India Office Property Market Overview October 2013

Office Property Market Overview
INDIA
QUARTERLY UPDATE | OCTOBER | 2013
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3Q 2013 | OFFICE
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MACRO ECONOMIC OVERVIEW

Indias GDP growth rate was 4.5% in AprilJune 2013. This is the slowest growth rate in the last 4 years. Headline inflation, based on the wholesale price index was recorded at 6.46% for the month of September 2013 as compared to 6.10% for August 2013. The rupee slumped during the quarter and touched a record low of 68.85 per US Dollar, however, in the subsequent weeks the rupee recovered and currently, hovering between INR 62-63 per US dollar. This volatility in the exchange rated caused a major concern to foreign investors and Indian importers.
INR Crore In Percentage
ECONOMIC INDICATORS
Gross Domestic Product at Factor Cost
12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%
Oct - Dec 09
Apr - Jun 12
Oct - Dec 10
Oct - Dec 11
Jan - Mar 09
Jul - Sep 09
Jan - Mar 10
Jan - Mar 12
Jun - Sep 12
Oct - Dec 12
Jul - Sep 10
Jan - Mar 11
Jul - Sep 11
Jan - Mar 13 Apr-July 2013
Apr - Jun 09
Apr - Jun 10
ECONOMIC BAROMETER
Sep-12
REPO RATE REVERSE REPO RATE CRR INFLATION (WPI)1 PLR2 DEPOSIT RATE3 Exchange RATE INR - USD 54.31 63.30 8.00% 7.00% 4.50% 8.07% 9.75% - 10.50% 8.00% - 9.25%
FDI in Real Estate

16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 2009-10 2008-09 2010-11 2011-12 2005-06 2006-07 2007-08 2012-13 0
Sep-13
7.50% 6.50% 4.00% 6.46% 9.70% - 10.25% 7.50% - 9.00%
Slowing economic growth, rising inflation, depreciating rupee and volatile equity markets further intensified the economic risk in Indian markets. Concerned with the increasing inflation, the Reserve Bank of India increased the repo and reverse repo rate by 25 basispoints. In 3Q 2013, relocation and consolidation were the primary demand generators for commercial office space. Overall demand for leasing commercial real estate softened due to the conservative expansion plans of most companies. The six major cities i.e. Mumbai, NCR, Bengaluru, Chennai, Kolkata and Pune recorded an overall absorption of around 6.2 million sq ft which is approximately 20% lesser than the last quarter absorption of around 8 million sq ft. COLLIERS VIEW : The economic environment in India is expected to remain uncertain due to overall global economic conditions and upcoming elections in 2014. We anticipate moderate leasing demand across the cities in next coming quarters. Inspite of moderate demand, rental values are expected to remain stable due to limited supply as developers deferring completion of their projects and refrained from adding more speculative supply in the market.
BSE Sensex & Realty Index

130 120 110 100 90 80 70 60 50 20-Aug-13 1-Jul-13 21-Jul-13 31-Jul-13 10-Aug-13 30-Aug-13 9- Sep-13 19- Sep-13 29-Sep-13 29-Sep-13 11-Jul-13
INR- Euro
71.30
84.17
Return on Alternative Investments

Sep-12 Sep-13 YoY % Change
Gold SILVER EQUITY (BSE SENSEX) REALTY INDEX 18,542 1,735 19.742 1,292 6.47% -25.79% 31,925 63,188 29,675 48,475 -7.05% -23.28%
* Rebase to 100
BSE Sensex
Apr - Jun 11
Realty Index
Exchange Rates
80 75 70 65 60 55 50 1-Jul-13 11-Jul-13 21-Jul-13 31-Jul-13 10-Aug-13 20-Aug-13 30-Aug-13 9-Sep-13 19-Sep-13
Note : All values in the above tables are as on 15th of September 2012 and 2013 1 Wholesale Price Index 2 SBI Prime Lending Rate 3 SBI interest rate < INR 1 crore Term Deposits for 1 Year
USD
Euro
Source: Colliers International India Research
www.colliers.com
Apr -Jun13
INDIA | 3Q 2013 | OFFICE MUMBAI

The Mumbai commercial market remained sluggish during 3Q 2013. Except for few large deals (75,000 - 150,000 sq ft), demand in the primary market remained moderate. The market recorded absorption of approximately 0.65 million sq ft of Grade A office space, which is comparatively less than the last two quarters absorption of 1.8 and 1.5 million sq ft. The third quarter saw no major new completions of Grade A commercial office projects except Sahar Business Center by The Continental Group at Andheri, measuring about 0.1 million sq ft. Projects launched during this quarter include, Fulcrum by Hiranandani Developers at Andheri (East) having more than 0.3 million sq ft of Grade A commercial office space. The project is likely to be completed by 2Q 2014. Vacancy levels remain stable due to moderate demand and limited addition of new supply in the market. About 8 million sq ft of commercial Grade A space was available for fit-out, which is approximately 2% less than in the last quarter.
YoY
-3% 0% 1% -3% 0% 0% 0% 0% 0% 0% 0%
AVAILABLE Supply in Prime Areas

