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India Q2 2016
Table of Contents
INDIA
Restricted Supply will put upward pressure on asking rents in most cities 	 4
MUMBAI
Mumbai Office...
4 Research & Forecast Report | September 2014 | Colliers International
Return on Alternative Investments
Economic Baromete...
5 Research & Forecast Report | July 2016 | <<India>> | Colliers International
0
10
20
30
40
50
60
70
80
90
100
Jan10
Jul10...
6 Research & Forecast Report | September 2014 | Colliers International
*Indicative Grade A rentals in INR per sq ft per mo...
7 Research & Forecast Report | July 2016 | <<India>> | Colliers International
Key under construction projects
Notes:
1. Of...
8 Research & Forecast Report | September 2014 | Colliers International
CBD and Aero
city witnessed
maximum leases
Small an...
9 Research & Forecast Report | July 2016 | <<India>> | Colliers International
quarter. They were Redfort Capital Tower 2 b...
10 Research & Forecast Report | September 2014 | Colliers International
Leasing activity
rebounded with
46% QoQ increase
R...
11 Research & Forecast Report | July 2016 | <<India>> | Colliers International
market of Udyog Vihar.
Rents remained stabl...
12 Research & Forecast Report | September 2014 | Colliers International
Office market
remained alive with
about 1 million sq...
13 Research & Forecast Report | July 2016 | <<India>> | Colliers International
Alphathum by Bhutani Infra, is an integrate...
14 Research & Forecast Report | September 2014 | Colliers International
Q2 2016 recorded
robust demand and
supply scenario...
15 Research & Forecast Report | July 2016 | <<India>> | Colliers International
million sq ft).
Buoyed by steady demand fro...
16 Research & Forecast Report | September 2014 | Colliers International
Demand revival
leads to highest
leasing in three
c...
17 Research & Forecast Report | July 2016 | <<India>> | Colliers International
operational in CBD itself. For the sixth co...
18 Research & Forecast Report | September 2014 | Colliers International
Rents surging up in
the wake of limited
new supply...
19 Research & Forecast Report | July 2016 | <<India>> | Colliers International
Pune market as of Q2 2016. Around 26% of th...
20 Research & Forecast Report | September 2014 | Colliers International
Healthy leasing by
Technology firms
increased office...
21 Research & Forecast Report | July 2016 | <<India>> | Colliers International
noted new supply influx of 1.1 million sq ft...
22 Research & Forecast Report | September 2014 | Colliers International
Office market
maintained status
quo in Q2 2016
Despi...
23 Research & Forecast Report | July 2016 | <<India>> | Colliers International
witnessed a marginal decline in vacancy lev...
Copyright © 2016 Colliers International.
ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any...
Office Property Market Overview India - Q2 2016
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Office Property Market Overview India - Q2 2016

Notwithstanding the global headwinds fostering slower growth
in the developed world, India appeared to remain the bright
spot evincing interest from leading fund managers. Office
market remained strong in Q2 2016 with 10.4 million sq ft
of office absorption totaling to about 19.2 million sq ft YTD.
Office absorption numbers recorded 18% increase qoq.The
growth was underpinned by positive economic data; despite a
dip in Business confi dence index, which stood at 43.8 in April
GDP for Q4 2015 (Jan – Mar 2016) was recorded at 7.9%,
an increase of 0.3% qoq. WPI infl ation was recorded in the
positive territory at 0.79 %.

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Office Property Market Overview India - Q2 2016

  1. 1. India Q2 2016
  2. 2. Table of Contents INDIA Restricted Supply will put upward pressure on asking rents in most cities 4 MUMBAI Mumbai Office Inventory geared up with new completions 6 DELHI CBD and Aero City witnessed maximum leases 8 GURGAON Leasing activity rebounded with 46% QoQ increase 10 NOIDA Office market remained alive with about 1 million sq ft office absorption 12 BENGALURU Office Q2 2016 recorded robust demand and supply scenario 14 CHENNAI Demand revival leads to highest leasing in three consecutive quarters 16 PUNE Pune market experiences high rental values across all micro markets 18 HYDERABAD Healthy leasing activities by technology firms increased office absorption 50% QoQ 20 KOLKATA Office market maintained status quo in Q2 2016 22
  3. 3. 4 Research & Forecast Report | September 2014 | Colliers International Return on Alternative Investments Economic Barometer Note: 1 Estimates as per International Monetary Fund 2 Wholesale Price Index (WPI), Latest estimates for Feb 2016 3 SBI interest rate < INR 1 crore Term Deposits for ≤ 1 Year Foreign Exchange INR - USD 67.60 67.37 INR- Euro 74.35 74.95 Parameters Q1 2016 Q2 2016 QOQ % Change Gold 27,583 31,507 14.23% Silver 35,403 44,755 26.42% Equity (BSE Sensex) 24,346 27,144 11.49% Realty Index 1,176 1,542 31.12% Research & Forecast Report India | Office July 2016 Restricted Supply will put upward pressure on asking rents in most cities Upward leap maintained in Q2 2016 with 10.4 million sq ft of office space absorption Notwithstanding the global headwinds fostering slower growth in the developed world, India appeared to remain the bright spot evincing interest from leading fund managers. Office market remained strong in Q2 2016 with 10.4 million sq ft of office absorption totaling to about 19.2 million sq ft YTD. Office absorption numbers recorded 18% increase qoq.The growth was underpinned by positive economic data; despite a dip in Business confidence index, which stood at 43.8 in April GDP for Q4 2015 (Jan – Mar 2016) was recorded at 7.9%, an increase of 0.3% qoq. WPI inflation was recorded in the positive territory at 0.79 %. Technology, BFSI and Manufacturing firms dominated expansion activities across all cities. Bengaluru remained the top contributor with 30% share of the absorption pie followed by NCR (21%), Hyderabad (20%), Chennai (15%), Mumbai (8%), Pune (5%) and Kolkata (1%). Few notable transactions include expansion by TCS, leasing over 4,00,000 sq ft in Noida and 3,75,000 sq ft in Bengaluru. IBM and Value Labs have expanded their footprint in Hyderabad by leasing about 3,00,000 sq ft and 2,20,000 sq ft respectively in Western suburbs. Noida established its position as an Electronic manufacturing hub with leading mobile manufacturers like Vivo Mobile and Oppo Mobile taking up 2,50,000 and 1,60,000 sq ft of office space respectively. The demand was well supplemented by the new supply and existing vacant stock, but vacancy levels have gone down in most of the cities due to limited addition of new supply. This Indicators Q2 2015 Q2 2016 Gross Domestic Product 7.50% 7.90% Business Confidence Index 56.40% 43.80% Repo Rate 6.75% 6.50% Reverse Repo Rate 5.75% 6.00% Cash Reserve Ratio 4.00% 4.00% Inflation (WPI)2 -0.91% 0.79% Prime Lending Rate 9.70% - 10% 9.70% - 10% Deposit Rate3 7.75% - 8% 7% - 7.75% Source: Government of India, Colliers International India Research
