subbannaiah Govindpura ITI
Nagar Dooravani
Colony Tank Palya Colony
Jai Jawan Nagar
Similar to new launches scenario, South

Andrahalli Sagayapura
In contrast, West Bengaluru saw

Jai Maruthi
Nagar Nagar Gurijiya
Bovipalya Gutta Kasturi
Nagar
Lava Kusha JC Nagar Sriram Benson Town Duravani
Vivekananda Krishnarajapura
Bengaluru continued to dominate on

Vijinapura
its share of new launches increase

Nagar
Sanjeevini
Nagar
Nagar Nagar
Nagapura MALLESWARAM Guttahalli Bangalore
Palace Lake
Nagar Roshan
Nagar Ayyappa
Nagar
Kachohalli Nagaravale
Nagar Shri Jayamahal Jyothi Puram Singayyanapalya
the sales front as well. The region saw

Chowdesh Mahatma Nagayana
significantly from a mere 4% in H2

Gajanana Rampura Benniganahalli Kaveri
Nagar Gandhi KB Nagar Pulkeshi Palya
Nagara Jeevanhalli Lake Nagar
Nagar Nagar
KHB Badavala
Prem Manjunatha Mariappanapalya Cox Colony Sadanandanagar
its share increase from 40% in H1

A Narayanapura Nagar Hoodi
2016 to 14% in H1 2017. The regions

Venkateswara Nagar Nagar Town Maheswari
Nagar Lakshminarayanapuram Nagar
Shivanagar
Sunkadakatte BEML Sulthangunta
Byadarahalli Vrishabha Layout
MAHADEVAPURA
2016 to a substantial 48% of the total 26,220 20,309 21,210 BASAVESHWARA RAJAJINAGAR Doddigunta
share of new launches in H1 2017 was

Nagar Nagavarapalya
Herohalli
Lake
Hanumatha Kottigepalya
NAGAR Mahaganapathi
Nagar Jai Bheema
Nagar
Madhava
Swamy
Shivanandapuram
Bharati
Nagar
Kallahalli
Sarvagnanagar
Vishwa Vihar
Garudachar
Palya Seetharampalya
Hoodi
Lake
sales in H1 2017. While the region has

Nagar
also an improvement over the share in

Nagar
Bedarahalli Anjana Okalipuram
Lakshmanpuri Ulsoor Ulsoor
CV RAMAN
Nagar
Kaveri
Lake Suddaguntapalya
NAGAR Kaggadasapura
UNITS UNITS UNITS
Cauvery Agrahara Michael
always attracted buyers, courtesy its

Pura Jedara r
ive
H1 2016 and majority of the launches
Nagar Prashant Dasarahalli Palaya Doddanakundi
Halli Bhuvaneswari Lake Vignana
Nagar
at h i
R
Gandhi Laksmipuram Nagar Kaggadasapura Nagar
Gidada aw
WHI
Pattegarhpalya ab Nagar
Bharat Konnenahalli Krishnappa Kartik Nagar
h
Vris
Nagar Garden
took place in micro-markets such as healthy congregation of large IT hubs, Malagala Malleshpalya
H2 2016 H1 2017
Amarajyothi Doddanekundi
H1 2016
Kodigehalli
Nagar Jogupalya GM Palya Lake
Yadava Doddanekundi
Annapurneshwari Upanagara
VIJAYANAGAR NEW
Cholur Chinnapanahalli
the launch of a number of affordable

Nagar Srigandada
Rajarajeshwari Nagar and Kengeri. Kaval
Adarsh
Palya Kempapura
Agrahara
Nagamma
Nagar Manivartapete
Gowthamapuram
Doopanahalli
THIPPASANDRA Nelluru
Jagadish
Nagar
Vibhutipura
Kundalahalli
Lake
Vishveshwaraya Nagar Madava Binny Pete Puram Lake
projects in its peripheral markets has

Hosahalli
Nagar Anubhav Upanagara
Extension Dodpete
Malathalli Nagar Padarayanapura
Lake Cottonpete
Kengunte Kodihalli Ananda
Bhyraveshwara Vinayaka Elagondanpalya Vinayaka Aswath
Puram
Nagar Nagar
increased the demand over the recent

Nagar Shamana Tipu Nagar
Ullal Annasandrapalya
Lake Mallathahalli Nagar Nagar
Ullal
Uppanagar Kala Ramesh
Attiguppe Thubarahalli
Grama Nagarbhavi
TICKET-SIZE SPLIT ANALYSIS

Kilkodungalur Guddadahalli Nagar Lake
past. For instance, micro-markets such

Ullalu Kalasipalayam Muniswamy Krishna
Jyothi Nagar Bapuji
Nagar
Garden
Viveka
Reddy Layout
Murugeshpalya
HAL Bangalore
MARATHAHALLI
CHAMRAJPET VILLAGE
Vijay Adarsha HAL
Manganahalli Srinagar Nagar Nagar Vinayaka Airport
OF LAUNCHED UNITS
Nagar
as Electronics City and Bommasandra Shankarapura Army Nagar

Vinayaka Nagar Neelasandra Area
Ahmed
Sir M. Nagar Kempambudhi Rajendra
Muneshwara Gajendra Munnekollal
Vishveshwaraiah Kere Nagar
are scheduled to be connected to the

Nagar Avalahalli Lalbagh Nagar
Layout
Lake
Kannikanagar Gandhi Bazaar
Vinayaka
Ambedkar
Extension Dasarhalli
Lakkasandra Nagar
H1 2016 H2 2016 H1 2017

Gavipura Challaghatta
other parts of the city through the metro

Yemalur Bellandur
Kempapura Amanikere
Gnana Hanumantha Ejipura
Jagajyothi
Layout
Bharathi
Nayanda BANASHANKARI
Nagar
Jaya
Someshwara
Nagar ADUGODI Belur
Nagasandra
Dodda Nayandanahalli Nagar Laljinagar CV Raman
rail in the next three years, thereby KADUBEESANAHALLI

Halli Sriranganagar
Basti Kere East Nagar
Sonnenahalli Mutharayana Girinagar
<`2.5 mn 8% 2% 3%
Balagere
Nagar Veerabhadra Hombegowda
Ramasandra Nagar Srinivasa Nagar
Upadhya
creating a favourable impact on the Layout Nagar Bellandur

Yediyur Lake
Komghatta SMV RBI JCR
Lake
Lake Layout Extension Layout
29% 64% 59%

Jawaban Doddi
`2.`5-5 mn
Thyagaraja Byrasandra Sadduguntepalya
potential buyers mind. KORAMANGALA

Dubasipalya Kenchenhalli Nagar Yediyur
Kathreguppe Lake
Subash Kere
Hoskere Nagar Balaji
Lake Dubasi
Dattatreya Nagar
Gnanabharathi Palya Jakkasandra Iblur
Hosakerehalli Nagar Banagiri Maruthi
Extension Village
KENGERI Duvasapalya Lake Nagar Nagar
`5-`7.5 mn 41% 18% 22% On the other hand, most other regions Kommaghatta SATELLITE TOWN
Gandhi
BHEL Layout
Bangarappanagar
Rajeev
JAYANAGAR
Krishnappa
Garden
Madivala
Bhoganhalli
ITTAMADU
Madiwala Agara
Nagar Nagar Lake Gunjur
Gattigere
BTM LAYOUT Venkatapura Palya
Gu
of the city saw a decline in their share

Kengeri Hosakerehalli DK Naik
11% 6% 5%
Lake Saul
`7.5-`10 mn
Nagar
Kere
Mailasandra Kadarenahalli
RT
BSM Nagar
of sales in H1 2017. Although West

Extension Suncity Vijayashree Vanganahalli
Sri Krishna Sachidananda
Layout
Garden Layout Nagar Srinivasa Sarakki Kaikondrahalli
Govinakanahalli MCHS
Nagar Nagar Lake
`10-`20 mn 8% 6% 10% J.P NAGAR Colony Roopena

HSR
Bengaluru witnessed a consistent
Kodipur Chikkalasandra Gangadhar Agrahara
Gowdanapalya Nagar Rajiv Gandhi
Nagar
iver
Fort
Kengeri Concord
Garden City
Vaddara Madivala
LAYOUT Kasavanahalli
Sunkalpalya Palya Uttarahalli Ilyas Lake
demand, the north and the east regions

R
KUMARASWAMY
3% 4% 1%
Virat
>`20 mn
Nagar
Vri s abawathi
Dorai Amalodbhavi Nagar

Kere
LAYOUT Kanakanagar JP Nagar
Phase 5
Nagar
Kaveri
Mangammanapalya
h
saw their shares reduce noticeably in

Chandra Nagar
Nagar Kashi Halanayakanahalli
DODDAKANNELLI
Sarakki Bilekahalli
KENGERI
Junnasandra
Subramanyapura Nagar Lake Lake
Prasanti Jarganahalli Harlur
Kodipalya Somasundarapalya
Ganakal Nagar Muneshwara
H1 2017 as compared to H1 2016.

Subramanya Panduranga
Kere Kodichikkanahalli Nagar

Puttenahalli Nagar
Konasandra Yadalam
Vasanthapura
Sharadhanagar HONGASANDRA
Lake Nagar Bikasipura Hosapalya
Garebhavipalya
Jettigana
Halli Sundar Ram Chamundeshwari Mico
Kuvempu Santrupthi Layout
Hemmigepura Shetty Nagar Nagar
Doddabele Gubbalala Nagar Nagar Parappana Hosa
Lake
On the ticket size front, H1 2017

Agrahara
Konanakunte
Kudlu
40
41
new launches that take place annually On the other hand, West Bengaluru still 5. PRICE MOVEMENT
MICRO-MARKET LOCATIONS in the region. With the sales velocity does not have a sufficient inventory and IN H1 2017
of the region improving in the past sales volume compared to the other
Central M.G. Road, Lavelle Road, Langford Town, Vittal Mallya Road, Richmond Road
few quarters and with infrastructure zones of the city. It has the highest QTS Price appreciation across most
East Whitefield, Old Airport Road, Old Madras Road, K.R. Puram, Marathahalli development in the offing, the situation and the second highest age of inventory locations in Bengaluru has remained
is expected to amend further in the as North Bengaluru. Despite its smaller stagnant during the last 12 months.
West Malleswaram, Rajajinagar, Yeshwanthpur, Tumkur Road, Vijayanagar
forthcoming periods. size at present, the region holds The range of price appreciation during
North Hebbal, Bellary Road, Hennur, Jakkur, Yelahanka, Banaswadi promise and the metro rail connectivity the period has been a mere 1-2% in
Meanwhile, North Bengaluru accounted
Koramangala, Sarjapur Road, Jayanagar, J.P. Nagar, HSR Layout, Kanakapura Road, is expected to be one of the prime select markets.
for QTS higher than East and South
South factors for this potential.
Bannerghatta Road Bengaluru, and a high age of inventory There has been no noticeable growth
as well. The unsold inventory in the The premium residential market of observed in the citys residential market
region can be attributed primarily to Central Bengaluru, catering to a niche in the last six months, primarily due to
relatively higher property prices and the clientele, does not have a sufficient part the sluggish movement in sales as well
4. MARKET HEALTH FIGURE -4 dearth of adequate social infrastructure to play in the citys residential market as owing to the huge unsold inventory
QUARTERS TO SELL (QTS) UNSOLD in place, amongst other factors. We dynamics owing to its minimal unsold
INVENTORY ANALYSIS
present in the market.
The quarters to sell unsold inventory East Bengaluru is currently the best expect this market to gain momentum inventory size.
BENGALURU
12 once the office sector gains prominence
(QTS) is the number of quarters required performing market of the city, with
to exhaust the existing unsold inventory the lowest QTS and a low age of 11
in the near future.
in the market. The existing unsold inventory. While traction has been
10
inventory is divided by the average sales slightly weakening in the past one PRICE MOVEMENT IN SELECT LOCATIONS
velocity of the preceding eight quarters year, the presence of several large 9
in order to arrive at the QTS number employment hubs, good social

8
for that particular quarter. A lower QTS infrastructure, substantial availability
NO OF QUARTERS 7
indicates a healthier market. Also, size of housing in various budget sizes and LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH
of the bubble indicates relative size of metro connectivity with the central and 6 (`/SQ FT) CHANGE CHANGE
unsold inventory in terms of number of western parts of the city are some of the
units. prime factors that has led the eastern 5 Langford Town Central 15,00021,000 0% 0%
region to perform well on an eight- 4 Lavelle Road Central 22,00030,000 0% 0%
The QTS for Bengaluru has been
quarter sales basis.
increasing gradually since September 3 K.R. Puram East 4,0006,750 0% 0%
2013, and currently stands at 10 South Bengaluru follows East Bengaluru
2 Whitefield East 4,5008,500 1% 0%
quarters. The unsold inventory of the as the second best performing market,
city is recorded at around 114,064 owing to low QTS and the lowest age 1 Marathahalli East 4,5007,100 0% 0%
units in various stages of construction, of inventory. However, the southern part
0 Indiranagar East 9,00012,500 0% 0%
leading to a matter of concern. of the city is faced with a glut of unsold
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17 Yeshwanthpur West 6,50010,800 0% 0%

inventory, based on the number of

Malleshwaram West 9,00013,300 0% 0%
FIGURE -5
MICRO-MARKET-WISE QTS VS AGE Rajajinagar West 8,50014,000 0% 0%
OF INVENTORY

Tumkur Road West 4,0005,100 2% 0%
15
Yelahanka North 4,5007,500 2% 1%
Hebbal North 5,0009,800 0% 0%

14
Hennur North 4,5007,500 1% 0%
13
Thanisandra North 4,1007,500 0% 0%
UNSOLD
12 MICRO-MARKET
INVENTORY Sarjapur Road South 4,5007,500 0% 1%
11 Central 243 Electronics City South 4,0006,500 2% 1%
East 24,096 Kanakapura Road South 4,3006,000 0% 0%

10
North 25,596 Bannerghatta Road South 4,2007,500 0% 0%

9
South 54,075 Source: Knight Frank Research
8
6 7 8 9 10 11 12 13 14 West 10,054
QTS
Source: Knight Frank Research BENGALURU CITY 114,064
42
43
preferred destination for people related to

the sector to reside in the region.
Prospective buyers
The period 201113 was marked by hectic
seeking ready-to-
construction activity and it observed the
move-in properties
launch of approximately 13,210 units on
a stretch of 16.5 km starting from the stand to gain as well
Sarjapur ORR junction till Sarjapur village. as speedy progress
The region soon became a cornucopia of in construction has
residential real estate, offering different brought in confidence
types of projects that ranged from
among buyers who
apartments to villa projects and plotted
were indecisive
developments, catering mostly to mid-end
and premium segment housing budgets. in booking under-
Significantly, the residential projects here construction projects
are relatively smaller in scale to the ones primarily due to timely
observed in the adjacent neighbourhood of delivery issue.
Haralur Road.
a number of older projects were still under

construction at a slow pace. However,
Until recently, Sarjapur Road was
things have changed in the recent few
characterised by rows of under-
quarters. Today, the first 7 km on Sarjapur
SARJAPUR ROAD
construction projects, barring the initial
Road from the ORR junction till the new
FIGURE -1
2 km from the ORR junction. The slew
Wipro SEZ is choc-a-bloc with newly
RESIDENTIAL LAUNCHES ON of project launches observed in the past
A CORNUCOPIA OF
SARJAPUR ROAD (201116) operational residential projects, undergoing
years had led to a glut in supply and not
possession. Where until only a year back
surprisingly, a general slowdown in the
6000 there were grey concrete blocks with
market was observed. Chart 1 depicts the
SOCIAL LIVING
5411
cranes overhead, today there stand brightly
number of new launches in the region on a
coloured residential towers with imposing
Year-Over-Year (YOY) basis.
gateways. Most of the residential projects
5000
- BY SANGEETA SHARMA DUTTA are undergoing a handover process, while
4229
Although the number of new launches have a few of them are putting on the finishing
reduced in the past few years, the region touches to their second phases. While
4000
E
this fast-paced completion of projects by
3570
is still witnessing project launches in the
very city has its own dynamics, One of the main regions that emerged as a
developers are seen by most as efforts
3300
latter part of the stretch leading to Sarjapur
and there is always a catalyst that favoured residential market was Sarjapur
village, albeit with small project sizes to comply with the timely completion
transforms the citys character. In Road towards the south-eastern part of Number of Units clause of the Real Estate (Regulation and
2675
3000 and mostly by local developers. The area
the case of Bengaluru, the advent of the IT the city. Once a distant, dusty, jagged road
around Sarjapur village is primarily marked Development) Act, 2016 (RERA), it has
industry was one such phenomenon that that lead to Sarjapur village garnered much
by villa projects and plotted developments. come as a boon for home owners who
turned the staid, pensioners paradise into significance with the development of the 1885 are looking for early completion of their
1800
2000 At present, the average price for a
a bustling cosmopolitan city, stirring up its Outer Ring Road (ORR) as a key office hub
residential apartment in the region ranges projects. Prospective buyers seeking
real estate composition. Within the realm of of the city housing large multi-tenanted
between ` 4,2007,000/sq ft. ready-to-move-in properties stand to
a decade and a half, Bengaluru developed office projects, the major occupiers being
gain as speedy progress in construction
into one of the major office destinations the IT/ITeS companies. Besides ORR, 1000 has brought in confidence among buyers
of the country. Soon, newer residential Sarjapur Roads proximity to other major
Despite the slowdown in number of who were indecisive in booking under-
neighbourhoods emerged and there were IT hubs and business centres in South and
launches, the Sarjapur residential market construction projects primarily due to
more options to look forward to for the East Bengaluru such as Electronics City,
is by no means inactive. Till early last year, timely delivery issue.
0
discerning homebuyer. Whitefield and Koramangala, made it a 2010 2011 2012 2013 2014 2015 2016
44
45
OFFICE MARKET
1. BENGALURU OFFICE
FIGURE -2
MARKET STOCK, NEW OFFICE SPACE STOCK AND VACANCY LEVELS
COMPLETIONS, TRANSACTION HALF-YEARLY TREND
AND VACANCY TRENDS STOCK OCCUPIED STOCK VACANCY (RHS)
160
11%
12%
Bengaluru, known for its buoyant
5411
Vacancy rates, which had been
10%
office market led by IT/ITeS demand, declining steadily over the years 140
observed a somewhat moderate owing to consistent transactions and 10%
activity in office space traction in the restrained new completions, continued
units
8%
120
8%
first half of 2017 (H1 2017) as compared on its downward movement and are
to the same period in the recent past. presently at 4%. 8%
7%
Highest number of new launches on 100
Sarjapur Road in 2013 The transaction quantum of Going forward, the inclusion of
6%
5.8 mn sq ft in H1 2017 reflected a Bengaluru in the Smart City list bodes 80 6%
decline of 5% over the transactions well, as that would lead to improved
in H1 2016. While this decline could
4%
infrastructure in the city and attract
60
mainly be attributed to dearth of ready more investors and office occupiers. 4%
office spaces that forestalled potential Smart solutions will be taken up to
40
occupiers looking to expand, stiff bridge service delivery gaps, thereby
competition from other cities, primarily enabling the use of technology in these 2%
Over the years, social infrastructure has availability of more options in that range. Hyderabad, could also be a key factor 20
sectors.
improved substantially and has become Further, the planned Peripheral Ring Road behind the growth constraint.
a major driver for growth in the region, once operational will give an alternative 0
FIGURE -1 0%
besides the IT corporate offices. Proximity route to commuters to reach north of the Another reason that explains the rather
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
NEW COMPLETIONS AND TRANSACTIONS
to a host of reputed educational institutes city from Electronics City, Sarjapur Road restrained behavior of the office market HALF-YEARLY TREND
and hospitals has lent to its overall via Bellary Road and KR Puram, thereby of the city is the tepid growth the IT/ NEW COMPLETIONS TRANSACTIONS Source: Knight Frank Research
attractiveness. In addition, Sarjapur Road improving the regions connectivity issues ITeS sector - the key demand driver of
8
also benefitted from widening of roads and further and would serve to decongest the the office market in Bengaluru. Having
the announcement of the ORR Metro has traffic bottlenecks. Besides, with more matured over the years the sector
lured residents to region. Today, with most people moving into their ready apartments, stands on a bigger base today thereby 7
projects being handed over on time, the it would aid in creating a cosmopolitan limiting the scope for remarkable
expansion that was witnessed earlier.
region is well up the social attractiveness environment and a self-sustainable eco- 6 Bengaluru, known for its
ladder. It is expected that by the year end, system. Thus, Sarjapur Road is set to see On the new completions front, the city buoyant office market led by
majority of the newly completed projects better days ahead, taking the social living witnessed the infusion of 3.7 mn sq
would see occupancy with families moving factor notches higher. ft of office space in H1 2017, which
5
IT/ITeS demand, observed a
Techies from the
mn sq ft
neighbouring
in and creating a more sociable setting in is slightly better than the quantum of somewhat moderate activity
the region. new completions in H2 2016. However, 4
Whitefield and in office space traction in the
this new office space infusion is
Electronic City, who considerably less in proportion to
first half of 2017 (H1 2017),
3
generally opt for Sarjapur Road will continue to be one of the demand observed in the recent as compared to the same
housing options within the preferred residential destinations in periods.
Bengaluru, primarily owing to its location 2
period in the recent past. It
the range of
advantage of being situated in proximity The inadequacy of ready to occupy clocked 5.8 mn sq ft in total
` 5075 lakh, are likely to the key IT hubs of the city. Techies from space has resulted in lending a
1 transactions in H1 2017 - a
to choose Sarjapur the neighbouring Whitefield and Electronic downward pressure on vacancies while
Road due to the City, who generally opt for housing options creating an upward pressure on office decline of 5% over H1 2016,
availability of more within the range of ` 5075 lakh, are rents in key office markets of the city in 0
which can be primarily
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
likely to choose Sarjapur Road due to the H1 2017. The increase in rental values
options in that range. attributed to the dearth of
observed on a Year-Over-Year (YOY)
basis was recorded at 9% during the
Source: Knight Frank Research ready office spaces that
period. deterred the expansion plans
of potential occupiers.
46
47
2. SECTOR ANALYSIS sector in H1 2017. The sector an increase over its share of 4% in H1
accounted for a share of 8% of the total 2016. Notable transactions in the sector
SELECT TRANSACTIONS
Bengaluru continued to attract office space transactions, showing a during H1 2017 include deals inked by
substantial occupier interest from nominal increase over its share of 7% in companies such as State Street Global
the IT/ITeS sector in H1 2017. The H1 2016 and a tad better than its share Services, Morgan Stanley, Western
sector accounted for 57% of the total of 4% in H2 2016. Union and Oben Insurance. OCCUPIER BUILDING LOCATION APPROX AREA (SQ FT)
transactions in H1 2017, albeit with
The BFSI sector remained consistent in
a drop in share as compared to H1 Deloitte Prestige Trade Towers Golf Road 159,000
its share of transactions and accounted
2016. The share of the sector was a 3. DEAL SIZE ANALYSIS
for a 9% share of the transactions in Microsoft Prestige Ferns Galaxy Sarjapur Outer Ring Road 588,784
staggering 62% in the second half of
H2 2016 as well as H1 2017, reflecting Lowes Manyata Embassy Business Park (Block L 2) Hebbal Outer Ring Road 450,000
2016. Of late, the IT/ITeS share has The average deal size in H1 2017 was
been gradually witnessing a decline recorded at 46,728 sq ft, which is lower
TCS Brigade Bhuwalka Icon Whitefield 375,000
courtesy the emergence of newer FIGURE -3
than the average deal size observed in
H1 2016 at 53,515 sq ft. This is primarily State Street Global Services RMZ Ecoworld (Block 6B) Sarjpur Outer Ring Road 225,000
service sectors in the city. SECTOR-WISE SPLIT OF TRANSACTIONS
due to the non-availability of substantial Rambus IBC Knowledge Park (Tower D) Bannerghatta Road 75,000
The share of the Other Services Sector H1 2016 H2 2016 H1 2017
large sized office space in the city as
which includes businesses such as 70% Mitel Communications Madhuvan North Avenue (Block M2) Hebbal Outer Ring Road 48,650
well as the preference of smaller office
e-commerce has slightly decreased
spaces by medium-sized IT companies
62%
from 30% in H1 2016 to 26% in H1 Source: Knight Frank Research

and other service sector companies.
58%
2017. While the build-up over the

57%
60%
e-commerce sectors large scale The number of deals, however,
improved by 9% in H1 2017 as 4. BUSINESS DISTRICT ANALYSIS
transactions in the past seems to have
cooled down presently, other services 50%
compared to the corresponding period
The Outer Ring Road (ORR) office
sector companies like consulting firms, in the previous year. FIGURE -5
market, which has been struggling BUSINESS DISTRICT-WISE TRANSACTION SPLIT
telecommunications and media houses
in the past few quarters on account
accounted for considerable office space 40%
FIGURE -4
AVERAGE DEAL SIZE AND NUMBER OF DEALS of dearth of ready to occupy space, H1 2016 H1 2017
offtake during H1 2017. A prominent
saw its share increase in H1 2017 50%
development observed during this
30%
AVERAGE DEAL SIZE (SQ FT) compared to H1 2016. Its share in the
period is the quantum of office
44%
30%
total transactions in H1 2017 improved
26%
45%
25%
NUMBER OF DEALS (RHS)

space taken up by co-working space
to 44%, as opposed to 33% in H1
operators, such as Awfis, Indiqube 80000 140
2016, owing to a slew of big ticket 40%
and 91 Springboard. Altogether, these
companies accounted for an offtake of
20% transactions led by companies such as 6.1 5.8
33%
70000 Microsoft, Lowes and Sandisk. Majority 35%
120
around 213,000 sq ft of office space in
of the transactions took place along the mn sq ft mn sq ft
9%
9%
H1 2017. 30%
8%
10% 60000 Sarjapur ORR. The region still accounts

7%
Meanwhile, a few major transactions

100
for a large quantum of pre-committed H1 2016 H1 2017
24%
4%
4%
Number
23%
25%
were recorded in the manufacturing 50000 space, which is scheduled to become
0% operational in the forthcoming months.
sq ft
80
18%
OTHER SERVICES
SECTOR
IT/ITEs
BFSI
MANUFACTURING
20%
16%
40000 On the other hand, the other prominent
Bengaluru continued to attract employment hubs of the city - PBD 15%
12%
60
11%
substantial occupier interest Source: Knight Frank Research 30000 East, comprising Whitefield, and
10%
from the IT/ITeS sector in H1 PBD South office markets observed
7%
7%
40
Note: BFSI includes BFSI support services their shares in the total number of
2017. However, of late, the IT/
4%
20000
5%
transactions to decrease significantly
1%
1%
ITeS share has seen a gradual
0%
20 in H1 2017 compared to their shares in
10000 0%
drop in its share courtesy H1 2016. Factors such as fewer grade
CBD &
OFF CBD
SBD
ORR
PBD
EAST
PBD
SOUTH
PBD
NORTH
PBD
WEST
A office projects becoming operational
the advent of newer service 0 0
and infrastructure bottlenecks have led
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
sectors in the city. A prominent their shares to drop in H1 2017. Source: Knight Frank Research
development observed during Meanwhile, the share of the CBD/

this period is the quantum 6.1 5.3 5.8 off-CBD markets and SBD markets
increased substantially in H1 2017 over
of office space taken up co-
mn sq ft mn sq ft mn sq ft the share in H1 2016, largely owing
working office space operators. to companies looking for smaller and
H1 2016 H2 2016 H1 2017
medium sized office spaces in centrally
connected areas with good social
infrastructure.
48
49
BENGALURU BUSINESS DISTRICT MAP

BUSINESS DISTRICT MICRO MARKETS
Lingarajapura Byappanahalli
Central business district

Sathnur
Dasanayakanahalli
BSF CAMPUS Dwarka Nagar Chagaletty
Vasudevapura
Srinivasa
Handarahalli
M. G. Road, Residency Road, Cunningham Road, Lavelle Road, Richmond Road, Infantry Road
(CBD) and off-CBD
Baba Nagar Chagalahatti
Ramagondanahalli Vinayak Nagar Challamakunte Vabasandra
Marenahalli
Nagar
Jarakbandekaval
Puttanahalli Venkatala Chokkanahalli
Attur
Lake
Suburban business district
Indiranagar, Koramangala, Airport Road, Old Madras Road
Lake Yelahanka Maruthi
Kere Nagar
Puttanahalli
(SBD)
Kempanahalli Mittaganahalli Mitganahalli
Srinivaspur
YELAHANKA
Shringaripura
Veersandra
Nagenahalli
Peripheral business district

Shamarajpura Bellahalli Kattugollahalli Jyothipura
Shnakanipura
Bellahalli
Prakruthi
Nagar
Markandhaiha
Nagar Kadusonnappanahalli
Whitefield
(PBD) East
Gandhi Doddenahalli Chikkasandra
Nagar Chikka
Voderahalli Amanikere
Hancharahalli
Aditya Nagar
Nehru Thirumenahalli
Soma
Nagar
Allalasandra
Lake
Nagar Kannuru
Gunduru
SDS Prakruthi
Electronics City, Bannerghatta Road
Raghuvanahalli
Lake Kodigehalli
a Vinayak
(PBD) South
Nagar Vidyaranyapura Jakkur
Lake Chokkanahalli Gundur Upparahalli
BEML LAYOUT
Allalasandra
Vignana
Hazrath Kendra Kammasandra

Shafi Colony Sampigehalli Chikkagubbi Kada
Jakkuru
Agrahara
Thanisandra, Yelahanka, Devanahalli

NTI
Layout
Yashoda
Singapura
Nagar Jakkur
Airfield
RK HEGDE Shirdi Sai Bommanahalli
(PBD) North
KVP NAGAR Nagar
Dodda Bendiganahalli
Nagar Maruthi Hoskote Lake
Gubbi
Nagar Sivagiri
Outer Ring Road (ORR) Hebbal ORR, Marathahalli ORR, Sarjapur Road ORR
Jalahalli Kodigehalli Shabhari
Nagar Township
East Rajiv Gandhi Phase 1
Nagar Athmavidya
Srirampura
Amrutahalli Nagar
Lovedale
Sneha
Doddabommasandra Nagar Kothnur
Chamundeswari Lake SAHAKARA Narayanapura Narayanapura Bidrahalli
Layout Virupakshapura NAGAR
Amrutahalli Mesthri Huskur
Lake Palya Bileshivale Vaderahalli
Kyalasanahalli
Rachenahalli
Lake Aduru
Thanisandra
BEL
5. RENTAL TREND
Lake Kothanur
Tatanagar Rampura
Koti Mariyannapalya
Sanjeevini
Khata JALAHALLI Hosahalli
Nagar
Sanchar
Katamnallur FIGURE -6
The Outer Ring Road (ORR)
Nagar Fortune Saraipalya Nagar
HMT
Valley Kattanallur
Estate
Hebbal
Kempapura
Bharath
Nagar
Geddalahalli
Maragondanahalli Harichitta
KR Defense
Colony
WEIGHTED AVERAGE RENTAL MOVEMENT
ASHWATH Kalkere
Lake
Donna
Rental values have been on a steady

Hirandahalli
NAGAR Lake
office market, which has

Hebbal Amani Goravigrere Amanikere
Jalahalli Lottegollahalli Lake Nagavara
Village Bahubali Manayata Byrathikhane Virgonagar
Lake
Nagar Bhoopasandra Tech Park
Sundara Margondanahalli
rise as demand continues to surpass

Gokula Nagar Horamavu
K Channasandra
Extension Veerannapalya Agara
70
been struggling in the past
Guddadahalli
Kithaganur
MSR
HEBBAL Sizzle Sai
new completions. Currently, the weight-

Nagar Lake Habitat
Brindavan Sanjaynagar Hormavu Kanaka
Nagar HBR Agara Lake
Govindapura Nagar
few quarters on account of

Muniswara Kanaka Layout Hennur Hallehalli
ed average rent in Bengaluru is around

Nagar Nagar Bande Bidare Agraha
Chola Chamundi
Geddalahalli Kundamalli Nagar Nagar Padmeshwari
Hormavu Kalkere
Rashad Nagar
WANTHPUR Shampura
Nagar
Jinkethimmanahalli
KALYAN
`60 per sq ft per month 9% higher dearth of ready to occupy
Ganganagar
60
Pampanagar Dinnur
Nanjappa
Reddy Devasandra
Ranka NAGAR BATTARAHALLI Doddabanahalli
Kannamangala
Colony
Nagar Varanasi
Anandapura JAYBHAMNAGAR
than in H1 2016.
Raghavendra Yele Mallappa Chikkabana
Hediyat Akshya Shetty Lake
Jal Vayu Shakthi Nagar Halli
Nagar
space, saw its share increase

Nagar Nagar
Vihar
Sena
Subedarpalya Ganga Nagar RT
kal
wara Ashwath Extension Nagar Ashok Vihar
Kallumantapa Thambu
Hosabasavanapura
SHIVA NAGAR
Dr. Ambedkar Nagar K R Puram Chetty Palya
ar Nagar Muneshwara
Nagar Munisvara Hoysalanagar Lake
The CBD and ORR office markets

Mahalakshmi Dodda Nagar Dr. Ambedkar
Kanteerava Nagar Kacharakanahalli
in H1 2017 compared to
Nagar Shankar Layout Banaswadi Nagar
50
Nagar Indira Venkateshpuram Sonnenahalli
Nandini Kodandarampura Puram Basavanapura
witnessed the maximum rise in rentals
(INR/sq.ft./month)
Layout
Sreenivas Sadashiva
Devara
Jeevanahalli
BANASWADI
Lingarajapuram
H1 2016, owing to a slew

Nagar Nagar Munireddypalya Kariyana Palya Subbannaiah Bhuvanagiri
Milk Sankey Govindpura Dooravani ITI Dommasandra
Colony Tank Palya Colony
in H1 2017, primarily due to the strong

Jai Maruthi Sagayapura Jai Jawan Nagar
Nagar Gurijiya Chaitanya
Nagar Bovipalya Belathur Ananya
Gutta Kasturi
Nagar
of big ticket transactions

Benson Town Duravani
corporate demand for office space in

JC Nagar Sriram Vivekananda Krishnarajapura
Vijinapura Nagar
Nagar Guttahalli Bangalore Nagar Roshan
Nagapura MALLESWARAM Palace Lake Ayyappa
40
Nagar Kumbena
Nagar
Agrahara
Shri Jyothi Puram
these regions, coupled with declining

Mahatma Jayamahal Singayyanapalya
h Rampura Nagayana Kaveri
led by companies such

Gandhi KB Nagar Pulkeshi Palya Benniganahalli
Nagar Jeevanhalli Lake Nagar
Nagar
KHB Badavala
new completions and vacancies in key

Manjunatha Mariappanapalya Cox Colony Sadanandanagar
CBD/off-CBD
Town A Narayanapura Nagar Hoodi
Nagar Maheswari
Lakshminarayanapuram Nagar
as Microsoft, Lowes and

Shivanagar
BEML Sulthangunta VS Reddy
office markets of the city.