Navi Mumbai 2% Malad 6% Thane / LBS 21% Worli / Goregoan / Prabhadevi JVLR Kalina 4% 2% Powai 1% 4%
Lower Parel 20%
CBD 1%
Andheri East 24% BKC 15%
MumBAI
Grade a Capital Values

35,000 30,000 Capital Values -INR Per Sq.ft. 25,000 20,000 15,000 10,000 5,000 0
CITY OFFICE BAROMETER

3Q 2013
Vacancy Absorption Construction Rental Value Capital Value
4Q 2013F
Andheri East
Navi Mumbai
Micro Market
Rental Values
225 - 260 90 - 125 225 - 320 140 - 180 80 - 90 55 - 75 100 - 120 175 - 225 80 - 110 175 - 210 50 - 100
% Change
AVERAGE RENTAL AND CAPITAL VALUE TREND

250 Rental Values -INR Per Sq.ft. Per Month Forecast 30,000
QoQ
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
CBD Andheri East BKC Lower Parel Malad Navi Mumbai Powai Worli/ Prabhdevi Goregaon/ JVLR Kalina Thane / LBS
20,000 150 15,000 100 10,000 50
COLLIERS VIEW : A number of corporate are looking for consolidation and relocation options in order to optimise their real estate costs. Overall rental values are expected to remain stable except for SBD where a marginal increase can be witnessed in premium projects due to limited supply.
5,000
1Q2009
1Q2010
1Q2011
1Q2008
1Q2012
Note: Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. Grade A Rental/Capital Values: Indicative asking price for Grade A office space. Prime Office Average Rental Trends: Average market rental values for Grade A properties.
Note: All the rentals shown above are indicative Grade A rentals in INR per sq ft per month.
KEY MARKET TRANSACTIONS CLIENT

CGG Veritas DHFL HSBC PVR Pictures India Rabo Bank Sandwell Building Name Reliable Tech Park TCG Financial Center India Bulls Finance Center Lotus Corporate Park Peninsula Business Park Nitco Business Park AREA (Sq. Ft.) 18,000 30,000 72,000 12,000 30,000 20,000 LOCATION Navi Mumbai BKC Lower Parel Jogeshwari Lower Parel Thane TRANSCATION TYPE Lease Lease Lease Lease Lease Lease
KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME

Fulcrum Green Span Zillion Developer Hiranandani Group BK Birla Group Kanakia Spaces AREA (Sq. Ft.) 342,000 320,000 525,000 LOCATION Andheri East Lower Parel Kurla Expected Completion 2014 2013 2014
Colliers International |
1Q2014F
1Q2015F
1Q2013
p. 3
Capital Values -INR Per Sq.ft.
Demand and supply equilibrium had kept the overall price levels in check, and rental and capital values remained stable during the surveyed quarter.
Thane / LBS 25,000
Lower Parel
Malad
Powai
Goregaon / JVLR
200
Worli/ Prabhdevi
Kalina
CBD
BKC
INDIA | 3Q 2013 | OFFICE DELHI

The Delhi commercial office market continued to see sluggish occupier demand in 3Q 2013. Only a few mid-sized deals were concluded in Connaught Place, Jasola and Saket, resulting in 0.15 million sq ft of Grade A office space absorption during the quarter. There were no major new completions in Delhi in 3Q 2013. However, a commercial project was launched by Parsvanath Ltd in KG Marg in the CBD, called Parsvnath 27. Infrastructure Leasing & Financial Services Limited (ILFS) also announced a commercial development at East Kidwai Nagar under the National Buildings Construction Corporation Ltd. (NBCC) Redevelopment Scheme. These projects together will add more than 1.4 million sq ft of Grade A commercial office supply to the citys total inventory by the end of 2016. Due to supply - demand equilibrium, the city witnessed stable vacancy levels QoQ. Approximately, 1.7 million sq ft of Grade A commercial office space was available for fit-out primarily concentrated in Saket and Jasola.
YoY
-7% 8% 3% 9% 0%