  4. 4. 5 Research & Forecast Report | July 2016 | <<India>> | Colliers International 0 10 20 30 40 50 60 70 80 90 100 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 Jan14 Jul14 Jan15 Jul15 Jan16 Index FDI in Construction Development Sector Gross Domestic Product at Factor Cost Nikkei India Services Business Activity Index quarter about 7.0 million sq ft was added to India’s total grade A office inventory. Rentals for Grade A buildings remained stable in majority of micro markets. Bengaluru, Hyderabad and Pune experienced an upward trajectory with 3-6% qoq average growth while Gurgaon, Noida, Delhi and Mumbai remained stable in terms of rents. Across cities, there a was high demand for Grade A office spaces in SBD areas. The micro markets which have recorded highest qoq rental appreciation across cities were CBD and Outer Ring Road in Bengaluru, Hadapsar/Fursungi in Pune and SBD in Hyderabad. Though steady numbers were recorded for Grade A capital values in most cities, an upward trend was also observed in Bengaluru, Noida, and Mumbai across a few micro markets. Now that the political uncertainty has dissolved, Hyderabad is an up and coming market to watch out for as several leading companies especially in the IT/ITeS sector are looking at Hyderbad as a preferred destination. Bangalore and Mumbai markets are expected to act as frontrunners on the supply side owing to expected completion of several new anticipated projects in coming quarters. Colliers View Slight expansion in business activity was recorded as seasonally adjusted Nikkei India Services Business Activity Index contracted by 5% and was registered at 51.0 in May 2016. Increased input costs contributed to the softer growth rate recorded in manufacturing production and services activity.There are other concerns over the uncertainty in direction of monetary policy on account of recent change in leadership at RBI and international happenings such as BREXIT. Although the UK exit from EU was unexpected and is affecting most global markets, in our opinion impact on the business outlook in India will be miniscule. Global investors are skeptical about reforms in China and Japan, but India will remain an emerging economy for potential investors. The Real Estate (Regulation and Development) Bill that was introduced in 2013 got President’s clearance on 25 March 2016 and as per Gazette Notification, Real Estate (Regulation and Development) Act (RERA) came into force from 1 May 2016. We expect that RERA will bring about much awaited discipline in the real estate sector affecting micro markets across India. Owing to these results we ought to alter our strong outlook for office market a little and expect marginal improvement in leasing activities for rest of the year. New supply is likely to remain restricted in most of the cities which will put an upward pressure on asking rents in preferred micro markets. Bengaluru will continue to lead the overall absorption but cities like Hyderabad, NOIDA will continue to outpace other Tier I cities due to affordable rents and availability of Grade A supply. Source: Government of India, Colliers International India Research 0% 2% 4% 6% 8% 10% 12% Q12005 Q32005 Q12006 Q32006 Q12007 Q32007 Q12008 Q32008 Q12009 Q32009 Q12010 Q32010 Q12011 Q32011 Q12012 Q32012 Q12013 Q32013 Q12014 Q32014 Q12015 Q32015 Percentage(%) 0 5000 10000 15000 20000 25000 30000 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 INRCrore 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Mumbai Delhi-NCR Bengaluru Chennai Pune Hyderabad Kolkata MillionSqFt 2015 H1 2016 Office Absorption
  5. 5. 6 Research & Forecast Report | September 2014 | Colliers International *Indicative Grade A rentals in INR per sq ft per month **Nariman Point, Ballard Estate and Fort MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY CBD** 200 - 250 0% 0% Worli/Prabhadevi 180 - 210 0% -5% Lower Parel 145 - 190 0% 0% BKC 225 - 320 0% 0% Kalina 150 - 220 0% 0% Goregaon / JVLR 120 - 140 0% 24% Andheri East 90 - 130 0% 5% Malad 80 - 100 0% 0% Powai 120 - 130 0% 0% Navi Mumbai 70 - 100 0% 6% Thane / LBS 60 - 75 0% 0% Rental Values Mumbai Office Inventory geared up with new completions With about 1.8 million sq ft of new supply added in Q2 2016, rents are likely to remain stable in coming quarters Mumbai office absorption at 0.71 million sq ft has witnessed a downward spiral with a 23% decrease in total absorption since Q1 2016 as mostly mid-sized transactions have occurred in Q2 2016 . The average deal size was about 14,000 sq ft this quarter, showing a decrease of 36% since last quarter. IT/ITeS, Engineering & Manufacturing and BFSI remained primary drivers of this demand with 25%, 23% and 23% share respectively. Location wise, about 38% of transactions were concluded in western suburbs followed by Central suburbs (24%), Central Mumbai (16%) and Navi Mumbai (14%). With a number of small and mid-sized transactions, Andheri remained the most active micro market this quarter. Around 10.5 million sq ft of Grade A supply is available for fit-outs in the Mumbai office market. Navi Mumbai and BKC contributed about 24% each in this supply, trailed by Western suburbs (21%) in Andheri, Goregaon, Malad and Kalina, followed by Central locations (24%) in Lower Parel, Worli, Prabhadevi, Powai, then Thane (5%) and CBD (2%). About 1.8 million sq ft of grade A new supply was added to the city inventory. Projects completed this quarter include Art Guild House (0.8 million sq ft) by Phoenix Market City at Source: Colliers International India Research Research & Forecast Report Mumbai | Office July 2016 Source: Colliers International India Research INDICATORS Q4 2015 Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  6. 6. 7 Research & Forecast Report | July 2016 | <<India>> | Colliers International Key under construction projects Notes: 1. Office Market: The major business locations in Mumbai are the CBD (Nariman Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandra Kurla Complex (BKC) and Andheri Kurla stretch. Powai, Malad and Vashi are the preferred IT/ITES destinations, while Airoli at Navi Mumbai and Lal Bahadur Shastri Marg are emerging as new office and IT/ITeS submakets. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Here Solutions Gigaplex 65,000 Airoli Lease Siemens Birla Aurora 60,000 Worli Lease Zee Empire Park 54,000 Vikhroli Lease Learning Mate Dee Gee IT Park 45,000 Andheri MIDC Lease Spykar Lotus Corporate Park 27,000 Goregaon East Lease BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Seawoods Grand Central Tower I & II L&T Infrastructure 1,350,000 Navi Mumbai 2018 Kanakia Wall Street Kanakia 1,000,000 Andheri East 2018 Top 5 Transactions of Q2 2016 Source: Colliers International India Research Kurla, K-Raheja Corp Building (0.3 million sq ft) by K-Raheja Corp and Boomerang (0.1 million sq ft) by Kanakia Spaces both at Andheri, Century Greenspan (0.4 million sq ft) by Century Estates at Worli and L&T Technology Center-IV (0.2 million sq ft) by L&T Realty at Powai. There was only one new launch this quarter, L&T Technology Center-V admeasuring 0.5 million sq ft; it is expected to be completed by 2017. Apart from this, K Raheja Corp is also planning to invest INR 2,000 crore in acquiring land and building 6 million sq ft of commercial space in the next two-and-a-half years in Navi Mumbai. Rental values remained stable in Q2 2016 in all micro- markets mirroring the pattern in previous quarters. However, a significant increase was observed in Goregaon/ JVLR, Andheri East and Navi Mumbai since last year. This change can be attributed to the limited supply and preference for these micro-markets among occupiers. Rental values also declined in Worli/Prabhadevi since last year due to limited demand in this micro-market. Colliers View We expect absorption to gain momentum looking at the current RFPs floating in the market. However, demand will be driven by Non-IT sectors. With new supply being introduced in the market, rents are likely to remain stable in the upcoming quarters with minor changes in some micro-markets in Central locations. Sanction of the new Development Plan prepared by BMC is eagerly awaited as it talks about an increase in FSI to 2 in selected locations. 150 200 250 350 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 100 50 0 10.00 8.00 9.00 2.00 3.00 4.00 5.00 6.00 7.00 1.00 0.00 Q4 Q3 Q2 Q1 2010 2011 2012 2013 2014 2015 2016 Forecast Q22008 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016 Q22017F Q22018F Q22019F Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  7. 7. 8 Research & Forecast Report | September 2014 | Colliers International CBD and Aero city witnessed maximum leases Small and mid-size transactions will dominate the office demand; rents likely to remain stable The second quarter of 2016 saw softer leasing demand for Grade A office premises with total absorption recorded at 0.09 million sq ft down from 0.34 million sq ft in the last quarter. BFSI remained the leading driver of office demand with over 52% share followed by IT/ITeS and Manufacturing companies taking up 20% share each. Connaught Place remained the most sought after location as about 48% of the total deals having taken place in this area. Small and mid-sized transactions kept the market alive with deal size averaging 8,000 sq ft. Besides this, Aero City emerged as the preferred destination with 31% share in total leasing activities. However, most of them were small sized transactions ranging from 2,000 to 18,000 sq ft. Most prominent office transactions of this quarter were lease of about 18,000 sq ft by Airtel and Power Finance Corporation each in Okhla and Connaught Place, respectively and 15,000 sq ft by Softbank in Bharti Worldmark located at Aero City. Rents witnessed downward pressure in Nehru Place due to overall lower leasing transactions. Jasola, Saket, Netaji Subhash Place and Aero city recorded largely stable rents both on quarterly and annual basis. On the other hand, due to lack of investment sales, capital values have registered an average 10% decline with maximum dip recorded in areas of Jasola, Saket and Netaji Subhash Place. About 1.4 million sq ft of Grade A office stock was available for lease and fit-outs this quarter. The city witnessed completion of two new Grade A projects in CBD area this Research & Forecast Report Delhi | Office July 2016 Source: Colliers International India Research Rental Values *Indicative Grade A rentals in INR per sq ft per month **Connaught Place ***Netaji Subhash Place MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY CBD** 180 - 450 0% 0% Nehru Place 175 - 235 -5% -2% Saket 130 - 200 0% 3% Jasola 90 -130 0% 0% NSP*** 70 - 120 0% 0% Okhla 30 - 100 0% -1% Source: Colliers International India Research INDICATORS Q4 2015 Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  8. 8. 9 Research & Forecast Report | July 2016 | <<India>> | Colliers International quarter. They were Redfort Capital Tower 2 by Parasvnath Developers at Bhaiveer Singh Marg with area of 85,000 sq ft and another commercial development at Shivaji Marg with a built up area over 2,00,000 sq ft. Also, two new projects were launched in the quarter with expected completion by 2017. Both these projects have a built up area of 40,000 sq ft each and are located at Okhla Phase III. Apart from this, another office building admeasuring about 100,000 sq ft area in Mohan Cooperative area is under renovation and likely to see completion by the end of 2016. In a move to boost the investor sentiments, the government is mulling plans to slash the circle rates in industrial areas of Udyog Nagar, Bawana and Narela which will help rationalize the gap between market rates and circle rates and revive interest among traders. Colliers View Overall rents are expected to remain stable in the short term. CBD and Aero city would remain the most preferred micro markets due to their location specific advantages. However, other micro markets such as Okhla and Netaji Subhash place will continue to garner interest of small and mid-size businesses looking to expand in Delhi at affordable rents. 0.20 0.40 0.60 0.80 1.00 1.20 1.40 0.00 2010 2011 Q4 Q3 Q2 Q1 2012 2013 2014 2015 2016 250 300 30,000 35,000 40,000 25,000 20,000 15,000 10,000 5,000 0 200 150 100 50 0 Forecast Q22008 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016 Q22017F Q22018F Q22019F Key under construction projects CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Power Finance Corporation Statesman House 18,000 Connaught Place Lease Airtel Plot 249 18,000 Okhla Lease Softbank Bharti Worldmark 15,000 Aero City Lease Dalmia Narain Manjil 14,000 Connaught Place Lease SBI Life Insurance Statesman House 8,500 Connaught Place Lease BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION NBCC Plaza NBCC Ltd. 1,300,000 Kidwai Nagar 2016 RPS Infi nia RPS Developer 1,200,000 Mathura Road 2016 Skipper House Govt. Trust 160,000 Barakhamba Road 2016 Top 5 Transactions of Q2 2016 Source: Colliers International India Research Notes: 1. Office Market: The commercial areas in New Delhi can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola and Saket . 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  9. 9. 