Layout
RAJAJINAGAR
Doddigunta MAHADEVAPURA Colony
BASAVESHWARA Nagavarapalya
NAGAR Mahaganapathi
Nagar Jai Bheema Swamy Bharati Kallahalli Vishwa Vihar
Garudachar
Palya Seetharampalya
Hoodi
Lake
30
Sandisk. Majority of the
Madhava Shivanandapuram Nagar Sarvagnanagar
PBD EAST
Nagar
Nagar
Agrahara
Okalipuram
Lakshmanpuri
SBD Ulsoor
Lake
Ulsoor
Michael
Suddaguntapalya
CV RAMAN
NAGAR
Jedara r Kaggadasapura
Prashant ive
transactions took place

Dasarahalli Palaya Bhuvaneswari Vignana Doddanakundi
Nagar Halli Lake
at h i
R
Gandhi Laksmipuram Nagar Kaggadasapura Nagar Happy Valley Chansandra

aw Nagar
ab
Krishnappa Kartik Nagar WHITEFIELD
h
Vris
Garden
Malleshpalya Prithvi Layout
Doddanekundi
20
along the Sarjapur ORR.
Jogupalya GM Palya Lake
Doddanekundi Vijay Nagar
Cholur Chinnapanahalli
AR Palya Kempapura
Nagamma
NEW Jagadish Gandhipuram Nagondanahalli
Agrahara Nagar Manivartapete Doopanahalli THIPPASANDRA Nagar
Kundalahalli
Lake
Gowthamapuram Nelluru Vibhutipura
Madava Binny Pete Puram Lake
Hosahalli
Upanagara
Extension Dodpete
Padarayanapura Palm Meadows Hagadur
Cottonpete
Kodihalli Ananda
Vinayaka Elagondanpalya Vinayaka Aswath
ORR
Puram
Nagar Nagar
VARTHUR KODI
10
Shamana Tipu Nagar
Nagar Nagar Annasandrapalya
Ajjagondahalli
H12014
H22014
H12015
H22015
H12016
H22016
H12017
uppe Ramesh Thubarahalli
Kilkodungalur Guddadahalli Nagar Lake
Kalasipalayam Muniswamy Krishna
Bapuji
Nagar
Garden Reddy Layout
Murugeshpalya MARATHAHALLI Khanekandaya Valepura
jay
agar Srinagar
Adarsha
Nagar CHAMRAJPET
Viveka
Nagar Vinayaka
HAL Bangalore
Airport
HAL VILLAGE Ramagondanahalli
Shankarapura Army Nagar

Vinayaka Nagar Neelasandra Area
Kempambudhi Rajendra
Gajendra Munnekollal
Kere Nagar

Avalahalli Lalbagh Nagar Varthur
Lake Kere
Gandhi Bazaar
Ambedkar
Dasarhalli
Gavipura Lakkasandra Challaghatta Nagar
Yemalur Bellandur
Kempapura Amanikere
Hanumantha Ejipura Janatha
Someshwara Belur Devasthanagalu Colony
Nagar
Jaya Nagar ADUGODI Nagasandra
BANASHANKARI Nagar Laljinagar CV Raman
Sriranganagar Prakash Madhura
Girinagar East Nagar
KADUBEESANAHALLI Balagere Layout Nagar
Veerabhadra Hombegowda
BUSINESS DISTRICT-WISE RENTAL MOVEMENT

Nagar Nagar
SBD
Srinivasa
Nagar Bellandur
Yediyur Lake
RBI JCR
Lake Chinkkanekkundi
Extension Layout
Thyagaraja Byrasandra Sadduguntepalya Gullakaipura
Nagar Yediyur
Kathreguppe Lake
KORAMANGALA
Balaji
Dattatreya Nagar
Jakkasandra Iblur
Hosakerehalli Nagar Banagiri Maruthi
Extension Village
Lake Nagar Nagar
agar Madivala
Krishnappa Bhoganhalli
Rajeev
JAYANAGAR Garden
Madiwala Agara
ITTAMADU Nagar Lake Gunjur Gunjur
BUSINESS DISTRICT RENTAL VALUE RANGE IN H1 2017 (`/SQ FT/MONTH) 12-MONTH CHANGE 6-MONTH CHANGE
Venkatapura
Hosakerehalli DK Naik BTM Palya
Saul
Nagar LAYOUT Kere
Kadarenahalli Gunjur
RT Lake
Vanganahalli Nagar
Kathirguppe
Srinivasa Sarakki Kaikondrahalli
Govinakanahalli
CBD & Off-CBD 78-110 9% 5%

Nagar MCHS Lake
Nagar Thippasandra
Colony Roopena
Kodipur Chikkalasandra Gangadhar J.P. Agrahara
Nerige
Gowdanapalya Nagar NAGAR Rajiv Gandhi HSR
Nagar
LAYOUT
ddara Kasavanahalli
Madivala
SBD 55 95 5% 3%
Palya Uttarahalli Ilyas Lake
Nagar Virat
Dorai KUMARASWAMY Amalodbhavi Nagar
Nagar
Kere LAYOUT JP Nagar Mangammanapalya
PBD SOUTH
Kanakanagar
Phase 5 Kaveri
Chandra Nagar
Nagar Kashi Halanayakanahalli
PBD East 33 48 3% 2%
Sarakki Bilekahalli Junnasandra
Lake
Subramanyapura
Prasanti
Nagar
Jarganahalli
Lake Harlur DODDAKANNELLI
Nagar Somasundarapalya
Muneshwara
Subramanya Panduranga
Kere Kodichikkanahalli Nagar Hegondanahalli
Puttenahalli Nagar
Vasanthapura
HONGASANDRA
PBD South 32 48 2% 1%
Yadalam Sharadhanagar
Nagar Bikasipura Hosapalya
Garebhavipalya
Sundar Ram Chamundeshwari Mico

Kuvempu Santrupthi Layout
Shetty Nagar Nagar Chambenahalli Volagerekallahalli
Gubbalala Nagar Nagar Parappana Hosa
ORR 50 85 9% 5%
Lake
Agrahara
Konanakunte
Kudlu

50
51
and a consequent requirement of new

housing units for the growing workforce.
This bodes well for the city, as it does seem
like Chennais ailing residential market is
due for a healthy boost in volumes, as the The positive vibe we
office space demand has been consistently picked up from our
robust and has hit a four year high at 5.3 interactions with market
mn sq ft in 2016. These reasons made a stakeholders regarding
compelling case for us to investigate the
an uptick in demand,
reality by interviewing leading developers
robust office space
and financial institutions and visiting major
residential projects on the ground. market fundamentals and
the concerted effort by
developers to make their
A discussion with a leading financial product more affordable
institution in the Chennai home loan
provide strong tailwinds
market was encouraging, as they have
seen a sharp uptick in activity with average
for an improvement in
monthly applications exceeding 600 the Chennai residential
in 2017 from approximately 450 in the market.
IS THERE A preceding two years. Developers too have

experienced a similar trend with purchase
enquiries increasing significantly over last
RECOVERY ON year. A deeper probe with two developers

with the largest stock of unsold inventory
in the lower ticket sizes. Increasing office
space development on the GST Road,
THE CARDS?
also revealed that a large chunk of this Mount Poonamalle High Road and Guindy
interest was being seen in the ` 40 lakh has also increased its attractiveness as a
and under budget category. The developer residential location.
Two developers with fraternity has been proactively moving
the largest stock of toward accommodating this need by
reducing unit sizes and offering discounts Recent legislations like the Real Estate
unsold inventory also
- BY YASHWIN BANGERA as high as 20% in some projects in an (Regulation and Development) Act, 2016
revealed that a large effort to boost demand. (RERA) and policy initiatives such as
chunk of this interest the Pradhan Mantri Awas Yojna (PMAY)
was being seen in the were quite conspicuous in terms of their
C
aught in the ongoing lull in the increasing supply forced developers to ` 40 lakh and under Prices continue to stagnate on the OMR lack of impact on the market. While the
Indian real estate industry, Chennai compromise on price growth to entice wary (Old Mahabalipuram Road) as it has to RERA has just been notified in Tamil
budget category. The
has probably been among the buyers back into the market. contend with a comparatively much bigger Nadu, there is very little awareness of the
developer fraternity
worst hit residential markets in India. stock of unsold inventory and increasing PMAY among residential buyers in spite
The existent slowdown has only been has been proactively competition from locations such as of leading developers making attempts to
exacerbated by a series of events ranging However, early indications show that the moving toward Tambaram, Vandalur and Medavakkam that educate their target buyers on the same.
from political uncertainty due to changes damage caused by the demonetisation accommodating this are located along the length of the GST The positive vibe we picked up from our
in leadership, extreme weather conditions drive has been repaired to a large extent need by reducing unit Road and the Velachery-Tambaram road interactions with market stakeholders
and to the recent demonetisation drive that in early 2017 as developers across the that extends and connects the GST road to regarding an uptick in demand, robust
sizes and offering
didnt allow market volumes to recover. country have been seeing increased the OMR. Locations along the GST Road office space market fundamentals and the
discounts as high as
In fact, H2 2016 saw residential market interest from buyers. Increasing are experiencing a lot of buyers interest concerted effort by developers to make
volumes fall below those of Hyderabad. commercial office space demand is a good 20% in some projects as prices here are at a 10-20% discount their product more affordable provide
Even the strength shown by the premium indicator for employment growth in any in an effort to boost from comparable locations on the OMR strong tailwinds for an improvement in the
segment till a year back has waned as region and points at increasing incomes demand. and are seeing increasing development Chennai residential market.
52
53
of the demonetisation drive, while a

FIGURE -2
more modest 5% YoY growth could MICRO-MARKET SPLIT OF LAUNCHED UNITS
finally point at the beginning of a more
sustained revival in demand. The H1 2016 H2 2016 H1 2017
67%
increase in sales can also be attributed 70%
to a sustained effort on part of the 65%

developers fraternity to bring more
60%
affordable product into the market and
5,815 4,800 6,035
52%
55%
to negotiate hard to push sales.
49%
50%
Similarly, the number of units launched UNITS UNITS UNITS
45%
also saw a healthy 4% growth YoY and
H1 2016 H2 2016 H1 2017
a much more pronounced 26% growth
36%
40%
over the preceding period in H1 2017, 35%
29%
as developers who had held off project
28%
30%
launches during the demonetisation
25%
drive brought their product to the
market during the current period. 20%
12%
12%
15%
H1 2017 clocked 8,850 and 6,035 units
10%
in terms of sales and unit launches, 10%
respectively, re-attaining the levels 5%
2%
2%
2%
seen in mid-2015. 0%
CENTRAL NORTH SOUTH WEST
2. MARKET SPLIT OF Source: Knight Frank Research
CHENNAI RESIDENTIAL LAUNCHES
The share of projects launched with

The comparatively affordable locations average ticket sizes under `5 mn has
of South Chennai saw the most ballooned from 39% in H1 2016 to 69%
development activity by far, as two in H1 2017, while the share of those
RESIDENTIAL MARKET third of the unit launches during H1 projects with average ticket sizes under
2017 took place in locations such as `7.5 mn has grown from 52% to 89%
1. CHENNAI RESIDENTIAL during the same period.
FIGURE -1 Pallavaram, Mahindra World City, A 14% growth in
MARKET LAUNCHES, SALES CHENNAI MARKET TRENDS - HALF-YEARLY SIPCOT OMR Road, Thalambur and Appaswamy Real Estates, Brigade sales during H1 2017
AND PRICE TRENDS Shollinganallur. Group, Jones Foundations and Casa
Grande featured prominently among
compared to the
12000 4750
These southern locations along with
At long last, the Chennai residential preceding period
4700
their western counterparts accounted the developers that launched projects

market has had some respite as 2017
4665
11000 during H1 2017. clearly indicates the

4662
4700 for a massive 96% of the residential

began on a positive note with sales as
products coming online during H1 2017.
well as unit launches seeing a healthy
10000
4650
transient impact of the
4596
bounce back. 9000 Bulk of the residential development has TICKET-SIZE SPLIT ANALYSIS demonetisation drive,
4600 clearly taken place in relatively cheaper OF LAUNCHED UNITS
Bogged down by the ongoing 8000 while a more modest 5%
` \sq ft
4532
4528
Number of units
micro markets as developers have

slowdown in the country in addition to 7000
4550
consciously taken steps to cater to the H1 2016 H2 2016 H1 2017 YoY growth could finally
its own issues ranging from political
6000 4500 cost-conscious consumer looking to point at the beginning of
uncertainty, building collapses (due <2.5 mn 18% 22% 23%
stay closer to the large office space
to flouting development norms), to a more sustained revival
4407
5000
4450 concentrations along the OMR and 2.5-5 mn 21% 36% 46%
the near catastrophic floods, the
4000 GST roads. in demand.
Chennai residential market had been 4400 5-7.5 mn 13% 28% 20%
in a downward spiral, finally finding a 3000 A deeper analysis of the ticket size split
7.5-10 mn 21% 8% 5%
4350
bottom in H2 2016 that saw its half- 2000
of units launched since H1 2016 clearly
yearly sales numbers fall below those depicts a strong supply-side response 10-20 mn 13% 3% 6%
4300
1000
of the Hyderabad residential market. to the changing tastes of consumers >20 mn 16% 2% 1%
0 4250 as developers have progressively
A 14% growth in sales during H1 2017
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
increased launches in lower ticket sizes Source: Knight Frank Research

compared to the preceding period
over the past three periods.
clearly indicates the transient impact
54
55
Mangodu
Edur
Pallavada
nthakapuram Elavur
Kota Injur
Annamalaicheri
Chedilpakkam Manellore Natham
Vazhuthalambedu
Jameelabad
Karambedu
GUMMIDIPOONDI Ayanallur Thirupalaivanam

Kannankottai
Verkadu Acharapallam
Arasur
Western locations such as Thiruverkadu
r
Kollanur
i ve
FIGURE -3
that had been experiencing increasing The share of projects
R
3. MICRO-MARKET-WISE RESIDENTIAL SALES MICRO-MARKET SPLIT OF SALES
ni
Kavaraipettai
Ara
Kattur Karungali
buyer interest in recent periods saw
Perumbedu launched with average
Peruvayal
H1 2016 H2 2016 H1 2017 some of that interest dwindle as prices
BUSINESS DISTRICT MICROMARKETS
Sengarai
r
i Rive Arani have fast approached those of locations ticket sizes under `5
Uthukkottai Nelvoy Aran 70%
66%
Tirup Kalanji
ath
mn has ballooned from
Senganimedu
Central Chennai i Road T. Nagar, Alandur, Nungambakkam, Kodambakkam, Kilpauk in the south that have comparatively
65%
61%
Kaniyambakkam
better residential dynamics and will be
39% in H1 2016 to 69%
SH- 5 1 Chinnambedu
58%
Thandalam
West Chennai Porur, Ambattur, Mogappair, Iyyappanthangal, Sriperumbudur 60%
naturally preferred by buyers with com-
Katchur
Thatchoor 55% parable budgets. in H1 2017, while the
South Chennai
Velakapuram Perumbakkam,
Vadamadurai Chrompet, Sholinganallur, Guduvancheri, Kelambakkam
Mamandoor 50% share of those projects
North Chennai Tondiarpet, Kolathur,
Kannigaipair Madhavaram, Perambur
Jaganathapuram Minjur
Seemapuram 45% with average ticket sizes
Vengal 40% 5. MARKET HEALTH under `7.5 mn has grown
CHENNAI Meyyur
MICRO-MARKET MAP Kortta Thirukkandalam
bakkam laiyar
Guruvoyal
River Cholavaram Thirunilai Vallur 35%
The quarters to sell unsold inventory from 52% to 89% during
28%
14 30% (QTS) is the number of quarters required the same period.
25%
S H-1
r
ive
Velliyur Nallur
to exhaust the existing unsold inventory
rR
Poondi 25%
20%
iya
Vichoor
Redhills in the market. The existing unsold in-
ala
Melanur Koduvalli
20%
rtt
Poondi ventory is divided by the average sales
Ko
Pandeswaram SH
Lake -1 15%
11%
1
velocity of the preceding eight quarters
9%
9%
1
Pullarambakkam
Koyambakkam Morai 10%
in order to arrive at the QTS number
5%
New Vellanur Puzhal
4%
4%
Ikkadu Pakkam Lake 5% for that particular quarter. A lower QTS
Kilambakkam Thiruvottiyur
SH
11
indicates a healthier market.
-
TIRUVALLUR 0%
Pattabiram CENTRAL NORTH SOUTH WEST The Chennai residential market currently
MADHAVARAM Source: Knight Frank Research
has a QTS of 6.5, with an average
Thiruvur
Perumalpattu AVADI
age of inventory of 13.8 quarters.
Anna Nagar TONDIARPET
The concerted focus of developers to
reduce the unsold inventory load before
Koppur ramping up supply along with the recent
Nemam EGMORE
Koyambedu growth in demand in H1 2017 has paid
GREAMS RD
rayamangalam Thirumazhisai
MT. POONAMALLEE RD ANNA SALAI dividends, as the QTS of the Chennai
Illuppur NUNGAMBAKKAM
Narasingapuram T NAGAR residential market is now at 2014 levels.
Nayapakkam
Sengadu
Mangadu NANDANAM While the citys residential market has fi- FIGURE -4
8,450 7,737 8,850 nally hit bottom after nearly four years, it QUARTERS TO SELL (QTS) UNSOLD
INVENTORY ANALYSIS
Chembarambakkam GUINDY
Thandalam
Chennai Adyar remains to be seen if the current bounce CHENNAI
Lake
Ulundai
International Airport St Thomas Mount UNITS UNITS UNITS is just a speed bump on the way down 8.0
Malayambakkam
Airport
H2 2016 H1 2017 or the beginning of a more sustained
PERUNGUDI H1 2016 7.8
SRIPERUMBUDUR
Pennalur Thirumudivakkam GST ROAD recovery.
Pallavaram
Chennai
International Airport 7.6
Somangalam
SH-10
9 A concerted effort by developers over
gandi Vadamangalam
Amarambedu the past three years to lighten unsold
7.4
Pondur inventory loads by constricting new
Demand has been largely consistent
NO OF QUARTERS
OMR supply has paid off. Unsold inventory 7.2
Pallur
Medavakkam with the upcoming supply as the south
levels have plummeted nearly 30% over
Manimangalam
Selaiyur and west micro markets that contain
Araneri Vallam the last two years to the current 28,110 7.0
the relatively cheaper inventory have
units.
Kunnam dominated the demand pie consistently 6.8
Vallakkottai
Vengambakkam over the three analysis periods since H1 Restricted supply and falling unsold
Madurapakkam
Salamangalam 2016. inventory has also pulled down the 6.6
Kandigai inventory load on the market from eight

nneri Sethupet Locations along the OMR and GST 6.4
quarters to a little over six quarters.
Oragadam
Potheri
Mambakkam Siruseri roads in the southern micro markets
Vengadamangalam
far outstrip their peers in other parts of The south and west micro markets hold 6.2
Ezhichur Nallambakkam
the city in terms of buyer preference as the highest amount of unsold inventory
Polacheri 6.0
allur Kayarambedu they offer the most appropriate mix of and will take under two years to get
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17
relatively affordable housing, connec- absorbed at the current rate. The north
Kelambakkam Kovalam
Maraimalai tivity to workplaces and a reasonably micro market holds over two years
Nagar Thiruvidandhai
Thalimangalam Kannivakkam
Velichi well-developed social infrastructure. worth of inventory but the ongoing dras- Source: Knight Frank Research
Karambur
Singaperumal
Villiambakkam Koil
The Great
Kalvoy
56
57
Ammapettai Salt Lake
Thaiyur
Pinayur
Thiruporur
tic reduction in supply by developers in 5. PRICE MOVEMENT IN H1 2017

that zone will ensure that it will maintain
While the citys residential
equilibrium in the short term and see an Residential price growth has been Stagnating prices have not helped the market has finally hit the
improvement if demand continues to weakening in the Chennai residential investors cause but have played their bottom after nearly four
sustain and grow from current levels. market and H1 2017 prices were in line role in keeping the Chennai house
with this trend, growing by a modest prices within the affordability range of
years, it remains to be seen
The recent 33% reduction in guideline
1% YoY. the homebuyer. if the current bounce is just
values across the state by the Tamil
Nadu government along with an in- a speed bump on the way
crease in the registration fee from1% to down or the beginning of a
4% does increase the effective acquisi-
more sustained recovery.
tion cost marginally for the home buyer.
However, game-changing measures,
such as the application of the Real
Estate (Regulation and Development)
Act, 2016 (RERA) and the PMAY, will PRICE MOVEMENT IN SELECT LOCATIONS
go a long way in increasing consumer
confidence by effectively regulating
developers and increasing transparency
in the real estate industry. This regulato- LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH
ry focus of the government will prove to (`/SQ FT) CHANGE CHANGE
be a strong buffer for market sentiment
in the year ahead and should aid a more Anna Nagar Central Chennai 10,70011,900 2% 1%
sustained recovery in Chennais real Kilpauk Central Chennai 14,80016,000 2% 0%
estate market fundamentals.
T. Nagar Central Chennai 18,25019,450 2% 1%
Alandur Central Chennai 7,0007,500 2% 2%
Porur West Chennai 5,2005,500 2% 2%
Ambattur West Chennai 4,1504,600 2% 1%
Mogappair West Chennai 6,2006,700 2% 2%
Iyyappanthangal West Chennai 4,0004,500 2% 2%
Sriperumbudur West Chennai 2,7003,200 2% 1%
Perumbakkam South Chennai 4,1004,500 1% 0%
Chrompet South Chennai 4,2004,700 1% 0%

FIGURE -5
Sholinganallur South Chennai 4,5005,500 2% 1%
MICRO-MARKET-WISE QTS VS AGE
OF INVENTORY
Guduvancheri South Chennai 3,2003,700 1% 0%
CENTRAL NORTH SOUTH WEST
Kelambakkam South Chennai 3,5003,900 0% 0%
17
16
Tondiarpet North Chennai 4,5004,800 1% 0%
15
Kolathur North Chennai 4,8005,500 2% 1%
14
13 Madhavaram North Chennai 4,5005,000 2% 0%
UNSOLD
MICRO-MARKET 12
INVENTORY Perambur North Chennai 6,2006,500 2% 1%
11
10
Central 1,505 Source: Knight Frank Research
9
North 1,319 8
7
South 16,642 6
5
West 8,644
4
CHENNAI 28,110 3
3 5 7 9 11 13
QTS
Note: The size of the bubble indicates the quantum of unsold inventory
58
59
OFFICE MARKET
1. CHENNAI OFFICE MARKET 2. SECTOR ANALYSIS FIGURE -3

STOCK, NEW COMPLETIONS, FIGURE -2
The total office space OFFICE SPACE STOCK AND VACANCY LEVELS
SECTOR-WISE SPLIT OF TRANSACTIONS
H1 2017 saw the BFSI
TRANSACTIONS AND HALF-YEARLY TREND
transaction volume in VACANCY TRENDS STOCK OCCUPIED STOCK VACANCY (RHS)
sectors share of
The Chennai office market has tradition- 50%
H1 2017 was 1.9 mn sq The Chennai office space market ally been anchored by the IT/ITeS sector transactions increase
ft, while only 1.1 mn sq and recent periodsespecially the last substantially due to two
43%
could not maintain the momentum in 80 30%
42%
transactions that it had gained over 18 monthshave seen it give way to
25.4%
ft of new office space large leases by Wells
24.4%
the last three analysis periods that 70 the the Other Services and the BFSI 40%
came online. Fargo and HDFC Bank
37%
22.5%
culminated with H2 2016 experiencing sectors.
24%
the highest transaction volumes in 60 The BFSI sector has been the smallest
amounting to over half
19.3%
history.
consumer of office space in the Chennai of the space transacted
16.8%
To a large extent this can be attributed 50 office space market. Notwithstanding 30%
by the sector
18%
26%
mn sq ft
to the abject lack of viable office space the lack of large format office spaces
24%
24%
24%
23%
required by the back offices of BFSI
12.2%
supply that continues to hamstring the 40
10.8%
market. sector companies, the current analysis
12% period saw its share increase substan-
18%
30 20%
Paucity of quality office space caused
tially due to two large leases being tak-
16%
the current period to witness a drop
en up by Wells Fargo and HDFC Bank
in transaction activity with H1 2017 20
12%
11%
6% amounting to over half of the 0.31 mn
recording 1.9 mn sq ft of transactions,
sq ft space transacted by this sector. 10%
4% lower than the 2 mn sq ft 10
transacted in H1 2016 and the lowest in The IT/ITeS sector continues to be the
FIGURE -1 the last three years. 0 0% largest consumer in the Chennai office
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
NEW COMPLETIONS AND TRANSACTIONS space market and accounted for 0.7 mn
HALF-YEARLY TREND The fact that the city saw just 3.7 mn sq
sq ft of office space transactions in H1 0%
ft of supply since H1 2015, compared
IT/ITeS
BFSI
MANUFACTURING
OTHER SERVICES
NEW COMPLETIONS TRANSACTIONS
2017. Automotive technology provider
to the 12.2 mn sq ft of transaction Source: Knight Frank Research
3.5 Valeo, Zifo Technologies and Paragon H1 2016
volume, has pushed down vacancy
Digital were among the most active IT/ H2 2016
levels from 22.5% in H1 2015 to 10.8%
ITeS companies during this period. H1 2017
3.0 H1 2017.
The share of the manufacturing sector
The total office space transaction
has been on the rise, as the bulk of the Note: BFSI includes BFSI support services
volume in H1 2017 was 1.9 mn sq ft,
2.5 quality office spaces available in recent
while only 1.1 mn sq ft of new office
times, particularly in the SBD, con-
space came online.
formed to their requirements compared
mn sq ft
2.0
to those of IT/ITeS companies and BFSI
back office operations. This sector
along with the Other Services sector
1.5
took up close to 24% or 0.45 mn sq ft
during H1 2017.
1.0
0.5 2.0 3.1 1.9

mn sq ft mn sq ft mn sq ft
0.0
H2 2016 H1 2017
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
H1 2016

60
61
Nagalapuram Arasur
er
Kollanur
Riv
Keelambakam
ni
Kavaraipettai
Ara
Vengalathur Kattur Karungali
Nindra
Perumbedu
Ar Peruvayal
an
iR Sengarai
ive r
Kaliambakam i Rive Arani
r Uthukkottai
Tirup Nelvoy Aran Kalanji
Padiri ath Senganimedu
RESEARCH Athur
i Road INDIA REAL ESTATE
Gangamambapuram Kaniyambakkam
Pennalurpet SH- 5 1 Chinnambedu
Jagannadhapuram Thandalam
Katchur
Goonipalayam Velakapuram Vadamadurai Thatchoor
Chivada
3. DEAL SIZE ANALYSIS FIGURE -4
Placepalayam
CHENNAI BUSINESS DISTRICT MAP
Mamandoor
Kannigaipair
Poonimangadu Jaganathapuram Minjur
AVERAGE DEAL SIZE AND NUMBER OF DEALS
Vijayapuram
Seemapuram
Vengal
Thirukkandalam
AVERAGE DEAL SIZE (SQ FT)
Kesavapuram Meyyur Kortta
The dearth of fresh office supply cur- Thumbikulam Nambakkam laiyar Thirunilai
River Cholavaram Vallur
Arungulam NUMBER OF DEALS (RHS) Guruvoyal
tailed the ability of potential occupiers
14
S H-1
to occupy large format office spaces
r
ive
Velliyur Nallur
rR
Arcod
40000 120 Poondi
and this is depicted clearly in the aver- Ramanjeri
iya
Nabalur Redhills Vichoor
ala
Melanur Koduvalli
age deal size during H1 2017 that is one
rtt
Poondi
Ko
of the lowest in the past seven reference Lake
Pandeswaram SH
-1
1
100
periods.
1
Thiruthani Pullarambakkam
Valarpuram Kaverirajapuram Koyambakkam Morai
30000 New Vellanur Puzhal

Pattaraiperumbudur Ikkadu Pakkam Lake
Kilambakkam Thiruvottiyur
SH
11
80
-
TIRUVALLUR
sq ft
Number
Ichiputhur
Veeraraghavapuram Thiruvalangadu Pattabiram
SELECT TRANSACTIONS Kilpakkam
Videiyur MADHAVARAM
20000 60 Thiruvur
Kavanoor
Vyasapuram Perumalpattu AVADI
Anna Nagar TONDIARPET
OCCUPIER BUILDING LOCATION APPROX AREA

Panambakkam PBD AMBATTUR
Harichandrapuram
40
Koppur
CBD & OFF-CBD
(SQ FT) 10000
Senji Nemam EGMORE
Seyyur Koyambedu
GREAMS RD
Erayamangalam Thirumazhisai
MT. POONAMALLEE RD ANNA SALAI
Valeo CeeDeeYes Navallur 155,000 20 Illuppur NUNGAMBAKKAM
Nagavedu Perumuchi Uriyur
Wells Fargo Chennai One Thoraipakkam 119,000

Narasingapuram SBD T NAGAR
Nayapakkam
Kalambakkam Sengadu
Thakkolam Mangadu NANDANAM
Renault Nissan Ascendas Mahindra 112,000 0 0
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
Technology Cybervale World City Chembarambakkam Thandalam
GUINDY
Chennai Adyar
Lake International Airport
Om Mangalam St Thomas Mount
FCI ETA Technopark Navallur 70,000

Kallambedu Ulundai
Malayambakkam
SBD OMR
Sayanapuram
Source: Knight Frank Research Airport
Kone Indiabulls Ambattur 50,000 PERUNGUDI

Pudhukandigai Pennalur Thirumudivakkam GST ROAD
SRIPERUMBUDUR Pallavaram
Sayanavaram Chennai
HDFC Bank Krishna Tech Tower NM Road 49,500 International Airport
SH-10
Valathur Somangalam 9
Maduramangalam
Paragon Digital CeeDeeYes Perungudi 49,000 Pullalur
Vadamangalam
Amarambedu PBD GST
Sogandi
Thirumalpur PBD OMR
Pondur
TVS Wabco RMZ Infinity Manapakkam 42,000 Keeranallur
OMR
Pudupakkam Pallur
Medavakkam
Shell RMZ Millenia Kandanchavadi 42,000 Selaiyur
Manimangalam
Ariyambakkam Araneri Vallam
Siruvakkam
Kuram
Kunnam
Neervalur Vallakkottai
Attuputhur Vengambakkam
Madurapakkam
Theneri Salamangalam
Enathur Marudham Lake
4. BUSINESS DISTRICT ANALYSIS Tenneri Sethupet
Kandigai
Puthagaram Mambakkam
Oragadam Siruseri
KANCHIPURAM Potheri
BUSINESS DISTRICT MICROMARKETS Vishar Vengadamangalam
20
H-1
Vippedu S Ezhichur Nallambakkam

Central business district Polacheri
Anna Salai, RK Salai, Nungambakkam, Greams Road, Egmore, T.Nattapettai
Nagar Nathanallur Kayarambedu
(CBD and off-CBD)
Villivalam Kelambakkam Kovalam
Suburban business district (SBD) MountPoonamallee Road, Porur, Guindy, Nandanam
Ayyangarkulam
Kalur
Avalur Pala
r Riv Maraimalai
er Thalimangalam Nagar Kannivakkam Thiruvidandhai
Velichi
SBD Old Mahabalipuram Hariharapakkam
Asoor Karambur
Perungudi, Taramani Singaperumal
Road (OMR) Mamandur
Villiambakkam Koil
Kambarajapuram The Great

Chithathur Kalvoy
Peripheral business district Ammapettai Salt Lake
Thaiyur
Arapakkam Pinayur
(PBD) OMR and Grand Southern OMR beyond Perungudi Toll Plaza, GST Road Thiruporur
Trunk Road (GST) Magaral

Mathur ar
Cheyy Kolavai Hanumanthapuram Nemmeli
Kunnavakkam Lake Anjur
PBD Ambattur Ambattur Puthali
Sirukundram
Edamachi Kavithandalam
Malayankulam
Akkur CHENGALPATTU
Ukkal
Senneri
Meyyur
Pattipulam
Pulipakkam Porunthavakkam Manampathy
Perunagar Karunguzhipallam
Mamandur
62
63
Athi Thandarai Manamathy
Uthiramerur MAHABALIPURAM
Lake
Pala
FIGURE -5
almost halve in H1 2017. Occupiers, FIGURE -6
BUSINESS DISTRICT-WISE TRANSACTION SPLIT especially from the IT/ITeS industry took WEIGHTED AVERAGE RENTAL MOVEMENT
up space in Navallur, Thoraipakkam

H1 2016 H1 2017 and Mahindra World City in projects 60
50% such as CeeDeeYes, Chennai One and

Ascendas Cybervale.
44%
50
Over half of the space taken up by the
BFSI sector comprised Chennai One
40%
in Thoraipakkam and Krishna Tower in 40
Mylapore.
(`/sq.ft./month)
32%
30% 30
5. RENTAL TREND
23%
22%
22%
20
Rental values have seen a sustained
19%
20%
rise since 2012 on the back of steady
15%
14%
demand coupled with drastic reduction

10
in office space inventory during
successive years.
10%
7%
The lack of vacant office stock, coupled 0
H12014
H22014
H12015
H22015
H12016
H22016
H12017
with steady demand, has pushed
2%
weighted average rentals in the Chennai

0% office space market to `55 per sq ft Source: Knight Frank Research
CBD
SBD
PBD Ambattur
SBD OMR
PBD OMR & GST
per month at the end of H1 2017 a

significant 5.6% growth YOY.