Connaught place 2% Nehru Place 10%
Jasola 59%
Saket 29%
delhi

60, 000

3Q 2013
50,000 Capital Values -INR Per Sq.ft.
4Q 2013F
40,000
30,000
20,000
10,000
0 Connaught Place Nehru Place Jasola Saket Netaji Subhash
Micro Market
Rental Values
231 - 475 150 - 250 140 - 190 100 - 125 65 - 75
% Change
QoQ
0% 0% 0% 0% 0%
Connaught Place Nehru Place Saket Jasola Netaji Subhash
Rental Values -INR Per Sq.ft. Per Month
30,000 200 25,000 20,000 15,000 10,000 5,000 0 0
150 100 50
COLLIERS VIEW : Amid economic uncertainties, occupiers are likely to remain cautious, thus demand is expected to remain moderate in the coming quarter. Rental and capital values are expected to remain stable with an upward bias due to limited supply of Grade A office space in Delhi.
1Q2008
1Q2009
1Q2010
1Q2011
1Q2012
1Q2013
1Q2014F

Kensar Oriflame Raheja Developer Samsung Data Yes Bank Building Name Rasvilas Corporate One Rectangle One M6 Plaza TDI AREA (Sq. Ft.) 1,500 50,000 10,000 21,500 8,500 LOCATION Saket Jasola Saket Jasola Jasola TRANSCATION TYPE Lease Lease Lease Lease Lease

NBCC Plaza NBCC Commercial Complexes Parsvnath 27 Developer NBCC Ltd. NBCC Ltd. Parsvnath Ltd. AREA (Sq. Ft.) 350,000 1,300,000 150,000 LOCATION Okhla Kidwai Nagar K.G. Marg Expected Completion 2014 2016 2016
p. 4
| Colliers International
1Q2015F
Rental values for Grade A office space remained unchanged during the quarter. Capital values remained stable, as the city witnessed almost no strata-title sales in secondary markets due to increased circle rates.

300 Forecast 40,000 35,000
250
INDIA | 3Q 2013 | OFFICE GURGAON

Gurgaon observed persistent occupier demand during 3Q 2013. The citys overall absorption was approximately 1.6 million sq ft which is double that of the last quarter. However, this increase in absorption was primarily attributed to the 0.8 million sq ft of office space leased by Aon Hewitt in the Unitech Infospace SEZ. The city witnessed completion of 0.5 million sq ft of Grade A office space. Projects contributing this supply were BPTP Centra One developed by BPTP Ltd at Sector 61 and Splendor Trade Tower developed by Splendor Group at Sector 65. Projects launched during 3Q 2013 include Paras Square by Paras Group at Sector 63A; Spaze Arrow and Spaze Forum, both by Spaze Group located in Sectors 78 and 70, respectively. These projects together will contribute more than 0.8 million of Grade A commercial office space to the citys inventory by the end of 2016. Vacancy in Grade A office space has increased marginally; approximately 15.6 million sq ft of Grade A commercial office space was available for fit-out in 3Q 2013. Despite consistent demand, the rental values witnessed downward pressure in the IT/ITeS driven micro-markets such as Golf Course Road and Sohna Road, and rents declined 2 5% QoQ. Rents for non-IT/ITeS office space remained stable due to limited availability. COLLIERS VIEW : Demand will be primarily driven by corporate looking for large facilities to consolidate their business operations. Considering the large vacant stock and costconscious occupiers, rental values for IT/ ITeS office space will remain stable with a downward bias. However, rental values in commercial office space may see marginal appreciation.
25,000

National Highway 8 18% Udyog Vihar & Industrial Sectors 4%
Manesar 26%
Golf Course Road Ext./Sohna Road 36%
MG Road 5% DLF Cyber City Golf Course Road 4% 4%
Institutional Sectors (Sec44, 32, 18) 3%
Gurgaon

3Q 2013
4Q 2013F
20,000
15,000
10,000
5,000
MG Road
Golf Course Road
National Highway 8
Manesar
National Highway 8 (IT)
Udyog Vihar & Industrial Sectors
Golf Course Road Ext./Sohna Road (IT)
Micro Market
Rental Values
95 - 140 85 - 140 50 - 65 48 - 65 97 - 125 45 - 50 75 - 78 45 - 65
% Change
QoQ
-2% 0% -4% -2% 0% 0% 2% 0%
YoY
-2% 13% -9% -10% 13% -17% 2% 10%

MG Rd Golf Course Rd Institutional Sect. (18,32,44) Golf Course Rd Ext./Sohna Rd NH8 Manesar Cyber City Udyog Vihar & Industrial Sectors
Udyog Vihar & Industrial Sectors (IT)
Institutional Sectors (Sec44, 32, 18)
Golf Course Road Ext./Sohna Road
Manesar (IT) 10,000 Capital Values -INR Per Sq.ft. 8,000 6,000 4,000 2,000 1Q2015F 0
100
80
60
40
20
1Q2010
1Q2008
KEY MARKET TRANSACTION CLIENT

Aon Hewitt CB&I Fluor Daniel GSK Michelin Building Name Unitech Infospace DLF Infinity Towers DLF Building No. 10B One Horizon Centre Orchid Business Park AREA (Sq. Ft.) 800,000 94,450 70,000 68,400 73,400 LOCATION Sohna Road DLF Cyber City DLF Cyber City Golf Course Road Sohna Road TRANSCATION TYPE Lease Lease Lease Lease Lease

