The document provides a summary of the key highlights of the Union Budget 2013-14 that may impact the real estate sector in India. Some of the key points include: 1) Introduction of 1% TDS on property transactions over Rs. 50 lakh to increase transparency. 2) Increase in excise duty on marble to increase construction costs. 3) Continued service tax exemption for affordable housing and single units. 4) Allocation of funds for rural housing, urban housing, and infrastructure development which will indirectly boost the real estate sector. 5) Increase in home loan interest exemption limit to promote home ownership. However, the budget remained silent on granting industry status to real estate and other

1. UNION BUDGET 2013 - A SNEAK PREVIEW
1Q 2013 | RESEARCH
Impact on Real Estate I Neutral
Company Change (%) Honorable Finance Minister P. Chidambaram started his budget speech 2013-14
BSE SENSEX -1.52
with the pretext of slowed global economic growth in 2012. He acknowledged
Realty Index -2.72
that the Indian Economy is challenged and mentioned that the Indian economy is
constrained because of a high fiscal deficit; its reliance on foreign inflows to
Anant Raj Ltd. -2.05
finance the current account deficit; decreased savings and lower investment; a
D B Realty Ltd. -3.54
tight monetary policy to contain inflation and strong external headwinds. He
DLF Ltd. -0.27
assured that the budget spelled out measures for each of the above mentioned
Godrej Properties Ltd. -2.97 issues. The agenda for the Union Budget 2013-14 is set for ‘higher growth
HDIL -5.62 leading to inclusive and sustainable development’. The finance minister
Hubtown Ltd. 0.23 projected the economy to grow by 4.8% in the next fiscal down from 5.5% in
Indiabulls Real Estate -7.51 2012-13.
Mahindra Lifespace -2.12
Orbit Corporation Ltd. -4.00
The real estate sector had high hopes this year from the Budget. However, the
budget remained silent on most of the major issues such as enactment of the Real
Parsvnath Developers -0.69
Estate (Regulation and Development) Bill, revision of Land Bill, granting industry
Peninsula Land Ltd. -2.93
status to the sector or infrastructure status to the much ailing affordable housing
The Phoenix Mills Ltd. -0.77 sector etc. None the less, there are few small measure has been taken for the real
Sobha Developers Ltd. -0.04 estate industry in this budget.
Sunteck Realty Ltd. -0.99
Unitech Ltd. -7.95 THE KEY HIGHLIGHTS OF THE BUDGET WHICH MAY IMPACT REAL ESTATE
Source: www.bseindia.com | Feb 28, 2013 SECTOR ARE AS FOLLOWS:
1% TDS on value of the transfer of immovable properties where the consideration
exceeds INR 50 lakh; No TDS for agricultural land transfer;
Impact: This move would help to increase the much needed transparency in the
real estate transactions. The provision of deducting 1% as TDS will improve the
reporting of such transactions and improve the government revenue from capital
gain taxes arising from such transactions.
Increase in excise duty rate on marble from INR 30 per sq. meter to INR 60 per sq.
meter;
Impact: Although the increase in excise duty rate on marble will affect the sector
by increasing in the overall construction cost. This impact will be minor considering
the percentage of cost allocated to this particular construction material and alternates
available. The impact will probably be felt more in the luxury residential and
hospitality construction sectors.
1 Colliers International www.colliers.com/india

2. 1Q 2013 | RESEARCH
UNION BUDGET 2013
KEY HIGHLIGHTS (CONTINUED)
Continuation of service tax exemption for low cost housing and single
residential units;
Impact: The service tax exemption for low cost housing and single
residential units will further encourage affordable housing scenario in the
country.
Reduction in rate of abatement from 75% to 70% for houses and flats of
more than 2,000 sq. ft. or valuing more than INR 1 Crore;
Impact: This move will particularly impact the premium residential
properties admeasuring at 2,000 sq. ft. or more on carpet area basis or
valuing more than INR 1 crore by making them more expensive due to
increase in service tax.
Increase in provision under Rural Housing Fund to INR 6,000 crore from
the existing INR 4,000 crore;
Impact: The rural housing fund maintained by National Housing Bank is
used to refinance lending institutions for providing loans for rural housing.