Rental growth was healthy across
micro-markets and SBD locations such
as Perungudi, Guindy and Taramani.
HYDERABAD METRO:
These areascontinued to witness above-
average rental growth, particularly as BRINGING GACHIBOWLI
CLOSER TO CHARMINAR
vacancy levels drop to as low as 6% in
the SBD and 11% on the SBD OMR.
- BY PANKAJ ANUP TOPPO
2.0 1.9
W
ith a stable state government THE IMPACT OF THE METRO: western corridors of the city more livable
mn sq ft mn sq ft in place and uncertainties of and could also add to the capital values of
At a macro level, it will make movement
the past laid to rest, it looks housing units in these areas. Even offices
H1 2016 H1 2017 like the Hyderabad real estate market is
within the city hassle free and that too at a
around the metro corridors could put a
quicker pace. The most important impact
finally making its presence felt both at premium on their rentals.
however, will be to further embellish the
the national level and at the Asia Pacific
growing brand of Hyderabad as an IT city.
BUSINESS DISTRICT RENTAL VALUE RANGE IN H1 12-MONTH 6-MONTH region. To further add to the growing
The metro will have a positive impact on
attractiveness of Hyderabad, the ci.bilee The major impact of this infrastructure
The OMR attracted over 55% of the 2017 (`/SQ FT/MONTH) CHANGE CHANGE the city at different levels.
Bus Stand. The metro was expected to push will however, be felt in the
demand during H1 2017 as occupiers
CBD & off-CBD 6095 4% 2% be functional by this year end. As per our established, residential colonies of the city
took up space in the relatively lower
survey, the metro will start services on such as Ameerpet and Srinagar Colony.
priced SBD OMR,the PBD OMR and PBD OMR & GST Road 2637 8% 4% At a granular level, it will further add to
the SR Nagar and Miyapur stretch by the These micro markets are thickly populated,
GST business districts. the growing attractiveness of the north-
SBD OMR 4580 6% 3% end of the year. It would be operational in residential colonies with an established
The PBD OMR and GST business western parts of the city, which typically
PBD Ambattur 2835 3% 1% phases. Work is going on at a break-neck social infrastructure. The best part is that
districts that had vacancy levels as high represent the new, changing face of the
speed on the green line and red line. these micro markets are in the heart of
as 50% at the end of 2015, has seen SBD 5065 5% 2% city of Nawabs. It will make these north-
the city. Infact, Ameerpet is one of the
this number steadily come down and Source: Knight Frank Research
64
65
major junctions and has the potential

BOLARAM MANOHARBAD
ALWAL to become what Rajiv Chowk has in the
MIYAPUR Delhi Metro Rail network. This will have a
JNTU CAVALRY BARRACKS
positive impact on the rentals in locations
10-15%
H.B.COLONY like Ameerpet and Srinagar Colony. Once
AMMUGUDA the metro becomes operational in these
LINGAMPALLI KAKATPALLY
locations, rentals here could move up by
BALANAGAR 1015%.
HI-TEC CITY
MOOSAPET
Once the metro becomes operational in these
The biggest benefit of the metro for
RAMAKRISHNAPURAM locations, rentals here could move up by
BORABANDA Hyderabad however, will be that it will 1015%.
FATEH NAGAR
SHILPARAMAM ERRAGADDA SAFILGUDA infuse new life into the old city, especially
ESI NATUNE JUBLIEE BUS the Charminar. The metro will bring the
HI-TEC CITY CUNE HOSPITAL DAYANANDNAGAR
S.R.NAGAR
RASOOLPURA PARADE GROUND areas around Charminar closer to residents
PRAKASH NAGAR PARADISE MALKA
COD MADHAPUR
MADHURA NARAG
MOULA ALI of the city who in the present day do no
BEGUMPET SANJEEVAIAH PARK
YUSUFGUDA METTUGUDA visit these parts of the city. During our
SECUNDERABAD
PEDDAMMA AMEERPET JAMES STRET LALAGUDA survey, many respondents spoke in unison
TEMPLE
PANJAGUTTA SITAPHALMANDI about the lack of easy access being the
JUBLI HILLS TARNKA
JUBLI HILLS ROAD GANDHI HOSPITAL
CHECKPOST HUSSAIN SAGAR prime reason for not visiting parts of the
ERRAMANZIL ARTS COLLEGE HABSHIGUDA
old city. To give an example, in the present
RAMNAGAR
KHAIRTABAD day, depending on traffic conditions, it will
JAMIA OSMANIA NGRE
take anywhere around one and a half hours
LAKDIKAPUL RTC CROSS ROAD
LAKDIKAPUL to two hours to reach Charminar from
ASSEMBLY
CHIKKADPALLY VIDYANAGAR Ameerpet, and when the metro begins its
HYDERABAD METRO UPPAL
NAMPALLY operations, it should not take more than
NAMPALLY NARAYANAGUDA 4045 minutes to cover the same distance.
KACHIGUDA NAGOLE
MUSI RIVER The ease of access will give new life to
GANDHI BHAVAN SULTAN
OSMANIA BAZAR these parts of the city.
MEDICAL COLLEGE
M.G.BUS STATION
MALAKPET NEW MARKET
SALAR JUNG MOOSARAMBAGH DILSUKHNAGAR On the whole, the metro will make the city
MUSEUM CHAITANYAPURI
DABIRPURA
more livable but from a real estate point of
CHARMINAR
YAKUTPURA view it could push up rentals and capital
values along its corridors. From a branding
SHALIBANDA
perspective however, it will be another
L.B.NAGAR feather in the cap of Hyderabad. Unlike The biggest benefit
SHAMSHERGANJ other cities, where the metro was required of the metro for
to help the movement of traffic, which had
JANGAMETTA Hyderabad however,
come to a standstill as its roads had got
FALAKNUMA FALAKNUMA will be that it will
choked, Hyderabad should get its metro
when the traffic on its roads is still moving. infuse new life
NPA SHIRAMPALLY
into the old city,
BEDVEL
Metro services are expected to start between especially the
Miyapur and SR Nagar by the end of this year
UMDANAGAR
Charminar.
66
67
The increased pace of construction

FIGURE -2
in ongoing projects gave homebuyers MICRO-MARKET SPLIT OF LAUNCHED UNITS
the confidence to go ahead and buy
a house. This increased confidence H1 2016 H2 2016 H1 2017
among homebuyers is largely 100%
responsible for a marginal uptick in
87%
87%
90%
sales in H1 2017 compared to H2 2016
80%
and H1 2016.
80% 5,700 5,790 2,571
Compared to other markets, sales
figures for H2 2016 in Hyderabad 70% UNITS UNITS UNITS
did not reflect the true impact of
60% H1 2016 H2 2016 H1 2017
demonetisation. Sales in Hyderabad
remained steady in H2 2016, despite 50%
demonetisation bringing sales to a halt
in other major markets. This can be 40%
attributed to the fact that sales in first

30% The minor loss of share in new launches
three months of H2 2016 were robust
for West Hyderabad has been the gain
and it saved the day for Hyderabad.
20% of North Hyderabad. The marginal
11%
While launches have nose-dived, sales switch could be attributed to developers
10%
6%
6%
are still steady. Meanwhile, prices have taking interest in affordable housing
4%
3%
3%
2%
2%
2%
2%
2%
2%
remained muted and are expected to projects.
0%
move in the same manner, in the near
CENTRAL EAST NORTH SOUTH WEST While capital values of new launches in
future.
West Hyderabad typically ranges from
HYDERABAD
Knight Frank India Research
` 3,500-6,500, those in North Hyder-
abad are in the range of ` 2,000-3,000
2. MICRO-MARKET SPLIT OF units.
Of the total launches that happened in TICKET-SIZE SPLIT ANALYSIS

OF LAUNCHED UNITS
RESIDENTIAL MARKET H1 2017, over 80% per cent happened
in West Hyderabad. Micro-markets that
H1 2016 H2 2016 H1 2017
1. HYDERABAD RESIDENTIAL FIGURE -1 witnessed new launches in West Hyder-
HYDERABAD MARKET TRENDS - HALF-YEARLY
MARKET LAUNCHES, SALES abad include Nallagandla, Chandanagar,
Sales in Hyderabad <2.5 mn 0.70% 8% 1%
AND PRICE TRENDS Serilingampally, Kukatpally, Narsingi,
2.5-5 mn 28.25% 15% 19%
Hayathnagar, Narsingi and Kokapet. remained steady in
Historically Hyderabad has seen new
9000 3800
West Hyderabad attracts most of the
H2 2016, despite 5-7.5 mn 32.15% 27% 28%
3710
3710
launches of more than 5,000 units 8000 development interest in the city courte- demonetisation bringing 7.5-10 mn 19.89% 27% 19%
but in H1 2017 it hit an all-time low of 3700 sy its upscale residential pockets and sales to a halt in other 10-20 mn 4.81% 14% 29%
3620
just over 2500 units. Compared to H1 7000 proximity to the IT/ITeS and BFSI sector
major markets. This can
3610
2016 new launches were down 55% >20 mn 14.21% 9% 4%

hubs. Neighbourhoods such as such
and compared to H2 2016 it shrunk by 6000 3600 as HITEC City and Gachibowli continue be attributed to the fact
Number of units
56%. to attract young IT employees that form that sales in first quarter
` \sq ft
3509
3502
5000 the bulk of the citys workforce. Source: Knight Frank Research
Lack of clarity on the implementation of H2 2016 were robust
3500
of the Real Estate (Regulation & The much awaited Hyderabad met- The shift towards affordable housing
Development) Act (RERA), 2016 has
4000 and it saved the day for is not apparent in Hyderabad as the
3390
ro too will make its debut in the city

emerged as major factor dampening between Miyapur and SR Nagar in West Hyderabad. bulk of the launches in Hyderabad are
3000 3400
new launches in Hyderabad. In Hyderabad, by the end of this year. This concentrated in relatively higher priced
comparison, RERA is already in force also reflects the governments focus in markets in the western side of the city.
2000
in the neighbouring state of Andhra improving infrastructure in the western As a result the below ` 5 mn ticket size
3300
Pradesh. There is still time before part of the city. contributes around 20% of the new
1000
RERA comes into force in Telangana. launches. In fact one-third of the new
While West Hyderabad continues to launches are in the price category of
On the other hand developers were in 0 3200
maintain its dominance in the share of more than 10 mn.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
a rush to complete ongoing projects new launches in H1 2017, its share has
before RERA came into force, the gone down from H1 2O16 and H2 2016
deadline for which was 1 May 2017.
68
69
4. HYDERABAD MARKET The quarters to sell unsold inventory

FIGURE -3
(QTS) is the number of quarters required
MICRO-MARKET WISE RESIDENTIAL SALES MICRO-MARKET SPLIT OF SALES
HEALTH
H1 2016 H2 2016 H1 2017 FIGURE -4 in the market. The existing unsold in-
MICRO-MARKET LOCATIONS QUARTERS TO SELL (QTS) UNSOLD
80% INVENTORY ANALYSIS
ventory is divided by the average sales
75% HYDERABAD
velocity of the eight preceding quarters
HMR-Central Begumpet, Banjara Hills, Jubilee Hills, Panjagutta, Somajiguda
69%
12
70%
65%
for that particular quarter. A lower QTS
63%
HMR-West Kukatpally, Madhapur, Kondapur, Gachibowli, Raidurgam 65% 11
HMR-East Uppal, Malkajgiri, L.B. Nagar 60% 10
55% With drastic reduction in launches and

HMR-North Kompally, Medchal., Alwal, Quthbullanpur 9
steady sales QTS H1 2017 fell down
50%
HMR-South Rajendra Nagar, Shamshabad 45%

8 compared to H2 2016. In H2 2016 QTS
NO OF QUARTERS
was 8 quarters and now it stands at
40%
A B C D
Gosaiguda Shamirpet Hoshyarpalle 7
5.9 quarters.
Lake
Army Ponnal
Alinagar
Residential
Kodakanchi
35%
Nalthuru Colony
Gaddapotharam Munirabad Yakhatpura
Bommarasipet
Mantrikunta
Kishtayapally 6
The markets of north and south are
Madhu
Babu Colony
Kistaipally
Sambhupur
Keshavapuram
Thumkunta
30%
TRR Nagar Saregudem
Serijankampet
Madaram
Mandalpalle
25%
5 however, under pressure as their QTS
Devaryamjal Upperpally Ramlingam
Thumkunta
and age of inventory is extremely high.

Vijay Nagar Palle
Village
Colony Indiramma
20% 4
Kazipally Colony Yadgarpalle Chouderpally
Praneeth
Gandigudem Natures west Rangapuram
SAI Nagar Cheruvu Bounty Yamjal Pothaipally
The age of inventory of west and east
13%
Bowrampet Bahadurpally Bhadurpalle
Wadakpally
11%
heruvu Rameshwaram
KBR Colony Maisamma
15%
10%
Anthaipally Yadgarpalle
3
Banda Venkat Gudem Thumukunta Dharmavaram
are also high but they have a healthy

Citizens Church Reddy Nagar East 1
Hakimpet Air
9%
9%
9%
Colony Wadakpally Sultanpur
Colony Force Station
8%
8%
Town Sundar
10%
ony Mallampet Rao Nagar
7%
7%
7%
Bachupally
6%
Devender
sales velocity. The high sales velocity

KVR Paradise Lakshmi Sai Nagar
Patelguda SJB Hills Colony Colony Khallsi Guda
Nagar Colony Thimmaipall Pedda
BSR Colony Ilapur
Suraram
Suraram
Jaibery Colony
Hakimpet Parvathapuram
2
Village CRPF
5%
could be attributed to the fact that it
Krishna Kowkoor
Alwin Colony Reddy Pet Shanthi Sree KBR Colony Saibaba Nagar Sri Ganesh
Whisper Bharat Nagar
Navyanagar Nagar Colony Valley Gajularamaram Nagar Badshahpet
Ambedkar
Keesaragutta
1
Colony Ram Reddy Satyam
S i l v e r H o u s e Venkusa
Hill County Enclave
0%
is the preferred market in the city for
Devender Nagar G o l f C l u b Estates Keesara
APSL AnandNagar Mayuri Nagar Brundavan Ratna
Colony Colony Nagar Colony Colony
Ameenpur MLA Colony Rajiv Swagruha Haridas Pally
Srivani Nagar Mahadevpur IDA Abhimaan
Lake Krishnaja Hills Fox Sagar
Prashanthi Colony Jeedimetla Chetana Project

Reddy Colony Hills Lake Golf Enclave
homebuyers looking for affordable

Shapur Dandamudi Housing Vishwa Karma Rajiv Gruha
Indira Nagar
0
Ameenpur Nagar Enclave Colony Colony Kalpa Colony
Manjeera Bison
Suvarna Mayuri Nagar Environmental Jawahar
Nagar Valley Miyapur Balaji Hills Ambar Kudlapur Nagar
Cheruvu Meenakshi Park
Venkat
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Colony
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17
Estate Shirdi Enclave Shivaji Nagar
options.
Patighanpur Bombay Ramana Dynamics Anjanadri
Colony Colony Widea Colony Nagadoni Bhanu Enclave Nagar
Tulasi Nagar Konda Badhra Godavari Extension
Bandam PJR Layout Indira Hills Sai Nagar Devi Kalyan
Prasanth Nagar HMT Colony Homes Overseas
BDL Colony Kommu Estate Gardens
Nadigada Jai Jawahar
Friends Pragathi Tanda Indhra Nagar Santosh
Enclave SinghNagar M.E.S.Colony Allareddyguda Nagar Colony Badishaguda
Colony Dwaraka Gayatri Nagar Godumakunta
Quthbullapur
JNTU Housing Board Vijaya Nagar Kundanpally
Colony Colony Ammuguda Puri Colony Colony
College Laxmi
Madinaguda
Miyapur Nagar Kapra Green Park

Jangampalli Bapu Nagar Nirmal Nagar Lake Enclave Patha SC
Kukatpally
Pati Salivahana Dhruva Kapra
Ghanpur Sri Sai Ram Enclave Colony
RTC Colony Colony Colony Vidhura Green Field Ramdas
Vihar Colony Nagar Colony Dharat Nagar Sai Sanjeeva Rayaraopet Lambada
Rapti Nagar GopalNagar Kukatpally NTR Nagar Ashok Nagar Sapthagiri Nagar Cheruvu Thanda
Gurumurthy Colony
Serilingampally
Society Colony Annarayan
Cheruvu Nagaram
Gandhi Gandhi Lake
Vivek Nagar IDPL Colony Nagar
Hig Phase Balnagar Rajiv Gandhi Radhakrishna Garden Nemuragomla
Spring Valley Fortune Indiragandhi Nagar
Colony Nagar R K Puram Nagar Bhagawan Padamatisaiguda
Marthanda Fields JPR Enclave Bowenpally Colony BJR Ambedkar
Gulmohar Habeeb Moosapet Maruthi Nagar
Nagar Nagar Kukatpally Laxmi Garden Colony
Velimela Park Colony CRF Colony RTC Rama Krishna MINT TWP
Ravi Colony Industrial Bon Colony
Estate Puram Cheruvu
Huda Layout Cheruvu
Kondapur FIGURE -5
Raja Sikandarabad
Rajeshwara Moosapet Bharatnagar Manovikas Surya Cherlapalli
Nagar Kaithalapur IDA Nagar Kondapur
Nagar Shankaraiah
Colony
MICRO-MARKET-WISE QTS VS AGE
Rail Vihar
Night Safari Siddhi Vinayak Safdar Nagar Colony
Park Nagar Napier
Erragadda Road
OF INVENTORY
Lines
Mudfort Upparguda APHB Colony Balaji Nagar
Sri Kotla Sanjeevaiah Mahendra
Kanchi Vijaybhaskar
Hitec City
Reddy Botanical Shilparamam Nagar Hills
CUC Garden HCL Colony Yamnampet 2
SRT Nagar
Begumpet
Begumpet Airport
Hitech City ESI Hospital Jubilee Bus Stand Asiagsb
SPR Hills Shanthi Campus
Madhapur HMR CENTRAL HMR SOUTH

Ankushapur
HMR EAST HMR NORTH HMR WEST
Prakash Nagar Parade Sri Saipuri Nagar
Rasoolpura Paradise Ground Colony
Begumpet Shakthi Chengiccherla Vasantagiri Ghanapur
Gachibowli Durga Madhapur PS Secunderabad Sai Nagar Pocharam
Pocharam
Cheruvu Venkatagiri Madhura
Gopanapally Nagar Durga Nagar Bokkonigusa Chandupatlaguda
Thanda Nacharam
Yousufguda Bala Chitea
29
Journalists Mettuguda Nagar
Ameerpet
Telecom Ameerpet Hanuman
Silpa Gram IDA Mallapur
7,700 7,800 7,901

Colony Phase 3 Peddamma Temple Jubilee Nagar Ghanpur
Emaar MGF
Nagar Craft Village Hills Road L N Colony Narapally Rajiv
Extension Silent IRISET
Boulder Hills Punjagutta Secunderabad Swagruha
Indra Reddy Gowlidoddy Valley hills Cruiser on Hire At Lalaguda Sri Sai Nagar
Jubilee Hills Mandadi

Nagar Hussain Sagar Gandhi Hospital
Checkpost
Jubliee Hills
Hema Nagar Surender
Colony BL Nagar Reddy Nagar
Kasu Brahmananda Swarnagiri
Reddy National Park Erra Manzil Indira Nagar Musheerabad Professors Tarnaka RTC Colony Colony
Nanakramguda Quarters North Srivnivasa

Kalyanpuri Nagar Edulabad
Dontanpally Ambedkar Habsiguda Bheem Lake
Swaroop Reddy Nagar Vaishanavi Venkatapur
Ram Nagar
24
Maqtha Muppas Nagar Nagar Colony
Financial
UNITS UNITS UNITS

Kousarali Panchvati Khairatabad Vidya Nagar
Banjara
District Colony Deen Dayal
Nagar
Manikonda
Mizaguda R.T.C. X Road NGRI
Jawahar
Maharajpet
Hills
Vinobha Lakdikapul Nagar Sai Nagar
Khanapur Shirdi Sai Survey of India
Nagar Nagar Chikkadpally Rahat Nagar Colony Divya Nagar
Gopularam Janwada Surya Musi Riv
Assembly Aziz Bagh Uppal er
Gungurthy Quli Qutub Nagar Parvathapur
H2 2016 H1 2017
Shah Layout Sathya Nagar
Uppal
Dollar Hills Nehru Nagar
Kokapet
H1 2016
Narayanaguda Lake View
Nampally Colony Srinivasa Gulam
HUDA Hills Colony
19
Lingampally Ramanthapur Gaddi Nagole Aliguda
Mehdipatnam Gandhi Bhavan Gayatri Nagar Bala Ji
Chinnamangalaram Narsingi Neknampur Kendriya Sultan Bazar Annaram
Township Pratap
Vihar Baghdad Jaiswal Garden Surya Nagar Singaram
OMC MGBS Kamakshlpuram M us i R i v e r
Nagar Vishwas Nagar
Mothkupally Mahalneknapur Narender
Colony Lalabagh Sai Ram
Nagar
Nagar Colony Weaker
Gandipet Guffa Nagar Section
Goshamahal Dhobi Galli Alkapuri Colony
Ibrahim Bagh Thimmaiguda
Osman Sagar Mu Saleh r Jayapuri Colony
Mu
s i Ri Manchirevula si Nagar M u s i R ive
Reddipally ver R ive Ramdev
Chandanagar Vill r Guda Malakpet Keshava Nagar Qutubullapur Dalra
Sogbowli Nalanda
Attapur
Salar Jung
Museum New Market Chaitanyapuri
Saru Nagar
Annaram Thatti Khana
14
Nagar Moosarambagh Dilsukhnagar
Chandanagar Madhavi
Gandhamguda Nagar Dilsukhnagar
Upparpally Maruthi Nagar Saddupally
Padmasri Charminar Victoria Memorial Akbarja
Estates Hanuman
Peeranchuruvu New Friends Sharada Nagar Nagolu Rock Hills Nagar
Radha Nagar HUDA Complex Laxmi Pasumamula
Mrugavani National Colony Aman Nagar Saidabad Enclave Colony Ganapathi
Park Lake
Colony
i
Snehita Hills Shalibanda

us
Saroornagar
M
Durga Devi Kuntloor Pedda

9
Yelkaguda Chilkur Nehru Gowlipura Lake Cheruvu
Colony Velly View Zoological L.B.Nagar
L B Nagar
Aziz Nagar Enclave Sukender Sri Ramagiri
West Hyderabad remains the preferred

Park
SVBS Nagar ReddyColony Gutta
Himayat Nagar Colony Mir Alam 3
Suleman Tank Shamsherganj Champapet
Nagar Bushrath
Bhagavatguda Nagar Pidugu
NTR Nagar Ramulu
Rakshapuram Colony
market, largely because buyers have a

Saibaba Nagar Jahanuma
HUDA Layout Jangammet Balijaguda
Pedda Gunta Shivam Hills
Baba Colony Virat Nagar
Budvel DRDO TWP B New Gayatri Kavadipally
Kings Falaknuma Nagar
4
ad
Colony
preference for ready to move in prop-

an
M u si Devakammathota
gpet
Agricultural Dwarkamai Dhatu Medbowli

HayathNagar
0 5 10 15 20
Research Sakal Basti Nagar Nagar
OMER Colony Hanuman
Ro
Institute SBI Colony

Tarapuri
ad
Bharadwaj Quarters Vattepally Meerpet Nagar

Chinnashapur Colony Colony
Himayat Adarsh
erties closer to the office hubs. Nearly

Sagar Lake Nagar Hafiz Baba Vaidehi Nagar
Appa Reddy
Guda Udamgadda
Rajiv Gandhi
Nagar
Nagar
Janpriya Nagar
Sirla Hills Maruthinagar
QTS
Barkas Sai Nagar Hari Hara
Durga Vignanapuri Puram
69% of the home sales took place in
Bangaliguda Nagar Yelmati Nagar Visaka Nagar Teachers Colony
Murtuzaguda Kothapet Jatoth Nagar
Nazeebnagar Badnaipet Sripuram Thqrpur
Rajendra Nagar Mahmood Madhura
Village
Note: The size of the bubble indicates the

Kanakamidi
Colony Nagar Panchayath Inamguda
Nagireddy Neeladri
this zone.
Padmashalipuram Badangpet Raj Colony
Guda Nagar
UNSOLD
Umda Nagar Sri Chaithanya Jefferguda
Colony Hanuman Maytri
Sajanpally Hayat Nagar Nagar Sri Laxmi Sree Nagar Cheruvu
MICRO-MARKET
Venkatapuram Ayodhya Nagar
Surangal
quantum of unsold inventory

Mustafa Hills Nagar RGK Swami Uppacuda
Sri Ram Roma Surmayaguda
INVENTORY
AS Nagar Vivekananad
Colony Enclave 3 Colony Gandicheruvu
Hariguda
Umda Mallapur
While the relative shares of other

Bakaram Kothwalguda Injapur Indira Nagar
Jalapalli Sagar
Lake
Papayakumandan Baba
Nagar
Ialbazar Source: Knight Frank Research
residential zones have gone down in HMR - Central 1,390
Bala Ji Nagar High Court
Amdapur Madanna YSR Nagar
Kavaguda Sathamrai Colony
HUDA Colony Village Gudem Nadargul Colony
Mayur Sitharampuram
Rural Anajpur Mazidpur
Kethireddypally MB Nagar
Ambedkar Umer
H1 2017 compared to H2 2016, West

Rajiv Gandhi Nagar Khanguda
Sultanpalle Nagar AV Nagar Brahmana
Sri Rama
1,185
Pally
Nagar
Kolbowidoddi
HMR - East
Hyderabad recorded an uptick in sales
Ragannaguda
Narkhoda Devatabowli
Lake
Kamuni Indira
Shamshabad Mamidipally Kurmaguda Sagar

Venkatapuram
Kavellguda HMR - North 3,985
Kacharam M.M.Kunta
Ramdas Pally
4 North Hyderabad has the potential to
Sollpet
Posettyguda Rajiv Gandhi International
Airport (HYD)
Gollapalle
Khurd
Naganpalle
grow in the future albeit with dedicated HMR - South 2,993
Ramanjapur Botiguda
support from the government .

Nanajipur
Grapes
HMR - West 13,105

Garden Sayyed Guda
Almasguda Polkampally Manyaguda
Ghasmiyaguda
Suramma Sardar Nagar
Cheruvu
Pedda Shapur Basaguda
Thanda Yengalaguda
Jukal Patel Guda
Raviryal
Pilloniguda
Muchintal
Shankarapuram
Chinna
Golcoonda
Gollapalle
Kalan HYDERABAD 22,658
Maddur Guduru Burujuguda Bahadurguda
Vastungar Manorabad
Lokya Tanda Tattikhana
Palmakole Mankhal Kongara Kalan
A B C D
70
71
PRICE MOVEMENT IN H1 2017

OFFICE MARKET
With lack of clarity on policy issues, With drastic reduction
capital values remained muted in Hyder-
in launches and steady
abad. While prices in the city remained
muted, premium markets witnessed a sales QTS in in H1 2017 1. HYDERABAD OFFICE FIGURE -2
marginal uptick of 1% in the past six compared to H2 2016. MARKET STOCK, NEW OFFICE SPACE STOCK AND VACANCY LEVELS
HALF-YEARLY TREND
months.
COMPLETIONS, TRANSACTION
In H2 2016 QTS was AND VACANCY TRENDS STOCK OCCUPIED STOCK VACANCY (RHS)
On a Y-O-Y comparison prices in premi- 8 quarters and now it

um markets have moved up at a health- 70 12%
stands at 5.9 quarters.
10.56%
ier rate than the overall price movement The Hyderabad office market
10.0%
of the city. witnessed transaction of 2.33 mn sq ft
60
9.0%
in H1 2017. This is approximately 26% 10%
8.41%
8.22%
lower than the office space transacted
7.59%
PRICE MOVEMENT IN SELECT LOCATIONS in H2 2016. But the dip in transacted 50
office space should not be looked in 8%
6.46%
isolation. The preceding six months
mn sq ft
40
set a new high in the amount of office
6%
LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH space transacted in Hyderabad. When
compared to H1 2016, office space 30
(`/SQ FT) CHANGE CHANGE
transaction fell by 15%.
4%
Begumpet Central 4,5006,000 2% 1%
The fall in office space transaction 20
Banjara Hills Central 7,00010,000 1% 0% is a result of paucity in supply of
Jubilee Hills Central 8,0009,500 2% 0% quality spaces coming into the market. 10
2%
Approximately 2 mn sq ft of office
Madhapur Central 5,8007,800 3% 1%
space was delivered during H1 2017.
0 0%
Uppal East 2,6002,800 2% 0% New completions in H1 2017 were 45%
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
lower than H1 2016 and 17% lower than
L. B. Nagar East 2,5002,900 1% 2%
H2 2016. The dip in new completions is
Nacharam East 2,2002,800 1% 0% a result of many projects being in the Source: Knight Frank Research
FIGURE -1
Kompally North 2,2003,100 2% 1% NEW COMPLETIONS AND TRANSACTIONS
pipeline.
HALF-YEARLY TREND
Quthbullapur North 2,1002,600 1% 0% Shrinking new completions has not
NEW COMPLETIONS TRANSACTIONS
been able to keep pace with the
Shamirpet North 2,0002,400 1% 0%
4.0 demand for quality office space. This
Shamshabad South 2,3003,000 0% 0% has pushed vacancy levels to a new
low. Vacancy level in Hyderabad is
Bandlaguda South 2,2003,100 0% 0% 3.5
around 9% which is lower than the level
Rajendranagar South 2,1003,100 2% 0% witnessed in H2 2016.
3.0
Kondapur West 4,0004,800 2% 1% Low vacancy is one of the biggest The dip in transacted
Gachibowli West 3,8005,250 3% 1% challenges for the Hyderabad market office space should
2.5
as occupier interest continues and
not be looked in
mn sq ft
Manikonda West 3,4004,500 3% 1%
quality office space is not available. It
Kukatpally West 2,8004,000 3% 1% 2.0 also includes office stock in locations isolation. The
that are not much preferred by preceding six months
Madinaguda West 2,6003,350 2% 1%
occupiers. Moreover, vacancy levels
1.5
in the most sought after locations
set a new high in
such as Madhapur, HITECH City, the amount of office
1.0 Gachibowli and Nanakramguda are as space transacted in
low as 24%.
Hyderabad. When
0.5
compared to H1
0.0
2016, office space
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
transaction fell
by 15%.
72
73
2. SECTOR ANALYSIS FIGURE -3

3. DEAL SIZE ANALYSIS
SECTOR-WISE SPLIT OF TRANSACTIONS SELECT TRANSACTIONS
Although the IT/ITeS sector has tradi- The average deal size in H1 2017 was
tionally dominated the transaction pie in reported to be 18,516 sq ft, which is
100%
the Hyderabad office space market its 54% lower than H2 2016 and 28% less
share dipped to 51% in H1 2017. The than H1 2016. The shrinking deal size OCCUPIER BUILDING LOCATION APPROX AREA (SQ FT)
86.6%
90%
fall in share of IT/ITeS sector is a result is a direct result of the fall in the share State Street Corporation Knowledge City Madhapur 230,000
of lack of availability of quality IT spaces of IT/ITeS sector within the transacted
in the city.
80%
office space in the city. ServiceNow Knowledge City Madhapur 150,000
The share of BFSI increased from 7.2% H1 2017 however, witnessed the highest Karvy APFSC Gachibowli 100,000
70%
in H2 2016 to 21.2% in H1 2017. State 60.6% number of deals ever in the city. The E&Y TSI Waverock Gachibowli 82,000
Street Corporation, HDFC and Intellect substantial increase in the number of
60% Teradata Ascendas Madhapur 75,000
Design were some of the major occupi- deals indicates greater confidence
50.8%
ers from the BFSI sector in H1 2017. among occupiers to take up office HDFC Meghana Tower Saifabad 73,000
50%
space in the market.
The share of the Other Services sector Sears IT Avance SEZ Madhapur 53,050
also moved up in H1 2017 compared to 40% Verity Knowledge Solutions Divyasree Orion Raidurgam 48,000
H2 2016. In fact it is marginally higher FIGURE -4
than in H1 2016. 30%
AVERAGE DEAL SIZE AND NUMBER OF DEALS OMICS Divyasree Orion Raidurg 45,000
22.5%
21.2%
20.4%
AVERAGE DEAL SIZE (SQ FT) Primera Medical Technologies My Home Hub - P2 Gachibowli 43,000
20%
NUMBER OF DEALS (RHS)
9.9%
Media Mint Kala Jyothi Gachibowli 38,000

9.1%
7.2%
5.5%
5.2%
10%
60000 140
Intellect Design Arena Reliance Building Madhapur 38,000
0.9%
0%
Ryan India Tax Services Ascendas Madhapur 36,346
IT/ITeS
BFSI
MANUFACTURING
OTHER SERVICES
120
50000
H1 2016 Commvault Systems Ascendas Madhapur 36,346
H2 2016
100
H1 2017 AT&T Ascendas Madhapur 36,346
Number
40000
sq ft
80 Deloitte KRC Building 9 Madhapur 35,000

Note: BFSI includes BFSI support services
30000
60
20000
40
Although the IT/ITeS

10000
sector has traditionally 20 4. BUSINESS DISTRICT ANALYSIS
dominated the
The business district that experienced accounted for 83% of the transactions..
transaction pie in the 0 0
the maximum increase in market share
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
Second only to the SBD in terms of

Hyderabad office space during H1 2017 was SBD, courtesy
quality of office development for the
availability of good quality office
market its share dipped Source: Knight Frank Research IT/ITeS sector PBD West contributed
spaces in locations such as Madhapur,
to 51% H1 2017. The fall nearly 23% of the transacted space
Raidurgam and Kothaguda. Nearly 62%
during H1 2017.
in share of IT/ITeS sector of the office space transaction took
place in SBD. The spill-over demand from the SBDs
is a result of lack of
IT/ITeS hotspots such as Madhapur and
availability of quality IT Madhapur, in SBD, took the lions share
Kondapur, which have almost no viable
spaces in the city. 2.8 3.2 2.3 of transacted office space within the
large-format office spaces left, pushed
city in H1 2017. Of the total office space
occupiers to take up spaces in PBD
mn sq ft mn sq ft mn sq ft transaction, in H1 2017, 51% happened
West.
in Madhapur. Within SBD this location
H1 2016 H2 2016 H1 2017
74
75
FIGURE -5
BUSINESS DISTRICT MICROMARKETS
BUSINESS DISTRICT-WISE TRANSACTION SPLIT Madhapur in SBD
Banjara Hills, Jubilee Hills, Begumpet, Ameerpet, Somajiguda, Himayat Nagar, took the lions share of
CBD and off-CBD H1 2016 H1 2017
Raj Bhavan Road, Punjagutta
Gosaiguda Shamirpet Hoshyarpalle
70% transacted office space
64.8%
Lake
SBD Madhapur, Manikonda, Kukatpally, Raidurg

Army Ponnal
Alinagar
within the city. Of the

Residential
61.6%
Kodakanchi Nalthuru Colony
Gaddapotharam Munirabad Yakhatpura
Bommarasipet
Mantrikunta
Kishtayapally
PBD West Gachibowli, Kokapet, Madinaguda, Nanakramguda, Serilingampally
57.7%
Madhu
office space transaction

Babu Colony
Sambhupur Thumkunta
Kistaipally Keshavapuram
R Nagar Saregudem
60%
PBD East Uppal, Pocharam in H1 2017, 51%
Madaram
Mandalpalle
Serijankampet Ramlingam
Devaryamjal Thumkunta Upperpally
Palle
Village
2.8 2.3 happened in Madhapur.

Indiramma
Kazipally Colony Yadgarpalle Chouderpally
Praneeth
Gandigudem Natures west Rangapuram
Wadakpally
Cheruvu Bounty
Bowrampet Bahadurpally Bhadurpalle
Yamjal Pothaipally 50%
Rameshwaram
KBR Colony Maisamma
Thumukunta Anthaipally Dharmavaram Yadgarpalle Within SBD this location
HYDERABAD BUSINESS DISTRICT MAP
Venkat Gudem
mn sq ft
Banda
mn sq ft
tizens Church Reddy Nagar East
olony Wadakpally Sultanpur Hakimpet Air
Colony Force Station
accounted for 83% of

Sundar
Mallampet Rao Nagar
Bachupally
KVR Paradise Devender Sai Nagar
Lakshmi
Patelguda SJB Hills Colony Colony Khallsi Guda 40%
H1 2017
Nagar Colony Thimmaipall Pedda
H1 2016
BSR Colony Ilapur Suraram Parvathapuram
the transactions.
Hakimpet
Suraram Jaibery Colony
Village CRPF
Krishna Kowkoor
Alwin Colony Reddy Pet Shanthi Sree KBR Colony Saibaba Nagar Sri Ganesh
Whisper Bharat Nagar
Navyanagar Nagar Colony Valley Gajularamaram Nagar Badshahpet
Ambedkar
Colony Ram Reddy Satyam Keesaragutta
Enclave S i l v e r Ho u s e Venkusa
Hill County Devender Nagar Go l f Cl u b Estates Keesara
APSL AnandNagar Mayuri Nagar Brundavan Ratna
Nagar Colony Colony
Colony Colony
Ameenpur
Lake
Srivani Nagar
Krishnaja Hills Prashanthi
Mahadevpur
MLA Colony
IDA
Fox Sagar
Rajiv Swagruha
Abhimaan
Haridas Pally
30%
Colony Jeedimetla Chetana Project
22.9%
Reddy Colony Hills Lake Golf Enclave
Shapur Dandamudi Housing Vishwa Karma Rajiv Gruha
Ameenpur Indira Nagar Colony Colony
Nagar Enclave Kalpa Colony
Manjeera Bison
Suvarna Mayuri Nagar Environmental Jawahar
Nagar Valley Miyapur Balaji Hills Ambar Kudlapur Nagar
Cheruvu Meenakshi Park
Venkat Colony
Bombay Ramana Dynamics Estate Shirdi Enclave Shivaji Nagar Anjanadri
Colony Colony Widea Colony Nagadoni Bhanu Enclave Nagar
Tulasi Nagar Konda Badhra Godavari Extension
Bandam PJR Layout Indira Hills Sai Nagar Devi Kalyan
BDL Colony Kommu Prasanth Nagar
Nadigada
HMT Colony Homes
Jai Jawahar
Estate
Overseas
Gardens 20% FIGURE -6
Friends Pragathi Tanda Indhra Nagar Santosh
12.3%
M.E.S.Colony Allareddyguda
Colony Enclave
JNTU Housing Board Vijaya Nagar
SinghNagar
Ammuguda
Nagar Colony Dwaraka Gayatri Nagar Kundanpally
Godumakunta Badishaguda
Miyapur
College Colony Colony
Quthbullapur Laxmi
Nagar Kapra Green Park
Puri Colony Colony
Jangampalli
Madinaguda Sri Sai Ram Salivahana Bapu Nagar Dhruva Nirmal Nagar Lake Enclave
Kapra
Patha SC
Colony
Kukatpally Enclave
5. RENTAL TREND
RTC Colony Colony Colony Vidhura Green Field Ramdas
Vihar Colony Nagar Colony Dharat Nagar Sai Sanjeeva Rayaraopet Lambada
Rapti Nagar GopalNagar Kukatpally NTR Nagar Ashok Nagar Sapthagiri Nagar Cheruvu Thanda
Colony
6.7%
Society Gurumurthy
Colony Annarayan
Serilingampally Vivek Nagar Balnagar
IDPL Colony
Rajiv Gandhi
Gandhi
Nagar Radhakrishna
Gandhi
Garden
Cheruvu Nagaram
Lake 10% 60
Hig Phase Spring Valley Indiragandhi Nemuragomla
Fortune Nagar R K Puram Nagar Bhagawan
2.9%
3.2%
Colony Nagar Padamatisaiguda
Marthanda Fields JPR Enclave Bowenpally Colony BJR Ambedkar
Gulmohar Habeeb Moosapet Maruthi Nagar
Huda Layout
Park Colony
Ravi Colony
Nagar
SBD Nagar Kukatpally
Industrial
Estate
CRF Colony
Bon
Cheruvu
RTC
Colony
Rama Krishna
Puram Cheruvu
Laxmi Garden
MINT TWP
Colony
Lack of vacant office stock, coupled

Raja Sikandarabad
Kondapur Rajeshwara Kaithalapur Moosapet Bharatnagar Manovikas Surya Cherlapalli Kondapur
with steady demand, has pushed
Nagar IDA Nagar Nagar
Shankaraiah
Colony
Night Safari Siddhi Vinayak Safdar Nagar
Rail Vihar
Colony 0% 50
Nagar
CBD & Off CBD SBD PBD West PBD East
Park Napier
PBD WEST
Kanchi
Sri Kotla
Vijaybhaskar
Erragadda Road Lines
Mudfort
Sanjeevaiah Mahendra Upparguda APHB Colony Balaji Nagar the weighted average rentals in the
Reddy Botanical Shilparamam Nagar Hills Yamnampet
CUC
Hitec City HCL Colony
Hyderabad office space market to just