Paras Square Spaze Arrow Spaze Forum Developer Paras Group Spaze Group Spaze Group AREA (Sq. Ft.) 250,000 300,000 250,000 LOCATION Sector 63A Sector 78 Sector 70 Expected Completion 2016 2016 2016
1Q2009
1Q2012
1Q2014
1Q2011
1Q2013
p. 5
INDIA | 3Q 2013 | OFFICE nOIDA

Demand in NOIDA office market decreased marginally in the third consecutive quarter. The city witnessed absorption of approximately 0.4 million sq ft primarily from IT/ITeS sector followed by banking and financial services sector. Developers abstained from adding more speculative supply in the market and no new office project was launched during this quarter. However, a few projects located in sector 62 were completed this quarter including Okaya Blue by Okaya Group Jagran IT Park by Dainik Jagran Group and Highway Tower by Sun Ramified Solutions Pvt. Ltd. & Capital Broadcasting Company Pvt. Ltd. All of these projects contributed around 1.2 million sq ft of grade A office space. Grade A & B office space vacancy rate remained unchanged in 3Q 2013. About 8.6 million sq ft of Grade A & B office space was available for fit-out primarily located in Institutional Sectors 16A, 62 and Sectors 125 to 143 along with NOIDA Expressway.
Rental Values
50 - 90 30 - 75 90 - 110 18 -45

Institutional Sectors (Sec.16A, 62, 125-142 90.5%
Industrial Sectors (Sec. 1-9, 57-60, 63-65) (Grade B) 1.0% Commercial Sectors (Sec 18) (Grade B) 10.6% Commercial Sectors (Sec 18) (Grade B) 0.2%
noida
Grade A Capital Values

15,000

3Q 2013
4Q 2013F
12,000
9,000
6,000
3,000
Institutional Sectors (Non IT)
Institutional Sectors (IT)
Micro Market
% Change
QoQ
0% 0% 0% 0%
YoY
3% 6% 3% 13%
Institutional Sectors (Non IT) Institutional Sectors (IT) Comercial Sectors Industrial Sector
Rental and capital values remained stable across all the micro markets barring few premium projects which recorded marginal increase in capital values. COLLIERS VIEW : Looking ahead, corporate occupiers are expected to largely remain cost cautious and incline towards deferring expansion plans due to uncertain economic sentiments. However, leasing will remain moderate due to demand for consolidation and relocation. Rentals are expected to remain stable with downward bias due to large supply availability.

80 70 60 50 40 30 20 10 0 0 1Q2010 1Q2011 1Q2012 1Q2013 1Q2014 1Q2015F 1Q2009 4,000 6,000 Capital Values -INR Per Sq.ft. 8,000 Forecast 10,000
Commercial Sectors
Industrial Sectors
2,000

Alpha Media HCL Honnex Pearson VUE Standard & Poor Building Name MMR Towers Advant IT Park NCPL Web Tower SB Tower Stellar IT Park AREA (Sq. Ft.) 80,000 80,000 5,300 9,400 2,000 LOCATION Sector 126 Sector 142 Sector 9 Sector 16A Sector 62 TRANSCATION TYPE Lease Lease Lease Lease Lease

Amigo Cyber Park Oxygen SEZ Tower F NOIDA One Developer Amigo 3C Group KLJ Group AREA (Sq. Ft.) 250,000 250,000 600,000 LOCATION NOIDA Expressway NOIDA Expressway Sector 62 Expected Completion 2013 2013 2016
p. 6
INDIA | 3Q 2013 | OFFICE CHENNAI

The Chennai commercial market witnessed increased demand this quarter. The overall absorption of Grade A office space was approximately 1.68 million sq ft compared to 1.67 and 1.02 million sq ft in the previous two quarters. This increase in absorption is attributed to the few large floor size deals registered in the SEZ (Special Economic Zone) in Manapakkam and Taramani. New project completions this quarter include Centre Point 2 at Guindy and Padmavati at Nungambakkam. These projects together add approximately 0.2 million sq ft of Grade A office supply to the citys inventory. Projects launched this quarter were Rajkamal Suites at Nungambakkam and Srikanth at Ekkaduthangal measuring 0.1 million sq ft. During the surveyed quarter, overall vacancy levels remained stable, except for Taramani and Perungudi, which witnessed a marginal increase due to the addition of new supply in the previous quarter. More than 13.5 million sq ft of Grade A commercial office space was available for fit-out. About 65% of this available supply was concentrated in OMR IT and Ambattur. Despite increased demand, rental and capital values for Grade A office space remained stable across all micro-markets due to persistent large vacancy levels. COLLIERS VIEW : Despite a revival in overall occupier demand, rental values are expected to remain stable in view of large accumulated vacant stock. Vacancy levels are expected to dip marginally due to limited prime office supply in the pipeline in next three months.
OMR (IT Corridor) 50%
GST Rd 3% Velachery 1% Vadapalani 0%
Ambattur 24% Guindy (SBD) 7%
CBD 14%
chennai