10 Research & Forecast Report | September 2014 | Colliers International Leasing activity rebounded with 46% QoQ increase Rents are likely to remain stable with upward bias due to limited supply of quality space in preferred micro markets. Gurgaon office property market witnessed about 1.02 million sq ft of office absorption this quarter, totaling to about 1.72 million sq ft YTD. On quarterly basis, this was about 46% increase. IT/ITeS and BFSI remained the key occupiers this quarter with about 32% and 25% share respectively in total lease volume. Apart from this, manufacturing and consulting firms looking to expand or enter the market, leased smaller office spaces, which formed the bulk of transactions. NH8 and Sohna Road remained the most preferred micro markets sharing about 32% and 24% of total office absorption indicating an increased inclination towards cost effectiveness among corporate occupiers. About 6.8 million sq ft of Grade A office space was available for lease in Gurgaon this quarter. Nearly 27% of this available stock was located in NH8, 25% in Golf Course Extension Road and Sohna Road followed by 15% at Manesar and 11% at Golf Course Road. MG Road is left with limited vacant stock amounting to only 7% . Only 0.65 million sq ft was added to the city’s total inventory this quarter. Two new projects with a scheduled completion by the first quarter of 2018 have been launched at Golf Course Extension Road which include IREO City (1.5 million sq ft) and International Tech Park, Phase 1 (0.95 million sq ft). A small project Adipta Tower, with a built up area of 0.18 million sq ft was also launched in supply constrained micro Research & Forecast Report Gurgaon | Office July 2016 Source: Colliers International India Research Source: Colliers International India Research *Indicative Grade A rentals in INR per sq ft per month MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY MG Road 110 - 140 0% -4% Golf Course Road 95 - 210 5% 22% Institutional Sectors (Sec 44, 32, 18) 60 - 90 0% -3% Golf Course Road Ext./ Sohna Road 60 - 75 0% 8% National Highway 8 50 - 130 0% 0% Udyog Vihar & Industrial Sectors 30 - 45 0% 10% Manesar 38 - 45 0% -2% DLF Cyber City (IT) 100 - 110 0% 4% Rental Values INDICATORS Q4 2015 Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  10. 10. 11 Research & Forecast Report | July 2016 | <<India>> | Colliers International market of Udyog Vihar. Rents remained stable in most of the micro markets with the only exception of Golf Course Road, that registered a 5.2% surge on quarterly basis. Capital Values have remained stagnant qoq. In a move to align the prevailing ground realities and rejuvenate the buyer sentiments, the Haryana government slashed the circle rates by 15% which were held constant for the last two years. In another initiative, the district planning committee gave a green signal to the Transit Oriented Development Policy. Accordingly, the policy provided increased FAR upto 3.5 in the TOD zone, which shall be designated up to 800 meters width on both sides from the boundaries of the Right of Way (ROW) of MRTS corridor. Colliers View We anticipate demand momentum to continue from sectors like IT/ITeS, BFSI and Manufacturing. Due to connectivity enhancement, Golf Course Road will garner the occupier interest while traditional micro markets such as Udyog Vihar, Institutional Sectors and NH8 will continue to see transaction due to advantages in location and affordable rents. Rents are likely to remain stable with upward bias due to limited supply of quality space in preferred micro markets. 1 2 3 4 6 5 0 2010 2011 Q4 Q3 Q2 Q1 2012 2013 2014 2015 2016 100 120 140 8,000 10,000 14,000 12,000 6,000 4,000 2,000 0 80 60 40 20 0 Forecast Q22008 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016 Q22017F Q22018F Q22019F Notes: 1. Office Market: The prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also emerging as the city’s new office destination. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE XL Catlin DLF Silokhera 150,000 DLF Silokhera Lease Amazon Ambience Corporate Tower II 90,000 NH 8 Lease Schneider Electric Individual Building 80,000 Sector 44 Lease Data Telesis Brookfield SEZ 80,000 Tikri Lease Guardian Insurance Brookfield SEZ 80,000 Tikri Lease Top 5 Transactions of Q2 2016 Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION IREO City IREO 1,500,000 Golf Course Road Extn 2018 International Tech Park Phase 1 Ascendas 950,000 Golf Course Road Extn 2018 New Office Development DLF 700,000 NH 8 2017 Source: Colliers International India Research Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  11. 11. 12 Research & Forecast Report | September 2014 | Colliers International Office market remained alive with about 1 million sq ft office absorption Leasing momentum to strengthen; Sector 62 and Noida Expressway will remain preferred locations on account of improved metro connectivity Noida recorded significant transaction volume with absorption being registered at about 1.0 million sq ft in Q2 totaling to YTD figure of 1.4 million sq ft. Demand largely remained concentrated in IT developments and manufacturing setups in Institutional and Industrial sectors. About 45% of transactions were concluded in Sector 62 followed by 30% in Industrial Sectors like Sector 63 and Sector 58 and 25% on Expressway indicating increased inclination towards affordable spaces by corporate occupiers. Noida is witnessing increased attention from electronics manufacturing companies and is gradually ensconcing itself as the Manufacturing hub. This quarter, Vivo Mobile has leased 0.25 million sq ft area in World Trade Centre which is an R&D and manufacturing facility at Greater Noida. Oppo Mobile and Lava Mobile have leased 0.16 and 0.10 million sq ft in Sector 63. Noida is already home to leading vendors like LG, Samsung, Spice, Karbonn and has evinced interest from companies like Salcomp, a mobile phone charger maker. Companies like to remain in the vicinity of other vendors to leverage common component suppliers and economies of scale. This quarter witnessed the launch of a few new projects on Noida Expressway with scheduled completion by 2019. Research & Forecast Report NOIDA | Office July 2016 Source: Colliers International India Research Indicative Grade A rentals in INR per sq ft per month *Sector 18 **Sector 16A, 62, 125-142 ***Sector 124, 57-60, 63-75 MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY Commercial Sectors* 70 - 110 0% -10% Institutional Sectors (Non IT)** 80 - 100 0% 6% Institutional Sectors (IT)** 40 - 55 -10% -14% Industrial Sector (IT)*** 35 - 55 0% 0% Rental Values Source: Colliers International India Research INDICATORS Q4 2015 Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  12. 12. 