Garden SRT Nagar Begumpet Airport
ESI Hospital Jubilee Bus Stand
Hitech City
SPR Hills Begumpet Shanthi
Asiagsb
Campus Ankushapur
Prakash Nagar Parade Sri Saipuri Nagar
Madhapur Rasoolpura Paradise Ground Colony Source: Knight Frank Research
over `49 per sq ft per month at the end
Begumpet Shakthi Chengiccherla Vasantagiri Ghanapur
Durga Madhapur PS Secunderabad Sai Nagar Pocharam
Gachibowli Cheruvu Venkatagiri Madhura
Bokkonigusa Chandupatlaguda 40
Gopanapally Nagar Durga Nagar
Nacharam Pocharam
of H1 2017, a 14% growth YoY.
Thanda
(INR/sq.ft./month)
CBD & Off-CBD
Yousufguda Bala Chitea
Journalists
Colony Phase 3
Emaar MGF
Telecom
Nagar
Silpa Gram
Craft Village Peddamma Temple Jubilee
Hills Road Ameerpet
Ameerpet
Mettuguda Hanuman
Nagar IDA Mallapur
L N Colony
Nagar
PBD EAST Narapally Rajiv
Ghanpur
Extension Silent IRISET
Boulder Hills Punjagutta Secunderabad Swagruha
dy Gowlidoddy Valley hills Cruiser on Hire At Lalaguda Sri Sai Nagar
Jubilee Hills Mandadi
H1 2017 saw rental levels grow across
Hussain Sagar Gandhi Hospital
Checkpost Hema Nagar Surender
BL Nagar
Jubliee Hills Ka s u B r a h m a n a n d a
Reddy National Park Erra Manzil Indira Nagar Musheerabad Professors Tarnaka
Colony
RTC Colony
Reddy Nagar Swarnagiri
Colony
Quarters North Srivnivasa
Nanakramguda Ambedkar
Kalyanpuri
Habsiguda Swaroop
Nagar
Bheem
Vaishanavi
Edulabad
Lake
locations, compared to the same period 30
Ram Nagar Reddy Nagar Venkatapur
Maqtha Muppas Nagar Nagar Colony
Financial Panchvati Khairatabad Vidya Nagar
Kousarali Deen Dayal
in the previous year. The upward
District Colony
aguda Nagar
Banjara Jawahar
R.T.C. X Road NGRI
Khanapur
Manikonda Shirdi Sai Vinobha
Hills Lakdikapul Nagar
Survey of India
Sai Nagar
Nagar Chikkadpally Rahat Nagar Colony Divya Nagar
movement of rentals can be gauged
Nagar
da Surya Musi Riv
Assembly Aziz Bagh Uppal er
Gungurthy Quli Qutub Nagar
Shah Layout Sathya Nagar Parvathapur
Dollar Hills Nehru Nagar
20
Narayanaguda Lake View
Uppal
Kokapet from the fact that rentals in Somajiguda,
Nampally Colony Srinivasa Gulam
HUDA Hills Colony
Lingampally Ramanthapur Gaddi Nagole Aliguda
Mehdipatnam Gandhi Bhavan Gayatri Nagar Bala Ji
Narsingi Neknampur Kendriya Sultan Bazar Annaram
Township Pratap
Vihar Baghdad Jaiswal Garden Surya Nagar Singaram
in CBD and off-CBD, reached ` 70 per
OMC MGBS Kamakshlpuram M us i R i v e r
Nagar Vishwas Nagar
Mahalneknapur Narender
Colony Lalabagh Nagar Sai Ram
Nagar Colony Weaker
Gandipet Guffa Nagar Section
sq ft. While Gachibowli in PDB West

Goshamahal Dhobi Galli Alkapuri Colony
Ibrahim Bagh Thimmaiguda
Osman Sagar Mu Saleh r Jayapuri Colony
Mu
s i Ri Manchirevula si Nagar M u s i R ive
ver R Ramdev
agar Vill ive
r Guda Malakpet Keshava Nagar Qutubullapur Dalra 10
Sogbowli Nalanda
Nagar Attapur
Salar Jung
Museum New Market
Moosarambagh Dilsukhnagar
Chaitanyapuri
Saru Nagar
Annaram Thatti Khana witnessed office space transaction at
Chandanagar Madhavi
` 68 per sq ft, Madhapur in SBD also

Gandhamguda Nagar Dilsukhnagar
Upparpally Maruthi Nagar Saddupally
Padmasri Charminar Victoria Memorial Akbarja
Estates Hanuman
Peeranchuruvu New Friends Sharada Nagar Nagolu Rock Hills Nagar
Radha Nagar HUDA Complex Laxmi Pasumamula
witnessed a couple of office space

Mrugavani National Colony Aman Nagar Saidabad Enclave Colony Ganapathi
Park Lake
Colony
i
Snehita Hills Shalibanda

us
Saroornagar
M
Durga Devi Kuntloor Pedda

Chilkur Colony Velly View Ne h r u Gowlipura Lake Cheruvu 0
transactions at ` 58 per sq ft.
Aziz Nagar Sukender
Zoological L.B.Nagar
Enclave Park Sri Ramagiri
ReddyColony
L B Nagar
H12014
H22014
H12015
H22015
H12016
H22016
H12017
SVBS Nagar Gutta
Himayat Nagar Colony Mir Alam
Suleman Tank Shamsherganj Champapet
Nagar Bushrath
Bhagavatguda Nagar Pidugu
NTR Nagar Ramulu
Saibaba Nagar Jahanuma Rakshapuram Colony
HUDA Layout Jangammet Balijaguda
Pedda Gunta Shivam Hills
Baba Colony Virat Nagar
Budvel DRDO TWP B New Gayatri Kavadipally
Kings Falaknuma Nagar
ad
Colony
an
M u si Devakammathota
gpet
Agricultural Dwarkamai Dhatu Medbowli

HayathNagar
Research Sakal Basti
OMER Colony Nagar Nagar Hanuman Source: Knight Frank Research
Ro
Institute SBI Colony

Tarapuri
ad
Bharadwaj Quarters Vattepally Meerpet Nagar

Colony Himayat Adarsh Colony
Sagar Lake Nagar Hafiz Baba Vaidehi Nagar
Rajiv Gandhi Nagar Maruthinagar
Udamgadda Nagar Sirla Hills
Janpriya Nagar
Barkas Sai Nagar Hari Hara
Durga Vignanapuri Puram
Bangaliguda Nagar Yelmati Nagar Visaka Nagar Teachers Colony
Murtuzaguda Kothapet Jatoth Nagar
Nazeebnagar
Badnaipet Sripuram Thqrpur
Rajendra Nagar Mahmood
Colony
Madhura
Nagar Panchayath
Village
Inamguda
Nagireddy Padmashalipuram Neeladri
Badangpet Raj Colony Nagar
Guda
Umda Nagar Sri Chaithanya Jefferguda
Colony Hanuman Maytri
Hayat Nagar Nagar Sri Laxmi Sree Nagar Cheruvu
Venkatapuram Ayodhya Nagar
Surangal Mustafa Hills Nagar RGK Swami Uppacuda
Sri Ram Roma Vivekananad Surmayaguda
Colony AS Nagar
Hariguda Enclave 3 Colony Gandicheruvu
Umda Mallapur
Bakaram Kothwalguda Injapur Indira Nagar
Jalapalli Sagar
Lake
Papayakumandan Baba
Nagar
Ialbazar
Amdapur
Kavaguda
HUDA Colony
Sathamrai
Village Mayur
Madanna
Gudem
Bala Ji Nagar
Nadargul
YSR Nagar
Colony
High Court
Colony BUSINESS DISTRICT RENTAL VALUE RANGE IN 12-MONTH CHANGE 6-MONTH CHANGE
Rural Sitharampuram Anajpur Mazidpur
MB Nagar
Ambedkar Umer
a
Sultanpalle
Rajiv Gandhi
Nagar
Nagar
AV Nagar Brahmana
Pally
Khanguda
H1 2017 (`/SQ FT/MONTH)
Kolbowidoddi
Ragannaguda
Narkhoda Devatabowli
Lake
Kamuni
Mamidipally Kurmaguda
Indira
Sagar
CBD and off-CBD 45-50 19% 6%
Shamshabad
a
Kacharam M.M.Kunta SBD 45-55 15% 2%

Ramdas Pally
Posettyguda Rajiv Gandhi International
PBD West 45-50 16% 0%

Airport (HYD) Naganpalle
Gollapalle
Khurd
Botiguda Nanajipur
Grapes
Sayyed Guda
PBD East 45-50 9% 2%

Garden
Almasguda Polkampally Manyaguda
Ghasmiyaguda
Suramma Sardar Nagar
Cheruvu
Pedda Shapur Basaguda
Thanda Yengalaguda
Jukal Patel Guda

Raviryal
Muchintal Gollapalle
Chinna
Pilloniguda Golcoonda Kalan
Shankarapuram
Guduru Burujuguda Bahadurguda
Vastungar Manorabad
nda Tattikhana
Palmakole Mankhal Kongara Kalan
76
77
developer profile as well. In addition to their growth potential for residential Budget 201718 as well as the nation-
national level developers such as Godrej development and within the span of a short wide scheme of Pradhan Mantri Awas
Properties and Tata Value Homes, other period, these locations became a hot hub Yojana, locations such as BT Road,
reputed developers also have large-scale for mid-end and budget housing. Sodepur and Barrackpore in the north,
residential projects in the region, offering and Baruipur, Garia and Sonarpur Road in
compact apartments at affordable rates. the south are expected to gain importance
Although the region has managed to gain Of late, the attention of developers and owing to their immense potential for the
buyer interest from all across the city, homebuyers has been drawn further affordable housing sector to thrive. With an
majority of the homebuyers still belong to down south towards Baruipur, the new adequate infrastructure push, these distant
the trading community that have resided administrative headquarters of 24 South neighbourhoods have the propensity to
in North Kolkata since generations. The Parganas. The stretch of EM Bypass fulfil their potential.
average price range here varies from between Garia and Baruipur, hitherto
` 2,6004,400/sq ft. considered as the citys hinterlands, has
a number of large residential projects,
launched by reputed developers such
The peripheral micro markets in the as Siddha Group and joint ventures by
north have a number of advantages in PS Group and Srijan. These projects
KOLKATA NORTH AND

their support. The upcoming metro rail have observed substantial demand from
extension from Baranagar to Barrackpore, neighbouring locations, consisting of
scheduled to be completed in 2019, will residents who had spent most of their lives
SOUTH THE RISE OF THE

aid in faster commute. Till then, the Kalyani in congested southern localities and now
Expressway will offer ease of access to aspired to live in well-maintained, gated
other parts of North Kolkata. In any case, communities with first-class amenities.
PERIPHERAL MARKETS
the northern peripheral micro markets are While this stretch of EM Bypass adjacent
relatively closer to the international airport to Baruipur runs along a canal and seems
than the southern parts of the city. On like a distant proposition without much
the social infrastructure front, there are social infrastructure, a number of factors The stretch of EM
several good educational institutes in the prove to be advantageous. There is good Bypass between Garia
region, such as St. Xaviers Institution and connectivity to Baruipur through the and Baruipur, hitherto
Adamas International, although it suffers suburban railway and more than 75 pairs considered as the citys
T
he burgeoning city of Kolkata has been a bastion of the trading community, like Madhyamgram, VIP Road and Jessore from a dearth of organised retail and of local trains ply through it on a daily
hinterlands, has a number
grown by leaps and bounds on largely occupied by the Punjabis and Road received considerable interest owing entertainment avenues. basis. Besides, with Baruipur having been
of large residential
the organised real estate front in Sindhis. It gained prominence in recent to their proximity to Rajarhat. Significantly, designated as the new headquarters of 24
the past one and a half decade. Several years, owing to the existing and upcoming despite its industrial tag, most of the South Parganas, it is expected to become projects launched by
micro-markets, which hitherto had been phases of the metro rail, impending residential neighbourhoods in North Meanwhile, South Kolkata has been a key employment hub of the region with reputed developers. These
sleepy neighbourhoods, have come to the infrastructure in and around VIP Road and Kolkata are thickly populated and harbour a conventionally-preferred residential several offices opening up, thereby boding projects have observed
fore, attracting not only the local populace Jessore Road, and its proximity to Rajarhat good residential demand. destination of the city, accounting for well for residential demand. Presently, the substantial demand from
but also investors from beyond the state. as well as the international airport. around 36% of the residential development average price of an apartment here ranges
neighbouring locations,
While Rajarhat became the star attraction underway. The region has a large between ` 2,5004000/sq ft.
consisting of residents
amongst the new residential markets In 2010, Godrej Properties launched its concentration of housing stock, catering
that emerged as a result of the new real Till a decade back, no national level first residential project in Kolkata Godrej to all budgets, and has typically been a who had spent most of
estate order set up in the city, of late, the developer had ventured into the region, Prakriti, on BT Road, at a distance of 21 bastion of the serviced class. While the Going forward, these northern and their lives in congested
peripheral locations towards the north and although most city developers had a km from the city centre. Spread over 22 south-central areas such as Bhowanipur southern peripheral locations of Kolkata southern localities and
the south have begun shining forth as well. number of projects there in order to acres and housing over 2,400 apartments, and Ballygunge are largely occupied by are expected to perform better in the now aspired to live in
cater to the demand of the population the project was the largest, residential- the gentry, the south-east and south- forthcoming periods, primarily due to the
well-maintained, gated
residing in the northern part of the city. gated community that the region had west neighbourhoods are home to the abundance of mid-end and affordable
communities with first-
North Kolkata, recognised primarily as The distant peripheral neighbourhoods of seen. Today, BT Road and the residential mid-income populace. In recent years, a housing here. Also, given the present
an industrial area till recently, has today North Kolkata, encompassing locations neighbourhoods along it have numerous number of southern peripheral locations conditions, where the government has class amenities.
emerged as a preferred residential location such as BT Road, Sodepur, Panihati and mid-end and affordable projects underway, such as Behala, Narendrapur, Sonarpur placed significant importance to the
among the citys dwellers, almost relieved Barrackpore were largely unexplored by witnessing favourable buyer response. Road and Diamond Harbour Road came promotion of the affordable housing
of its industrial tag. The region has typically reputed developers, though other locations The market boasts of a diversified up on the developers radar owing to segment, reflected both in the Union
78
79
barring the anomalistic period of H2

FIGURE -2
2016 that was instrumental in bringing MICRO-MARKET SPLIT OF LAUNCHED UNITS
down the sales volume drastically. H1
2017 saw an increase of 11% in sales in H1 2016 H2 2016 H1 2017
over the sales figure in H2 2016. 60%
However, more importantly, on a Year- 55%

Over-Year (YOY) comparison between
H1 2016 and H1 2017, the citys
50%
11,891 9,093 9,764
46%
residential market is still much behind 45%
40%
the numbers observed in H1 2016 and UNITS UNITS UNITS
40%
36%
the decline noted was to the tune of
H1 2016 H2 2016 H1 2017
34%
22% in H1 2017.
32%
35%
27%
The weighted average price remained 30%
25%
stagnant in H1 2016, depicting the fact
25%
that the market is almost at a standstill,
owing to the decrease in new launches 20%
17%
15%
and sales, waiting for clarity on factors 15%
such as RERA compliance and GST
10%
9%
amongst other factors. 10%
7%
5%
1%
1%
0%
2. MARKET SPLIT OF 0%
CENTRAL EAST NORTH RAJARHAT SOUTH

KOLKATA
Over the last few years, Rajarhat has
been accounting for the largest share
these pockets have good potential for
in the total number of new launches
residential development, particularly
in the city owing to persistent interest
for budget housing.
from the developer community. It
accounted for 36% share of the total North Kolkata which had seen a
RESIDENTIAL MARKET number of new launches in H1 2017, gradual decline in new launches in
emerging once again as the region with the recent past saw resurgence in H1
1. KOLKATA RESIDENTIAL The Kolkata residential
FIGURE -1 the highest number of residential units 2017. While its share was 17% in H1
MARKET LAUNCHES, SALES KOLKATA MARKET TRENDS - HALF-YEARLY
AND PRICE TRENDS
launched in Kolkata. However, there 2016, dipping further in H2 2016, the market that has been
was a decrease in the share compared first half of this year witnessed the
LAUNCHES SALES WT. AVG. PRICE (RHS) witnessing a tightening of
to H1 2016 and H2 2016. Rajarhat is share increase to 25%. The surge is
The Kolkata residential market has 18000 3640
expected to maintain its momentum in attributed to a number of launches new launches in recent
3614
recently been witnessed tightening of the forthcoming years considering the in locations such as BT Road and years saw the numbers
3620
16000
new launches, after hitting its peak quantum of office-sector development Barrackpore. The region holds
in 2014. While the first half of 2016 (H1 3600
dip substantially by 18%
and infrastructure underway in the potential in the near future owing to
3575
3572
14000
in H1 2017, compared
3570
2016) had seen the launch of almost region. The road infrastructure is well- the existing and upcoming phases of
3580
11,900 units, the numbers dipped planned in the region with upcoming the metro rail as well as impending on an annual basis,
12000
` \sq ft
substantially by 18% in H1 2017.

Number of units
3560 metro rail connectivity that will provide infrastructure around VIP Road and
although it was a slight
3535
However, the new launches figure in 10000 a further boost to the region. Jessore Road. Its proximity to Rajarhat
3540
improvement over H2
3514
H1 2017 saw a slight improvement of and the international airport is an

South Kolkata followed Rajarhat with
7% over the figure six months prior 8000 3520 added advantage. 2016. Sales volumes also
3495
the second highest share of new

in H2 2016, when the governments 3500 launches. It accounted for 32% of The East zone comprising locations observed an increase
6000
demonetisation initiative had rendered the total new launches in H1 2017, as
3480
such as Salt Lake and Kankurgachi, in H1 2017 over H2
most real estate activities to come compared to 27% in H1 2016. The and the central region of the city
to a pause, leading developers and
4000
region has been a conventionally- observed a limited number of new
2016, but recorded a
3460
buyers alike to refrain from making any
2000
preferred residential destination of launches due to land constraints. While substantial 22% decline
property related decisions. 3440
the city and in recent years a number East Kolkatas share reduced to 7% in as compared to H1 2016
In the past few years, end-user driven 0 3420 of southern peripheral locations such H1 2017 from 9% in H1 2016, Central
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
sentiments of the city had led the sales as Narendrapur, Sonarpur Road Kolkata did not have sufficient number
volumes to remain mostly steady, and Baruipur have come up on the of launches.
Source: Knight Frank Research developers radar. Going forward,
80
81
the infrastructure status accorded to

FIGURE -3 MICRO-MARKET LOCATIONS
Rajarhat accounted for this sector in the Union Budget with a MICRO-MARKET SPLIT OF SALES
host of tax incentives, buyer-friendly
36% share of the total Central Park Street, Rawdon Street, A.J.C. Bose Road, Minto Park, Elgin Road
regulations such as the RERA, lower H1 2016 H2 2016 H1 2017
number of new launches home loan rates and the nationwide 60% East Kankurgachi, Beliaghata, Salt Lake, Narkeldanga, Keshtopur, E.M. Bypass (eastern parts)
in H1 2017, emerging as scheme of Pradhan Mantri Awas Yojana
55% North Baguiati, Ultadanga, Jessore Road, Shyambazar, Lake Town, B.T. Road, VIP Road
(PMAY) were some of the measures
the region with the highest Rajarhat Rajarhat New Town
announced. 50%
number of residential Ballygunge, Alipore, Tollygunge, Narendrapur, Behala, Garia, Maheshtala,
42%
45%
South
units launched in Kolkata E.M. Bypass (southern parts)
3. MICRO-MARKET WISE 40%
during the period, followed Dankuni Agarpara
35%
RESIDENTIAL SALES
34%
KOLKATA MICRO-MARKET MAP
33%
35%
by South Kolkata. North
32%
Uttarpara Michael Nagar
South Kolkata witnessed the largest Belangara Nimta

Kolkata saw resurgence in 30%
25%
21%
share of sales volume in H1 2017
24%
Dakshineshwar
its new launches share in accounting for 33% of the total sales
25%
NH
Baluhati North
H1 2017, with a number of
2
18%
volume when it edged past Rajarhat for 20% PWD Rd Belgharia Dumdum
Jagadishpur Dunlop Babughat
projects launched in the the first time in the recent past. This was Bally Mini Bus Terminus Netaji Subhas
13%
15% Chandra Bose
Bonhoogly
11%
International
Grand Trunk Rd
a significant improvement compared to Rajbari Airport
peripheral markets. its previous share of 25% in H1 2016. 10% Baranagar kh e
rjee R d
8%
Debirpara A K Mu
NH
The increase in sales is attributable Belur Math Belur Math

Subhas Nagar 34
5% Bus Terminus
Kashipur Rd
Ave.
2%
to the host of affordable and mid-end Belur
1%
1%
Sinthi
Nazrul Islam
Motijheel
housing projects that has come up in 0%
Var Kashipur Rd
CENTRAL EAST NORTH RAJARHAT SOUTH a nas Dum Dum
Rajarhat
the southern peripheral locations such i Rd
.
re Rd
Salap Liluah Gopalpur
as Baruipur, Narendrapur and Garia. Chitpur
Jesso
Baguiati
Belgachia Lake
On the other hand, Rajarhat, which Makar
da Rd.
Town
Bankra Bagbazar Belgachia
TICKET-SIZE SPLIT ANALYSIS has been accountable for the largest .
m Ave
share of sales in the past few years, Jagachha Isla
OF LAUNCHED UNITS Santragachhi Belilios
Rd.
Ultadanga Naz
rul
Salt Lake City
was relegated to the second place
RS Neta
East
NH ji S
Bantra Maniktala Central Park
H1 2016 H2 2016 H1 2017 after South Kolkata. The region saw its 117 ub Jorasanko
ern
h ash R
d
MMe
share reduce considerably from 42% Tha
kda
<`2.5 mn 60% 70% 67% ri R
tropo
GPO MG d
e.
Rd
in H1 2016 to 32% share in H1 2017. Rd
anjan Av
Baksara .
Salt Lake
unk
litan
10,339 7,308 8,109 Naora Bus Terminus
d Tr
`2.5-`5 mn 17% 19% 20% While the decrease has been substan-
C hit ar
Panchpara Dalhousie Square
Gran
Grand Trun Bus Terminus Beliaghata
k Rd Shibpur Nabanna
tial during this period, it remains to be UNITS UNITS UNITS Bus Terminus
`5-`7.5 mn 9% 7% 8% Esplanade
seen whether it conforms to becoming a Shalimar Bus Terminus
`7.5-`10 mn 5% 3% 3% trend in the forthcoming months. H1 2016 H2 2016 H1 2017

NH
117 Tangra
>`10 mn 9% 1% 2% North Kolkata, too, saw its share reduce Race Course Beniapukur
to 21% in H1 2017, from 24% in H1 Park Circus
Source: Knight Frank Research 2016. Although its share is less, we Garden Reach
Karl Marx Sarani Dhapa
Khidirpur Bhawanipur
expect this region to perform better LEGEND Bantala
Rd
A whopping 87% of the new launches in the forthcoming periods due to the Major Landmark Ballygunje Tiljala
Hospital Judg
announced in H1 2017 were in the be- e's Court Hazra Rd
abundance of mid-end and affordable Hotel
Alipore
Kasba
Chetla
low ` 5 mn ticket size bracket. The trend housing here. Cinema
New
Educational Institute
Kalighat
Alipore Dhakuria
was observed even in H2 2016 when Southern Market
East Kolkata accounted for 13% of the Airport
Goalbati
the share was higher at 89%. k RdBus Stand
Taratala
total number of sales in H1 2017, an Orissa Trun
Railway Station
Charu Market Santoshpur
Most of the new launches in the recent improvement from H1 2016 when it had City Boundary
National Highway
months have been taking place in secured a mere 8% share. The eastern Behala
Tallygunge
r Rd
Major Road
Tollygunge CTC Mukundapur
arbou
peripheral locations of the city with region is a much preferred domicile, es- Rail LineBi
ren Ra Bus Terminus Jadavpur
y Rd We Kheyadah
ond H
Metro st
promise of infrastructure development pecially of the affluent class. It boasts of Bagha Jatin Rd Village
Metro Elevated
Diam
key commercial areas such as Salt Lake Sodepur Baghajatin
in the near future, thereby explaining the Metro Underground
Paschim
River
lower price bracket. Sector V and the road infrastructure is Putiary Naktala
Lakes/Ponds
well-planned. Various flyovers provide Vegetation
NH
117
This development comes as a welcome
easy connectivity with the CBD, thereby
trend given the recent slew of govern- Thakurpukur Garia
making it a sought-after residential Srikhanda
ments initiatives to boost the
destination. Mandirtala
affordable housing sector. For instance, Joka
Rajpur
Sonarpur
Ghasiara
Sankharipota
82
83
Daulatpur Copyright 2015
4. MARKET HEALTH FIGURE -4

The QTS for Kolkata currently stands 5. PRICE MOVEMENT IN H1 2017
QUARTERS TO SELL (QTS) UNSOLD at 10.6 quarters. The unsold inventory
INVENTORY ANALYSIS
The quarters to sell unsold inventory of the city is recorded at around 39,114 Price appreciation across most locations in Kolkata has
KOLKATA
(QTS) is the number of quarters required 13 units in various stages of construction, remained stagnant during the last 12 months.
to exhaust the existing unsold inventory which is a matter of concern.
12 There has been no noticeable growth observed in the citys
in the market. The existing unsold in-
11
Among the various zones, we infer residential market in the last six months, primarily due to
ventory is divided by the average sales
South Kolkata as the best performing the sluggish movement in sales
velocity of the preceding eight quarters 10
market in H1 2017, as it has the lowest
9 QTS amongst all the micro-markets
in the city. This is on account of the PRICE MOVEMENT IN SELECT LOCATIONS
NO OF QUARTERS
8
indicates a healthier market. Also, size
steady rate of sales in the past quarters.
of the bubble indicates relative size of 7
However, the region still accounts for a
unsold inventory in terms of number of
6 high age of inventory and a large unsold
units. LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH
5
inventory, having evolved much earlier
as a residential destination in the city. (`/SQ FT) CHANGE CHANGE
4
South Kolkata emerged Rajarhat is the second best perform- Park Street Central 12,00020,000 0% 0%
3
as the best performing ing market in the city, based on its
2 low QTS, after South Kolkata. Factors Rowdon Street Central 10,00019,500 0% 0%
market in H1 2017, as such as presence of office projects,
1 Ballygunge South 8,50018,000 0% 0%
it has the lowest QTS well-planned existing and upcoming
0 Tollygunge South 6,50016,500 0% 0%
amongst all the micro- road networks, the proposed metro
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17
connectivity within Rajarhat and with Behala South 3,3004,800 0% 0%

markets in the city. other locations of the city, and proximity
Source: Knight Frank Research Narendrapur South 2,6004,350 1% 0%
This is on account of to the international airport have helped
Kankurgachi East 6,0009,150 0% 0%
the steady rate of sales this micro-market perform well in recent
months. Salt Lake East 5,0008,000 0% 0%
in the past quarters.
North Kolkata has the highest QTS in New Town Rajarhat Rajarhat 4,3007,000 0% 0%
the city. This is on account of the large
Madhyamgram North 2,5503,300 0% 0%
number of launches that the region has
witnessed since 2014. However, with BT Road North 3,2004,500 0% 0%
better sales momentum expected in
Jessore Road North 4,3205,600 0% 0%
the affordable housing sector, coupled
with infrastructure push, North Kolkata Source: Knight Frank Research
is projected to perform better in the

forthcoming periods.
FIGURE -5 East Kolkata emerged as the region with

MICRO-MARKET-WISE QTS VS AGE a QTS lower that the northern region but
OF INVENTORY
with a higher age of inventory.
CENTRAL EAST NORTH SOUTH RAJARHAT
15
14
13
12
UNSOLD
11 MICRO-MARKET
INVENTORY
10
Central 377
9
East 5939
8
North 11333
7
South 7350
6
6 7 8 9 10 11 12 Rajarhat 14116
Source: Knight Frank Research QTS
KOLKATA CITY 39114
84
85
INFRASTRUCTURE
- TRANSFORMING
MUMBAI REALTY
THE DYNAMICS OF CITYS The offices are mainly concentrated in
REVERED PROPERTY MARKET Mumbai whereas the population resides
- BY NIBODH SHETTY in neighboring MMR where housing
The residential prices in the city vary
prices are more affordable. Since a major
across a steep gradient while one moves
chunk of the population travels from the
from Mumbai city to MMR regions. The
place of residence to work, it makes the
prices vary from `1,00,000 per sq ft. to
role of infrastructure in particular the
`3,000 per sq ft. Such huge price gradient
THE MUMBAI LANDSCAPE transport infrastructure very crucial. The
3.9
POPULATION SURGE: 2001-2011 arises because of multiple factors
transportation needs of the population
The Mumbai Metropolitan Region (MMR) is spread over an area of 4,355 sq. km, which commuting time to employment hubs and
have been identified by the Government
includes 458 sq. km of the Mumbai City district and the rest comprising regions in the other places of importance such as access
and it came up with a nodal agency to
% Thane, Palghar and Raigad districts. The city boasts the headquarters of all the major
companies in the country across sectors with a huge mixture of BFSI, media, marketing
to education, healthcare, entertainment
avenues, location profile and gentry, etc.
plan and coordinate the implementation
FOR MUMBAI CITY of transportation projects in Mumbai-
and other services providing companies. These factors vary across localities and so
17.8
The Mumbai Metropolitan Regional
does the property price. The city is divided
The population of Mumbai increased from 11.9 mn in 2001 to 12.4 mn in 2011 - a decadal Development Authority (MMRDA).
along 3 major railways line- western,
growth rate of 3.9% while the MMRs population growth was much higher, at 17.8%,
central and harbor. MMRDA has been very instrumental
% taking its population from 19.3 mn to 22.8 mn during the same period.
in implementing some of the major
FOR MMR
86
87
Vas
ai Cr
e ek
Bhayandar
Vasai Creek
r
ve
Bhatsa Ri
Kharbao
RESEARCH Vasai Creek

INDIA REAL ESTATE
Vas
Mira Road
Ul
ai C
er
ha
reek
R iv
sR
1 l
1
iver
Ka
u
r
Ulhas Rive
r
Bhiwandi Ulh as R ive
Ambivali
Road
Ulh
as
i ve
R
r
r
Dahisar ive
sR
Railway U l ha
Vasa
transportation projects like Mumbai Metro METRO rising affluence and inability of railways to
iCree
Shahad
k
I (Versova-Andheri-Ghatkopar), Eastern provide additional capacity in local trains
As a part of the MRTS project, the MMRDA
Ul Kalyan Jn
r ha
sR
ive
Freeway, Mumbai Monorail, Santacruz to cater to the growing population. As a
iv e
R
r
as
S a n j ay Ga n d h i
Ulh
Borivali
Railway
N a t i o n a l Pa r k
Thakurli R S has started implementing the 33.5 km all
Chembur Link Road (SCLR), flyovers and Pune Link Road result there are a huge number of traffic
Dombivli underground metro route of the Metro Line
many more. Ulhasnagar
snarls along the western express highway
Kopar
III connecting Colaba to SEEPZ via Bandra.
during peak hours. In order to decongest
Kopar
Road R S
Ulh
The projected is slated to be completed in
as
Rive
Kandivali
the highway the Government has planned
r
2021. The residential price gradient along
INFRASTRUCTURE AS A CATALYST
i ver
Ulhas R
Kalwa R S
the 35.6 km long Coastal Road Project.
the metro line varies from over `75,000
The bidding process is expected to start
Tulsi Lake
Mumbra
The Mumbai Metro I has changed the face

Datiwli R S
per sq ft. at Colaba to `17,000 per sq ft.

Malad R S
Thane
Diva
in mid of 2017, the project is estimated

of east-west connectivity forever. Earlier WESTERN EXPRESS HIGHWAY at SEEPZ. The average office rental varies
Des
ai
K hadi to be completed by 2020. Running along
people commuting from locations along Mulund R S from approximately
the citys coastline, this road will be the
the western line to central line using the Goregaon
`220 per sq ft. per month at Nariman
first of its kind, which will provide high-
local railways had to go Dadar (a central 2 Point to `250 per sq ft. 2per month at BKC;
AY
k
ee
Cr
Airoli R S
d
speed connectivity between the western
HW
ala
M
Vihar Lake
point) to change trains inorder to reach
Nahur
however, it reduces to `110 per sq ft.
IG
CENTRAL RAILWAY LINE
suburbs and south Mumbai. The coastal
SH
their destination; despite going to Dadar per month towards Andheri-SEEPZ belt.
ES
Bhandup R S
roads would have exit ramps which would
PR
having them take a long detour. This detour Jogeshwari R S
Rabale
The MIDC-SEEPZ area in Andheri East
EX
provide seamless connectivity to Marine
was reduced significantly after the Metro VERSOVA-GHATKOPAR currently has connectivity to other areas of
RN
Versova
Kanjurmarg R S
METRO RAILWAY LINE Lines, Princess Street, Tardeo, Mahalaxmi,
E
D.N. Nagar Powai Lake
I became operational. Majority of the
ST
Azad Nagar
Andheri Mumbai only via roads and lacks access
EA
Worli, Girgaon, Kalbhadevi, Tulsi Wadi
commuters now get off at Andheri railway Andheri
Western Express Ghansoli R S to other modes of mass transportation.
and Peddar Road. The business districts
Highway
Vikroli R S
Airport
on western line and take the metro to reach Chakala
(J B Nagar)
Road
Asalpha The railways stations on Central line and
WESTERN RAILWAY LINE in these areas would benefit immensely
Ghatkopar railway station on the central Chhatrapati Shivaji
Sakinaka
Western line are a significant distance away
Vile
Parle R S
International Airport
(Mumbai Airport)
from this much needed connectivity,
line. Not only is the detour avoided, but the Asalpha
from SEEPZ. Once the Colaba-Bandra-
Thane Creek whereas the residential areas of North
travel time is reduced significantly from Sh a s
t ri
M
ar
g
SEEPZ metro line becomes operational this
Lal B
ahadur
Mumbai may witness reduction in price
90 mins to 44 mins. Earlier the average Santa Cruz
belt would witness increase in demand for
gradient compared to South Mumbai.
Taloje
Vidyavihar
Panchnand R S
M U M BAI
road travel time from Andheri to Ghatkopar Turbhe R S
residential and commercial projects as it
The residential price in the belt varies
was over 150 mins during peak hours,
Lokmanya
Khar
Road R S Kurla
Tilak
Sanpada
RS would get connectivity to the major office
Junction
Tilak Nagar Chembur from `75,000 per sq ft. at Napean Sea
post metro the vehicular traffic on this and residential districts of Mumbai and
Bandra
Terminus Vashi
Chembur
Road in South Mumbai to `13,000 per
Railway
Monorail Station Cent ral
route reduced significantly bringing down

Govandi
Park
also the Versova-Andheri-Ghatkopar metro
Bandra Juinagar R S
BANDRA- WORLI SEALINK Chunnabhatti
sq ft. at Charkop and `15,500 per sq

Navade Road R S
VNP And RC
the road travel time to less than 90 mins. line via this metro. Currently there are a
Marg
Mankhurd
Sion R S
Fertilizer
ft. In Goregaon West in North Mumbai.
Over 3.5 lakh commuters use the metro 3
Mahim
large number of old industrial sheds and

Township
Junction NAVI MUMBAI
Wadala Depot Sector 11
3
GTB Nagar
Bharat
Petroleum The primary reason for the huge price
every day, the metro has also led to rapid
Guru Tegh
warehouses located in this area most of

Kalamboli R S
Bahadur Nagar R S Nerul R S
difference is to proximity to employment

Matunga
k
Antop Hill
CHEMBUR TO WADALA
ee
Road R S Bhakti Park Cr
development of office and residential which are non-operational; these may give
Science Park e
Matunga R S loj
Mysore
MONORAIL LINE Seawoods
Ta
hubs apart from those markets in South

Colony Sector 7 Kharghar R S
Acharya - Darave
spaces in between Andheri to Ghatkopar

DADAR Atre Nagar
way to another business district emerging
Over 3.5 lakh commuters
Dadar
Belapur CBD
Mumbai having premium characteristics.
with the rates increasing significantly since
Mansarovar
in the area like we witnessed in case of

Parel
use the metro everyday; In comparison to the most expensive
the announcement of the project. The Elphinstone
Road R S
Pan
vel C
reek Khandeshwar
Lower Parel.
Arabian Sea Thane Creek micro-market of Napean Sea Road on this
residential rates went up from `2800 per sq Mumbai
Reay Road the metro has also led to
corridor, Goregaon West and the Charkop
Lower Parel R S
Currey
ft. from 2004 when the State Government Road R S

rapid development of office Panvel
residential markets trade at a discount

approved the metro plan to `15,500 per sq Mumbai
Chinchpokli R S
and residential spaces In addition to the metro lines the

Mahalakshmi
of 79% and 83%, respectively. With the
ft. in 2014 when it became operational. Government has also planned 2 major road
in between Andheri to
Mumbai
Reay Road
Mumbai
Byculla
upcoming Coastal Road, the commute time
Central Local
infrastructure projects The Coastal road
Chikhale R S
Grant Road
Dockyard
Road Ghatkopar with the rates and Mumbai Trans-harbour Link (MTHL).
will shrink significantly along the route and
increasing significantly price gaps will narrow down. We foresee
By Sandhurst
UPCOMING INFRASTRUCTURE
Road
markets such as Charkop and Goregaon

PROJECTS since the announcement of
Masjid
Charni Somatane
Bunder R S
Road
West to be the major beneficiaries of this