10,000

3Q 2013
4Q 2013F
6,000
4,000
2,000
Guindy (SBD)
Ambattur
CBD
Micro Market
Rental Values
65 - 85 50 - 60 25 - 30 25 - 40 35 - 40
% Change
QoQ
0% 0% 0% 0% 0%
YoY
0% 4% 0% 0% 0%

60 Rental Values -INR Per Sq.ft. Per Month Forecast 8,000 7,000 6,000 40 5,000 4,000 3,000 2,000 10 1,000 0 1Q 2014 1Q 2015F 1Q 2008 1Q 2010 1Q 2011 1Q 2009 1Q 2012 1Q 2013 Capital Values -INR Per Sq.ft.
CBD Guindy (SBD) Ambattur OMR (IT Corridor) GST road
50
30
20

Amazon Bank of New York Mellon E&Y Fidelity Kotak Mahindra Bank L & T Infotech Building Name S P Infocity DLF SEZ DLF SEZ Ramanujam IT SEZ TVH Agnitio DLF SEZ AREA (Sq. Ft.) 645,000 70,000 73,000 270,000 60,000 189,000 LOCATION Perungudi Manapakkam Manapakkam Taramani Perungudi Manapakkam TRANSCATION TYPE Lease Lease Lease Lease Lease Lease
KEY UNDER CONSTRUCTION PROJECTS PROJECT NAME

Chennai One (BPO Park) Phase 2 Ramanujan IT City Little Wood Tower Block D SP InfoCity Developer ETL Tata Realty & Infrastructure Shapoorji Pallonji Group AREA (Sq. Ft.) 1,100,000 1,340,000 1,200,000 LOCATION OMR Taramani OMR Expected Completion 2013 2013 2013
OMR (IT Corridor)
p. 7
INDIA | 3Q 2013 | OFFICE BENGALURU (BANGALORE)

The Bengaluru commercial market witnessed weakening demand this quarter. The absorption of Grade A commercial office space was approximately 1 million sq ft, which is significantly less than the previous two quarters absorption of 2.9 and 2.7 million sq ft. This decline in absorption is primarily due to circumscribed demand from the IT/ITeS occupiers during the quarter. The third quarter saw completion of approximately 1 million sq ft of Grade A commercial office space. Projects completed this quarter include; Mind Comp Tech Park by Sattva Group at Whitefield; Pritech STPI by Primal Group; and Embassy Tech Square - Omega Block by Embassy Group, both at Outer Ring Road (ORR). Projects launched during this quarter include, Brigade Summit - Annexe by Brigade Group and Gopalan Axis SEZ, both located at Whitefield. The projects are expected to be completed by the end of 2015 and will contribute around 1 million sq ft of Grade A office space in the city.
Rental Values
80 - 100 20 - 40 24 - 33 23 - 32 50 - 60 50 - 60

Bannerghatta Road 3% Outer Ring Road 30%
Electronic City 12%
CBD 6%
Hosur Road 5% EPIP Zone/ Whitefield 44%
bengaluru

20,000

3Q 2013
4Q 2013F
15,000
10,000
5,000
Micro Market
% Change
QoQ
0% 0% 0% 0% 0% 0%
YoY
0% 0% 4% 0% 4% 1%
CBD Hosur Rd. EPIP Zone/ Whitefield Electronic City Bannerghatta Rd. Outer Ring Rd.
Both rental and capital values were remained largely stable across the micro-markets owing to large vacant stock and cautious demand. COLLIERS VIEW : The fourth quarter is expected to witness a moderate level of absorption as decision-making is expected to remain slow by corporations due to economic and political uncertainties. Considering the large available stock and cautious occupier demand, the price levels are likely to remain steady with marginal downward bias.
40 30
6,000
4,500 3,000
20
10
1,500
1Q2008
1Q2011
1Q2013F
1Q2009
1Q2010
1Q2012
1Q2014F

Accenture Adobe Genpact Global Edge Happiest Mind Qualcomm Building Name Prestige Technopolis Prestige Platina Tech Park Pritech Park Global Village Suhas Tech Park Prestige Tech Park AREA (Sq. Ft.) 250,000 250,000 120,000 40,000 70,000 60,000 LOCATION HMT Layout Outer Ring Road Outer Ring Road Mysore Road Electronic City Outer Ring Road TRANSCATION TYPE Lease Lease Lease Lease Lease Lease

Brigade Summit - Annexe Gopalan Axis - SEZ Prestige Platina Tech Park Developer Brigade Group Gopalan Group Prestige Group AREA (Sq. Ft.) 550,000 536,000 1,000,000 LOCATION Whitefield Whitefield Outer Ring Road Expected Completion 2015 2014 2015
p. 8
1Q2015F
The vacancy rate increased marginally and approximately 11.5 million sq ft of Grade A commercial office space was available for fitout.