13 Research & Forecast Report | July 2016 | <<India>> | Colliers International Alphathum by Bhutani Infra, is an integrated development spread across 25 acres in the prime location of Sector 90. Antriksh India Complex, launched in a low density region of Sector 150 with FSI of 1.5 offers both office and retail spaces. Advant Solaris/Navis with 3.3 million sq ft area was launched in Sector 142 on Noida Expressway. Increased transaction activity in IT and Manufacturing sectors, resulted in tightening in vacancy with overall vacant stock available for fit out recorded at 8.5 million sq ft down by 25% on quarterly basis. About 0.2 million sq ft was added to the stock with completion of ATS Towers in Sector 135 of Noida Expressway. Rents in largely remained stable in most of the micro markets. However, tightening of vacancy levels particularly in the Industrial Sectors of Noida resulted in a slight upsurge in rents qoq. Colliers View With favorable incentives for IT and Manufacturing units in place, and work on infrastructure projects like Metro Rail in Sector 62 and Noida Expressway in good progress, upswing in leasing activity will continue to persist in the short term. On account of its affordable rents, Industrial Sectors in Noida will continue to witness demand putting an upward bias on rents. Increasing supply side competition in Noida Expressway will weigh down on rents in this region. 70 80 90 8,000 10,000 12,000 14,000 6,000 4,000 2,000 0 60 50 40 30 10 20 0 1.00 0.50 1.50 2.00 2.50 3.50 3.00 0.00 Forecast 2010 2011 2012 2013 2014 2015 2016 Q4 Q3 Q2 Q1 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016F Q22017F Q22018F Q22019F Source: Colliers International India Research Notes: 1. Office Market: NOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and 125-142, industrial sectors include Sec 1-9, 57-60 and 63- 65 while sector 18 is the most developed commercial sector. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE TCS Okaya Tower 400,000 Sector 62 Lease Vivo Mobile World Trade Center 250,000 Greater Noida Lease Oppo Mobile ASF Synergy 160,000 Sector 63 Lease Lava Mobile Sector 63 100,000 Sector 63 Lease Indus Tower Okaya Tower 25,000 Sector 62 Lease Top 5 Transactions of Q2 2016 Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Assotech Business Cresterra Assotech 500,000 Greater Noida Expressway 2017 World One CBS International Projects Pvt. Ltd. 100,000 Sector 90 2017 Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  13. 13. 14 Research & Forecast Report | September 2014 | Colliers International Q2 2016 recorded robust demand and supply scenario ORR loses share in overall leasing activity while Whitefield and North Bengaluru picked up; rents are likely to inch up in coming quarters In Q2 2016, Bengaluru’s total office sector leasing stood at 3.6 million sq ft registering a hefty appreciation on the back of continued demand momentum across major sectors. In line with the trend witnessed in Q1 2016, IT/ITeS sector accounted for a majority share (71%) in the overall leasing followed by BFSI (17%). As per our earlier predictions, due to a dearth of vacant spaces on Outer Ring Road, the leasing has slowed down in this micro market and accounted for only 20% of the total absorption this quarter. EPIP Zone/Whitefield and North Bengaluru were the primary beneficiary of this spill over demand and garnered about 12% and 11% share respectively in total leasing this quarter. Significant tenants that leased space in North Bengaluru included Apple India Pvt. Ltd. And Comviva leasing about 38,000 sq ft and 85,000 sq ft respectively. Apart from leasing, we have also recorded couple of sales transactions this quarter. The most prominent one includes the purchase of 120,000 sq ft office space by E Clinical Research Centre in Whitefield. Healthy demand was well complimented by robust supply and about 2.5 million sq ft of grade A office space was added to city’s inventory in Q2 2016 registering a 30% appreciation on a quarterly basis. Substantial new supply was concentrated in peripheral micro markets of Sarjapur Road and EPIP Zone/Whitefield. IT-SEZs constituted 76% of the total new supply this quarter as one project each became operational in both Sarjapur Road (1 million sq ft) and EPIP Zone/Whitefield (0.54 Research & Forecast Report Bengaluru | Office July 2016 Source: Colliers International India Research Source: Colliers International India Research *Indicative Grade A rentals in INR per sq ft per month MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY CBD 90 - 150 9% 9% Outer Ring Road (Sarjapur - Marathahalli) 75 - 80 9% 30% Outer Ring Road (K.R. Puram - Hebbal) 65- 75 8% 24% Bannerghatta Road 55 - 68 3% 3% Hosur Road 25 - 40 2% 2% EPIP Zone/Whitefield 32 - 38 9% 9% Electronic City 28 - 36 0% 0% Rental Values INDICATORS Q4 2015 Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  14. 14. 15 Research & Forecast Report | July 2016 | <<India>> | Colliers International million sq ft). Buoyed by steady demand from IT/ITeS occupiers, all new launches in this quarter comprised of IT Parks and IT-SEZs. Nearly 3.5 million sq ft new space was launched, out of which 70% was in North Bengaluru locations such as Yelahanka and Thanisandra Road. Despite healthy demand supply equation, most of the micro markets recorded rental appreciation this quarter. CBD, EPIP Zone/Whitefield and Outer Ring Road witnessed 7-9% qoq appreciation as demand continued to outpace supply. Capital values largely remained stable in most of the markets except EPIP Zone/Whitefield. Colliers View We expect leasing momentum to continue in coming quarters. However, despite being a preferred location, ORR will continue to lose its share in total leasing activity, while other micro markets such as Whitefield, North Bengaluru and Sarjapur Road will see maximum leasing due to availability of vacant stock and relatively affordable rents. Overall rental values are likely to inch up further due to limited supply in almost all preferred micro markets. 6,000 8,000 10,000 4,000 2,000 0 70 90 80 60 50 40 30 10 20 0 4.00 2.00 6.00 8.00 10.00 12.00 14.00 16.00 0.00 Forecast Q4 Q3 Q2 Q1 Q22008 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016 Q22017F Q22019F Q22018F Notes: 1. Office Market: Prime office properties in Bengaluru can be divided into three principal sub-market— CBD/Off CBD (MG Road, Millers Road, Vittal Mallya Road etc.) the SBD (Banerghatta Road & Outer Ring Road (ORR) and PBD (Hosur Road, EPIP Zone, Electronic City and Whitefield). 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Tata Consultancy Services Brigade Bhuwalka Icon 375,000 Whitefield Lease Broadridge Financial Solutions Divyasree NR Enclave 156,000 Whitefield Lease Infosys Karle IT Park 150,000 Outer Ring Road Lease Ingersoll Rand IBC Knowledge Park 120,000 Bannerghatta Road Lease Google Bagmane Constellation IT Park 105,000 Outer Ring Road Lease BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Embassy Tech Village Embassy Group 2,900,000 Outer Ring Road 2018 Prestige Technostar Prestige Group 1,050,000 Whitefield 2018 Bagmane Constellation - Block Carina Bagmane Group 1,100,000 Outer Ring Road 2017 Top 5 Transactions of Q2 2016 Key under construction projects Source: Colliers International India Research 2010 2011 2015201420132012 2016 Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  15. 