The increase in fund will help to provide housing finance at competitive
rates to targeted groups in rural areas.
Allocation of INR 2,000 crore for creation of Urban Housing Fund to
National Housing Bank;
Impact: With the success of rural housing fund where so far 400,000
families have taken housing loan, the urban housing fund has been created
to provide housing finance at competitive rates in urban areas.
Allocation of INR 15,184 crore for Indira Awas Yojna;
Impact: Under this scheme the financial assistance is provided to some
of the weakest sections of society to upgrade or construct a house.
Allocation of INR 15,184 crore will help to achieve Government’s vision to
replace all temporary houses from Indian villages by 2017.
www.colliers.com/india 2

3. 1Q 2013 | RESEARCH
UNION BUDGET 2013
KEY HIGHLIGHTS (CONTINUED)
Allocation of INR 5,000 crore to NABARD to finance construction of
warehouses, godowns, silos and cold storage units designed to store
agriculture produce;
Impact: This fund will enable finance for construction of new supply
chain facilities at competitive rates for both public and private sector and
boost the investment in retail and industrial sector.
Increase in the exemption limit of home loan interest payable under
section 24 (b) from 1.5 Lakh to 2.5 Lakh;
Impact: This increase will promote home ownership in turn give boost
to the affordable housing sector and other related industries like steel,
cement, brick, wood, glass. However, this incentive is made available only
for those taking their first home loan; upto a limit of INR 25 lakh.
Provision is made to claim this exemption in the second year in case the
limit is not exhausted in the first year itself.
Enhancement of the exemption limit for the general category of
individual taxpayers from INR 200,000 to INR 220,000; tax credit of INR
2,000 to individual tax payer having total income up to INR 5 lakh: 10%
surcharge on income above INR 1 crore;
Impact: Increase in disposable income in the hand of common man
which will in turn increase the spending power and boost domestic
investments. However, at the same time the surcharge on the individuals,
HUFs, Firms and entities having income above INR 1 crore will augment
government revenues and help the government. in fiscal consolidation.
Conclusion: From real estate perspective the budget seems to be salient;
the realty Index and most of the listed real estate companies reacted
negatively after the budget announcement. The budget stated that during
the 12th five year plan, infrastructure investment will go up to INR 55 lakh
crore out of which 47% is expected to come from private sector. The
Government has allocated INR 21,700 crore to PMGSY (Pradhan Mantri
Gram Sadak Yojana), INR 14,873 crore for JNNURM (The Jawaharlal Nehru
National Urban Renewal Mission)
3 Colliers International
www.colliers.com/india www.colliers.com/india

4. 1Q 2013 | RESEARCH
and INR 20,000 crore for Rural Infrastructure Development Fund.
Government has also encouraged the investment in the infrastructure via
raising funds from Infrastructure Debt Funds (IDF), India Infrastructure
Finance Corporation Ltd (IIFCL) in partnership with the Asian
Development Bank and issuing the tax free infrastructure bonds to a limit
of INR 50,000 crore. Further, the budget assured improvement in
communication regarding taxation and regulatory policy to boost overall
confidence of investor in doing business in India. All these measures are
thus expected to enhance capital inflow and indirectly give impetus to the
real estate industry.
Industry Expectations from Budget 2013 -14
Wish-list Results
Industry status to Real Estate Sector
Infrastructure status’ to Affordable Housing, Integrated Townships and Group Housing Projects
Enactment of the Real Estate (Regualtion and Development) Bill
Developer / Investors
Approval for The Land Acquisition, Rehabitilation and Resettlement Bill
Single window clearance for new projects
Extension of tax exemption under section 80 IA (4) for industrial parks
Relaxation in the deadlines proposed under revised DTC for Special Economic Zones
Extension of the external commercial borrowing (ECB) scheme to the entire Indian Real Estate Sector
MAT reduction to 5% for units located in Special Economic Zones (SEZ)
Incentives for low cost housing technoligies and raw material by reducing import duty, excise duty and
sales tax
Provision of additional FSI for public parking and utilities development
Additional FSI for developing smaller affrodable houses (300-500 sq ft)
Wish-list
Reinstatement of the tax holiday benefits under Section 80IB– (10) for Affordable Housing Projects
Increase in the exemption limit of home loan interest payable under section 24 (b) from 1.5 Lakh to 2.5 Lakh
Provision of additional FSI for public parking and utilities development
Increase in limit of interest subsidy upto INR 5 lakh from the existing INR 1 lakh
Individuals
Exclusion of principal repayments on home loans from benefits under section 80 C and inclusion of
separate tax exemption entity
Continuation of service tax for low cost housing and single residential unit.