M
aha
the project. The residential B. THE COASTAL ROAD

rshi
Chhatrapati
Additional metro lines have been planned

Shivaji Terminus
Karv
project, and expect a price upside for

e Road
across the city and three are being Churchgate
Jasai R S
rates increased from `2,800 Every day there are a significant number of these markets.
implemented currently- The Mumbai per sq ft in 2004, when the private vehicles using the western express
Metro Line II (Dahisar WestDN Nagar), state government approved highway to go from the densely populated
Mumbai Metro Line III (Colaba-Bandra- north Mumbai where majority of residences C. MUMBAI TRANS-HARBOUR LINK
4 the metro plan, to `15,500 4
Airport-SEEPZ) and Mumbai Metro Line VII are located to southern part of Mumbai, (MTHL)
per sq ft in 2014, when it
(Andheri EastDahisar East). where offices are located. Every year the
became operational.
Ransai
Reservoir
Rasayani The existing Mumbai airport has a capacity
Kar nala Bird Sanct uary number of vehicles keep going up due to
A. COLABA-BANDRA-AIRPORT-SEEPZ Kar nala Fo r t Trek
of handling 45 million passengers annually
Uran R S
Apta R S
k
ee
Cr
nja
ara
88
89
K
A B C
Kaman Road
Vas
ai Cr
e ek
Bhayandar

Vasai Creek
r
ve
Bhatsa Ri
Kharbao
Vasai Creek
Vas
Mira Road
Ul
ai C
er
ha
reek
R iv
sR
1 l
1
iver
Ka
u
r
Ulhas Rive
r
Bhiwandi Ulh as R ive
Ambivali
Road
and it has almost reached its saturation. demand in search of relatively cheaper THE REVISED DRAFT
Ulh
as
i ve
R
r
The city is in dire need of another airport to Dahisar

Railway
housing locations towards north Mumbai DEVELOPMENT PLAN 2034 U l ha
sR
ive
r
(RDDP2034) IMPETUS
Vasa
support the proliferating air traffic growth. - western and central suburbs. As a result,
iCree
Shahad
k
The Government has identified a site in new business districts have emerged in
r Ul Mumbai city is about to witness
Kalyan Jn
Navi Mumbai for the citys new airport. BKC, Lower Parel, Andheri, Goregaon and
ha
sR
ive
iv e
R
r
investments upwards of `60,000 crore over
as
Sanjay Gandhi
Ulh
Borivali
Earlier Navi Mumbai was envisaged as a Powai. With the horizontal expansion city,
Railway
N ational Park
Thakurli R S
the next 5 years in the above mentioned

Pune Link Road
satellite town in MMR to decongest the saturation of the transport infrastructure Dombivli
infrastructure projects. Once complete, `

Ulhasnagar
60,000
Kopar
Mumbai city. However, over the years and rapid increase in population, Kopar
Road R S
these projects would transform the way
Ulh
MUMBAI METRO II
it grew as an additional city with huge commuting from different regions of
as
Rive
DAHISAR TO DN NAGAR
of transport in Mumbai. Travelling across
Kandivali
r
number of vehicles going to and fro during Mumbai to South Mumbai has become
Ulhas R
i ver
Kalwa R S
the city would become easier and we
peak hours. With the new airport coming Tulsi Lake increasingly difficult and time consuming.
Malad R S
Mumbra
Datiwli R S would witness emergence of new hotspots
up, the traffic woes are going to increase
Thane
Diva
The state government has taken initiatives with real estate development potential CRORE
further. To ease the burden of traffic and
to improve connectivity and reduce
Des
ai
K hadi in the areas surrounding these projects.
provide access to the new airport, the Mulund R S
travelling time from the western and Brihanmumbai Municipal Corporation is Mumbai city is about to witness investments
Government planned the 22.5 km 6-lane Goregaon
MUMBAI METRO VII
DAHISAR TO ANDHERI EAST
central suburbs to south Mumbai through also drafting its new master development upwards of `60,000 crore over the next five
sea bridge the Mumbai trans-harbor link2 2
k
ee
Cr
Airoli R S
implementation of three important

d
plan - the Revised Draft Development Plan years in the above mentioned infrastructure
ala
M
Vihar Lake Nahur
(MTHL) connecting Sewri in South Mumbai projects.

infrastructure projects; namely, the Coastal 2034 (RDDP2034) which identifies this
to Nhava Sheva near the new airport. The Bhandup R S
Road, the Colaba-Bandra-SEEPZ metro potential. It has provisions to develop new

project is in its final stage of bidding with Jogeshwari R S
Rabale
line and the Mumbai Trans-Harbour Link. central business districts or CBDs around
29 bidders being shortlisted. The work on Versova
These infrastructure initiatives would

Kanjurmarg R S
D.N. Nagar Powai Lake areas having access to various modes

the project is expected to begin later this Azad Nagar
Andheri
not just reduce travelling time to South of transportation by providing additional
year and is expected to be completed by Andheri
Western Express Ghansoli R S
Highway
Vikroli R S Mumbai, but also have the potential to FSI for the development of the plot. An
end of 2019. Nhava Sheva was earlier a
Airport
Chakala Road
breed a new lease of life into the business

Marol Naka
FSI of five has been proposed for the new
(J B Nagar)
remote area in Navi Mumbai having limited Sakinaka

Vile
districts of south Mumbai. Currently, it CBDs. This move is expected to encourage
access with very little real estate potential.
Parle R S
Chhatrapati Shivaji
(Mumbai Airport)
Asalpha
takes around 2.5 hours to 3 hours during commercial development within the city, Once the Colaba
There were no organized players willing to
Thane Creek
g
BandraSEEPZ metro line

ar
MUMBAI METRO III peak hours to travel from the western
M
to a great extent particularly in and around

t ri
Sh a s
COASTAL ROAD Lal B
ahadur
go and construct in this area due to very Santa Cruz

SEEPZ TO COLABA
low rates. The average rate in Sewri is M UM BA I

Vidyavihar suburbs to south Mumbai. This is expected
Turbhe R S
Taloje
Panchnand R S the areas where the new and existing mass becomes operational, this
to come down to an hour once the coastal transport projects would intersect or cross belt would witness an
`30,000 per sq ft. and in Nhava Sheva the Khar
Lokmanya
Tilak
Sanpada
Road R S Kurla RS
road is operational. The Colaba-Bandra- over each other. Not just these areas, but
increase in demand for
Junction
comparable development from organized Tilak Nagar Chembur

Bandra
SEEPZ metro would Cen provide improved

Terminus Vashi
Chembur Railway
t r al the areas around the Octroi Naka would
residential and commercial
Monorail Station
developers is virtually non-existent, the Bandra
Govandi
Juinagar R S Par k
Chunnabhatti
VNP And RC access from the north eastern regions of Navade Road R S
also benefit from RDDP2034. With the
prices at Drongari 10 km from Nhava Sheva Marg
projects, as it would get
the city to south Mumbai. The Mumbai
Mankhurd
Sion R S
Goods and Services Tax (GST) becoming
is around `3,000 per sq ft. Once the MTHL
Fertilizer
Mahim Township
NAVI MUMBAI
Trans-Harbour Link would not only reduce connectivity to the major
Junction
3
Wadala Depot
Bharat
Sector 11
effective from July 1, 2017,
3 the Octroi
is constructed, the increased proximity Guru Tegh GTB Nagar Petroleum Kalamboli R S
travelling time from Navi Mumbai to south office and residential

Bahadur Nagar R S
would be subsumed in GST and the Octroi

Nerul R S
Matunga
k
and access to Sewri and other areas in
Antop Hill
ee
Road R S Bhakti Park
e Cr
Science Park
loj
Mumbai but would also provide access to
Matunga R S
Ta
Mysore
Colony
Seawoods Sector 7 Kharghar R S Nakas in Mumbai would be redundant. districts of Mumbai and
South Mumbai due reduction in travel
Acharya - Darave
DADAR Atre Nagar
the new International Airport. In order to make use of this huge chunk
also the VersovaAndheri
Dadar
Belapur CBD
time would drive real estate prices in this Mansarovar
MONORAIL II of land approximately 49 hectares in the

area and make it a hot spot for real estate Parel
Elphinstone
WADALA TO JACOB CIRCLE The Eastern Freeway which was Ghatkopar metro line via
Arabian Sea
Road R S
Pan
vel C
reek Khandeshwar
periphery of Mumbai, the RDDP2034 has
development. Thane Creek constructed a few years back significantly
Lower Parel R S
Mumbai
Reay Road MUMBAI TRANS HARBOR LINK made provisions for the land to be used for this metro. Currently, there
Currey
reduced the commuting time and improved
Road R S
Panvel
parking hubs, commercial space and office are a large number of
connectivity of central suburbs to south
space development. old industrial sheds and
Chinchpokli R S
Mumbai
CAN INFRASTRUCTURE ALSO Mahalakshmi

Mumbai. Once these under construction
warehouses located in this
Mumbai
CATALYZE THE DEMAND

Reay Road
Mumbai
Central Local
Byculla
infrastructure projects become operational With the implementation of RDDP2034,
Chikhale R S
FOR ERSTWHILE BUSINESS Grant Road

Dockyard
Road by 2021-22, the business districts of south we expect locations like Andheri, Dadar, area most of which are
DISTRICTS? By Sandhurst
Road Mumbai would get improved connectivity Dahisar, Govandi-Mankhurd, Mulund and non-operational. These
to all areas of Mumbai the western Ghatkopar to become the hotspots for may give way to another
Masjid
Until a decade back Nariman Point, Fort

Charni Somatane
Bunder R S
Road
RDDP 2034 CBDs suburbs, central suburbs, central Mumbai, real estate development with focus on the
M
business district emerging

aha
and other business districts of South

rshi
Chhatrapati
Shivaji Terminus
Navi Mumbai and it would become the only

Karv
development of new commercial hubs

e Road
Mumbai which were once the most in these areas like we

business district within Mumbai region locations.
Churchgate
sought after office destinations of the

Jasai R S
IMPACT LOCATIONS closest to the new International Airport. witnessed in the case of
country witnessed a significant fall in
Due to all these initiatives we may witness Lower Parel.
preference amongst occupiers. One of
a sudden revival in preference for office
the major reasons for this fall was the shift
4 4
space in these business districts.
in residential demand of the population
Ransai
Reservoir
Rasayani
Kar n ala B ird San ct u ar y

Kar n ala Fo r t Trek
90
91
Uran R S
constructions would remain until the citys and central, accounted for 51% and 23%,
solid waste treatment capacity is enhanced respectively, of the new office space
from 3,000 tonnes a day to 11,000 tonnes completions from 20132016.
a day.
Central Suburbs and

The Maharashtra Chamber of Housing
The Court order is not very clear on IT Industry (MCHI) had also filed a review
Western Suburbs
parks. It appears prima facie that IT parks petition challenging the ban on new accounted for 51% and
may be outside the purview of this stay constructions in the city, including 42%, respectively, of the
order as IT parks come under the purview buildings meant for residential and residential launches from
of the industrial vertical. commercial purposes, which was 20142016. The suburban
dismissed by the Bombay High Court in
business districts,
May 2017.
Our assessment is - the order would Western and Central,
adversely affect residential constructions accounted for 51% and
mostly in western suburbs and central The Brihanmumbai Municipal Corporation 23%, respectively, of
suburbs and office constructions in the could take certain cues from its the new office space
suburban business districts (central and neighbouring municipal corporation the
completions from
western), as these areas had seen the Kalyan-Dombivali Municipal Corporation
20132016.
maximum real estate launches/office (KDMC). A similar ruling was passed by the
DUMPING GROUND space completions over the past few years.

central suburbs and western suburbs
Bombay High Court in April 2015 staying all
new constructions in the KDMC area due
GROUNDS REAL
accounted for 51% and 42%, respectively, to inadequate facilities for safe disposal
of the residential launches from 20142016. of waste. Over 150 building projects that
The suburban business districts, western had applied for permissions were stuck.
ESTATE IN MUMBAI
Reports indicated that projects worth
over `500 crore had failed to take off as a
result of the ban, which had also affected
THE STAY, HOWEVER, DOESNT
KDMCs coffers.
APPLY TO;
M
- BY NIBODH SHETTY
umbai generates around 9,000 ground, which is supposed to be the only Construction of hospitals, However, in April 2016, the Bombay High
tonnes of solid waste per day dumping ground in the city where waste is educational institutions and Court lifted the ban on new construction
out of which approximately disposed off scientifically. redevelopment projects covered projects in the twin townships of Kalyan
3,000 tonnes is treated and disposed by clauses (5), (6), (7), (8), (9) and and Dombivli following a plan of action
scientifically; the rest of the untreated (10) of DCR No. 33 submitted by KDMC to initiate measures
waste is dumped illegally. This Due to repeated fires deteriorating the for a garbage disposal management
Projects which had received
indiscriminate dumping has led to severe air quality in the city and the inability of system. KDMC had submitted a plan to the
IOD before the judgment was
environmental problems. There were many the Government of Maharashtra and Court that included setting up two waste
passed. For those projects the
fires at the dumping ground in 2016 and Brihanmumbai Municipal Corporation processing plants to dispose of garbage
construction would continue.
some of the major fires had caused the air (BMC) to comply with the Municipal scientifically. It said that it had identified
However, for new projects the
9000
quality in the city to deteriorate severely Solid Waste (Management and Handling) land at Barave and Umberde and was in
civic body can only accept
causing the particulate matter (PM) levels rules-2000 at the Deonar and Mulund the process of issuing tenders. We hope
proposals for but not issue IOD
to increase many times beyond permissible dumping grounds, the Bombay High Court that akin to the KDMC move, BMC also
and CC certificates.
levels. Since it took several days for the came down heavily on BMC by putting comes up with its own waste disposal
tonnes firemen to douse the fire at the landfill a stay on all development permissions/ Consideration of the proposals plan at the earliest, as this will ensure that
3000
GARBAGE GENERATED DAILY in Deonar the entire city for weeks was Intimation of Disapproval (IOD) on the for repairs/reconstruction of the construction in the Mumbai realty market is
buried in smog arising from the fires at the applications/proposals submitted from 1st existing buildings, which do not back on track.
dumping ground. Since 2005, around 16 March 2016 onwards for construction of involve use of any additional FSI
petitions have been filed against various new buildings for residential or commercial in addition to the FSI already
tonnes
dumping grounds in Mumbai, the maximum use including malls, hotels and restaurants. consumed.
GARBAGE DISPOSAL CAPACITY
being against the Kanjurmarg dumping The Court ruled that the stay on
92
93
and the Real Estate (Regulation and

FIGURE -2
Development) Act, 2016 (RERA). Earlier, MICRO-MARKET SPLIT OF LAUNCHED UNITS
Mumbai had unsold inventory in the
H1 2016 H2 2016 H1 2017
under-construction category, however,
it has started witnessing build-up 50%
in the unsold inventory even in the
41%
45%
39%
ready-possession category. This has
40%
deterred developers from launching
new projects before their pile of unsold 35%
inventory is cleared. 30%
25%
23%
In the latter part of H1 2017, a large
21%
25%
19%
19%
18%
number of developers had stopped
17%
20%
all marketing activities and were not
13%
15%
ready to provide any details of their
9%
9%
9%
9%
8%
7%
7%
projects on paper or e-mail before 10%
they became RERA complaint. Despite
3%
2%
2%
5%
1%
0%
0%
0%
that, the sales increased by 26%
0%
sequentially, but were down 8% YoY. CENTRAL CENTRAL NAVI PERIPHERAL PERIPHERAL SOUTH THANE WESTERN
MUMBAI SUBURBS MUMBAI CENTRAL WESTERN MUMBAI SUBURBS
Any buyer/consumer would not have
SUBURBS SUBURBS
confidence to buy a property, if the Source: Knight Frank Research
developer is not ready to provide any
details of the project on paper, hence apartments a perception of being
RERA compliance deterred builders affordable. Such apartments had a
from marketing their projects, thereby higher sales velocity and witnessed
MUMBAI
impacting residential sales. a higher buyer demand than for the
older ones.
Apart from the primary issues of
unsold inventory and RERA, there
were two other lingering issues, which 24,450 9,740 15,763
also affected new launches in Mumbai
2. MICRO-MARKET SPLIT OF UNITS UNITS UNITS
the dumping ground issue and
RESIDENTIAL MARKET announcement of the Revised Draft
H1 2016 H2 2016 H1 2017
FIGURE -1 Development Plan 2034 (DP2034). Few
1. MMR RESIDENTIAL MMR MARKET TRENDS - HALF-YEARLY developers were awaiting clarity on
During H1 2017, a large number of
MARKET LAUNCHES, SALES those issues before they could start
developers deferred their plans to
AND PRICE TRENDS LAUNCHES SALES WT. AVG. PRICE (RHS)
construction.
launch residential units due to RERA.
In H1 2016, the Mumbai Metropolitan For unsold inventory in buildings which Most of them were either focussing
40000 8500
Region (MMR) residential market has completed construction where the on completing existing projects or
witnessed its best growth momentum unit size could not be changed, there transforming their businesses to be An interesting trend was
35000
after the 2008 global financial crisis. was a marginal reduction in prices RERA complaint. As a result, the emerging in the Mumbai
8120
8093
on account of promotional schemes launches were lower by 36% YoY but

8044
The signals were optimistic even for

30000 residential market for new
7994
7994
the remaining part of the year, thereby adopted to push sales. Hence, the higher by 61.8% than H2 2016, the
raising hopes that the MMR residential 8000 weighted average prices for residential H2 2016 numbers were abysmally low launches. For a large number
Number of units
25000
of new launches, the residential
7796
market which has been on a downward property in MMR reduced by 0.6% YoY due to demonetisation.
and 1% sequentially.
spiral since 2010 would see a growth in Across Mumbai there is a huge stock prices per sq ft was not
` \sqft
20000
sales in 2016. However, in H2 2016, the However, an interesting trend was of under-construction inventory,
market suffered a big blow with both
reduced, but developers
emerging in the Mumbai residential particularly in the peripheral central
15000 had reduced the size of the
7382
launches and sales plummeting due to market for new launches. For a suburbs, Navi Mumbai and westerns
7500
demonetisation. large number of new launches, the suburbs. Hence, the developers apartments significantly,
10000
residential prices per sq ft was not have slowed down on new launches.
H1 2017 was better than H2 2016 w.r.t. thereby reducing the overall
launches and sales, but in terms of reduced, but developers had reduced The peripheral central suburbs had
5000
the size of the apartments significantly, the highest proportion of under- price that the buyer would have
overall launches, it was lower than the
comparable periods of the previous thereby reducing the overall price that construction units; therefore, the to pay, i.e. the ticket size of the
0 7000 the buyer would have to pay, i.e. the launches have been drastically
years. There are two primary reasons apartments would be lower.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
for lower launches huge stock of ticket size of the apartments would be lower in this area in H1 2017. In the
unsold under-construction inventory lower. The lower ticket size gave the peripheral western suburbs, there
94
95
was a launch of a large number of units the interest subsidy on loans given MUMBAI METROPOLITAN REGION MAP
in a single project in Palghar. The same to this segment. The seeds to push A B C
Palivali
pe Road
Nimbavali Kukse
was the case in the central suburbs. affordable housing were sown in the
Borpada Gorsai Vashere
Shivaji Nagar
Panju Islamd Maljipada
Sa
Borpada Usroli
Paigaon
K a l y a n-
Tembhavali
In central suburbs there was a project Union Budget 2015-16 proposals,

Navghar Gane Sawandhe Pise
Sasunavghar
Vanjar
Paye Gaon Dahyale
Vas
patt
Ravtyacha
a
launched in the affordable housing but the real impetus came in the
Firangpada Khandval
iC
Ganesh Nagar Kambe
i F l yover
Pada
ree
Nagle Aamne
Shiv Kripa Pogaon
k
BH YA N D A R Chawl
Malodi
Arjoli
segment The Crystal Xrbia. This Prime Ministers announcement on 31

Brahmangaon Janwal
Indralok Bhawale Kiravali
Phase 4 Dongari Pada Tarf Sonale
Vadunavghar
Vasai Creek Subhash Nagar
r
ive
project came up in Chembur with over December 2016 and the Union Budget
Kumbhar Ali Sonale Lonad Sange
Bhatsa R
Village Itade
Rai Village Unique Narpoli
Dongri Gardens
Dunge
2000 units in a single project having 2016-17 proposals. Post the budget
Aagri Mira Vasai Creek
Road East Bhayandarpada Jai Bhawani
Nagar Tare Shiv Nagar
MIRA RO A D Poonam
Kalwar
Mogharpada
Va
Versova Gaimukh Compound Ul Devrung Nandkar
sai
smaller unit size of apartments. This led proposals, developers had started
Kashimira
er
Gaon Mansarovar
ha
Cre
R iv
Vijay Bapgoan
sR
Complex Koliwada l
1 1
ek
Ka
u
iver
Park Hawaiian Radha Krishna
Village Colony Umberde
Kevani Saravali
to significant increase in the share of skewing constructions in this favour and

Sector 2 Chena Rahanal New Tadal er Gaon
Kashigaon Sapad
Ulhas Riv
Uttan Owale Kasarvadavali Ulh as Riv
er
Bhavani Nagar Chanakya
Dive
BH IWA N D I Thakaracha
Pada Nagar Ambivli
units launched in central suburbs. began launching units in the affordable
Ulh
Raunak City
The Crystal Xrbia project in

MIDC
as
Ri
Purna Val ve
r
Dapode Gove Gandhar Wri Pada
Dharkhadi Pachwad Kopar Wadeghar Nahar r
segment. The overall ratio of the units D A H ISA R

Navagaon Patlipada
Village
Pimplas Sai Colony Gaon
U l ha
sR
iv e
Vas
Chembur which launched
Beturkar Pada
Kiran Mill Rajlaxmi
ai C
Colony Kalher Complex Gundavali Emerald
launched in the price range of below
reek
Eksar Vehele Society
Patvanapada Patlipada Kon Mharal
Om Siddhivinayak Kasheli KA LYA N

TICKET-SIZE SPLIT ANALYSIS
Anusaya
over 2000 units in a single

Society er Ul
`75 lakh has increased significantly in

Govind Nagar ha Nagar
Gorai 3 sR
v
Yeoor Hills
Ri
Sanjay Gandhi Kokanipada Sarang i v er
as
Indostrial Area Ajad Nagar
BO RIVA LI
Ulh
Sherr Ram Navapada
National Park Kalyan East
OF LAUNCHED UNITS
Raheja Eatate Nagar
a short span of time from 56% during Yeoor Thane West Surai
project with smaller unit

Kachora Gaon
Pawar Nagar Thaakurwadi
Sector 8
Shimpoli
Dive Anjur DO MB AV IL I Thakurli
H1 2016 to 84% in H1 2017. The units

Puttupatti Khatau Eatate Shivai Nagar Amrai
GH O D BU N D E R RO A D
sizes of apartments, this
Sahyadri Bharodi Saisaradha Ashale Gaon
Janata Nagar Kandivali East Yashodhan Sudarshan
Nagar Parsik Anjur Nagar
H1 2016 H2 2016 H1 2017

Charkop Gaon Kansai Gaon
Ulh
Nagar Tukaram Nagar
costing less than `25 lakh formed the KA N D IVA LI Nagar Bharodi Gaon
as R
Manori Nagar
Gandhi Hanuman Samata Nagar Alimghar
Kharegaon
ive r
Nagar Nagar Rabodi
Dawadi Gaon
led to significant increase

Kandiwali Kailash
highest percentage of launches i.e. 36%

Lokhandwala r
West Utkolshetwar Rive Patil Wadi Colony
Charai Ulhas Nanadivli
N A U PA D A
Koliwada
<2.5 mn 13% 11% 36%

TWP
Nagar
Valnai Tulsi Lake

Shanti Nagar
KA
Kalwa LWA
Hill Area Betwade Gaon
Navneet Nagar Gaikwad Pada
in H1 2017 much higher than 13% in H1 MA LAKurar

DVillage Naupada
in the share of launched in

Sandap Gaon Bhal Gaon
Azad Nagar Liberty Vaishali Nagar Bhola Nagar
Babrekar Garden
2.5-5 mn 20% 52% 32%

Natu Paranjpe
Nagar
Gaikwad
Yogi Hills
TH AColony
NE Ramu Limaje Umbharli
2016 and 11% in H2 2016.

Usarghar Gaon
Nagar Omkar Nagar Gaon
Mira Nagar Thane East
Central Suburbs.
Ghaarivali
Des
ai
K hadi
Khoni
5-7.5 mn 23% 13% 16%

Durgawadi
GO RE GAGokuldham
ON
Pagadyacha Mangarul
Mulund TTC Industrial Domkhar
Colony Khardipada Hedutane Pada Gorpe
Colony Area Gaon Bamavani
Madh Goregaon Desai Village Nagar
Mali Nagar Yadusen Nevali Dhoke
Daravali West
A IRO LI
ek
Village Bhandup Phadkepada
2 2
7.5-10 mn 6% 9% 3%
re
Devripada Padle Gaon
C
Motilal Complex
ad
Nagar I Workers Mulund East Sagarli Gaon Nilje Gaon Antarli
al
Goregaon
M
Colony Vihar Lake Kharad
Posari
Bhandup West Ambhe
Helen Nagar
Tarapore
Gardens BH A N D U P Khidkali
10-20 mn 22% 7% 12%

Rabale
Unit 25 Daighar Gaon
Oberoi Mahatma Jai Ambe Vadavail Kh.
Hanuman Sector 10 A Gothivali
Splendor Phule Nagar Nagar Sakharoli
Teki Village
Andheri West Unit 22 Uttarshiv Kumbharli
Vewsova
JO GE SH WA RIGanesh Nagar Sector 23
>20 mn 16% 9% 1%
Income Narhen Kushivali
Versova Tax Colony Bale Karvale
Azad Nagar Bhandarli Wadi
Nagaon
Ratan Kunj D.N. Nagar
Azad Nagar
Powai Lake
GH ASector
N SO 14
LI
Ghansoli
Mokashi Pada
Andheri Sector 13
Waklan Bandhanwadi
A N D H E RI Western Express Hiranadani VIKH RO LI
Mahape
Highway
Gardens Dahisar Burdul
Airport
Chakala Road Shri Nagar Kannamwar
(J B Nagar) Asalpha Nahar I
Dhansar Turbhe
Hanuman Nagzari Nitlas

Nitale
Sakinaka Nagar
VILE PA RLE
Sahar
Village
Barve Nagar
Sector 17
Adivali Shahpur
Asalpha Pisarve
Bhim Nagar Sector 14
Azad Nagar Vikhroli Thane Creek
Pawne
East Wavanje
There has been an unprecedented

Chhatrapati Shivaji
International Airport Rohinjan
Ashok Nagar (Mumbai Airport)
GH ATKO PA R
Pant Nagar
Ghot
Kherane
Multi Green
SA N TA C RU Z Mhad Colony Colony

Koyana Velhe
response from the developers in

Khar Danda Inampuri Dongrepada
Sector 9 Indira Nagar
MUMBAI Sagar Vihar
Neelkanth
Tondhare
KU RLA
Vihar Forest Area Chindhran
Devichapada
Mumbai to the Government of Indias

Akruti
Rising City Nirankar
Pali Hill Taloja
Nagar
C H E MBU R SA N PA D A
Sector 32 Pendhar
Kanpoli Mahalungi
focus on affordable housing and its Chembur VA SH ISanpada Sector 29 Adarsh Nagar
BA N D RA Shiv Monorail Station
New
Srushti Mandala Cen tr al
Chapewadi P ar k
Del
Govadi East Morbe
efforts to push through this initiative Navade
h
VNP And RC Juinagar
i-M
Marg Sector 20
SIO N
um
Padgha
Pratikhsha
bai C
Fanaspada Hedutane
Mankhurd
by granting it infrastructure status for

Nagar Fertilizer Pale Bk.
Township Goan
N AV I M U M B A I
WA D A LA
hennai High
DHARAVI Sector 6 Khanav
Wadala Depot Anushakti Sector 12 Sector 11
3 Wanjawadi Bharat Nagar 3
GTB Nagar Petroleum
N E RU L Sambhaji
affordable housing projects along with Nagar Sector 10

Valavali
Fanaswadi
ek
way
Antop Hill HP Nagar
re
Bhakti Park C
Science Park j e
lo
Ta
Acharya
Mysore
Colony Vishnu Nagar
B.A.R.C
Sector 7 KH A RGHA R Sector 36
Nevali
DADAR
DADAR Atre Nagar Harigram
Sector 34
Vasan Nagar
Ambapada Prayag Nagar
BE LA PU R
Sector 10
Adai Arihant Arham

BPT Colony Kishanganj
Kalachauki Jui Adaigaon
LO WE R Pratiksha
Nagar vel C
ree k
Vaghivali Akurli
PA RE L Vihighar
MICRO-MARKET WISE RESIDENTIAL SALES

Pan
Arabian Sea Lower
Parel West
Thane Creek Ganeshpuri
New
Panvel East
PRA BH A D E VI Pargaon Dungi
Bhokarpada
WO RLI
MPT
Targhar Chinchpada PA NV EL Moha
MA H A LA KSH MI Hay Bunder

Shivkar
U LWE Pargaon Dombala

Kalundre
MICRO-MARKET LOCATIONS
Ulwe Owle Chikhale
N E PE A N SE A RO A D Wahal Babavpada Belvali

Tardeo Sector 18
Nhava Nhavakhadi Nandgaon Sangade
Sector 17 Manghar
Kudave Kon
Central Mumbai Dadar, Lower Parel, Mahalaxmi, Worli, Prabhadevi Shelghar

Jawle Mosare
MA LBA R H ILL Bhagatvadi Padeghar Vadavali Ariwali
eer Bhaurao
Patnoli Turmale
Central Suburbs Sion, Chembur, Wadala, Kurla, Ghatkopar, Vikhroli, Bhandup, Mulund Raj Bhavan
Chirvat
Ashte
Karmav
Giravale
Sheva Sangurli Bhatan
Navi Mumbai Vashi, Nerul, Belapur, Kharghar, Airoli, Panvel, Ulwe, Sanpada Belpada
Gavthan
Jambhulpada
Nanoshi
Dahivali
Peripheral Central Suburbs Kalyan, Kalwa, Dombivli, Ambernath, Bhiwandi, Mumbra, Karjat t
ga
ha
B Sawarkhar
id Dhutum Jatade
ah
Mora Sonari
Sh
Pohi
4 Koliwada Panje 4
Peripheral Western Suburbs Vasai, Virar, Boisar, Palghar, Bhayandar, Nalasopara
Koliwada Sector 3 Sawale
Dighode
Ransai
C O LA BA Boripakhadi
Panje
Harishchandra
Posari
Rasayani
Navy Nagar
Kegaon Shematikhar Pimpale Ransai
Dongri Reservoir
Dhakti Jui
K a r n a la Bird S a n c t u a ry
South Mumbai Malabar Hill, Napean Sea Road, Walkeshwar, Altamount Road, Colaba
Waltikhar
Waveghar
Takigaon K a r n a la Fort Tre k
Bhavra Kaladhonda Akulwadi
Bhendkhal
Danda Uran Dhasakhosi Kaire
Thane Naupada, Ghodbunder Road, Pokhran Road, Majiwada, Khopat, Panchpakhadi

Mothijui
Koproli Budruk
Jai Ambika Navin Sheva Bandhpada Chirner Karada
Ladivali
Nagar
Prajapati Vihar
Kalambusare
Chanje Kacherpada
Western Suburbs Bandra, Andheri, Goregaon, Kandivali, Borivali, Santacruz, Vile Parle Pirwadi Ka
ra n ja
C re
ek Koproli
Barapada
Chavane
Pandive Jambhivali
Kasvalepada Pirkone Apta
Navapada
Pirkon
Dighati Dolghar
Juipunade
A B Sangpalekhar C Kaliwali
96
97
FIGURE -3
MICRO-MARKET SPLIT OF SALES
4. MARKET HEALTH
FIGURE -4
QUARTERS TO SELL (QTS) UNSOLD
The quarters to sell unsold inventory INVENTORY ANALYSIS The Peripheral Central
H1 2016 H2 2016 H1 2017
50% (QTS) is the number of quarters required MMR Suburbs is the largest
45%
12.5
to exhaust the existing unsold inventory market in the MMR in
45%
in the market. The existing unsold in- 12.0
40% 33% ventory is divided by the average sales
terms of the quantum of
35% velocity of the preceding eight quarters 11.5 under-construction housing
in order to arrive at the QTS number units. This lead has been
27%
30%
for that particular quarter. A lower QTS 11.0
maintained for a long period
NO OF QUARTERS
25%
20%
19%
18%
of time.
17%
10.5
16%
20%
The unsold inventory level has come
14%
12%
11%
15% down steadily from a peak of 213,742
10%
10%
10.0
9%
9%
9%
units in H1 2014 to 138,653 units in H1
8%
8%
10%
2017. Consequently, the QTS for MMR 9.5
2%
5%
1%
1%
1%
has also come down from 12.1 quarters

0%
0%
0% to 8.8 quarters. However, this is not a

CENTRAL CENTRAL NAVI PERIPHERAL PERIPHERAL SOUTH THANE WESTERN 9.0
MUMBAI SUBURBS MUMBAI CENTRAL WESTERN MUMBAI SUBURBS desirable phenomenon considering that
SUBURBS SUBURBS
the decline came on account of a sharp 8.5
reduction of launches as the market
continues to shrink. 8.0
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17
Even while the premium markets of
South Mumbai and Central Mumbai
contribute to just about 4% of the un-
sold inventory, they face the worst QTS
at 16 and 17, respectively.
The Peripheral Central Suburbs is the Peripheral western suburbs had the
largest market in the MMR in terms highest percentage of inventory in ready
34,971 25,403 32,077
of the quantum of under-construction possession category. As the unit size for
housing units. This lead has been inventory in this category cannot be var-
UNITS UNITS UNITS
maintained for a long period of time. ied, the developers who are unwilling to
H1 2016 H2 2016 H1 2017 However QTS was lowest for the Thane reduce the prices are finding it difficult
market. to find the desired number of buyers.
FIGURE -5
UNSOLD MICRO-MARKET-WISE QTS VS AGE OF INVENTORY
MICRO-MARKET
INVENTORY
CENTRAL MUMBAI CENTRAL SUBURBS NAVI MUMBAI PERIPHERAL CENTRAL SUBURBS
Along with supply, the demand has also
Central Mumbai 4,281 WESTERN SUBURBS SOUTH MUMBAI THANE PERIPHERAL WESTERN SUBURBS
shifted towards affordable housing,
which is evident from the jump in sales Central Suburbs 19,453 20
in the peripheral central suburbs. Navi Mumbai 24,618

17
Peripheral Central 31,758
Suburbs 14
Peripheral Western 22,126

Suburbs 11
South Mumbai 1,174

8
Thane 13,192
Western Suburbs 22,051 5
Mumbai 138,653
2
2 5 8 11 14 17 20
Source: Knight Frank Research QTS

98
99
5. PRICE MOVEMENT IN H1 2017 OFFICE MARKET

Residential property prices in Mumbai pays only 5% upfront and remaining on
are witnessing a time correction since possession, have become a widespread
the last two years. The demonetisation phenomenon. A price protection plan The new landscape of
decision has further fuelled consumer is also being offered to prospective transparency, efficiency and 1. MUMBAI OFFICE MARKET FIGURE -1
STOCK, NEW COMPLETIONS, NEW COMPLETIONS AND TRANSACTIONS
expectation of price cuts. However, no consumers to assuage concerns in the
governance brought collectively TRANSACTIONS AND HALF-YEARLY TREND H1 2017 witnessed the
across-the-board price cuts have been event of a price decline.
recorded in the market except for some by the demonetisation scheme, VACANCY TRENDS NEW COMPLETIONS TRANSACTIONS highest supply of new
projects in Mira Road and Virar. benami property law and 8.0 completions over the past
In case of an under-construction the real estate regulation will The office transactions have been
several years. The new
project, price reduction disturbs the challenge the status quo of slowing down since H2 2015. The 7.0
supply increased to 7.6
equation with existing buyers and overall transactions were down by 19%
real estate investment and mn sqft during H1 2017
investors. Hence, most cases have YoY and 5% sequentially. The GDP 6.0
reported to offer indirect discounts by transactions growth of India for the quarter ending
higher by 54% YoY. This
waiving stamp duty and registration March 2017 was 6.1%, indicating a has caused significant
5.0
charges. Instances of free gifts, in the significant slowdown in the economy increase in vacancy rates.
mn sqft
form of gold and consumer appliances post demonetisation. The slowdown
or a liberal financing plan, where a buyer in business environment was one of 4.0 Across MMR the vacancy
the primary reasons for low demand of rates had reduced to 19.6%
office spaces. 3.0 during H2 2016; however,
Over the past few years developers it jumped back to 21.9%
shunned office developments plans in 2.0
in H1 2017 higher than H1
favour of residential projects, which has
caused significant constrain in supply 2016.
LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH 1.0
of Grade A office spaces in preferred
(`/SQ FT) CHANGE CHANGE
locations of the city. In spite of the
slowdown in GDP growth a significant 0.0
Lower Parel Central Mumbai 25,00036,000 1% 0%
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
number of discussions have surfaced
Worli Central Mumbai 31,00055,000 1% 0%
between occupiers and developers
FIGURE -2
Ghatkopar Central Suburbs 12,00022,000 1% 1% in the recent past. However, the talks
Source: Knight Frank Research OFFICE SPACE STOCK AND VACANCY LEVELS
have not translated into transactions HALF-YEARLY TREND
Mulund Central Suburbs 10,70014,000 2% 0%
primarily because the developers are STOCK OCCUPIED STOCK VACANCY (RHS)
Powai Central Suburbs 14,50020,000 2% 1% holding on to rates and are unwilling
Panvel Navi Mumbai 4,0006,500 -2% -2% to reduce their rates while negotiating
22.6%
140 23%
22.5%
with potential occupiers.
Kharghar Navi Mumbai 6,7009,000 3% 1%
H1 2017 witnessed the highest
21.9%
21.9%
120
Vashi Navi Mumbai 10,00015,000 1% 0%
supply of new completions over the
21.6%
21.6%
22%
Badlapur Peripheral Central Suburbs 2,7003,500 0% 0% past several years. The new supply
increased to 7.6 mn sqft during H1 2017 100
Dombivali Peripheral Central Suburbs 4,5006,000 2% 2%
higher by 54% YoY. This has caused
Mira Road Peripheral Western Suburbs 5,5007,300 -3% -2% significant increase in vacancy rates. 21%
80
Virar Peripheral Western Suburbs 4,5005,500 -4% -2% Across the MMR the vacancy rates
had reduced to 19.6% during H2 2016;
Tardeo South Mumbai 40,00060,000 0% 0% however, it has jumped back to 21.9% 60
20%
Ghodbunder Road Thane 6,00010,000 -1% 0% in H1 2017 higher than the vacancy
rates during H1 2016. The vacancy 40
19.6%
Naupada Thane 14,00018,000 0% 0%
levels were lowest in Central Mumbai at
19%
Andheri Western Suburbs 15,00022,000 0% 0% 0.4%, followed by BKC at 5.2%.
20
Bandra(West) Western Suburbs 40,00060,000 0% 0% The total occupied stock increased by
6% YoY and sequentially by 3% to 103
Borivali Western Suburbs 11,00015,000 -1% 0% 0 18%
Mn sqft.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
Dahisar Western Suburbs 9,00011,000 0% -1%
Goregaon Western Suburbs 13,00015,000 -1% -1% Source: Knight Frank Research