15. 16 Research & Forecast Report | September 2014 | Colliers International Demand revival leads to highest leasing in three consecutive quarters Occupier preference to remain concentrated in OMR Pre-Toll and CBD; leading to upward pressure on rentals in these micro markets During Q2 2016, Chennai witnessed substantial gross leasing of nearly 1.3 million sq ft as the commercial office sector rebounded post state elections recently. This is primarily due to stable macroeconomic fundamentals coupled with pent-up demand which led occupiers to execute expansion strategies in the city. OMR Pre - Toll remained the most preferred micro market and accounted for 43% share in total leasing volume followed by CBD and Mount Poonamalle Road sharing 21% and 17% respectively. IT/ITeS sector continued to remain the catalyst behind increased leasing volumes accounting for 73% of total demand followed by BFSI which had a 7% share. IBM, Ford, Athena Healthcare and BNP Paribas are major tenants who leased spaces in this quarter. Apart from leasing, this quarter also witnessed a a notable sales transaction as Mysys brought 30,000 sq ft and 13,000 sq ft space in ASV Chandilya located at OMR Post-Toll. In Q2 2016, the city witnessed minimal new supply infusion of about 0.2 million sq ft, out of which 70% became Research & Forecast Report Chennai | Office July 2016 *Indicative Grade A rentals in INR per sq ft per month Source: Colliers International India Research Source: Colliers International India Research MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY CBD 65 - 85 0% 3% Off CBD 55 - 65 4% 9% Ambattur 30 - 40 3% 21% OMR (Pre Toll) 55 - 65 2% 9% OMR (Post Toll) 25 - 40 0% 0% Mount Poonamalle Road 50 - 60 0% 0% GST Road 35 - 45 0% 0% Rental Values INDICATORS Q3 2015 Q4 2015 Q1 2016 Q2 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  16. 16. 17 Research & Forecast Report | July 2016 | <<India>> | Colliers International operational in CBD itself. For the sixth consecutive quarter, new IT-SEZ supply remained absent in the city pushing occupiers to consider alternate options, including OMR Post-Toll and even in non IT spaces in central city areas. Capital values and rents largely remained stable in this quarter. However, OMR Pre-Toll, Ambattur and Off CBD noted 2-4% marginal rental uptick over the previous quarter as vacancy dipped and no new supply entered these micro markets. Colliers View We expect, demand momentum to remain upbeat over the coming quarters due to positive occupier sentiments and a number of RFPs floating in the market. Also, planned IT-SEZ supply set for completion in the next two years is eagerly awaited by corporates looking at establishing or expanding presence in Chennai. Rents are expected to further appreciate in OMR Pre-Toll and CBD micro markets due to limited supply availability and occupier preference for these micro markets. 1 2 3 4 5 6 0 2010 2011 2012 2013 2014 2015 2016 Q4 Q3 Q2 Q1 6,000 7,000 8,000 9,000 5,000 4,000 3,000 2,000 1,000 0 90 70 60 80 50 40 10 30 20 0 Forecast Q22008 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016 Q22017F Q22018F Q22019F Notes: 1. Office Market: Prime office properties in Chennai are located in seven principal sub markets: CBD, Off CBD, Ambattur, OMR I, II & III, Mount-Poonamallee Road, GST Road. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE IBM DLF Cybercity 57,000 Mount Poonamalle Road Lease Athena Health SP Info City 52,000 Old Mahabalipuram Road Lease Ford SP Info City 52,000 Old Mahabalipuram Road Lease Caibre Point Chennai One Magnum 45,000 Old Mahabalipuram Road Lease BNP Paribas SP Info City 45,000 Old Mahabalipuram Road Lease BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Chennai One SEZ - South Block IG3 Infra Ltd. 1,200,000 Pallavaram Thoraipakkam Road 2016 Ramanujan IT City (Cambridge Block) TRIL 750,000 Taramani 2016 Ramanujan IT City (Infinity Block) TRIL 550,000 Taramani 2016 Top 5 Transactions of Q2 2016 Key under construction projects Source: Colliers International India Research Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  17. 17. 18 Research & Forecast Report | September 2014 | Colliers International Rents surging up in the wake of limited new supply Vacancy rate is at an all time low; restricted future pipeline for office supply will push the rents upward in short to medium term. Keeping up with trends in previous quarters, IT/ITeS sector was a frontrunner in the Pune office market scene with 56% share in overall leasing volume followed by BFSI (22%), Engineering & Manufacturing (11%) and others (11%). The city absorption was about 51% lower in Q2 2016 when compared to last quarter. The total office absorption recorded this quarter was 0.6 million sq ft totalling to 1.8 million sq ft YTD. The decrease in office absorption on QoQ basis was primarily due to a few big transactions concluded in Q1 2016. Kharadi, Hinjewadi and CBD locations were primary preferences among office occupiers with 21%, 20% and 15% share respectively. These were followed by Airport Road/ Pune Station (14%), Bavdhan (8%), Kalyani Nagar (7%), Hadapsar/Fursungi (5%), Nagar Road (5%), Baner and Aundh (5%). Notable transactions this quarter include Citibank which leased about 80,000 sq ft of office space in the SEZ EON Cluster – E at Kharadi. Fiserv took about 33,000 sq ft in Kumar Cerebrum IT Park 2 at Kalyani Nagar and other transactions were concluded by Innoplexus and Msys Technologies which secured 28,000 sq ft each in Midas Tower at Hinjewadi. Office space stock of over 3.7 million sq ft is available in Research & Forecast Report Pune | Office July 2016 Source: Colliers International India Research Source: Colliers International India Research *Indicative Grade A rentals in INR per sq ft per month MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY Baner 50 - 60 3% 10% Bund Garden 53 - 67 3% 4% Airport road/pune station 56 - 87 2% 12% Aundh 50 - 64 4% 9% Senapati Bapat Road 65 - 110 6% 25% Bavdhan 39 - 50 3% 11% Kalyani Nagar 52 - 65 4% 9% Nagar Road 52 - 65 4% 11% Hinjewadi 42 - 55 5% 13% Hadapsar/Fursungi 55 - 72 9% 23% Kharadi 48 - 90 6% 22% Rental Values INDICATORS Q4 2015 Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  18. 18. 