Inclusion of Housing Finance Companies (HFCs) deposits for tax exemption u/s 80C of Income Tax Act
Increasing the deduction u/s 24(a) of the IT Act for repairs, maintenance, etc. from the current 30-50%
Removal of service tax on Under Construction Property
Extension of the existing scheme of interest subvention of 1% on housing loans upto INR 15 Lakh where
cost of the house does not exceed INR 25 Lakhs for another year
www.colliers.com/india 4

5. 1Q 2013 I RESEARCH
Colliers International (India) provides property services to property Investors and Occupiers. We
deliver customised service solutions utilising local and global knowledge in partnership with our
clients via our property Investment and Occupier service lines. These service lines include - Office
Services, Facility Management, Project Management, Residential Services, Investment Services United States: 147
Canada: 37
and Valuation & Advisory Services.
Latin America: 19
www.colliers.com/india Asia P
EMEA: 118
For research related queries please contact: $1.8 billion in annual revenue
Surabhi Arora MRICS 2.55 billion square feet under management
Associate Director, Research
Over 12,300 + professionals
surabhi.arora@colliers.com
Recent Reports :
GLOBAL RETAIL
MID-YEAR 2012 | RETAIL
INDIA OFFICE INDIA RESIDENTIAL APAC OFFICE GLOBAL RETAIL
MID-YEAR 2012 | RETAIL
INDIA BUDGET 2012-13
Q1 2012 | RESEARCH
RESEARCH TEAM
GLOBAL GLOBAL
A SNEAK PREVIEW
HIGHLIGHTS HIGHLIGHTS
Amit Oberoi MRICS
UNION BUDGET 2012 -13
Record Rents for Top Retail Corridors; Global Record Rents for Top Retail Corridors; Global
Slowdown Impacts Momentum Elsewhere Slowdown Impacts Momentum Elsewhere Budget Highlights | Real Estate
MARKET REACTION TO BUDGET
ANN T. NATUNEWICZ Manager | Retail Research | USA ANN T. NATUNEWICZ Manager | Retail Research | USA Company Change (%) Finance Minister Pranab Mukherjee started his budget speech 2012-13 in the
BSE SENSEX -1.19
Colliers’ 2012 Global Retail Streets survey found that of 129 locations tracked, 51 posted higher year Colliers’ 2012 Global Retail Streets survey found that of 129 locations tracked, 51 posted higher year
Realty Index -1.26
TOP 10 GLOBAL RETAIL STREETS* TOP 10 GLOBAL RETAIL STREETS* Anant Raj Inds -6.04
National Director, Valuation & Advisory; Research
(USD PER SQUARE FOOT PER YEAR) Retailers entering new markets—both developed and developing—continue to hedge risk by targeting (USD PER SQUARE FOOT PER YEAR) Retailers entering new markets—both developed and developing—continue to hedge risk by targeting mentioned that due to adverse global economic sentiments there has been a
the same one or two premier locations, generating heated competition and outsized rental rate growth D B Realty -2.02 slowdown in the Indian Economy but the fact is India still remains among the
ANNUAL the same one or two premier locations, generating heated competition and outsized rental rate growth
ANNUAL DLF 0.15
RENT CHANGE in a handful of space-constrained corridors. RENT CHANGE in a handful of space-constrained corridors. front runners in the economic growth in any cross country comparison. The
STREET/PRECINCT (USD)** (%) STREET/PRECINCT (USD)** (%) Godrej Properties -2.82
Companies with the most ambitious long-term expansion plans remain focused on emerging markets Companies with the most ambitious long-term expansion plans remain focused on emerging markets budget aims at faster, sustainable and more inclusive growth across sectors
New York – Fifth Avenue ||,||| ||.| New York – Fifth Avenue , . HDIL -5.21
with rapidly growing middle-class populations, but recently institutional capital has pulled back with rapidly growing middle-class populations, but recently institutional capital has pulled back
Hong Kong – Queen's ||,||| ||.| somewhat to favor core markets and investments. Hong Kong – Queen's , . Hubtown Ltd. -4.13
Road Central, Central (tie) somewhat to favor core markets and investments. rapid revival of high growth in private investment, removal of supply bottlenecks,
Road Central, Central (tie)
Indiabulls Real Estate -1.95 addressing malnutrition in 200 high burden districts and expedite improvement
Hong Kong – ||,||| ||.| Hong Kong – , .