100
101
2. SECTOR ANALYSIS 3. DEAL SIZE ANALYSIS

FIGURE -3 SELECT TRANSACTIONS
SECTOR-WISE SPLIT OF TRANSACTIONS
There was a slowdown in demand The average deal size during H1

45%
from the BFSI sector and the IT/ITES. 2017 increased by 57% YoY and
42%
OCCUPIER BUILDING LOCATION APPROX AREA (SQ FT)
Sequentially both the sectors saw a 29% sequentially since the volume of
drop of 45% in demand, which led 40% deals dropped by 48% YoY and 27% Jacobs Gigaplex Navi Mumbai 120,000
to companies under the category sequentially.
Syedna Trust Fort House Fort 120,000
34%
of other services becoming the 35% Not only were the volume of
33%
32%
largest consumers of office space Novartis Inspire BKC BKC 100,000
31%
transactions lower, the largest
for H1 2017, which generally require transaction in terms of sqft of space TCE Reliable Empire Navi Mumbai 90,000
30%
smaller size units compared to IT/ leased was also lower in H1 2017. The
ITES. This category which comprises Zydus HQ 460 Goregoan East 80,000
largest transaction in H1 2017 was
24%
e-commerce, consulting, media etc. 25%

120,000 sqft compared to 250,000 sqft Here Maps Gigaplex Navi Mumbai 65,000
22%
21%
21%
also recorded a staggering 96% in H2, 2016.
New York Film School Urmi Lower Parel 40,000
sequential increase in demand in H1 20%
17%
2017. Vertex Rupa Solitaire Navi Mumbai 40,000

16%
FIGURE -4
While developments within India 15% FDC Pharma Independent building Andheri West 38,000
have a limited impact on the Indian
IT industry, global developments SBI Bank Kalpavruksha Navi Mumbai 36,000
9%
10% AVERAGE DEAL SIZE (SQFT)

particularly Americas and the Europe,
NUMBER OF DEALS (RHS) Source: Knight Frank Research
has put the technology sector under
pressure, hence the demand from IT/ 5%
40000 280 4. BUSINESS DISTRICT
ITES has been reducing. Coupled FIGURE -5
ANALYSIS BUSINESS DISTRICT-WISE TRANSACTION SPLIT
with absence of any large deals in H1 0%
IT/ITeS
BFSI
MANUFACTURING
OTHER SERVICES
2017, the IT sectors demand share has 240

H1 2016 H1 2017
almost halved from 16% in H2 2016 to
H1 2016 Office rent consciousness coupled 45%
9% in H1 2017. The demand share of H2 2016
30000
200 with the changing profile of residential
the manufacturing sector during the H1 2017
Number
catchments across the metropolitan
same period was stable around 32% 40%
sqft
Source: Knight Frank Research region is translating into movement of

sequentially.
35%
160
office demand to the north of the city
Note: BFSI includes BFSI support services 35%
20000 where rents are much lower compared 3.8 3.1
31%
120 to the central business districts.
28%
30%
SBD Western and PBD witnessed
mn sq ft mn sq ft
the largest contribution to the office H1 2017
10000
80 25% H1 2016
demand during H1 2017. Given
20%
the residential density and good
40 20%
connectivity to localities in SBD West,
15%
the companies in the other services
14%
13%
15%
0 0 sector which generally have smaller
11%
11%
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
10%
space requirements preferred taking
9%
10%
office space up in these regions.
Sequentially both the BFSI Source: Knight Frank Research

5%
Not only were the volume
2%
and IT/ITES companies saw of transactions lower,
a drop of 45% in demand
0%
the largest transaction
BKC &
Off-BKC
CBD &
Off-CBD
CENTRAL
MUMBAI
PBD
SBD
CENTRAl
SBD
WEST
which led to companies 3.8 3.3 3.1 in terms of sqft of space
under the category of other Source: Knight Frank Research leased was also lower
mn sq ft mn sq ft mn sq ft
services becoming the in H1 2017. The largest
largest consumers of office H1 2016 H2 2016 H1 2017 transaction in H1 2017 was
space in H1 2017. 120,000 sqft compared to
250,000 sqft in H2, 2016.
102
103
MUMBAI METROPOLITAN REGION MAP

BUSINESS DISTRICT MICRO-MARKETS
A B C
Palivali
pe Road
Nimbavali Kukse
Borpada
CBD & off-CBD Nariman Point, Cuffe Parade, Ballard Estate, Fort, Mahalaxmi, Worli
Shivaji Nagar Gorsai Vashere
Panju Islamd Maljipada
Sa
Borpada Usroli
Paigaon
K a l y a n-
Tembhavali
Navghar Gane Sawandhe Pise
Sasunavghar
Vanjar
Paye Gaon Dahyale
Vas
Bandra Kurla Complex & off-Bandra
patt
Ravtyacha
a
Firangpada Khandval
iC
Ganesh Nagar Kambe
i F l yover
Pada
BKC, Bandra (E), Kalina and Kalanagar

ree
Nagle Aamne
Shiv Kripa Pogaon
k
B H YA N D A R Chawl Arjoli
Indralok
Phase 4
Brahmangaon
Malodi
Vadunavghar Dongari Pada

Bhawale Janwal Kiravali
Tarf Sonale
Kurla Complex (BKC & off-BKC)
Vasai Creek Subhash Nagar
r
ive
Kumbhar Ali Sonale Lonad Sange
Bhatsa R
Central Mumbai Parel, Lower Parel, Dadar, Prabhadevi
Village Itade
Rai Village Unique Narpoli
Dongri Gardens
Dunge
Aagri Mira Vasai Creek
Road East Bhayandarpada Jai Bhawani
Nagar Tare Shiv Nagar
M I R A R O A D Poonam
Kalwar
SBD West Andheri, Jogeshwari, Goregaon, Malad

Mogharpada
Va
Versova Gaimukh Compound Ul Devrung Nandkar
sai
Kashimira
er
Gaon Mansarovar
ha
Cre
R iv
Vijay Bapgoan
sR
Complex Koliwada l
1 1
ek
Ka
u
iver
Park Hawaiian Radha Krishna
Village Colony Umberde
Kevani Saravali
Sector 2 Chena Rahanal New Tadal er Gaon
Kashigaon Sapad
Ulhas Riv
SBD Central Kurla, Ghatkopar, Vikhroli, Kanjurmarg, Powai, Bhandup, Chembur
Uttan Owale Kasarvadavali Ulh as Riv
er
Bhavani Nagar Chanakya
Dive
BH I WA N D I Thakaracha
Pada Nagar Ambivli
Ulh
MIDC Raunak City
as
Ri
Purna Val ve
r
Dapode Gove Gandhar Wri Pada
Dharkhadi Pachwad Kopar Wadeghar Nahar r
DAHISAR
Navagaon Patlipada
Village
Pimplas Sai Colony Gaon
U l ha
sR
iv e
Vas
Beturkar Pada

Kiran Mill Rajlaxmi
ai C
Colony Kalher Complex Gundavali Emerald
reek
Eksar Vehele Society
Patvanapada Patlipada Kon Mharal
Govind Nagar
Om Siddhivinayak
Society
Kasheli
er Ul
ha
K A LYA N Anusaya
Gorai 3 sR
Nagar
v
Yeoor Hills
Ri
San j ay Gan dh i Kokanipada Sarang i v er
as
Indostrial Area Ajad Nagar
B O R I VA L I
Ulh
Sherr Ram Navapada
Raheja Eatate N at i o n al Par k Yeoor Thane West
Nagar
Surai
Kalyan East
5. RENTAL TREND
Kachora Gaon
Pawar Nagar Thaakurwadi
Sector 8
Shimpoli
Dive Anjur D O M BAVI L IThakurli FIGURE -6
Puttupatti Khatau Eatate Shivai Nagar Amrai
Sahyadri
Janata Nagar
G H OD BU N D E R R OA D
Yashodhan
Bharodi
Sudarshan Saisaradha Ashale Gaon
Kandivali East
Charkop Gaon Nagar Parsik Anjur Nagar Kansai Gaon
Ulh
Nagar Tukaram Nagar
K A N D I VA L I Nagar Bharodi Gaon
as R
Manori Nagar
Gandhi Hanuman Samata Nagar Alimghar
Kharegaon
ive r
Nagar Nagar Rabodi
Kandiwali Dawadi Gaon Kailash
Lokhandwala r
West Utkolshetwar Rive Patil Wadi Colony
Charai Ulhas Nanadivli
N A U PA D A
Koliwada TWP
The rental values have increased

Nagar
Valnai Tulsi Lake

Shanti Nagar
KKalwa
A LWA
Hill Area Betwade Gaon
Navneet Nagar Gaikwad Pada
125
Azad Nagar Liberty
M A L AKurar
DVillage Vaishali Nagar
Naupada
Bhola Nagar
Sandap Gaon Bhal Gaon
Babrekar
Nagar
Gaikwad
Garden
Yogi Hills
THANE
Natu Paranjpe
Colony Ramu Limaje Usarghar Gaon Umbharli
in most office markets except for
Nagar Omkar Nagar Gaon
Mira Nagar Thane East
peripheral business districts which had

Ghaarivali
Des
ai
K hadi
Khoni
120
Durgawadi
GOREGAON Gokuldham Pagadyacha Mangarul
Mulund TTC Industrial Domkhar
Khardipada Hedutane Pada Gorpe
the highest vacancy rates of 32%. Due

Colony Colony Area Gaon Bamavani
Madh Goregaon Desai Village Nagar
Mali Nagar Yadusen Nevali Dhoke
Daravali West
A I R OL I
ek
Village Bhandup Phadkepada

2 2
to lower vacancy levels compared to 115
re
Devripada Padle Gaon

C
Motilal Complex
d
Antarli
ala
Nagar I Workers Mulund East Sagarli Gaon Nilje Gaon

Goregaon
M
Colony Vihar Lake Kharad

Posari
Bhandup West Ambhe
Helen Nagar
Tarapore
Gardens B H A ND U P Khidkali
rest of the city, both BKC and Central
SBD WEST Unit 25
Jai Ambe
Rabale
Daighar Gaon
Oberoi Mahatma Hanuman Sector 10 A Gothivali Vadavail Kh.
Nagar Sakharoli
110
Splendor Phule Nagar
Mumbai recorded 6% surge in rentals

Teki Village
Andheri West Unit 22 Uttarshiv Kumbharli
(INR/sq.ft./month)
Vewsova
J O G E S H WA R IGanesh Nagar
Income Sector 23
Bale
Narhen Kushivali
in H1 2017 over H1 2016.

Versova Tax Colony Karvale
Azad Nagar Bhandarli Wadi
Nagaon
Ratan Kunj D.N. Nagar
Azad Nagar
Powai Lake
G H A N SGhansoli
OL I Sector 14
Mokashi Pada
Andheri Sector 13
Waklan Bandhanwadi 105
AN D H E R I VIKHROLI
Mahape
Western Express
Highway
Airport
Hiranadani
Gardens Dahisar Burdul
The rents for MMR appreciated to `118/
Chakala Road Shri Nagar Kannamwar
Asalpha
sqft/month in H1 2017 higher by 1% The rental values have

(J B Nagar) Nahar I
Dhansar Turbhe
Hanuman Nagzari Nitlas
Nitale
Sakinaka Nagar
100
V I L E PA R LVillage
E
Sahar Barve Nagar SBD CENTRAL
Sector 17
Adivali Shahpur
Pisarve
YoY compared to `117/sqft/month in H1
increased in most
Asalpha
Bhim Nagar Sector 14
Azad Nagar Vikhroli Thane Creek
Pawne
2016. The rents had gone up during H2

Chhatrapati Shivaji East Wavanje
Rohinjan
95
Ashok Nagar (Mumbai Airport)
G H AT K
PantO PA R Ghot
Multi Green
office markets except

Nagar Kherane
S A N TA C R U Z Mhad Colony Colony
2016 due to fall in vacancy rates.

Khar Danda Koyana Velhe Dongrepada
Sector 9 Indira Nagar Inampuri
MUMBAI Sagar Vihar
Neelkanth
Tondhare
KURLA
Vihar Forest Area Chindhran
Devichapada
for peripheral business

Akruti
90
Rising City Nirankar
Pali Hill Taloja
Nagar
BKC & off-BKC CHEMBUR S A N PA D A
Sector 32 Pendhar
Kanpoli Mahalungi
Chembur VA S H ISanpada Sector 29 Adarsh Nagar
B AN D R A
districts which had the
Shiv Monorail Station
New
Srushti Mandala Ce ntra l

Chapewadi Pa rk
Del
Govadi East Morbe

Navade
85
h
VNP And RC Juinagar

i-M
Marg Sector 20
SION
um
Padgha
highest vacancy rates of

Pratikhsha
bai C
Fanaspada Hedutane
Nagar Fertilizer Mankhurd Pale Bk.
Township Goan
NAVI MUMBAI
WA D A L A
hennai High
DHARAVI Sector 6 Khanav

Wadala Depot Anushakti Sector 12 Sector 11
3 Wanjawadi Bharat Nagar 3
GTB Nagar Petroleum
NERUL Sambhaji
32%.
Nagar Sector 10 Fanaswadi
Valavali
80
ek
way
Antop Hill HP Nagar

re
Bhakti Park C
Science Park j e
lo
H12014
H22014
H12015
H22015
H12016
H22016
H12017
Ta
Acharya
Mysore
Colony Vishnu Nagar
B.A.R.C
Sector 7 KHARGHAR Sector 36
Nevali
DADAR
DADAR Atre Nagar Harigram
Sector 34
Vasan Nagar
Ambapada Prayag Nagar
BE L A P U R
Sector 10
Adai Arihant Arham

BPT Colony Kishanganj
Kalachauki Jui Adaigaon
LOWER Pratiksha Vaghivali Akurli

Nagar ree k
vel C
Vihighar
Arabian Sea PAREL
Lower
Parel West
Thane Creek
Pan
Ganeshpuri
New
Panvel East
P RA B H AD EV I Pargaon Dungi
Bhokarpada
W O RL I
MPT
CENTRAL MUMBAI Targhar Chinchpada PA N VE L Moha
M AH AL AKSH M I Hay Bunder

Shivkar
U LW E Pargaon Dombala
Kalundre
Ulwe Owle Chikhale
N EP EAN SEA RO A D
Tardeo Sector 18
Wahal Babavpada
Nandgaon Sangade
Belvali
Nhava Nhavakhadi
Sector 17 Manghar
Kudave Kon
Jawle Mosare
Shelghar
MA L B AR H I L L Bhagatvadi Padeghar Vadavali Ariwali
eer Bhaurao
Patnoli Turmale
Ashte
Raj Bhavan CBD & off-CBD
Chirvat
Karmav
Giravale
Sheva
Jambhulpada
Sangurli
Dahivali
Bhatan
BUSINESS DISTRICT RENTAL VALUE RANGE IN H1 12-MONTH CHANGE 6-MONTH CHANGE
Gavthan
Nanoshi
Belpada
t
2017 (`/SQ FT/MONTH)
ga
ha
B Sawarkhar
id Dhutum Jatade
ah
Mora
BKC & Off-BKC 220-330 6% 2%

Sonari
Sh
Pohi
4 Koliwada Panje 4
Koliwada Sector 3 Sawale
Dighode
Ransai
C O L AB A Boripakhadi
Panje
Harishchandra
Posari
Rasayani
Navy Nagar
CBD & Off-CBD 160-250 2% 0%

Kegaon Pimpale Ransai
Dongri Shematikhar Reservoir
Waltikhar
Dhakti Jui
Kar nala B ird S anctuary
Waveghar
Takigaon Kar nala Fort Trek
Central Mumbai 170-200 6% 3%

Bhavra Kaladhonda Akulwadi
Bhendkhal
Danda Uran Dhasakhosi Kaire

Mothijui
Koproli Budruk
Jai Ambika Navin Sheva Bandhpada Chirner Karada
PBD 50-90 -4% -3%

Ladivali
Nagar
Prajapati Vihar
Kalambusare
Chanje Kacherpada
ek Koproli
C re
SBD Central 80-150 3% 2%

ja Barapada
ran
Pirwadi Ka Chavane
Pandive Jambhivali
Kasvalepada Pirkone Apta
Navapada
Pirkon
Dighati Dolghar
A B Sangpalekhar Juipunade
C Kaliwali
SBD West 80-140 2% 1%

104
105
GETTING THINGS
RIGHT
INFRASTRUCTURE
PUSH IN GURUGRAM
- BY ANKITA SOOD
U
rban growth is an inevitable The saying that people follow jobs proved whopping 500% from 2001 to 2011. The Gurugram has been lost with bumper-to-
phenomenon and the only reason right in the case of Gurugram when economic pull factor of the city is such that bumper traffic jams at various junctions.
why Gurugram is different is Maruti made its foray in the city in the thenumber of vehicles that enter Gurugram
the fact that it happened too fast for 1980s. In 1983, the Maruti Suzuki plant This spurt in job creation are three times more than the ones
this city. Projected from the start as the proved to be a major turning point in resulted in the movement registered in the city. This has put pressure on the seamless
millennium city, Gurugram grew by leaps Gurugrams economy, which was then connectivity to the economic hub and
of people to the city and
and bounds owing to it being a natural followed by the movement of General the monsoons in 2016 proved to be a
Gurugrams population As time passed, and office and residential wake-up call for the authorities. The rains
extension to the countrys capital and its Electric (GE) in 1997. This paved the
proximity to the international airport in way for other multinational corporations grew by over a whopping developments took place, Gurugram brought Gurugram to a standstill and left
New Delhi. Factors such as the availability (MNCs) such as American Express, IBM, 500% from 2001 to 2011. slackened its pace of infrastructure people stranded helplessly on various
of huge land parcels, favourable tax Microsoft, Infosys, Ericson and many The economic pull factor development and somewhere lost the lead such important junctions. The result of this
policies, availability of manpower and more, to set up businesses in Gurugram of the city is such that the it had maintained over its contemporary was the push to either speed up work or
good connectivity to national highways, which in turn, changed the social and market Noida. If we look at the past few construct new decongestion alternatives
number of vehicles that
all worked in favour of this city. So much physical landscape of the city. years, Gurugram has been struggling such as like flyovers and underpasses in
enter Gurugram are three with the delivery of various infrastructure the city. Most of the road infrastructure
so, that Gurugram took the lead over its
contemporary market Noida, in terms of times more than the ones projects, unlike Noida. While work on the construction underway is slated to finish
the supply and absorption of office space This spurt in job creation resulted in registered in the city. roads and metro connectivity in Noida has by 2019. Lets take a view at some of the
or price appreciation of residential real the movement of people to the city and been going on in record speed, the pace major ongoing infrastructure projects in
estate. Gurugrams population grew by over a of development in Gurugram has been Gurugram that will help in decongesting
extremely slow. The breeze of the roads in the city.
106
107
The 16-lane expressway. The upcoming OUTLOOK

(partially open) 10.5-km, 16-lane
This push for improvement in infrastructure,
expressway will join NH-8 at Shankar
especially road infrastructure, in Gurugram
Chowk to Sectors 5556 on Golf Course
will not only decongest the city but also
Road. This will connect Golf Course
add to the brand value of this city and
Road with the commercial district of DLF
enhance its attractiveness as a location for
Cybercity on one end and to the upcoming
business and residence. However, even
residential and office corridor of Golf
in the present day there are projects like
Course Extension Road on the other. The
the Dwarka Expressway in Gurugram that
road, once complete, will provide the much
have been delayed for more than a decade.
needed swift connectivity between these
It is only wise that the authorities take
corridors and will ease the travel time to
cognisance of the fact that the resource
DLF Cybercity by half, as it would take only
pressure on Gurugram is only going to
810 minutes to reach the office hub of DLF
increase in future owing to it being an
Cybercity from Golf Course Extension. At
economic nucleus. Going forward, if the
present, the Genpact crossing is the only
physical infrastructure does not keep pace
patch left.
with the economic development, then
INDIAN FARMERS FERTILIZERS office locations of Sohna Road and DLF
Gurugram would only be a millennium city
CORPORATION (IFFCO) CHOWK Cybercity and is expected to halve the
on paper.
travel time . In the present day coming to RAPID METRO
This is a complex intersection in Gurugram
Soha Road and DLF Cybercity from the
where vehicles converge from multiple Another important infrastructure push
sectors of New Gurugram (Sectors 8195)
points such as the retail corridor of has been the linking of the Rapid Metro
could take anywhere between 11.5 hours
MehrauliGurugram (MG) Road, Old to Sectors 5556 in Gurugram. The
during peak office hours.
Gurugram, Sector 17/18 and Shankar now operational, 7-km-long line from
Chowk. Once completed, this flyover will Sikandarpur metro station to Sectors
facilitate the movement from Jaipur to Delhi 5556 has made the commute to Golf
SIGNATURE TOWER
and also help movement towards the office Course Road and Golf Course Extension
hub of Udyog Vihar and the Old Gurugram This is a two-way, four-lane underpass on Road smoother from the DLF Cybercity.
area. It will also further facilitate easy the DelhiGurugram Expressway (NH-8). However, the woes of unreliable road
access to the retail stretch of MG Road The underpass will improve connectivity to transport on this stretch for last mile-
It is only wise that from Sector 14 and Sector 17. the residential catchment of Old Gurugram connectivity still remains a problem. On
the authorities take and Palam Vihar via the Maharana Pratap a broader level, the metro has opened
cognisance of the fact that Chowk. This improvement in access will up areas like Golf Course Extension
the resource pressure on HERO HONDA CHOWK make the residential catchment of Old and improved its perception of being
Gurugram, like Sector 14, and further down inaccessible without having a vehicle. The
Gurugram is only going to The 1.4-km and eight-lane flyover at the
the areas like Palam Vihar well connected metro on this route has five metro stations
increase in future owing Hero Honda Chowk is nearing completion
with offices in Signature Tower and and will cater to the riders from Golf
to it being an economic and will bring relief to commuters on
Unitech Cyber Park.Prominent hospitals Course Road Sectors 42, 43, 53, 54, 55, 56
the DelhiJaipur Highway or NH-8, who
nucleus. Going forward, if like Max and Fortis would see seamless and DLF Phase 1 to commercial and office
in peak times have to crawl to enter or
the physical infrastructure connectivity While the underpass will stretches of DLF Cybercity and MG Road.
exit Gurugram. This flyover will also
does not keep pace provide a seamless drive to the metro The attractiveness of the Golf Course Road
provide additional connectivity to the
interchange at HUDA City Centre, it will and the areas along Golf Course Extension
with the economic upcoming Dwarka Expressway where the
also improve access to the packed F&B Road will only increase with the completion
development, then new residential sectors (8195) of New
hub in Sector 29. of these two major infrastructure projects
Gurugram would only be a Gurugram are coming up. Once completed,
(16-lane expressway and Rapid Metro) by
the flyover will also ease access to
millennium city on paper. the end of 2017.
108
109
focusing on completing pending FIGURE -2

projects as opposed to launching MICRO-MARKET SPLIT OF LAUNCHED UNITS
new ones. . Ambiguity over RERA
H1 2016 H2 2016 H1 2017
guidelines in Haryana and Uttar
Pradesh which house the two major 100%
residential markets of Gurugram and 90%
82%
Noida respectively has also slowed
80%
new projects. . While RERA rules in
Haryana are at the draft stage, the 70%
Uttar Pradesh government has notified 60%

it. But, in absence of a gazette the
44%
41%
50%
regulation is yet to come into force.
40%
27%
The uncertainty coupled with slow
30%
sales velocity and time correction
14%
12%
13%
13%
in price since 2013 has brought 20%
11%
7%
7%
stagnancy to the market. NCR today 10%
2%
0%
0%
0%
0%
0%
0%
has the highest unsold inventory under
0%
different stages of construction but is Delhi Faridabad Ghaziabad Greater Noida Gurugram Noida
struggling to find buyers.
Althoughthe sales volumeshave
dropped by 26% YoY in H1 2017, it has
shown a marginal increase over the
demonetisation-induced slump in H2
NATIONAL CAPITAL 2016.
REGION (NCR) 2. MARKET SPLIT OF

RESIDENTIAL LAUNCHES 17,462 9,273 4,800
The new launches in NCR have come
RESIDENTIAL MARKET down to a staggering 4,800 units in H1
UNITS UNITS UNITS
1. NCR RESIDENTIAL MARKET FIGURE -1

2017 registering a YoY drop of 73%. On H1 2016 H2 2016 H1 2017
an average, NCRs six- monthly new
LAUNCHES, SALES AND PRICE NCR MARKET TRENDS - HALF-YEARLY
TRENDS
launches have been above 50,000 units With the attraction towards
LAUNCHES SALES WT. AVG. PRICE (RHS) in the past, but have hit rock bottom in
ready to move in projects
50000 5000
H1 2017. complete or are nearing completion.
New launches in NCR have shrunk to
Also, the fact that most of the projects
and the structural change
a staggering minimal of 4,800 units Many factors have contributed to this
45000
drop, such as the looming uncertainty are construction linked, developers in the Indian Real Estate
in H1 2017 registering a 73% de-
over RERA that pushed developers to are rushing to finish their previously market in the form RERA
4578
growth YoY compared to H1 2016. The 40000 4700

complete projects in hand instead of launched inventories in order to
4511
market shows no respite even from

regulate their cash flows.
becoming a reality, new
4444
the bottomed out last half of 2016

35000 starting newones. The fear of provision
4400
launches in the National

4346
for re-registration under the of the

Number of units
and registered a 48% de-growth in

30000 4400
Capital Region have come
4250
Real Estate Regulatory Authority

4250
new launches compared to H2 2016.

(RERA) have also caused developers TICKET-SIZE SPLIT ANALYSIS
to a historical low. Also,
` \sq ft
Dwindling consumer confidence 25000

to control the launch of new projects OF LAUNCHED UNITS
in the market courtesy delay in
20000 4100 and concentrate more on project since most of the projects
projects marred by litigations and poor H1 2016 H2 2016 H1 2017
connectivity in potential growth areas completions. Under this law, all real have a construction-linked
15000
estate projects (including those under <2.5 mn 8% 2% 70%
has slowed the market. That slowdown payment plan, developers
has restricted developers to launch construction and the ones which are
10000 3800 2.5-5 mn 56% 14% 11% are concentrating on
new projects. yet to get a completion certificate
5000 ) have to be registered with the real 5-7.5 mn 15% 35% 7% completing their existing
The new launches in NCR have been estate regulator.
dwindling since 2010, but have come
7.5-10 mn 14% 33% 12% projects to boost their cash
0 3500
Developers have also taken note of flows
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
to its nadir in H1 2017. With the Real 10-20 mn 8% 4% 0%

Estate (Regulation and Development) the fact that the buyer preference has
>20 mn 0% 11% 0%
Act, 2016 a reality, developers are shifted towards projects that are either
110
111
It is also interesting to note that 70% FIGURE -3 4. MARKET HEALTH The quarters to sell unsold inventory
of the 4,800 units launched in H1 2017 MICRO-MARKET SPLIT OF SALES (QTS) is the number of quarters required
The NCR residential market to exhaust the existing unsold inventory
have been in the less than `2.5 Mn FIGURE -4
category signifying the inclination of

H1 2016 H2 2016 H1 2017
is showing green shoots of QUARTERS TO SELL (QTS) UNSOLD in the market. The existing unsold in-
47%
INVENTORY ANALYSIS
50% ventory is divided by the average sales
the supply side towards the affordable recovery in H1 2017 with NCR
43%
housing segment. The central gov- 45%
20 velocity of the preceding eight quarters
40%
sales marginally picking in order to arrive at the QTS number
ernment has granted the infrastruc- 40%
ture status to the affordable housing up from its nadir point 18
35%
segment, which in turn has incentivised in H2 2016. Our survey indicates a healthier market.
28%
16
developers to launch projects in this 30%
suggests that there is an The QTS of NCR has been moving in
23%
price bracket.
22%
14
25% close range of 1718 in the past six
improvement in the buyer
19%
18%
NO OF QUARTERS
17%
Gurugram known for its luxurious prop- 20% 12
quarters stands at 18 quarters at the
sentiment in H1 2017 owing
14%
erties and unaffordable ticket size saw end of June 2017, which is extremely
11%
15%
10%
85% of its new supply in the less than to the streamlining of the 10 high. This translates that if the sales
10% velocity remains the same, it would take
`2.5 mn price bracket. Sectors such as
real estate sector through 8
95, 95A and 36 in Gurugram saw new approximately 4.5 years to exhaust the
2%
2%
5%
1%
1%
1%
the implementation of
0%
launches under the Pradhan Mantri current unsold inventory of 180,370

0% 6
Awas Yojna (PMAY) in H1 2017. DELHI FARIDABAD GHAZIABAD GREATER NOIDA GURUGRAM NOIDA RERA, which is slowly units.
New launches in the micro-market of Source: Knight Frank Research bringing back confidence 4
Though there have been no new launch-
es in Ghaziabad and Greater Noida
Greater Noida have dropped by 93% to the market. 2
in H1 2017 compared to the same remain still NCRs comparatively better
dence to the market.
period in 2016. Taking cognisance of 0 performing markets, with a QTS of 17
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Though there is a YoY 26% drop in
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17
the volume of unsold inventory in this and 15, respectively. Affordability op-
micro-market, developers in Greater sales in the overall market in H1 2017, tions add to the attractiveness of these
Noida have refrained from launching there has been a huge uptick in the Source: Knight Frank Research markets, which has helped sales trickle
new projects. The market is known for micro-markets of Ghaziabad and Noida. in.
its residential property offerings under Ghaziabad which is mostly an under
the `5 mn category. `50 Mn ticket size market has regis- 23,092 16,913 17,188
tered a 40% growth in sales in H1 2017.
Primarily catering to the affordable and UNITS UNITS UNITS
3. MARKET-WISE the mid-segment, Ghaziabad includes
RESIDENTIAL SALES H1 2016 H2 2016 H1 2017
established residential clusters such
as Kaushambi, Vaishali and Indirapu-
pproximately 17,188 units were sold
A
ram and the relatively newer areas of
in the first half of 2017, compared to
Raj Nagar Extension, NH 24, including FIGURE -5
23,092 units in H1 2016, thus registering MICRO-MARKET-WISE QTS VS AGE OF INVENTORY
Crossings Republic. Ghaziabad has
a drop of 26%. However, on a half year- UNSOLD
always garnered interest from price MICRO-MARKET
will have a positive reverberation on the INVENTORY
ly comparison, the market is showing DELHI FARIDABAD GHAZIABAD GRETER NOIDA GURUGRAM NOIDA
sensitive buyers. residential market as well. The Central
green shoots of recovery and sales have Delhi 1,539
22
picked up by a marginal 2% in H1 2017 Noida on the other hand registers a Government has given its final approval
5,677

for a greenfield international airport at Faridabad
compared to H2 2016. 42% increase in H1 2017 sales com-
20
pared to the same period in 2016. Jewar which is expected to finish its first Ghaziabad 29,711
Demand in NCR had been on a down- phase in 56 years. The government has
ward spiral since 2013 and H2 2016 On a half- yearly comparison, sales in Greater Noida 69,019 18
already set aside 3,000 hectares for this
saw the lowest half yearly sales with Greater Noida and Noida have started
project and once operational the airport Gurugram 47,480
only 16,913 units. This historic low in to look up post the currency demone- 16
is expected cater to 3050 million
sales was evidence to the Indian Gov- tisation initiative in H2 2016 and have Noida 26,944
passengers a year. The coming of the
ernments move to clamp down black gone up by 9% and 10% respectively. NCR 180,370 14
airport will give a major boost to the
money which brought the NCR real This uptick in sales is majorly due to
office and residential market in Noida
the traction in the affordable housing Source: Knight Frank Research
estate market on its knees. and Greater Noida, which was lagging
12
segment which is in the price bracket of

However, our survey suggests that there behind Gurugram due its distance from
`<5 mn. 10
is an improvement in the buyers senti- the airport. 12 14 16 18 20 22 24 26 28 30 32 34 36
ment in H1 2017 owing to the stream- Going forward, the recent announce- QTS
lining of the real estate sector through ment of a new airport at Jewar in
the implementation of RERA which is Greater Noida will add to the attractive-
slowly bringing back the buyers confi- ness of Noida as an office market which
112
113
Pipli Nahari Colony Surana Gyaspur
Marmurpur Hasanpur Khaila
Masoori Painga Yaqutpur Govindpuri
Rohana
Lampur NARELA Cullakpur Mubarikpur
Sherpur Vijay Nagar
Nizampur Khurd Janti Khurd
Gopalpur Jhinjoli Fakharpur Begumabad
Swatantra Palla Mohammad Sheikhpuri Suthari Kumheda
Sec.-A7 Tajpur Abdullapur Budhana Bakharva
Pai-R Nagar Singhola Shahpur Dabana
MODINAGAR
Samchana Kalan
Akbarpur Sungarpur Sonda
Rampur Ferozpur Harewali Tikri Khurd Majra Subhanpur Rawli Phaprana
Bangar Ghoga Rataul
RESEARCH
Khurampur
Pahladpur-R
AUCHANDI
Mungeshpur Darayapur
Asthal Colony D E L H I Bakhtawarpur
Tiggipur
Allipur Vinaipur
Sharfabad
Nekpur Kharjivanpur
Khimawat
INDIA
Didauli REAL ESTATE
Hajari
Sikhaida
Sanoth Mandaula Gotra Milak Ravali