19 Research & Forecast Report | July 2016 | <<India>> | Colliers International Pune market as of Q2 2016. Around 26% of this stock is at Pune’s IT hub, Hinjewadi followed by 15% at Airport road/ Pune station, 13%, 11% and 10% at Nagar Road, Bund Garden and Kharadi respectively, while 26% was available in other locations. New supply remained restricted and only a small development Power One admeasuring 0.03 million sq ft by Spara Properties at Mudhwa witnessed completion. Similarly, a few small new projects were launched this quarter totaling to about 0.21 million sq ft. Sai Square at JM Road, SBH at Wakad and Global Business Hub at Kharadi are to be completed in the next 1-2 years. Limited supply and continued dip in vacancy levels have led to a significant increase in rental values across all micro markets in Pune, with Hadapsar/Fursungi leading the way with a 9% increase since last quarter. Colliers View Pune market has experienced a supply crunch and rent escalation for past few quarters. In long run limited supply pipeline and continued escalation in rentals has the potential to decrease the overall attractiveness of the city for IT majors and other large occupiers. Thus rents will continue to rise for a short term but will stabilize within most micro markets in longer term. The recent launch of 14 smart city projects in Pune will trigger rapid development leading to an increased demand across commercial markets, however city will need new supply to adhere to this demand. 6,000 7,000 8,000 5,000 4,000 3,000 2,000 1,000 0 80 70 60 50 20 10 40 30 0 1 2 3 4 5 6 0 Forecast 2010 2011 2012 2013 2014 2015 2016 Q4 Q3 Q2 Q1 Q22008 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016 Q22017F Q22019F Q22018F Source: Colliers International India Research Notes: 1. Office Market: The prime office sub-markets of Pune include CBD (Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp), Off CBD (Aundh, Airport Road and Kalyani Nagar) and the eastern corridor, along with Nagar Road and Kharadi, which have emerged as a preferred location for financial and IT/ITES companies. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Citi Bank EON Cluster – E 80,000 Kharadi Lease Fiserv Kumar Cerebrum IT Park 2 33,000 Kalyani Nagar Lease Innoplexus Midas Tower 28,000 Hinjewadi Lease MSys Technologies Midas Tower 28,000 Hinjewadi Lease True Connect Suzlon 25,000 Kharadi Lease BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Global Business Hub Shubh Developers 100,000 Kharadi 2018 SBH Chordia Group 100,000 Wakad 2017 Sai Square Jalan Group 10,000 JM Road 2017 Top 5 Transactions of Q2 2016 Key under construction projects Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  19. 19. 20 Research & Forecast Report | September 2014 | Colliers International Healthy leasing by Technology firms increased office absorption 50% QoQ Demand to strengthen further in coming quarters; rents to see upward trends in SBD as demand likely to outstrip supply During Q2 2016, Hyderabad witnessed about 1.9 million sq ft total absorption across the city. Widespread expansion coupled with entry of new companies brought about vigorous qoq appreciation of 54% in overall leasing volumes. Prominent tenants such as IBM leased nearly 300,000 sq ft in Phoenix Avances in HITEC City. Value Labs also took up almost 220,000 sq ft in Lanco Hills in Manikonda. New age technology driven data analytics and Internet of Things (IoT) companies were the prime demand driver and accounted for about 76% of the overall leasing share. HITEC City remained the preferred micro market with 85% share in total leasing volume due to presence of several IT Parks and IT-SEZs. Apart from SBD, Central Business District (CBD) also commanded a 12% share in total leasing volume as some companies across IT/ITeS, Media and BFSI with mid-sized space requirements continued to prefer CBD due to ease of connectivity and proximity to other business hubs. Since SBD has traditionally witnessed maximum share in overall leasing, most of the upcoming supply is concentrated in locations within this micro market. This quarter, too, we Research & Forecast Report Hyderabad | Office July 2016 Rental Values *Indicative Grade A rentals in INR per sq ft per month Source: Colliers International India Research Source: Colliers International India Research MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY CBD 45 - 50 -4% -4% Off CBD 45 - 50 -9% -13% SBD 50 - 55 10% 18% PBD 25 - 30 0% 0% Rental Values Source: Colliers International India Research INDICATORS Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  20. 20. 21 Research & Forecast Report | July 2016 | <<India>> | Colliers International noted new supply influx of 1.1 million sq ft in Raidurgam and Nanakramguda which is 19% higher compared to the last quarter. While the entire supply comprises of IT-SEZ spaces, Grade A spaces account for 88% of the total supply. As vacancy levels are consistently decreasing in HITEC City, developers have started planning new projects in areas around HITEC City. In Q2 2016, three new projects comprising a total of 4.7 million sq ft were launched, out of which 85% will be concentrated in Nanakramguda and Raidurgam. These new projects are expected to become operational by December 2018. High demand for prime office spaces in SBD led to a 10% qoq rental appreciation in this micro markets. Rents in CBD decreased by 4% due to lack of grade A spaces. Colliers View We expect leasing volumes to strengthen in the second half of the year as a stable political climate and incentives provided by state government will help propel Hyderabad’s image as a leading center for innovation and design for IT/ ITeS companies. SBD will continue to remain the preferred micro market amongst occupiers. While new supply of nearly 1.2 million sq ft is likely to see completion in SBD in Q3 2016, rents may still appreciate further in this micro market due to a steady demand. 40 30 20 10 0 2010 20122011 2013 2014 2015 2016 Q4 Q3 Q2 Q1 Q22011 Q22012 Q22013 Q22014 Q22015 Q22017F Q22016F Q22018F Q22019F Source: Colliers International India Research 0 1 2 3 4 5 6 7 Notes: 1. Office Market: The prime office sub markets of Hyderabad include CBD (Banjara Hills Road No. 1,2, 10 and 12), Off CBD (Begumpet, Somajiguda, Raj Bhavan Road, S.P. Road, Himayath Nagar, Off Banjara Hills and Jubilee Hills), SBD (Madhapur, Gachibowli, Manikonda, Kondapur, Nanakramguda) and PBD (Pocharam, Uppal and Shamshabad) 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE IBM Avances Business Hub 300,000 HITEC City Lease Value Labs Lanco Hills 220,000 Manikonda Lease Development Bank of Singapore Wave Rock 148,000 Nanakramguda Lease HDFC Bank Roxana Palladium 100,000 Banjara Hills No.1 Lease DE Shaw Raheja Mindspace 87,000 HITEC City Lease BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION My Home Divija My Home Group 3,000,000 Raidurg 2018 Knowledge City Salarpuria Sattva 1,540,000 Raidurg 2017 Laxmi Cyber Towers Gar Corp 1,000,000 Nanakramguda 2018 Top 5 Transactions of Q2 2016 Key under construction projects 50 60 Forecast Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental Trend MillionSq.ftRentalValuesINRPerSFPerMonth