60 Forecast 9,000
Bannerghatta Road
Hosur Road
EPIP Zone/ Whitefield
Outer Ring Road 7,500
0 Electronic City CBD 50
INDIA | 3Q 2013 | OFFICE KOLKATA

Kolkatas office market remained sluggish due to the overall negative economic scenario. The city recorded absorption of approximately 0.2 million sq ft. The micro- markets that remained most active were the Sector 5, Salt Lake and New Town. This quarter, various small commercial office projects were completed, including APJ Tower by APJ Group at Ruby, Arihant Benchmark by Arihant Group at Topsia, Credent Tower by Credent Group at Salt Lake, Neighbourhood Tower by Neighbourhood Group at Ballygunje Circular Road and Lemon Eco by Lemon Group at New Town. Together, all of these projects contributed more than 0.1 million sq ft of Grade A commercial office space to the citys total inventory. A few projects were launched during the quarter, including Arora Water Front by Arora Group, Primac Tower by Pasari Group and Window Technology by Window Technologies Ltd. Together, these projects will contribute more than 0.5 million sq ft of Grade A commercial office space to the citys total inventory by 1Q 2017. Rental values declined in the range of 1 - 7% QoQ in almost every micro-market, other than the CBD and Sector 5; where they remained stable. COLLIERS VIEW : In the coming quarter, overall office leasing is expected to remain moderate. Due to the prevailing high vacancy levels in the peripheral micro-markets, such as Sector 5 Salt Lake and Rajarhat, rentals are expected to remain under pressure.
NEW Supply in Prime Areas
East Kolkata 48%
Sector-5 52%
Kolkata

20,000

3Q 2013
4Q 2013F
15,000
10,000
5,000
CBD (Park St,Camac St,AJC Bose Road)
Ballygunge Circular Road
East Kolkata
Sector-5
Micro Market
Rental Values
100 - 125 90 - 105 70 - 80 48 - 50 34 - 38
% Change
QoQ
-6% -7% -6% 0% -1%
YoY
-6% -11% -6% -7% -1%

CBD Ballygunge Circular Rd. East Kolkata Sector-5 New Town, Rajarhat
100
PBD (New Town, Rajarhat) 10,000 Capital Values -INR Per Sq.ft. 8,000 6,000 4,000 2,000 0 1Q2014F
80
60
40
20
1Q2008
1Q2011
1Q2009
1Q2010
1Q2012

Acclaris Ericsson IFK BPO Jacobs KPMG PWC Building Name Ambuja Eco Space Ambuja Eco Space BIPL Infinity Lagoon Godrej Water Side South City Pinacle AREA (Sq. Ft.) 10,000 9,000 20,000 70,000 20,000 46,000 LOCATION New Town New Town Sector 5, Saltlake Sector 5, Saltlake Sector 5, Saltlake Sector 5, Saltlake TRANSCATION TYPE Lease Lease Lease Lease Lease Lease

IT Godrej Simocco Phase 2 Primac Tower Window Technology Developer Godrej Genesis Pasari Group Window Technology AREA (Sq. Ft.) 1,000,000 40,000 20,000 LOCATION Sector 5, Saltlake Sector 5, Saltlake Sector 5, Saltlake Expected Completion 2013 2014 2013
1Q2015F
1Q2013
p. 9
INDIA | 3Q 2013 | OFFICE PUNE

Steady occupier demand from the IT/ITeS sector kept Punes office market steady during 3Q 2013. The city witnessed absorption of approximately 0.85 million sq ft, which is about 15% less than the 1 million sq ft absorbed in both the previous quarters. An increasing trend of relocations and consolidations was seen in the market and resulted in a few large transactions (60,000 - 300,000 sq ft) in some micro-markets, such as Yerwada and Hadapsar. As no major projects were completed during the quarter, the citys vacancy rate declined marginally. The city has approximately 5.1 million sq ft of Grade A commercial office space available for fit-out. Most of this space is concentrated in certain micro-markets, such as Kharadi, Hinjewadi, Nagar Road, Kalyani Nagar and Baner. Developers continued to refrain from adding more speculative supply to the market. Only two small projects that totalled 140,000 sq ft of Grade A office space were launched during the quarter Pride Gateway by Pride Purple Group and Raikar by Chaitanya Group. Both projects are located at Baner.