Canton Road (tie) as Cairo and Athens), high streets with strong fundamentals remained remarkably resilient, suggest- Canton Road (tie) as Cairo and Athens), high streets with strong fundamentals remained remarkably resilient, suggest- Mahindra Lifespaces -0.72 in delivery system, governance and transparency.
London – Old Bond St.*** ||,||| ||.| ing, at least for now, some separation between macroeconomic issues and underlying real ing, at least for now, some separation between macroeconomic issues and underlying real Orbit Corp. -3.37
London – Old Bond St.*** , .
estate fundamentals.
Email: Amit.oberoi@colliers.com
Paris – Avenue des***
Paris – Avenue des*** estate fundamentals. Parsvnath Developers -4.04 From a real estate perspective, the budget remained silent on most of the major
Champs-Élysées issues including status of STPIs (Software Technology Parks of India), Real
Champs-Élysées Peninsula Land -3.18
Hong Kong - ||,||| ||.| has already begun to impact retailers’ revenues and could hinder landlords’ near-term ability to
Causeway Bay Hong Kong - , . has already begun to impact retailers’ revenues and could hinder landlords’ near-term ability to Phoenix Mills -2.65
Causeway Bay arrive at a political consensus on the issue of allowing 51% Foreign Direct
New York – |||| ||.| Sobha Developers 3.04
Madison Avenue New York – . Investment (FDI) in multi-brand retail.
Madison Avenue Sunteck Realty -1.13
This spring proved to be a tricky time to conduct global benchmarking, as market sentiment has THE KEY HIGHLIGHTS OF THE BUDGET WHICH MAY IMPACT REAL ESTATE
This spring proved to be a tricky time to conduct global benchmarking, as market sentiment has Unitech -1.68
deteriorated markedly since April. During the past year, virtually every entity making a forecast—
Milan – |||| (|.|)
including Colliers in our 2012 U.S. Retail Outlook Milan – (.)
deteriorated markedly since April. During the past year, virtually every entity making a forecast— Source: www.bseindia.com | Mar 16, 2012 SECTOR ARE AS FOLLOWS:
Via Monte Napoleone including Colliers in our 2012 U.S. Retail Outlook
Sydney – Pitt Street Mall
Source: Colliers International
* selected cities
|||| (||.|)
More than two years post-recession, though, results from our annual survey of High Street rents
OFFICE Residential Property
Via Monte Napoleone
Sydney – Pitt Street Mall
Source: Colliers International
( .)
projects.
** exchange rate as of March 31, 2012 illustrate that the world’s priciest retail corridors continue to attract the most sought-after tenants at lofty * selected cities More than two years post-recession, though, results from our annual survey of High Street rents
*** Zone A rents ** exchange rate as of March 31, 2012 illustrate that the world’s priciest retail corridors continue to attract the most sought-after tenants at lofty external commercial borrowing (ECB) norms as interest rate charged is lower in
rental rates. Eight of Colliers’ top ten Global Retail Streets in 2011 made the list again this year. The big
PROPERTY MARKET OVERVIEW
*** Zone A rents rental rates. Eight of Colliers’ top ten Global Retail Streets in 2011 made the list again this year. The big case of external borrowings in comparison to rates charged by domestic
Market Overview
story, however, lies with the explosive year over year rental growth achieved in a handful of markets. Six
story, however, lies with the explosive year over year rental growth achieved in a handful of markets. Six institutions.