Kalan Bankoli Kakra
Nilauthi Pehladpur
Kirholi Bawana Vihang
Sohti Holambi Kalan Ghitora Bhagot Khanjarpur
Ramzanpur
Bajitpur Sadabad Sikri
Qutabgarh Thakran Panchayara Shahzadpur
Sec. 2 Hiranki Husainpur Jakhaiva Khurd
Holambi Khurd Alipur Vill.
Mandola Navaada Rewri
Bawana Zindpur Badshahpur
Extension Rewra
Bawana Ind. Area Sirauli
NATIONAL CAPITAL
Loharheri
JasaurREGION
Kheri MAP Ladrawan Iradat Nagar Keshav
Tronica City
Manota
Budhpur Nagar Sultanpur
Bijapur Ibrahimpur Khanpur Pabhi Muradnagar
Punjab Khor Khera Khurd Tyagi Sadakpur Mewala Bhatti
Chirauri
Kulasi Puth Khurd Sec. 34 Nathupura Haqiqatpur Sirora Jalalpur
Majra Dabas Nangli Fatiyabad
Puna Salempur
Khairpur Sec. 29 Nihaura
Jheemar Pura Sultanpur Dabas Indraprasth
Kanonda Sec. 35 Colony Ukhlarsi
Chatesar Chandpur Sec. 28 Bhalswa Loni Dehat
Asauda Sikhrani Mohammadpur
Sewan Burari
Asaudha Jaunti ROHINI Shahabad
Daulatpur Samaypur
Aurangabad Ristal Jagjivanpur Dwedha
Asoda Sec. 31 Chaman Vihar
Todran Udhan Jagatpur Noorpur
Rohad Sec. 37 Mukundpur Khadar Shamsher Shahpur Nij Muradgam
Mukundpur Pana Sec. 17 Sanjay Gandhi Banthla Sharifabad Morta Hisali Pur Parsi
Sec. 32
Transport Nagar Lalbag Rajapur
Barahi Kanjhawala Sec. 25 Sonia Colony
Manav Kunj Wazirabad Vihar Bhenara Khurd Basantpur Saitli
Karala Sec. 38 Sec. 16 Kanauja Didwari
Bomnoli Sec. 24 Karawal
Begam Swarna Jharoda Behta Nagla
Jakhoda Kanjhawala Pur Jayanti Park Jahangirpuri Nagar
Hazipur Nistoli
Ind. Area Sec. 13 Gandhi Vihar
Rithala Shalimar Jalalabad
Surya Nagar Nizampur Sec. 22
Budh Vihar Sec. 9 Bagh Model Town Kushaliya
Ashoka Meer Vihar Old Nahal
Morti
Sec. 16
Colony Upkar Vihar
Colony
Sec. 14 AZADPUR Nehru Vihar
Mustafabad
Hindon Airforce
Matiyala
Mandothi Inder Station
Sankhol Rani Khera Enclave Gokalpur Mandoli
Kasaar Netaji Nagar
Sawda Sultanpuri
Pitampura Mukherjee Subash Vihar
Sec. 2 Nagar Ashok Nagar Sanjay Nagar Parson
Tandaheri Model-Town Mangolpuri Usmanpur
Kherka BAHADURGARH
Ghevra
Mundka
Prem Nagar Rani Bagh
ASHOK VIHAR SHAHDARA Ghukna
Govind Puram
Dasna Dehat
Musalman Nangloi Dilshad Garden Galand
Tri Brahmapuri Rajendra Nagar
Netaji Subhash Vihar Dasna Piplehda
Silothi Nagar Dilshad
Peeragarhi Garden
Inderlok Kamla Patel Nagar
Ashok Park Nagar
Hiran Kudna Mundka Punjabi Main
Nuna Majra Kamruddin Bagh Jhimil Colony
GHAZIABAD
Nagar
Daboda Khurd
Lawa Khurd
Naya Gaon Neelwal Bakkarwala
Paschim
Vihar
Moti
Nagar
Anand
Parbat
Seelampur SAHIBABAD Sec. 6 Bayana
Ravali
Adhyapak
Nagar Mehrauli Dinanathpur
Jharoda Kalan
Lok Nayak
Puram Ranhola Kirti Nagar Karol CHANDNI Geeta
Kinauni
Village Nehru Nagar
Puthi
Shiv Nagar
Nilothi Tagore
Garden
Kirti
Nagar
Bagh
CHOWK Colony
Vaishali
Sec. 17 Sadat Nagar
Ikla
Soldha Lowa Daryaganj Bamheta
Kalan Jhandewalan Vaishali Pratap Vihar
Bupania Shidipur Lowa Naveen

Dichaon
Kalan
Baprola
Razapur Vikaspuri Tilak Nagar
Rajouri
Garden Pusa CONNAUGHT PLACE Laxmi
Nagar
Indirapuram
Arifpur
Palace Khurd Hasanpur
Hastsal Rajiv Lal Kuan Lodha Chauna
Isherheri Chowk IP Extension Nai Basti
Laxmi Vihar Mayapuri
Colony Vipin Dundahera Islamabad Kalda
Mandi House
Garden Sec. 62A
Kair
Mitraon
Haibutpur Uttam
Nagar
JANAKPURI Naraina Todapur
Patparganj Chautpur Dujana
Sidipur
Luksar Chhapraula
Mundhela
Forest Saraswati
NAJAFGARH
Enclave
Dwarka
Matiala Bindapur
Central Ridge
Reserve
Central
INDIA MAYUR VIHAR
Khora Colony Yusufpur
Kalan Nangal Raya Forest
Secretariat
GATE Sec. 58
Bhangel Bishnuli Bambawar
Rasoolpur
Mitraon Rajapuri
Gubhana
Rawta Roshanpura
Dharampura
Mahavir
Enclave
Sagarpur DELHI New Kondli
Chaukhandi
Dasana
Majri
Bakargarh Surhera
Deenpur
Kakrola
CANTONMENT
Sadar Bazar
Dhaula
Kuan
New Ashok
Sec. 12
Sec. 61
Ithaira Achheja Rajatpur
NTPC Dadri
Nagar
Jaffarpur DWARKA Palam Chanakyapuri Nizamuddin
East Sec. 10 Sec. 53 Sector 119 Sadullapur
Deri
Machha
Bisahda
Kalan Kharkhari Shekhawati Safdarjung
Samashpur Khera Nahar Lines Airport Sec. 15
Khalsa Dabar Paprawat Qutub Vihar Moti Bagh Jangpura Sec. 27
Kazipur Sarojini Sec. 51 Vaidpura Ranoli Latifpur
Issapur Nagar Lajpat
Sec. 19 Kidwai Nagar Dhoom Kheda
BADLI Tajpur Khurd Sec. 8 Nagar Noida City Centre Sec. 3
Bisrakh Bhola Rawal
Rewla Sorkha Deri Skaner
Khanpur IGI Airport
Shankar
Vihar
Vasant
R.K. Puram
East of
OKHLA Jahidabad
Jalalpur
Ujwa Chhawla Sec. 40 Nagla Kirani

Pandwalan Sec. 22 Vihar Kailash
Khurd Chauganpur
DHANSA Somesh
Sec. 24
Dwarka Sec. 21
Green Park Sec. 48 Sec. 80 Bhanauta
Daryapur Khurd Hasanpur Vihar
Sec. 26
IGI Airport
HAUZ
Munirka
KHAS GREATER
Nehru
Sec. 44
Sec. 81
Sarangpur
Daulatpur
Bamnoj
Bharthal Mahipalpur Katwaria
KAILASH
Place Jasola
Sec. 102 Jalpura Khodna Khurd Pink City
Dadri
Phoolpur
NOIDA
Sarai Colony
Isapur Khera Malviya Kalkaji Chithara
Bijwasan Nagar Madanpur
Ghummanhera Bajghera Sec. 105 Buddha Kathhera
Badusarai Vasant Kunj Seth Sarai Govindpuri Khadar
Rangpuri Habibpur
Raota
Shikarpur
KAPASHERA Tughlakabad Okhla Sec. 128 Sec. 93 Yakubpur
Village Tilpatta
Jhatikra Raghopur Saket Extension Phase I

Mehrauli Surajpur
Mundakhera Nankheri Choma Pali
Palla
Badsa Rajokri Sec. A Lakhnawali
Dauralla Badarpur
Ismailpur Pawala Palam Vihar Sainik Farms Sec. 137 Makauda Chamrawali
Tughlakabad Basantpur UPSIDC Site B
Khasrupur Malakpur Bodaki
Mankrola Palam Vihar Extn. Nangli Sec. 143
Fatehpur Daulatabad Sangam Village
Iqbalpur Sec. 105 Ghitorni Vihar Bhogpur
Chhatarpur Badarpur
Lal Sec. 144
Kuan Mithapur Junpat
Kherki Majra Nagli Delta II Kaimrala
Budhera Sarhol
GREATER NOIDA
Kaliawas Bahrampur Gamma I Chakrasenpur
Gurgaon Sikandarpur
Vijay Nagar Sec. 166
Rural DLF Farms Sehatpur
Mubarakpur Sat Bari Sec. 163 Sec. MU
Asola Wildlife Sec. 91
Sec. 102 Sec. 4 Sanctuary
Sec. 28 Chhota Golf Course
Sec. 12A Aya Nagar Arangpur Sec. 35 Jaypee Greens
Chandu Chandan Hola Mathurapur
DLF Jaunapur Sec. 162
Sultanpur Sec. 29 Phase 1 Dadasiya PARI
Sultanpur
Bird Sanctuary Sec. 9
Aya Nagar Anangpur
Tilapat
Jhatta
Badauli
Bangar CHOWK Eachachhar Raipur Rithori
GURUGRAM
Gopalpur HUDA City DLF Fatehpur Beri Kirawali
Golf Course Extension Sec. 32 Dalelpur
Sadhrana Sec. 31 Centre Kondli
FARUKH Bamripur Garhi Sec. 11
Khadar
Dadha
NAGAR Harsaru Maincha
Sec. 37D Sec. Asola
10A RAJIV CHOWK
Sec. 32 Sec. 45
Mandi
Sherpur Khadar Sec. 151
Saidpur Dera Amit Nagar
Sec. 37 Sec. 54
Sec. 88A Wazirpur Kasna
Hamirpur Sec. 46 Sec. 52 Gwal Pahari Sec. 29 Dhadar Shikargarh
Sec. 33 Sec. 149
Sec. 21C Badshahpur
Sec. 95B Bhatti Kalan Khanpur
Sec. H6 Sec. 34 Sec. 47 Old Surajpur Site V
Sec. 56 Faridabad Ladpura
Sec. 94 Sec. 88 Khandsha Sec. 57 Sec. 150
Ghata
Sec. 95 Sec. 50 Sec. 21D Sec. 18 Sec. 89 Rajpur Kalan
Patli Hajipur Bandhwari Luksar
Nacholi Fuhari Salempur
Narsinghpur Imalyaka Gurjar
Sec. 97 Sec. 92 Sec. 90 Sihi Sec. 61
Fajilpur Sec. 65 Sec. 84
Sec. 85
FARIDABAD
Alahawas Badkhal Enclave Sec. 86 Pauvari Bisaich
Jasana Amipur
Jhund Sarai Viran Sec. 86
Sec. 66 Sec. 63
Sec. 76 Sec. 14 Kheri Khurd Murshadpur
Sec. 75 Atai Muradapur
Taj Nagar Sec. 38 Pali Sec. 49
Sec. 81 New Industrial
Township Sec. 78 Akbarpur
Sec. 77 Kadarpur Gothda Pali Village Dhahkola Jaganpur Amarpur Nawada
Manger Mohbtabad Sec. 80 Afzalpur
IMT MANESAR Sec. 51 Rajiv Gandhi
Faizupur Majra Bhuapur Nanua Ka Kanarsi
Colony Razapur
Sanpka Neemka Manjhawali
Ghazipur Alipur
Sec. 80 Bhainsrawli Samspur
Sec. 79 Selakhari Sec. 7 Atta Gujran
Tikli Maruti Kunj Sec. 23 Gautam Buddha Nagar
Kasan Nimka Gharora
Ghoshgarh Sec. 53 Tigaon
Sec. 4 Mandhawali
DANKAUR
Dhouj
Sec. 54
BALLABHGARH Sec. 71
Bela Khurd
Nawada
114
115
Garat Pur Bas Sec. 1 Sec. 25
Behlpa Sarurpur Tigaon Bahadurpur Dungarpur
Fatehpur Taga
Mokalwas Mahendwara Sec. 69 Rilka
Chitter Sain Rajiv Colony Ajit Nagar Mathurapur
Kukrola Kot Alampur Sec. 68
4. PRICE MOVEMENT IN H1 2017 OFFICE MARKET

Prices in the NCR residential market that time making the market more
had already started correcting in the unaffordable.
first half of 2016, where the market 1. NCR OFFICE MARKET The stable pace of absorption and
The fact that there has been no STOCK, NEW COMPLETIONS, the shrinking supply has nudged
corrected for the first time and
increase in prices since 2013 signifies TRANSACTION AND VACANCY down vacancy levels to 17.7% in H1
registered a 4% YOY drop. The story
that developers are cognisant of the TRENDS 2017 compared to 20.6% in H1 2016.
continues in the first half of 2017
accumulating inventory and slow sales However, vacancy levels in micro-
as well and the market has seen no
velocity which has restrained them markets of Gurugram such as DLF
movement in weighted average prices
from increasing prices. The office stock in NCR stood at 144 Cybercity and Golf Course Road have
which clearly shows a time correction.
mn sq ft at the end of June 2017, of reached single digits.
Factors such as speculative increase
which 119 mn sq ft is occupied stock.
in prices over opening up of new
FIGURE -2
land parcels, announcement of new The new completions in NCR have
OFFICE SPACE STOCK AND VACANCY LEVELS
infrastructure projects and investor been dwindling since 2016 and have HALF-YEARLY TREND
interest in micro-markets such as failed to pick up even in the first half STOCK OCCUPIED STOCK VACANCY (RHS)
Gurugram had fuelled the overnight of 2017. New completions registered a Project delays that
YoY drop of 36% in H1 2017 with only
increase in prices during 2010-2011 plagued the real estate
21.5%
160 22%
1.8 mn sq ft entering the market. Fresh
21.0%
market were visible in the
20.7%
supply of office space had already
20.6%
140
bottomed out in 2016 and the story is 21% office market as well. As
20.0%
no different in the first half of 2017.
120 a result new completions
In terms of leasing, NCR saw a 20%
in NCR have reached an
18.9%
total of 3.2 mn sq ft of office space
LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH transactions in H1 2017, registering a
100
all-time low. Only 1.8 mn
19%
(`/SQ FT) CHANGE CHANGE 9% drop compared to the same period sq ft of new completions
17.7%
80
in 2016. hit the NCR market in H1
Yamuna Expressway Greater Noida 3,2953,557 0% 0% 18%
60 2017 registering a 36%
Sector Chi V Greater Noida 3,4743,514 -1% 0%
FIGURE -1
NEW COMPLETIONS AND TRANSACTIONS 17% decline from the same
Sector 16 B Greater Noida 3,1003,400 0% 0% 40
HALF-YEARLY TREND
period in 2016.
Sector 16 C Greater Noida 2,6683,866 0% 0% NEW COMPLETIONS TRANSACTIONS
16%
20
Sector 78 Noida 5,5005,627 -1% 1% 8
Sector 70 Noida 4,1004,101 -7% 0% 0 15%
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
7
Sector 117 Noida 4,8004,880 0% 1%
Sector 143 B Noida 3,9705,200 0% 1%

6 Source: Knight Frank Research
Sector 37 Gurugram 4,2005,600 0% 0%
Sector 49 Gurugram 7,70010,200 0% 0% 5

2. SECTOR ANALYSIS
mn sq ft
Sector 67 Gurugram 9,1009,200 0% 2%
The proportion of BFSI in its total leased
4 office space in NCR has dropped by a
Sector 79 Gurugram 4,2006,200 -2% -2%
striking 80% in H1 2017. The sectors
Sector 82 Gurugram 3,7005,900 -1% -1%
3 average transaction size also dropped
NH-24 Bypass Ghaziabad 2,8423,000 1% 1% from 21,196 sq ft in H1 2016 to a mere
Raj Nagar Extension Ghaziabad 2,8842,900 -3% -1% 14,919 in H1 2017. Some of the major
2
transactions in this sector were from
Crossings NH24 Ghaziabad 3,2003,300 -1% 1% companies such as HDFC Ergo, RBL
Sector 37 Faridabad 4,7047,200 13% 1% 1 Bank and Dena Bank in Connaught
Place, Delhi.
Sector 75 Faridabad 2,500 3,500 -20% 0%
0 The main driver of office space in NCR
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
Sector 76 Faridabad 2,7202,900 0% 0%
fails to impress in H1 2017 as well even
though there is a YoY 14% uptick in the
Source: Knight Frank Research total space taken up by the sector. The
116
117
share of IT/ITeS is on a decline from

FIGURE -3 3. DEAL SIZE ANALYSIS
2014. Factors such as consolidation, SECTOR-WISE SPLIT OF TRANSACTIONS SELECT TRANSACTIONS
cloud computing, automation and The average transacted space which
protectionist policies by developed had come down significantly to 19,850
45%
countries have all contributed to the
42%
sq ft in H1 2016 has recovered to
41%
slowed growth of this sector. Adding to 27,300 sq ft in H1 2017. OCCUPIER BUILDING LOCATION APPROX AREA (SQ FT)
40%
this the SEZ supply in NCR is in short
Gurugram yet again led the tally of the Amazon Unitech Infospace Sector 62, Noida 200,000
36%
supply and we believe that the slump
number of deals with 58% of the total Hi Pad Dayal Tower Sector 63, Noida 150,000
34%
in leasing is a temporary phase for the 35%
105 deals in H1 2017, followed by SBD
IT/ITeS sector. Some of the noteworthy Google Rolta Tower Udyog Vihar 1, Gurugram 140,000
Delhi and Noida with 22 and 16 deal
transactions in this sector have been
29%
28%
30% conversions respectively. Locations
28%
AECOM SP Infocity Udyog Vihar 1, Gugranur 66,000
Google in Gurugram and Hi Pad in
such as Saket Aerocity in SBD Delhi
Noida. Honeywell Unitech Trade Center Sushant Lok, Gugugram 65,000
25% and sector 62 in Noida were among the
The Other Services sector accounted most preferred locations for occupiers Pay U Bestech Business Tower Sohna Road, Gurugram 65,000
21%
for 42% of the total office space in this half.

20% Skootr Building 9 DLF Cybercity, Gurugram 45,000
demand in H1 2017, which is almost
17%
at par with the H1 2016 levels. Some International Finance Corporation World Mark 3 Aerocity, SBD Delhi 38,000
of the large transactions in this sector FIGURE -4
13%
15%
AVERAGE DEAL SIZE AND NUMBER OF DEALS Awfis Lotus Business Park Noida Greater Noida Expressway, Noida 30,000
include PayU, Gartner, Amazon and
Ameriprise Financial.
10% HDFC Argo Konnectus Minto Road, CBD Delhi 23,000
8%
AVERAGE DEAL SIZE (SQ FT)

The share of manufacturing in the total NUMBER OF DEALS (RHS)
transacted pie of H1 2017 stands at NDTV Good Earth Business Bay Sector 6, Noida 20,000
5%
3%
34% compared to 29% in H1 2016.

40000 200 Aramco Two Horizon Center Golf Course Road, Gurugram 20,000
The sector registers a 6% increase in
0%
the total transacted space in H1 2017
IT/ITeS
BFSI
MANUFACTURING
OTHER SERVICES
Accenture World Mark 3 Aerocity, SBD Delhi 18,000

compared to the same period in 2016.
Demand from the sector has seen a H1 2016 Kone Elevator India Private Limited Discovery Tower Sector 62, Noida 12,000
H2 2016 30000 150
steady increase post the Make in India
H1 2017 Dena Bank Konnectus Minto Road, CBD Delhi 7,000
campaign. Some of the prominent
Number
sq ft
transactions in the manufacturing Source: Knight Frank Research

AIS Research Tapasya Corporate Heights Noida Greater Noida Expressway, Noida 7,000
sector include Vivo Mobile, Stryker in Note: *BFSI includes BFSI Support Services
Gurugram and Mitsui & Co in Aerocity in 20000 100
SBD Delhi.
The share of IT/ITeS 10000 50

is on a decline from
2014. Factors such as
4. BUSINESS DISTRICT ANALYSIS
consolidation, cloud
0 0
computing, automation 3.5 3.8 3.2 BUSINESS DISTRICT MICROMARKETS
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
and protectionist policies

mn sq ft mn sq ft mn sq ft CBD Delhi Connaught Place, Barakhamba Road, Kasturba Gandhi Marg and Minto Road
by developed countries Source: Knight Frank Research
H2 2016 H1 2017 SBD Delhi Nehru Place, Saket, Jasola, Bhikaji Cama Place, Mohan Cooperative and Aerocity
have all contributed to H1 2016
Gurugram Zone A M.G. Road, NH-8, Golf Course Road and Golf Course Extension Road
the slowed growth of this
sector. Adding to this the Gurugram Zone B DLF CyberCity, Sohna Road, Udyog Vihar and Gwal Pahari
SEZ supply in NCR is Gurugram Zone C Manesar
in short supply, and we Noida Sectors 16, 18, 62, 63 and the NoidaGreater Noida Expressway
believe that this slump
Faridabad Sector Alpha, Beta, Gamma and Tech Zone
in leasing is a temporary
phase for the IT/ITeS sector.
118
119
Pipli Nahari Colony Surana Gyaspur
Marmurpur Hasanpur Khaila
Masoori Painga Yaqutpur Govindpuri
Rohana
Lampur NARELA Cullakpur Mubarikpur
Sherpur Vijay Nagar
Nizampur Khurd Janti Khurd
Gopalpur Jhinjoli Fakharpur Begumabad
Swatantra Palla Mohammad Sheikhpuri Suthari Kumheda
Sec.-A7 Tajpur Abdullapur Budhana Bakharva
Pai-R Nagar Singhola Shahpur Dabana
MODINAGAR
Samchana Kalan
Akbarpur Sungarpur Sonda
Rampur Ferozpur Harewali Tikri Khurd Majra Subhanpur Rawli Phaprana
Bangar Ghoga Rataul
RESEARCH
Khurampur
Pahladpur-R
AUCHANDI
Mungeshpur Darayapur
Asthal Colony D E L H I Bakhtawarpur
Tiggipur
Allipur Vinaipur
Sharfabad
Nekpur Kharjivanpur
Khimawat
INDIA REALHajari
Didauli ESTATE
Sikhaida
Sanoth Mandaula Gotra Milak Ravali

Kalan Bankoli Kakra
Nilauthi Pehladpur
Kirholi Bawana Vihang
Sohti Holambi Kalan Ghitora Bhagot Khanjarpur
Ramzanpur
Bajitpur Sadabad Sikri
Qutabgarh Thakran Panchayara Shahzadpur
Sec. 2 Hiranki Husainpur Jakhaiva Khurd
Holambi Khurd Alipur Vill.
Mandola Navaada Rewri
Bawana Zindpur Badshahpur
Extension Rewra
Bawana Ind. Area Sirauli
NATIONAL
LoharheriCAPITAL BUSINESS DISTRICT MAP
Jasaur Kheri Ladrawan Iradat Nagar Keshav
Tronica City
Manota
Budhpur Nagar Sultanpur
Bijapur Ibrahimpur Khanpur Pabhi Muradnagar
Punjab Khor Khera Khurd Tyagi Sadakpur Mewala Bhatti
Chirauri
Kulasi Puth Khurd Sec. 34 Nathupura Haqiqatpur Sirora Jalalpur
Majra Dabas Nangli Fatiyabad
Puna Salempur
Khairpur Sec. 29 Nihaura
Jheemar Pura Sultanpur Dabas Indraprasth
Kanonda Sec. 35 Colony Ukhlarsi
Chatesar Chandpur Sec. 28 Bhalswa Loni Dehat
Asauda Sikhrani Mohammadpur
Sewan Burari
Asaudha Jaunti ROHINI Shahabad
Daulatpur Samaypur
Aurangabad Ristal Jagjivanpur Dwedha
Asoda Sec. 31 Chaman Vihar
Todran Udhan Jagatpur Noorpur
Rohad Sec. 37 Mukundpur Khadar Shamsher Shahpur Nij Muradgam
Mukundpur Pana Sec. 17 Sanjay Gandhi Banthla Sharifabad Morta Hisali Pur Parsi
Sec. 32
Transport Nagar Lalbag Rajapur
Barahi Kanjhawala Sec. 25 Sonia Colony
Manav Kunj Wazirabad Vihar Bhenara Khurd Basantpur Saitli
Karala Sec. 38 Sec. 16 Kanauja Didwari
Bomnoli Sec. 24 Karawal
Begam Swarna Jharoda Behta Nagla
Jakhoda Kanjhawala Pur Jayanti Park Jahangirpuri Nagar
Hazipur Nistoli
Ind. Area Sec. 13 Gandhi Vihar
Rithala Shalimar Jalalabad
Surya Nagar Nizampur Sec. 22
Budh Vihar Sec. 9 Bagh Model Town Kushaliya
Ashoka Meer Vihar Old Nahal
Morti
Sec. 16
Colony Upkar Vihar
Colony
Sec. 14 AZADPUR Nehru Vihar
Mustafabad
Hindon Airforce
Matiyala
Mandothi Inder Station
Sankhol Rani Khera Enclave Gokalpur Mandoli
Kasaar Netaji Nagar
Sawda Sultanpuri
Pitampura Mukherjee Subash Vihar
Sec. 2 Nagar Ashok Nagar Sanjay Nagar Parson
Tandaheri Model-Town Mangolpuri Usmanpur
Kherka BAHADURGARH
Ghevra
Mundka
Prem Nagar Rani Bagh
ASHOK VIHAR SHAHDARA Ghukna
Govind Puram
Dasna Dehat
Musalman Nangloi Dilshad Garden Galand
Tri Brahmapuri Rajendra Nagar
Netaji Subhash Vihar Dasna Piplehda
Silothi Nagar Dilshad
Peeragarhi Garden
Inderlok Kamla Patel Nagar
Ashok Park Nagar
Hiran Kudna Mundka Punjabi Main
Nuna Majra Kamruddin Bagh Jhimil Colony
GHAZIABAD
Nagar
Daboda Khurd
Lawa Khurd
Naya Gaon Neelwal Bakkarwala
Paschim
Vihar
Moti
Nagar
Anand
Parbat
Seelampur SAHIBABAD Sec. 6 Bayana
Ravali
Adhyapak
Nagar Mehrauli Dinanathpur
Jharoda Kalan
Lok Nayak
Puram Ranhola Kirti Nagar Karol CHANDNI Geeta
Kinauni
Village Nehru Nagar
Puthi
Shiv Nagar
Nilothi Tagore
Garden
Kirti
Nagar
Bagh
CHOWK Colony
Vaishali
Sec. 17 Sadat Nagar
Ikla
Soldha Lowa Daryaganj Bamheta
Kalan Jhandewalan Vaishali Pratap Vihar
Bupania Shidipur Lowa Naveen

Dichaon
Kalan
Baprola
Razapur Vikaspuri Tilak Nagar
Rajouri
Garden Pusa CONNAUGHT PLACE Laxmi
Nagar
Indirapuram
Arifpur
Palace Khurd Hasanpur
Hastsal Rajiv Lal Kuan Lodha Chauna
Isherheri Chowk IP Extension Nai Basti
Laxmi Vihar Mayapuri
Colony Vipin Dundahera Islamabad Kalda
Mandi House
Garden Sec. 62A
Kair
Mitraon
Haibutpur Uttam
Nagar
JANAKPURI Naraina Todapur
Patparganj Chautpur Dujana
Sidipur
Luksar Chhapraula
Mundhela
Forest Saraswati
NAJAFGARH
Enclave
Dwarka
Matiala Bindapur
Central Ridge
Reserve
Central
INDIA MAYUR VIHAR
Khora Colony Yusufpur
Kalan Nangal Raya Forest
Secretariat
GATE Sec. 58
Bhangel Bishnuli Bambawar
Rasoolpur
Mitraon Rajapuri
Gubhana
Rawta Roshanpura
Dharampura
Mahavir
Enclave
Sagarpur DELHI New Kondli
Chaukhandi
Dasana
Majri
Bakargarh Surhera
Deenpur
Kakrola
CANTONMENT
Sadar Bazar
Dhaula
Kuan
New Ashok
Sec. 12
Sec. 61
Ithaira Achheja Rajatpur
NTPC Dadri
Nagar
Jaffarpur DWARKA Palam Chanakyapuri Nizamuddin
East Sec. 10 Sec. 53 Sector 119 Sadullapur
Deri
Machha
Bisahda
Kalan Kharkhari Shekhawati Safdarjung
Samashpur Khera Nahar Lines Airport Sec. 15
Khalsa Dabar Paprawat Qutub Vihar Moti Bagh Jangpura Sec. 27
Kazipur Sarojini Sec. 51 Vaidpura Ranoli Latifpur
Issapur Nagar Lajpat
Sec. 19 Kidwai Nagar Dhoom Kheda
BADLI Tajpur Khurd Sec. 8 Nagar Noida City Centre Sec. 3
Bisrakh Bhola Rawal
Rewla Sorkha Deri Skaner
Khanpur IGI Airport
Shankar
Vihar
Vasant
R.K. Puram
East of
OKHLA Jahidabad
Jalalpur
Ujwa Chhawla Sec. 40 Nagla Kirani

Pandwalan Sec. 22 Vihar Kailash
Khurd Chauganpur
DHANSA Somesh
Sec. 24
Dwarka Sec. 21
Green Park Sec. 48 Sec. 80 Bhanauta
Daryapur Khurd Hasanpur Vihar
Sec. 26
IGI Airport
HAUZ
Munirka
KHAS GREATER
Nehru
Sec. 44
Sec. 81
Sarangpur
Daulatpur
Bamnoj
Bharthal Mahipalpur Katwaria
KAILASH
Place Jasola
Sec. 102 Jalpura Khodna Khurd Pink City
Dadri
Phoolpur
NOIDA
Sarai Colony
Isapur Khera Malviya Kalkaji Chithara
Bijwasan Nagar Madanpur
Ghummanhera Bajghera Sec. 105 Buddha Kathhera
Badusarai Vasant Kunj Seth Sarai Govindpuri Khadar
Rangpuri Habibpur
Raota
Shikarpur
KAPASHERA Tughlakabad Okhla Sec. 128 Sec. 93 Yakubpur
Village Tilpatta
Jhatikra Raghopur Saket Extension Phase I

Mehrauli Surajpur
Mundakhera Nankheri Choma Pali
Palla
Badsa Rajokri Sec. A Lakhnawali
Dauralla Badarpur
Ismailpur Pawala Palam Vihar Sainik Farms Sec. 137 Makauda Chamrawali
Tughlakabad Basantpur UPSIDC Site B
Khasrupur Malakpur Bodaki
Mankrola Palam Vihar Extn. Nangli Sec. 143
Fatehpur Daulatabad Sangam Village
Iqbalpur Sec. 105 Ghitorni Vihar Bhogpur
Chhatarpur Badarpur
Lal Sec. 144
Kuan Mithapur Junpat
Kherki Majra Nagli Delta II Kaimrala
Budhera Sarhol
GREATER NOIDA
Kaliawas Bahrampur Gamma I Chakrasenpur
Gurgaon Sikandarpur
Vijay Nagar Sec. 166
Rural DLF Farms Sehatpur
Mubarakpur Sat Bari Sec. 163 Sec. MU
Asola Wildlife Sec. 91
Sec. 102 Sec. 4 Sanctuary
Sec. 28 Chhota Golf Course
Sec. 12A Aya Nagar Arangpur Sec. 35 Jaypee Greens
Chandu Chandan Hola Mathurapur
DLF Jaunapur Sec. 162
Sultanpur Sec. 29 Phase 1 Dadasiya PARI
Sultanpur
Bird Sanctuary Sec. 9
Aya Nagar Anangpur
Tilapat
Jhatta
Badauli
Bangar CHOWK Eachachhar Raipur Rithori
GURUGRAM
Gopalpur HUDA City DLF Fatehpur Beri Kirawali
Golf Course Extension Sec. 32 Dalelpur
Sadhrana Sec. 31 Centre Kondli
FARUKH Bamripur Garhi Sec. 11
Khadar
Dadha
NAGAR Harsaru Maincha
Sec. 37D Sec. Asola
10A RAJIV CHOWK
Sec. 32 Sec. 45
Mandi
Sherpur Khadar Sec. 151
Saidpur Dera Amit Nagar
Sec. 37 Sec. 54
Sec. 88A Wazirpur Kasna
Hamirpur Sec. 46 Sec. 52 Gwal Pahari Sec. 29 Dhadar Shikargarh
Sec. 33 Sec. 149
Sec. 21C Badshahpur
Sec. 95B Bhatti Kalan Khanpur
Sec. H6 Sec. 34 Sec. 47 Old Surajpur Site V
Sec. 56 Faridabad Ladpura
Sec. 94 Sec. 88 Khandsha Sec. 57 Sec. 150
Ghata
Sec. 95 Sec. 50 Sec. 21D Sec. 18 Sec. 89 Rajpur Kalan
Patli Hajipur Bandhwari Luksar
Nacholi Fuhari Salempur
Narsinghpur Imalyaka Gurjar
Sec. 97 Sec. 92 Sec. 90 Sihi Sec. 61
Fajilpur Sec. 65 Sec. 84
Sec. 85
FARIDABAD
Alahawas Badkhal Enclave Sec. 86 Pauvari Bisaich
Jasana Amipur
Jhund Sarai Viran Sec. 86
Sec. 66 Sec. 63
Sec. 76 Sec. 14 Kheri Khurd Murshadpur
Sec. 75 Atai Muradapur
Taj Nagar Sec. 38 Pali Sec. 49
Sec. 81 New Industrial
Township Sec. 78 Akbarpur
Sec. 77 Kadarpur Gothda Pali Village Dhahkola Jaganpur Amarpur Nawada
Manger Mohbtabad Sec. 80 Afzalpur
IMT MANESAR Sec. 51 Rajiv Gandhi
Faizupur Majra Bhuapur Nanua Ka Kanarsi
Colony Razapur
Sanpka Neemka Manjhawali
Ghazipur Alipur
Sec. 80 Bhainsrawli Samspur
Sec. 79 Selakhari Sec. 7 Atta Gujran
Tikli Maruti Kunj Sec. 23 Gautam Buddha Nagar
Kasan Nimka Gharora
Ghoshgarh Sec. 53 Tigaon
Sec. 4 Mandhawali
DANKAUR
Dhouj
Sec. 54
BALLABHGARH Sec. 71
Bela Khurd
Nawada
120
121
Garat Pur Bas Sec. 1 Sec. 25
Behlpa Sarurpur Tigaon Bahadurpur Dungarpur
Fatehpur Taga
Mokalwas Mahendwara Sec. 69 Rilka
Chitter Sain Rajiv Colony Ajit Nagar Mathurapur
Kukrola Kot Alampur Sec. 68
Gurugram yet again emerged as the 5. RENTAL TREND