Kharadi 25% Hadapsar/Fursungi 4%
Baner 10%
Hinjewadi 24%
Bund Garden 6% Airport road/ pune station 1% Aundh
2% Senapati Bapat Road 3% Bavdhan 1% Nagar Road 14% Kalyani Nagar 10%
pune

12,000

3Q 2013
4Q 2013F
8,000
6,000
4,000
2,000 0 Baner Kalyani Nagar Bund Garden Senapati Bapat Road Airport road/ pune station Nagar Road Hinjewadi Aundh Bavdhan Hadapsar/ Fursungi Kharadi 8,000 7,000 Capital Values -INR Per Sq.ft. 6,000 5,000 4,000 3,000 2,000 1,000 0 1Q2015F
Micro Market
Rental Values
45 - 55 50 - 60 42 - 60 45 - 60 55 - 85 35 - 45 45 - 60 40 - 60 30 - 45 30 - 50 32 - 65
% Change
QoQ
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
YoY
11% -8% -3% 24% 7% 7% 0% 18% 7% -6% 8%

80 70 60 50 40 30 20 10 0 Forecast
Baner Bund Garden Airport Rd. / Pune station Aundh Senapati Bapat Bavdhan Kalyani Nagar Nagar Rd. Hinjewadi Hadapsar/ Fursungi Kharadi
Rents and capital values remained unchanged across every micro-market during the surveyed quarter. COLLIERS VIEW : Overall leasing is expected to remain upbeat during the next quarter. However, the majority of this demand is expected to come from corporate looking to optimise costs through consolidation and relocation in peripheral locales because of the lower rents and quality space that is available there. Under these circumstances, we expect rents to remain stagnant across the micromarkets in the coming quarters.
1Q2008
1Q2009
1Q2010
1Q2012
1Q2013
1Q2011
KEY MARKET TRANSAcTIONS CLIENT

Barclays Cummins Deutsche Bank Principle The Event ZS Associates Building Name EON Cummins IOC Biz Bay Pentagon Panchshil Tech Park Pentagon AREA (Sq. Ft.) 100,000 700,000 300,000 560,000 42,000 560,000 LOCATION Kharadi Balewadi Yerwada Hadapsar Yerwada Hadapsar TRANSCATION TYPE Lease Lease Lease Lease Lease Lease

Business Bay Tower D Cummins BTS Nyati Corporate Developer Panchshil Panchshil Realty Nyati Group AREA (Sq. Ft.) 800,000 1,2000,000 350,000 LOCATION Yerwada Balewadi Yerwada Expected Completion 2013 2014 2014
p. 10
1Q2014F
INDIA | 3Q 2013 | OFFICE
OFFICE SUBMARKETS
Mumbai 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 submarkets. Delhi The commercial areas in New Delhi metropolitan area can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola and Saket . Gurgaon 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 citys new office destination. NOIDA 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. Chennai Prime office properties in Chennai are located in four principal sub-markets: the CBD, the IT Corridor, the SBD and the PBD. The SBD comprises Guindy, Manapakkam, Velachery and other areas. The PBD primarily includes Ambattur and GST Road, while the IT Corridor is the Old Mahaballipuram Road (OMR) in south Chennai. Bengaluru (Bangalore) Prime office properties in Bengaluru can be divided into three principal sub-market CBD, the SBD consisting of Banerghatta Road & Outer Ring Road (ORR) and PBD including Hosur Road, EPIP Zone, Electronic City and Whilefield. Pune The prime office sub-markets of Pune include Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp (CBD), while the Off CBD includes Aundh, Airport Road and Kalyani Nagar, among other locations. The eastern corridor, along with Nagar Road and Kharadi, have emerged as a preferred location for financial and IT/ITES companies. Kolkata The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge circular Rd, East Kolkata), East Kolkata and PBD (New Town & Rajarhat). The area around Park Street, Camac Street and AJC Bose road houses number of high-rises commercial buildings such as Chatterjee International Centre, Tata Centre, Everest House and Industry House among others.
City Barometer
Increasing as compared to previous quarter Decreasing as compared to previous quarter Remained stable from previous quarter
p. 11
INDIA | 3Q 2013 | OFFICE