REGIONAL RETAIL RESEARCH CONTACTS
AMERICAS
> Ann T. Natunewicz
20%.
At a regional level, streets in areas that entered 2007-08 better-positioned economically—Australia,
ASIA PACIFIC REGIONAL RETAIL RESEARCH CONTACTS
AMERICAS
20%.
At a regional level, streets in areas that entered 2007-08 better-positioned economically—Australia,
- Increase in provision under Rural Housing Fund to INR 4,000 crore from the
INDIA INDIA > Ann T. Natunewicz existing INR 3,000 crore.
OFFICE MARKET OVERVIEW
Ann.Natunewicz@colliers.com
slower to emerge from the recession. We will be watching these areas closely. Even as they represent Ann.Natunewicz@colliers.com
Surabhi Arora MRICS
EUROPE/MIDDLE EAST/AFRICA slower to emerge from the recession. We will be watching these areas closely. Even as they represent groups in rural areas at competitive rates.
> Zuzanna Baranowska some of the most attractive destinations for expansion-minded companies and yield-seeking investor EUROPE/MIDDLE EAST/AFRICA
they too are vulnerable to softening consumer demand and, for those with reliable data, encroachment of > Zuzanna Baranowska some of the most attractive destinations for expansion-minded companies and yield-seeking investor
Zuzanna.Baranowska@colliers.com QUARTERLY UPDATE | JANUARY | 2013
e-commerce. QUARTERLY UPDATE | NOVEMBER | 2012 Zuzanna.Baranowska@colliers.com they too are vulnerable to softening consumer demand and, for those with reliable data, encroachment of - Extension of the existing scheme of interest subvention of 1% on housing
ASIA e-commerce.
> Simon Lo ASIA loans up to INR 15 lakh where the cost of the house does not exceed INR 25
Simon.Lo@colliers.com 3Q 2012 > Simon Lo
survey, conducted in April 2012. The second incorporates content from Colliers’ brokerage and research Simon.Lo@colliers.com lakh for another year.
AUSTRALIA/NEW ZEALAND survey, conducted in April 2012. The second incorporates content from Colliers’ brokerage and research
> Nora Farren
teams worldwide who contributed market operational metrics, nuanced commentary on retail conditions, AUSTRALIA/NEW ZEALAND by providing cheaper loan to the end users.
teams worldwide who contributed market operational metrics, nuanced commentary on retail conditions,
Nora.Farren@colliers.com and forward-looking opinions on what the next year will hold for consumers, landlords, and investors. > Nora Farren
Nora.Farren@colliers.com and forward-looking opinions on what the next year will hold for consumers, landlords, and investors.
Accelerating success. Accelerating success. P. 1 | COLLIERS INTERNATIONAL
Accelerating success.
www.colliers.com
www.colliers.com www.colliers.com/india
Associate Director, Research
Email: Surabhi.arora@colliers.com
Sachin Sharma
Assistant Manager, Research
Email: Sachin.sharma@colliers.com
Heliana Mano
Assistant Manager, Research
Email: Heliana.mano@colliers.com
For general queries and feedback:
India.Research@colliers.com
Tel: +91 124 456 7580
For service line information contact:
Joe Verghese George McKay Amit Oberoi Poonam Mahtani
Managing Director South Asia Director National Director National Director
India Office & Integrated Services Valuation & Advisory Services Residential Services
joe.verghese@colliers.com george.mckay@colliers.com amit.oberoi@colliers.com poonam.mahtani@colliers.com
Vikas Kalia Saacketh Chawla Rajesh Shetty Suresh Castellino
National Director National Director National Director National Director
Office Services Project Management Facilities Management Investment Services
vikas.kalia@colliers.com saacketh.chawla@colliers.com rajesh.shetty@colliers.com suresh.castellino@colliers.com
This document has been prepared by Colliers International for general information only. Colliers International does not guarantee warrant or represent that the information contained in this document is
correct. Any interested party should undertake their own enquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties
arising out of this document and excludes all liability for loss and damage arising directly or indirectly there-from.
@ Copyright 2013-2014 All Rights Reserved.
This book is printed on 100% Recyclable paper
Accelerating success.