FIGURE -5 FIGURE -6
Gurugram yet again emerged most preferred office market in NCR in BUSINESS DISTRICT-WISE TRANSACTION SPLIT WEIGHTED AVERAGE RENTAL MOVEMENT The stable pace of
H1 2017. It accounted for 55% of the The new completions in NCR have dried
as the most preferred office absorption and the
total transaction pie of 3.2 mn sq ft. H1 2016 H1 2017
up and only 1.8 mn sq ft was pumped 78
market in NCR in H1 2017. More than half of the leasing activity in 70% into the market in H1 2017. Just as the shrinking supply has on
76
Approximately 55% of the the business district was concentrated residential sector even the office market one hand nudged down
62%
in locations such as DLF Cybercity, 74
faced delayed projects that brought
total transacted space vacancy levels to 17.7%
Golf Course Road and Golf Course 60%
in this supply crunch in NCR. Also, 72
55%
of 1.7 mn sq ft here was Extension Road. Approximately 55% whatever supply has been coming up in 70
in H1 2017 compared to
in the micro-markets of of the total transacted space of 1.7
50%
the past one year has been in peripheral
68
20.6% in H1 2016 and
(INR/sq.ft./month)
mn sq ft was in these micro-markets. areas of Greater Noida which has failed
DLF Cybercity and Golf 66 have also created upward
Some of the prominent occupiers who to attract the occupiers. Another factor
Course Road. Some of the leased space in Gurugram in H1 2017 40% that is of major concern to the market 64 pressure on rentals.
prominent occupiers here in are PayU, AECOM, Tower Research, is the lack of good quality supply. The 62 Rentals across business
Gartner, Google and Honeywell. occupiers are looking for good quality
H1 2017 are PayU, AECOM, districts have firmed up
29%
60
30% buildings with ready infrastructure and
Noida registered a 14% increase in the
Tower Research, Gartner, 58 in H1 2017 with occupiers
23%
amenities which is currently in short
total transacted space in H1 2017 com-
Google and Honeywell. pared to the same period in 2016. With
supply. 56 willing to pay more for
20%
quality office buildings.
15%
this increase in the leasing activity, the 54
This lack of quality office space has put
12%
percentage share of Noida in the total an upward pressure on rentals and has 52
office take up has also gone up to 29% 10% pushed the weighted average rental 50
H12016
in H1 2017 from 23% in H1 2016.
H12014
H22014
H12015
H22015
H22016
H12017
values from `70 per sq ft per month in
2%
1%
H1 2016 to `75 per sq ft per month in
FARIDABAD 0%
0%
GREATER 0%
NOIDA 0%
Known for its options for IT/ITeSs 0%
H1 2017 registering a YoY increase of
CBD -
DELHI
NOIDA
SBD - DELHI
back office, the announcement of a Source: Knight Frank Research
GURUGRAM
7%.
new airport at Jewar in Greater Noida
is set to increase the attractiveness of
Noida as an office market. The Central Source: Knight Frank Research BUSINESS DISTRICT-WISE RENTAL MOVEMENT
Government has given its final approval
for a greenfield international airport at
Jewar which is expected to finish its first
phase in 56 years. The government BUSINESS DISTRICT RENTAL VALUE RANGE IN H1 12-MONTH CHANGE 6-MONTH CHANGE
has already set aside 3,000 hectares 2017 (`/SQ FT/MONTH)
for this project and once operational
CBD Delhi 214350 4% 0%
the airport is expected cater to 30 50
million passengers a year. The coming SBD Delhi 93163 1% 0%
of the airport will give a major boost
Gurugram Zone A 106165 12% 6%
to the office market in Noida, which
was lagging behind Gurugram due its 3.5 3.2 Gurugram Zone B 72134 8% 6%
distance from the airport. Some of the
Gurugram Zone C 2535 0% 0%
major transactions in Noida in H1 2017 mn sq ft mn sq ft
are Amazon, Awfis, Paytm, Hi Pad and Noida 4470 9% 3%
H1 2016 H1 2017
Norgen.
Leasing activity in CBD Delhi was
steady and concentrated around
Connaught Place on Minto Road while
Aerocity and Saket were the most pre-
ferred micro-markets in SBD Delhi. No-
tably so, most of the leasing in Aerocity
was concentrated in Bharti Worldmark.
Some of the notable transactions in
this area involve International Finance
Corporation, Accenture, Haliburton and
Duff & Phelps
122
123
to the connectivity between Noida and of this micro market. The only airport in
in infrastructure and competitive office
Greater Noida once the route is extended Delhi NCR, Indira Gandhi International
rentals, it is the lack of quality office
from the existing Noida City Centre station Airport in Delhi, is approximately 50 km
spaces and the distance from the airport
NOIDA-GREATER NOIDA to Pari Chowk, in Greater Noida. The link,

which is slated to be completed by early
2018, will provide an alternative mode of
from the NoidaGreater Noida Expressway.
It could take anywhere between 22.5
hours or more during the peak hours of
that is slowing the pace of movement of
offices in the corridor. In this regard, the
recent announcement of a new airport
EXPRESSWAY
travel for the workforce. morning and evening traffic to commute
at Jewar in Greater Noida will add to the
from the NoidaGreater Noida Expressway
attractiveness of Noida as an office market
to the airport. On the other hand, it takes
which will have a positive reverberation on
WHAT IS STOPPING THE OCCUPIER? COMPETITIVE RENTALS
Apart from seamless connectivity,
3040 mins to cover a distance of 16 km
from Golf Course Road in Gurugram to
the residential market as well. The Central
Government has given its final approval for
the airport. It is clearly a choice that the
competitive rentals in the range of `3555 a greenfield international airport at Jewar
- BY ANKITA SOOD occupiers, especially corporates, make
per square feet per month give this corridor which is expected to finish its first phase in
while setting up their offices along the
I
an added advantage over other similar 56 years. The government has already set
t is an established fact that the two NoidaGreater Noida Expressway.
locations in Delhi NCR like DLF Cyber City, aside 3,000 hectares for this project and
stalwarts of the Delhi NCR office
where rentals are in the range of `110120 once operational the airport is expected
market are Gurugram and Noida and
per square feet per month and Noida, cater to 3050 million passengers a year.
they monopolise 75% of the current office QUALITY OFFICE SPACE
where rentals range between `4570 per The coming of the airport will give a major
stock of 144 mn sq ft. Both these micro
square feet per month. Companies such There is a dearth of quality office boost to the office market in Noida, which
markets are magnets for employment
as SafeNet, IGATE, Genpact, Jubiliant space along the NoidaGreater Noida was lagging behind Gurugram due its
and infrastructure in Delhi NCR, and
Foodworks Ltd, NEC, Dell and Newgen Expressway to attract occupiers willing to distance from the airport.
their prominence is evident from the
are some of the major occupiers on this pay higher rentals. The Expressway is yet
fact that they absorb 8590% of the Also, development of good quality office
stretch, with transactions ranging between to see state-of-the-art office space, such
total annual offtake of Delhi NCR. Good stock is critical for speeding up the pace of
60,00090,000 sq ft. as Bharti Worldmark at Aerocity in Delhi
connectivity and robust infrastructure movement of companies along this stretch.
or One Horizon Center on Golf Course
attracted occupiers to set up base in
Road in Gurugram, which commands the
these markets, thus creating a plethora of
READY RESIDENTIAL PRODUCT highest office rentals in NCR. By virtue of
white-collar employment opportunities.
their location and building specifications,
In the last few years, Gurugram has taken The Expressway has a ready-to-move-in
these office spaces command rentals in
over the lead from Noida, in terms of residential catchment, especially in sectors
the range of `150250 per square feet per
supply and absorption of office space in 93, 94, 137, 143 and 168. Unlike a few years
month.
NCR. Whereas Gurugram has hubs like back, when the stretch was perceived
as distant and uninhabitable, today, the It is an established fact
DLF Cybercity, Golf Course Road and
Sohna Road, Noida has not been able NoidaGreater Noida Expressway boasts that the two stalwarts
EASE OF DOING BUSINESS
to attract and garner the same occupier of being one of the most developed of the Delhi NCR office
interest for its 24-km, six-lane highway, corridors in Delhi NCR with ready social As per our survey, occupiers have rated market are Gurugram
popularly called the NoidaGreater Noida and physical infrastructure in the form of Gurugram higher than Noida on the ease
and Noida and they
Expressway. schools and hospitals and connectivity. of doing business parameter. Occupiers
monopolise 75% of the
There are a large number of property believe that governance issues are better
options on this stretch that run in the range taken care of in Gurugram than in Noida. current office stock
WHATS GOING FOR THE of `3,8005,900 per sq ft, even the rental We believe that authorities, in Noida, of 144 mn sq ft. Both
EXPRESSWAY? value in this corridor is comparatively low should take cognisance of this fact and these micro markets are
as compared to the developed stretches in improve the perception, of the micro magnets for employment
SEAMLESS CONNECTIVITY
Gurugram. market.
and infrastructure in
The singularity of this corridor is in its
Delhi NCR, and their
seamless connectivity with Delhi through
the Delhi Noida Direct (DND) Flyway, which WHAT IS GOING AGAINST THE THE POTENTIAL GAME CHANGERS prominence is evident
will be augmented further by the upcoming EXPRESSWAY? from the fact that they
Having delved into the strengths and
30-km NoidaGreater Noida Metro link.
The missing airport:Even though there a lot weaknesses of the corridor, it can be
absorb 8590% of the
Construction work on this metro route is
of factors that work for the Expressway, the said that though the NoidaGreater total annual offtake of
in progress, and it will add immense value Delhi NCR.
lack of easy access nullifies the advantages Noida Expressway has upped its game
124
125
REAL ESTATE DYNAMICS AND THE Punes office market is distributed broadly
INFRASTRUCTURE across the east and west zones. Currently,
more than 80% of the citys office space
The residential catchments of Pune are
spread across the length and breadth
stock is accounted for by these two zones, Spread across the
while the remaining is spread across the limits of more than one
of the city. We take a look at the major
central, north and south zones. This means
residential segments and also the office civic body, this project
that more than 80% of the citys white-
sectors to understand the need for urban
collared workforce commutes to either the
will enhance the north-
transport that is affordable, convenient and south connectivity
East or West of the city.
contemporary.
through the PCMC-
Swargate corridor
Unlike its cousin city Mumbai, Punes
Central Pune, with residential localities and the east-west
suburban train network is not the
such as Koregaon Park, Dhole Patil connectivity through
commuting option of choice. The city
Road, Model Colony and Kothrud, is
is also not equipped with metro rail or Vanaz-Ramwadi
the commercial heart of the city, with corridor.
monorail connectivity. While there is a
numerous corporate offices located in the
network of the bus rapid transit system
central business district (CBD) areas of
(BRTS), the BRTS network does not do
Bund Garden Road, M. G. Road, Deccan,
justice to this mass movement of the
Senapati Bapat Road and Shivajinagar.
PUNE PLAYING
population. The biggest challenge that the
Neighbourhoods such as Katraj, Kondhwa,
city currently faces is the absence of a
NIBM Road and Warje in South Pune are
mass rapid transit system (MRTS) because
affordable alternative to Central Pune for
CATCH UP WITH THE

of which a large section of the workforce
home buyers . However, they lack a strong
either has to travel via private vehicles or
employment appeal.
employer-provided transportation to reach
MRTS PUSH North Pune, with major residential localities

such as Pimpri, Chinchwad, Nigdi and
their workplaces. Metro rail as an MRTS
has been a long pending demand of the
city. The upcoming metro rail plan is a push
in this direction. The Phase 1 shall have
Moshi are primarily industrial areas with
a route of 31.2 km, out of which the first
various automobile and auto ancillary as
- BY VIVEK RATHI corridor will run from PCMC to Swargate,
well as engineering industries located here.
a distance of 16.5 km, and the subsequent
The twin towns of Pimpri and Chinchwad
corridor will run from Vanaz to Ramwadi,
THE CANVAS OF PUNE CITY AND absence of a single, unified planning host the manufacturing units of some of
which is a length of 14.6 km. Spread across
THE LARGER METROPOLITAN authority for the metropolitan region Indias leading automobile companies,
the limits of more than one civic body,
REGION has led to an inordinate delay in the such as Bajaj Auto, Tata Motors, Force
this project will enhance the north-south
execution of various infrastructure projects. Motors and DaimlerChrysler. On the other
the residential Punes urban agglomeration, also known connectivity through the PCMC-Swargate
However, last year, the Government of hand, East Pune, with anchor localities like
catchments of as the Pune Metropolitan Region (PMR), corridor and the east-west connectivity
Maharashtra finally notified the formation Viman Nagar, Kharadi, Wagholi, Hadapsar
Aundh, Baner, Wakad, is spread over 3,500 sq km and consists through Vanaz-Ramwadi corridor. Thus,
of a regional development body, called the and Dhanori, has been developed and
of the Pune Municipal Corporation (PMC), the proposed metro rail network will come
Hinjewadi and Pune Metropolitan Region Development much sought-after residential market on
Pimpri Chinchwad Municipal Corporation as a big relief to the commuters in the
Bavdhan make up the Authority (PMRDA). PMRDAs integrated account of the presence of a large number
(PCMC), Pune Cantonment and Kirkee region. It is only in December 2016 that the
action centre market development plan (DP) for the entire region of IT/ITeS offices and social infrastructure.
(Khadki) Cantonment. According to Census state government gave its approval to the
will replace the individual development Similarly, the residential catchments of
80%
of West Pune. This 2011, the total population of the PMR was project, which is targeted to be completed
plans of the various local bodies, including Aundh, Baner, Wakad, Hinjewadi and
has been possible 5.75 mn. in an ambitious timeframe by 2021. While
the PMC and PCMC. The PMRDA may Bavdhan make up the action centre market
mainly on account of a also be responsible for major infrastructure of West Pune. This has been possible
this will set the ball rolling on the citys
robust presence of IT/ most significant infrastructure parameter,
projects, such as the metro rail and outer mainly on account of a robust presence of
The development of the PMR is undertaken the ultimate success will depend on how
ITeS companies in the ring roads; the benefit of which accrues IT/ITeS companies in the vicinity.
by various agencies, such as the PMC, well and how fast the next phases of the More than 80% of the citys white-collared
vicinity. beyond the conventional city limits.
PCMC, the Public Works Department metro rail become a reality. workforce commutes to either the East or
(PWD) and others. Until last year, the West of the city.
126
127
and Development) Act 2016 by 2. MARKET SPLIT OF TICKET-SIZE SPLIT ANALYSIS

notifying the law as well as putting the RESIDENTIAL LAUNCHES OF LAUNCHED UNITS
regulator in place on 1st May 2017.
In terms of launches, East and South
This single largest change in history H1 2016 H2 2016 H1 2017
Pune were the largest markets in
of real estate industry will protect the
the H1 2017. In East micro-market, <2.5 mn 27% 21% 54%
consumer and provide a level playing
localities like Kharadi, Wagholi, 2.5-5 mn 47% 49% 31%
field to all stakeholders by increasing
Hadapsar and Keshav Nagar were the
the transparency and governance 5-7.5 mn 19% 18% 5%
largest contributors.
standards in the real estate industry.
However, between 1st May 2017 7.5-10 mn 5% 3% 9%
In Punes southern micro-market,
and 31st July 2017 the window for Pisoli saw the largest share of launches 10-20 mn 1% 8% 1%
registration of projects, any project in one project. The other localities in
>20 mn 1% 0% 0%
whether new or on-going ones were the south micro-market have been
barred from advertising, marketing or Katraj, Undri, and NIBM Road.
selling without registration with RERA.
With developers re-directing efforts
from sales to RERA compliance, pace FIGURE -2
MICRO-MARKET SPLIT OF LAUNCHED UNITS
of launches was lower in this period.
The governments efforts towards
H1 2016 H2 2016 H1 2017 Housing for All agenda and incen-
tives offered to fulfil this objective have
With developers 50% started to reflect in the supply side
response. The less than ` 2.5 mn ticket
re-directing efforts from 45% size saw its launches share increase
sales to RERA compliance, from 27% in H1 2016 to 54% in H1
PUNE
40%
pace of launches was lower 2017.
in H1 2017 35% With residential property price around
31%
31%
`3,500-4,500 per sqft the markets such
28%
28%
28%
30%
as Pisoli, Chikhali, Kane Phata, Talwade
25%
24%
saw the maximum launches in the less
25%
22%
than ` 2.5 mn ticket size.
21%
RESIDENTIAL MARKET In the backdrop of these landmark
19%
19%
20%
events this performance has also been
16%
1. PUNE RESIDENTIAL dictated by the developers baggage of 15%
FIGURE -1
MARKET LAUNCHES, SALES PUNE MARKET TRENDS - HALF-YEARLY unsold inventory, which until a year ago
AND PRICE TRENDS was mainly in the under construction 10%
6%
LAUNCHES SALES WT. AVG. PRICE (RHS) category. However, now ready for
5%
After the tumultuous H2 2016 when 25000 5000 possession apartments are also
1%
1%
the demonetisation needle punctured available across markets.
0%
the market pulling down residential In Punes southern
The government has been paying CENTRAL EAST WEST NORTH SOUTH
sales and launches by 38% and 19% focused attention to the affordable micro-market, Pisoli
4860
4860
4860
20000 4900 Source: Knight Frank Research

respectively, H1 2017 has ushered as
4835
housing segment of the realty market. saw the largest share of

4819
an eventful period. Housing loan interest rates, at around

launches in one project.
Number of units
In H1 2017, launches stood at 7,905 8-8.5%, are at the lowest level last
15000 4800
The other localities in
4747
units and sales at 17,480 units i.e. seen in 2009 and developers have
been forthcoming in offering freebies south micro-market
` \sq ft
launches lower by 9% and sales

higher by 11% compared to H1 2016. and discounts to attract demand. As
10000 4700
have been Katraj, Undri,
In comparison to the demonetisation a consequence of these developments
and NIBM road.
4614
period of H2 2016, the launches are housing sales have seen 11%
sequentially 30% lower and the sales a improvement in H1 2017 compared to
modest 4% higher. 5000 4600 H1 2016. 8,713 11,300 7,905
The first two months of H1 2017 saw UNITS UNITS UNITS
consumers and the industry as a
whole grapple with the aftermath 0 4500 H1 2016 H2 2016 H1 2017
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
of demonetisation. Further, the

state of Maharashtra was the first to
implement the Real Estate (Regulation Source: Knight Frank Research
128
129
PUNE MICRO-MARKET MAP

A B C D E F G H I J
3. MICRO-MARKET WISE RESIDENTIAL SALES
oli
Dehu
ir
Sh
To
Pune - Nashik Road
MICRO-MARKET LOCATIONS
To
K
ha
1 1
nd
al
a
To
Chimbhali
Kh
Central Koregaon Park, Boat Club Road, Erandwane, Deccan, Kothrud, Model Colony
nda
ala
NH
4
East Viman Nagar, Kharadi, Wagholi, Hadapsar, Dhanori,

Chincholi
Chikhali
West Aundh, Baner, Wakad, Hinjewadi, Bavdhan, Pashan
M
um
0
ba
National Highwa y 5
Mum
i-
Pu
bai
ne
North Pimpri, Chinchwad, Moshi, Chikhali, Chakan, Talegaon

Ex
Pun
pr
sw
es
eB
ay
ypa
2 2
Moshi
ss R
Nigdi Chinchwad
South Kondhwa, Ambegaon, Undri, Dhayari, Warje, Sinhgad Road
oad
Ravet Akurdi
Pimpri Looking at the infrastructure dynamics

Bosari
Na
tio
FIGURE -3
na
of the city, absence of a mass rapid FIGURE -4

lH
igh
Tathawade MICRO-MARKET SPLIT OF SALES

wa
QUARTERS TO SELL (QTS) UNSOLD

y4
transit system (MRTS) is the the biggest

y 50
Pimpri Dighi INVENTORY ANALYSIS
wa
Au
nd
al High
3 3
h
challenge for the city. A large section

Ro
a
PUNE
d
H1 2016 H2 2016 H1 2017

NH
Pimpri
on
i
Nat
10
4
Chinchwad of the workforce either has to travel via

Rahatani
Dighi
private vehicles or employer-provided
Wakad 50% 9
transportation to reach their workplac-
Hinjewadi
45% es. Hence there is a strong preference 8
Pimple Kalas to choose residential properties in the
Pune
Pimple Dapodi Dhanori

International
Airport
ga
on
Nilakh Gurav re
Ko a
4 To him
B
4
40% proximity to the place of work. 7
Viman Wagholi
Mahalunge Nagar
NO OF QUARTERS
Khadki
35% Hence, the demand was spread across 6
Mum
micro-markets. West and south markets

bai
Road
Naga r
Chande Nande Aundh Ganeshkhind

Pun
Baner Yerwada
28%
Kharadi
e Byp
28%
Sus 30% contributed to 27% and 28% respec- 5
27%
27%
Na
ass
tiona
25%
Roa
25%
tively.
l Hi
Ashok
24%
24%
d
Kalyani
ghw
23%
23%
25% 4
ay 4
G Nagar Nagar
21%
an
es
Pashan
hk
ad
Sangamvadi d
20%
5 hi a Ro a 5
Ro
nd
R
en
Mundhwa
oa
rd
d
w
Ga
Mundh
Koregaon 20% 3
nd
Gokhalenagar Kavadewadi 4. MARKET HEALTH

Bu
Lavale Park Annexe

K h a r di B yp ass Road
Bavdhan 15% 2
ad
Pune
Ro
Pirangut Ghorpadi The quarters to sell unsold inventory

JM
M.G. Road
Paud Road
Kothrud 10% (QTS) is the number of quarters required 1
Sadashiv Solapur Road
Road Peth Hadapsar

6
Paud
Pune Wanowri 6 5% 0
National
Highway
in the market. The existing unsold in-
2%
2%
2%
9
Contonment
Sep-14
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Mar-15
Mar-16
Mar-17
Jun-14
Jun-15
Jun-16
Jun-17
National Highway 4
To Uruli Kan
Parvati chan
Warje
Bibvewadi ventory is divided by the average sales
Darshan 0%
velocity of the preceding eight quarters
CENTRAL EAST WEST NORTH SOUTH Source: Knight Frank Research
Na
Vadgaon Phursungi in order to arrive at the QTS number

tio
na
lH
Budruk
ig
Kondhwa Mohamadwadi Source: Knight Frank Research

hw
Shivane for that particular quarter. A lower QTS

ay
4
Khurd d
Undri
oa

dR
wa
as
Dhankawadi
S
7 Narhe Katraj Kondhwa 7
Until a year ago the developers bag-

Dhayari
Phata
Budrukh
The developers
Wadaki gage of unsold inventory was mainly
Pisoli Gaon
in the under construction category. baggage of unsold
However, now ready for possession inventory, until a year
Dive
Jambhulwadi
Mum
Gha
apartments are also available across

ago was mainly in the
t Roa
b
iP
a
d
une
markets.
Bypa Roa d
under construction
ss
8 To
Dive
8
15,688 16,800 17,480

Ga
on
Of the unsold inventory of around

40,000 units, east, eest and north
category. However, now
Nati
ona
ready for possession

lH
UNITS UNITS UNITS micro-markets are the largest contrib-

igh
wa
4
y
utors. The share of ready possession apartments are also

Ko
ndh
H2 2016 H1 2017
wa
H1 2016
Ro
ad
Patharwadi
Aatekar
Vasti
Gogalwadi inventory, which indicates that the sales
schedule has stretched far beyond the
available across
y
Vasvewadi
hw a
9 9
Chambhali
markets.
Pune Ban galore Hig
To
Sata
ra construction schedule of the project,
To Satara
has increased. Of the available inventory

A B C D E F G H I J
in each market, south and north Pune
130
131
markets have higher number of such

FIGURE -5
PRICE MOVEMENT IN H1 2017
ready possession stock. MICRO-MARKET-WISE QTS VS AGE
OF INVENTORY The Pune weighted average price has Virtually no market has seen a price
The Pune residential market has seen stagnated at `4,860 per sqft. for the rise over the last six months. Some
CENTRAL EAST WEST NORTH SOUTH
a receding unsold inventory level. From last one year implying no price growth localities have seen a marginal
the peak of around 71,000 units in H1 13 for buyers of residential property. This price decline to the tune of 1 to2%.
2014, the latest inventory level is around has weakened the investment premise Developers have also been forthcoming

40,000 units. Consequently, the QTS of the residential property asset class. in offering freebies and offers to attract
has also come down to an all-time low 12 demand.
of 4.5 quarters.
Amongst the micro-markets, the central

Pune market on account of being the 11
premium market has the highest QTS of
7.2 quarters.The age of unsold inventory
is also among the highest in the city, 10
LOCATION MICRO-MARKET PRICE RANGE IN H1 2017 12-MONTH 6-MONTH
indicating that a large number of previ-
ously launched projects are still unsold (`/SQ FT) CHANGE CHANGE
in this micro-market.
9 Koregaon Park Central 13,000 - 17,000 -1% -1%
3 4 5 6 7 8
The south micro-market with localities
Source: Knight Frank Research QTS Kothrud Central 7,500 - 13,000 -1% -1%
such as Kondhwa, Ambegaon, Undri
and Warje have the lowest QTS of 3.3 Erandwane Central 13,500 - 18,000 -1% -1%
UNSOLD
MICRO-MARKET
quarters. INVENTORY Boat Club Road Central 14,500 - 19,500 0% 0%
Central 1,108 Kharadi East 5,300 - 6,300 2% 0%
East 10,597 Wagholi East 3,500 - 4,600 2% 0%
West 10,616 Dhanori East 3,900 - 4,800 0% 0%
North 10,994 Hadapsar East 4,600 - 6,000 3% 0%
South 6,826 Aundh West 7,800 - 9,500 3% 0%
PUNE 40,141 Baner West 5,600 - 8,000 0% 0%
Hinjewadi West 4,800 - 5,900 5% 0%

Note: The size of the bubble indicates the quantum of unsold inventory Wakad West 5,400 - 6,200 -1% -1%
Moshi North 3,700 - 4,300 0% 0%
Chikhali North 3,500 - 4,100 0% -2%
Chakan North 3,000 - 3,400 3% 0%
Ambegaon South 4,400 - 5,500 -1% -1%
Undri South 3,900 - 4,800 1% -1%
Kondhwa South 4,600 - 5,700 1% -1%

132
133
OFFICE MARKET
1. PUNE OFFICE MARKET 2. SECTOR ANALYSIS

STOCK, NEW COMPLETIONS, FIGURE -2
The headwinds that OFFICE SPACE STOCK AND VACANCY LEVELS
FIGURE -3
A trend emerges here
TRANSACTION AND VACANCY HALF-YEARLY TREND SECTOR-WISE SPLIT OF TRANSACTIONS
the Indian IT industry TRENDS as we see firms like
STOCK OCCUPIED STOCK VACANCY (RHS) In H1 2017, the share of the IT/ITeS H1 2016 H2 2016 H1 2017
is facing, due to the industry was the highest at 60% a 70%
Awfis and Smartworks
anti-outsourcing wave in decline in comparison to the same pe- that provide co-working
64%
70 25%
The Pune office market is witnessing
riod last year; the manufacturing sector
60%
the developed markets an ironical situation on account of space taking up office
on the other hand has suffered with a
20%
60%
and the automation the demand-supply dynamics. The 60
significant decline in share. The BFSI space in markets
headwinds that the Indian IT industry 20%
drive, has been a factor. is facing, due tothe anti-outsourcing
sector share is marginally lower at 12% like Nagar Road and
16%
50 in H1 2017 compared to 14% in H1
However, shortage of wave in the developed markets and the
50%
Hadapsar.
15%
44%
2016.
relevant office supply automation drive, has been a factor.
15%
However, shortage of relevant office 40 The other services sector has been a
for the citys largest
11%
40%
supply for the citys largest occupier promising group with its share jumping
occupier segment has
33%
9.3%
segment has been a major factor for from 13% in H1 2016 to 22% in H1
30
8.2%
7.9%
been a major factor the decline in transactions by 12% to 10% 2017. A trend emerges here as we see
30%
1.8 mnsqft in H1 2017 compared to H1 firms, like Awfis and Smartworks that
for the decline in 20 provide co-working space, have taken
22%
2016.
transactions. 5%
up space in markets like Baner, Nagar
In the case of new completions, H1 20%
10
Road and Hadapsar. The concept of
14%
14%
2017 recorded 1.7 mnsqft, a 35%
13%
co-working spaces essentially involves
12%
increase compared to H1 2016.
10%
groups of start-ups, creative con-
9%
However, a significant portion of these 0 0%
10%
sultants, freelancers and Small and
5%
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
FIGURE -1 were small projects with a leasable
NEW COMPLETIONS AND TRANSACTIONS Medium Enterprises (SMEs) who share
HALF-YEARLY TREND area of less than 0.1 mnsqft, which are
workspace and break through ideas, ex-
not the ones desired by the citys top Source: Knight Frank Research 0%
NEW COMPLETIONS TRANSACTIONS pand their business horizon and gain a
IT/ITEs
BFSI
MANUFACTURING
OTHER SERVICES
occupier industry.
3.5 fresh standpoint on their own business-
Since the global financial crisis era of es by dint of sharing workspaces. Such
200809, the overall vacancy level in co-working space providers have taken Source: Knight Frank Research
3.0 the city has been coming down each up as much as 1,28,000 sq ft of office
year. In H1 2017, the vacancy level space during H1 2017. Note: BFSI includes BFSI support services
remained 7.9% compared to 9.3%
2.5
in H1 2016. In the yesteryears, the
vacancy level in the market had been
mn sq ft
2.0
as high as 28% in 2009.The vacancy
level in locations such as Kharadi,
Viman Nagar, Yerwada and Nagar
1.5 Road, which are highly preferred by
occupiers, is even lower with absolutely
no availability of good quality office
1.0
space.
For the remaining part of the year, we

0.5
2.0 1.8 1.8
expect a similar situation as no major
new supply has been lined up.Such mn sq ft mn sq ft mn sq ft
a scenario would put pressure on
0.0
occupiers to sign the available quality H1 2016 H2 2016 H1 2017
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
space.
134
135
3. DEAL SIZE ANALYSIS PUNE BUSINESS DISTRICT MAP

FIGURE -4
With occupiers cognizant of the AVERAGE DEAL SIZE (SQ FT)
disappearing quality space, in H1 2017, The largest deals in excess of a 0.1 mn NUMBER OF DEALS (RHS)
we saw larger deals taking place and sq ft were from the IT/ITeS sector with
60000 120
consequently, the average deal size companies like Fiserv and TIA
increased from 40,000 sqft in H1 2016 Technology taking up spaces.
to 47,800 sqft in H1 2017. 50000 100
SELECT TRANSACTIONS
Number
40000 80
sq ft
OCCUPIER BUILDING LOCATION APPROX AREA 30000 60
(SQ FT) Bhosari
Fiserv Inorbit Nagar Road 255,000 20000 40
TIA Technology WTC Kharadi 132,000 Pimpri

Chinchwad
Western Union Business Bay Yerwada 91,000 10000 20
SBD NORTH
HSBC Business Bay Yerwada 90,000 Hinjewadi Wakad
Amdocs SP Infocity Phursungi 55,000 0 0

PBD WEST
BALEWADI
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016
H2 2016
H1 2017
Accenture Blue Ridge Hinjewadi 50,000
SBD EAST
Awfis Business@Mantri Nagar Road 50,000 Source: Knight Frank Research Vishrantwadi Nagar Road
Baner Yerwada Kharadi
Aundh
Kalyani
SBD WEST CBD & OFF-CBDNagar
SB Road Bund Garden Road
Deccan
Bavdhan Kothrud CAMP
PBD EAST
4. BUSINESS DISTRICT ANALYSIS
Satara Road Hadapsar
BUSINESS DISTRICT MICROMARKETS SBD SOUTH Wanowrie
CBD and offCBD Bund Garden Road, S. B. Road, Camp, Deccan, University Road, Shankar Sheth Road Bibwewadi Phursungi
SBD East Kalyani Nagar, Yerwada, Nagar Road, Vishrantwadi, Hadapsar
PBD East Kharadi, Phursungi, Wanowrie
SBD West Wakdewadi, Aundh, Baner, Kothrud, Balewadi
PBD West Hinjewadi, Bavdhan, Wakad Major Roads

Railway Line
Source: Knight Frank Research Proposed Metro Corridor I
Proposed Metro Corridor II
SBDEast, which includes locations IT occupiers because of the lower

such as Kalyani Nagar, Yerwada, Nagar rentals here. In the absence of large-
Road and Hadapsar, witnessed a sharp space availability in existing projects,
jump in its share of the total transaction occupiers are not going over board for
volume, as many big-ticket deals took built-to-suit (BTS) deals on account of
place in this micromarket in H1 2017. uncertainty in the operating environment
of the IT/ITeS industry.
PBD West, as a market, is generally
preferred by large-space requirement
136
137
5. RENTAL TREND
FIGURE -5 KEY CONTACTS
BUSINESS DISTRICT-WISE TRANSACTION SPLIT
With the improving occupancy level
H1 2016 H1 2017 in the market, the office rents in Pune
have been on an ascent for more than ADVISORY, RETAIL & HOSPITALITY INDUSTRIAL & ASSET SERVICES AHMEDABAD
50%
Balbir Singh Khalsa
47%
five years. The weighted average rent Gulam Zia Balbir Singh Khalsa
Executive Director - Advisory, National Director Branch Director
45% has reached `61 per sqft per month, an balbirsingh.khalsa@in.knightfrank.com
Retail & Hospitality balbirsingh.khalsa@in.knightfrank.com
increase of 7% compared to H1 2016 gulam.zia@in.knightfrank.com
and 2% compared to H2 2016. CHENNAI
38%
40%
Kanchana Krishnan
36%
Saurabh Mehrotra OFFICE AGENCY
The lack of significant IT/ITeS supply Branch Director
35% National Director - Advisory Viral Desai
will keep occupiers on edge. At the saurabh.mehrotra@in.knightfrank.com kanchana.krishnan@in.knightfrank.com
National Director
30%
same time, rent growth fromnow on will viral.desai@in.knightfrank.com
BENGALURU
be moderate, as inter-city comparison Aditya Sachdeva
24%
Director - Retail PROJECT MANAGEMENT Shantanu Mazumder
25% will be made between these elevated Senior Branch Director
aditya.sachdeva@in.knightfrank.com
rent levels by the cost-conscious IT Deben Moza shantanu.mazumder@in.knightfrank.com
occupiers. Executive Director
20% CAPITAL MARKETS deben.moza@in.knightfrank.com HYDERABAD
14% Rajeev Bairathi
Samson Arthur
15% FIGURE -6 Executive Director RESEARCH
12%
WEIGHTED AVERAGE RENTAL MOVEMENT Branch Director

rajeev.bairathi@in.knightfrank.com Dr. Samantak Das
samson.arthur@in.knightfrank.com
9%
10% Chief Economist and National Director
8%
7%
70
FACILITY MANAGEMENT samantak.das@in.knightfrank.com
PUNE
5%
Nellie Samuel
5%
Executive Director Paramvir Singh Paul
nellie.samuel@in.knightfrank.com Branch Director
0% ParamvirSingh.Paul@in.knightfrank.com
CBD &
OFF-CBD
SBD
EAST
SBD
WEST
PBD
EAST
PBD
WEST
60
In the absence of
Source: Knight Frank Research REPORT AUTHORS
large-space availability
(INR/sq.ft./month)
in existing projects, 50 Vivek Rathi

Vice President Research
occupiers are not going
Pankaj Anup Toppo
over board for built- 40
Vice President Research
to-suit (BTS) deals on Yashwin Bangera
Assistant Vice President Research
account of uncertainty
Sangeeta Sharma Dutta
in the operating 3.3 1.8 30
Assistant Vice President Research
environment of the IT/ Ankita Sood
mn sq ft mn sq ft
ITeS industry. Lead Consultant Research
H1 2016 H1 2017 20
Nibodh Shetty
H12014
H22014
H12015
H22015
H12016
H22016
H12017
Consultant Research
rch Kaushal Vartak
Source: Knight Frank Resea
Consultant Research
COPY EDITOR
Soubhik Mitra
Content Lead,
BUSINESS DISTRICT RENTAL VALUE RANGE IN H1 12-MONTH CHANGE 6-MONTH CHANGE Marketing & Public Relations
2017 (`/SQ FT/MONTH) Deborah Herbert
Copy Editor - Advisory Services
CBD and off CBD 70100 2% 1%
DESIGN & GRAPHICS
SBD East 5585 5% 2%
SBD West 5075 4% 2% Mahendra Dhanawade

Manager Graphic & Design,
PBD East 4575 4% 1% Marketing & Public Relations
PBD West 3548 2% 1%

138
139
COMMERCIAL BRIEFING
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of the commercial property market, visit
knightfrankblog.com/commercial-briefing/
RESEARCH
RESEARCH
Dr. Samantak Das
Chief Economist and
National Director Research
samantak.das@in.knightfrank.com
PRESS OFFICE
Sukanya Chakraborty
National Director
Marketing & Communications
media@in.knightfrank.com
Knight Frank India Research provides development and strategic advisory to a wide range of
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RESEARCH

INDIA REAL ESTATE

INDIA REAL ESTATE

AHMEDABAD | BENGALURU | CHENNAI | HYDERABAD | KOLKATA | MUMBAI | NCR | PUNE

GOLDMINE. While Brazil, Russia and South Africa were

TABLE: PERFORMANCE OF BSE REALITY INDEX BSE SENSEX

Source: Knight Frank Research

PUSH TO is in the affordable

HOUSING the Government of India

- BY SANGEETA SHARMA DUTTA

lease out their entire area, or a large part of

H1 2016 H2 2016 H1 2017

5000 After the initial

ALL INDIA H1 2016

After the tumultuous H2 2016 when all stakeholders have reconciled to

respectively, H1 2017 has ushered as RERA compliance, pace of launches 0

60% office space markets during H1 2017.

MUMBAI NCR BENGALURU PUNE CHENNAI HYDERABAD KOLKATA AHMEDABAD

Source: Knight Frank Research

Consistently falling since H1 2012, the

massive real estate development as Residential and commercial office spaces

A LOOK AT THE PAST. COMING TO THE PRESENT DAY.

SHIFTING POWER largely to the affordable segment where

launched has been the lowest

affordable housing. Of the total units

still lower by 7% than the same period

CENTRAL EAST NORTH SOUTH WEST

AHMEDABAD 2. MARKET SPLIT OF

The lack of available spaces in south

70% of the new launches in this market

10000 <2.5 mn 28.94% 29.78% 56.51%

housing units were launched. Lack of 2800

(Regulation & Development) Act, 2016 8000

witnessed the maximum launches. At

launching new projects. 6000

happened in the city. Of the total units

Tajpur RIV Devdi

Modasar Chosar Raska

Sari Kasindra Barejadi

4. AHMEDABAD MARKET 5. PRICE MOVEMENT

12 as well. saw a tepid growth of

in sales have had a bearing on the 9 Ahmedabad.

unsold inventory in Ahmedabad is less 1

manages to catch up with the average (`/SQ FT) CHANGE CHANGE

Bopal West 3,500 - 4,800 0% 0%

11 Chandkheda North 2,500 - 3,200 1% 0%

Motera North 2,800 - 3,600 0% 0%

BANGALORE METRO this year the much awaited north-south

BEHEMOTH IN THE WAITING

OUTER RING ROAD

With Phase 2 of the Bangalore Metro Going forward,

sales. H1 2017 witnessed an increase FIGURE -2

While the tightening of new launches 35% H1 2016 H2 2016 H1 2017

The residential market of Bengaluru Sarjapur. The region continues to be

4700 North Bengaluru, which in recent years

2017 compared to H1 2016.

market is reeling under pressure 25000

constricting conditions. 20000

property prices, strove to bounce back

observed a significant chunk of new

city accounted for the BSF CAMPUS

H2 2016 as well. Till H1 2016, majority

H1 2016 H2 2016 H1 2017

After the tumultuous H2 2016 when all stakeholders have reconciled to

Consistently falling since H1 2012, the

The lack of available spaces in south

While the tightening of new launches 35% H1 2016 H2 2016 H1 2017

The residential market of Bengaluru Sarjapur. The region continues to be

4700 North Bengaluru, which in recent years

in H1 2017, primarily Notably, most of the new launches in Veersandra

This development comes as a Alur Soladevanahalli Chikkabanavara Vignana

Similar to new launches scenario, South

In contrast, West Bengaluru saw

On the ticket size front, H1 2017