  21. 21. 22 Research & Forecast Report | September 2014 | Colliers International Office market maintained status quo in Q2 2016 Despite restricted supply in coming quarters, rents are likely to remain stable due to high vacancy levels In the last two quarters, Kolkata market has seen marginal improvement in enquiries mostly into Non-IT segment for expansion requirements. However, with an average deal size of 7500 sq ft the overall leasing volume was unable to pick up this quarter as well. We recorded about 0.12 million sq ft of office absorption this quarter totalling to about 0.3 million sq ft YTD. Sector V remained the occupier preference due to availability of grade A buildings and about 70% of the leasing took place in this location. Besides this, traditional CBD locations continued to see small transactions and shared about 17% in the total absorption pie. Most of the demand was catered to local companies looking for expansion. One of the notable transactions this quarter includes Senrysa Technologies lease of 18,000 sq ft space in Godrej Watersode located at Sector V. Financial Services firms like Karvy Financial and Destimoney have leased about 14,000 sq ft each in CBD zone and Sector V, respectively. Besides this we have also witnessed couple of small outright purchase transactions in a few recently completed grade A buildings. No major commercial project witnessed completion this quarter. City level vacancy was recorded at 24% with IT Zones in the micro markets of Sector 5, New Town and Rajarghat witnessing high vacancy level of about 30% and East Kolkata registered a vacancy level of 15%. Over 90% of the vacant stock is available in Rajarhat, New Town and Sector V, however, in recent times these micro markets Research & Forecast Report Kolkata | Office July 2016 Source: Colliers International India Research Source: Colliers International India Research *Indicative Grade A rentals in INR per sq ft per month **Park Street, Camac Street, Chowranghee Road, AJC Bose Road ***EM Bypass, Topsia, Ruby ****Salt Lake, New Town, Rajarhat MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY CBD** 85 - 115 0% 0% SBD*** 60 - 70 -3% -7% Sector V 40 - 45 -3% 0% PBD **** 34 - 35 0% 0% Rental Values INDICATORS Q4 2015 Q1 2016 Q2 2016 Q3 2016F Vacancy Absorption Construction Rental Value Capital Value City Office Barometer
  22. 22. 23 Research & Forecast Report | July 2016 | <<India>> | Colliers International witnessed a marginal decline in vacancy levels due to limited supply. In the coming quarters as well, supply will remain restricted apart from small office supply in a few mixed use projects. Rents and capital values in most of the micro markets remained largely unchanged however, a few buildings continued to demand premium over average market rents. This quarter IT/ITeS major, Wipro had proposed to set up an IT/ITeS SEZ over an area of 19.76 hectares in Rajarhat, but is now rethinking its strategy of expanding its business on account of deferment on part of government in giving SEZ status to the project. Colliers View Looking at the current stage of construction, the market is unlikely to see any major new supply of commercial space in the remaining quarters of 2016. However, rents are likely to remain stable due to high vacancy level. In the backdrop of sluggish real estate market, unless the government adopts a more investor friendly approach the status quo is expected to continue. Source: Colliers International India Research Notes: 1. Office Market: The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd, AJC Bose Rd), East Kolkata (EM Bypass, Topsia, Ruby), Salt Lake/ Sector V and New Town / Rajarhat. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All figures in the report are based on market information as on 25th June 2016. CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Senrysa Technologies Godrej Waterside 18,000 Sector V Lease Karvy Financial Apeejay House 14,000 CBD Lease Destimoney Sugam Business Park 14,000 Sector V Lease MET Technologies Brookfield Infospace 11,000 Rajarhat Lease ATO Engg. Srijan Corporate Park 10,700 Sector V Lease BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Technopolis 2 Forum Projects 1,200,000 Bantala 2016 PS Srijan Tech Park II PS Group & Srijan 925,000 Sector V 2016 Primac Tower Primac Group 47,000 Sector V 2016 Top 5 Transactions of Q2 2016 Key under construction projects Rental Values Capital Values 8,000 10,000 12,000 6,000 4,000 2,000 0 100 120 80 60 20 40 0 0.80 0.60 0.40 0.20 1.00 1.20 1.40 1.60 1.80 0.00 2010 2011 2012 2013 2014 2015 2016 Q4 Q3 Q2 Q1 Q22008 Q22009 Q22010 Q22011 Q22012 Q22013 Q22014 Q22015 Q22016 Q22017F Q22018F Q22019F Forecast Source: Colliers International India Research Source: Colliers International India Research Office Absorption Average Rental And Capital Value Trend MillionSq.ftRentalValuesINRPerSFPerMonth CaptialValuesINRPerSF
  23. 23. Copyright © 2016 Colliers International. ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. About Colliers International Group Inc. Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is an industry leading global real estate services company with more than 16,000 skilled professionals operating in 66 countries. With an enterprising culture occupiers, owners and investors worldwide. Services include strategic advice and execution for property solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting. help clients accelerate their success. Colliers has been ranked among the t International Association of Outsourcing Professionals’ Global Outsourcing for 11 consecutive years, more colliers.com 554 66 countries on 6 continents United States: 153 Canada: 34 Latin America: 24 Asia : 39 ANZ: 192 EMEA: 112 $2.5 billion in annual revenue 2 billion square feet under management 16,000 professionals Primary Authors: Surabhi Arora Senior Associate Director | Research +91 124 456 7500 surabhi.arora@colliers.com Divya Grover Senior Manager | Research Uttara Nilawar Manager | Research Parul Bhargava Senior Analyst | Research Amit Oberoi I National Director Valuation & Advisory Services & Research Mumbai: George Mckay I South Asia Director george.mckay@colliers.com Delhi / NCR: Vaibhav Mahurkar | Director vaibhav.mahurkar@colliers.com Bengaluru: Goutam Chakraborty I Senior Director goutam.chakraborty@colliers.com Hyderabad: Hari Prakash I Senior General Manager hari.prakash@colliers.com Pune: Rishav Vij I Senior Associate Director rishav.vij@colliers.com Chennai: Shaju Thomas | Senior Associate Director shaju.thomas@colliers.com Kolkata: Swapan Dutta I Senior Associate Director swapan.dutta@colliers.com Colliers International Technopolis Building, 1st Floor, DLF Golf Course Road, Sector 54, Gurgaon - 122 002 TEL +91 124 456 7500

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