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 and Valuation & Advisory Services. www.colliers.com/india For national offices services related queries please contact: George Mckay, South Asia Director Office & Integrated Services George.mckay@colliers.com Tel: +91 22 4050 4553 Vikas Kalia, National Director Office Services Vikas.kalia@colliers.com Tel: +91 124 456 7531 482 offices in 62 countries on 6 continents United States: 140 Canada: 42 Latin America: 20 Asia Pacific: 195 EMEA: 85 $2.0 billion in annual revenue 1.1 billion square feet under management Over 13,500 + professionals
Mumbai : Vaibhav Kumar, Office Director Vaibhav.kumar@colliers.com IndiaBulls Finance Centre, 1701-A, 17th Floor, Tower 3, Elphinstone Mills, Senapati Bapat Marg, Mumbai- 400 013. Tel : +91 22 4050 4527, fax : +91 22 2351 4272 Delhi NCR : Ajay Rakheja, Office Director Ajay.rakheja@colliers.com New Delhi : Statesman House, 4th Floor, Barakhamba Road, Connaught Place, New Delhi, India - 110001 Tel : +91 11 3044 6423, fax : +91 11 3044 6500 Gurgaon : Technopolis Building, 1st floor, DLF Golf Course Main Road, Sector 54, Gurgaon, India - 122002 Tel : +91 124 456 7500, fax : +91 124 456 7502 Bengaluru : Goutam Chakraborthy, Office Director Goutam.chakraborthy@colliers.com Prestige Garnet, Level 2, Unit No.201/202, 36 Ulsoor Road, Bengaluru, India - 560 042 Tel : +91 80 4079 5500, fax : +91 80 4112 3131 Pune : Suresh Castellino, Office Director Suresh.castellino@colliers.com Hotel Le Meridian, 101, R.B.M. Road, Pune, India - 411 001 Tel : +91 20 4120 6438, fax : +91 20 4120 6434 Chennai : Kaushik Reddy, Office Director Kaushik.reddy@colliers.com Heavitree Complex, Unit 1C, 1st floor, 23, Spurtank Road, Chetpet, Chennai, India - 600 031 Tel : +91 44 2836 1064, fax : +91 44 2836 1377 Kolkata : Soumya Mukherjee , Office Director Soumya.mukherjee@colliers.com Infinity Business Centre, Infinity Benchmark, Room No 13, Level 18, Plot G - 1, Block EP & GP, Salt Lake Sector V, Kolkata - 700 091 West Bengal, India Tel : +91 33 2357 6501, fax : +91 33 2357 6502 Recent Reports :
India office India reSIDENTIAL GLOBAL RETAIL BENGALURU RESIDENTIAL MARKET
REAL ESTATE
COLLIERS INTERNATIONAL INDIA RESEARCH
AUTHORS
Amit Oberoi MRICS National Director, Valuation & Advisory; Research Email: Amit.oberoi@colliers.com Surabhi Arora MRICS Associate Director, Research Email: Surabhi.arora@colliers.com Sachin Sharma Assistant Manager, Research Email: Sachin.sharma@colliers.com Heliana Mano Assistant Manager,Valuation & Advisory Email: Heliana.mano@colliers.com For general queries and feedback : India.Research@colliers.com Tel: +91 124 456 7580
This report and other research materials may be found on our website at www.colliers.com/India. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries 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 damages arising there from. Copyright 2012 - 2013 All Rights Reserved.
GLOBAL INDUSTRIAL
iNDIA bUDGET
PUNE RESIDENTIAL MARKET

REAL ESTATE
Colliers International India Research
Global | Retail | 2013 HIGHLIGHTS
BENGALURU RESIDENTIAL MARKET HEATS UP

ver the last two decades, Bengaluru has cemented its position as the leading IT/ITeS. destination amongst top Indian cities. In 2012, Bengaluru commanded a 30% market-share of all of the commercial (office) real estate absorbed across the top seven cities (Delhi NCR, Mumbai, Pune, Chennai, Hyderabad and Kolkata). Bengalurus commercial absorption share was greater than Mumbai and Delhi NCR. The increase in jobs has been the primary growth-driver for residential real estate. The citys population is expected to exceed 12 million by 2020, as compared to 8.5 million in 2011. Now of course the city is experiencing a surge in investors buying real estate. In spite of increasing prices, the city still is comparatively affordable compared to other major cities such as Mumbai and Delhi. With its higher rental yields and favourable currency exchange rates, Bengaluru is emerging as one of the most promising markets in the country for Residential investment. Moreover, the professional approach of developers is also providing much needed comfort to investors as well as end users. Considering the demand potential, it is not only Bengaluru-based developers that are investing, but many national level developers are also entering in this market. The government is also actively participating in the
Tourists and Brands Flock to High Streets

> Slower economic growth in China did not make a lasting dent on
tourist spending in Hong Kong. Retail sales have rebounded from the lows of Q3 2012. The latest figures from the Hong Kong Tourism Board show that Hong Kong received a total of 12.5 million inbound visitors during the three-month period ending May 2013, an 11.8% year-over-year increase. Nine million of those visitors were from Mainland China.
Colliers Picks: The latest Colliers International research unvails top investment destination in Bengaluru (Bangalore)
Global | Industrial | Midyear 2013 HIGHLIGHTS
PUNE RESIDENTIAL MARKET

LUXURIOUS YET AFFORDABLE
Global Top 10 Industrial Warehouse Rents*
LONDON (HEATHROW) HONG KONG SINGAPORE TOKYO OSLO GENEVA PARIS HELSINKI MINSK SYDNEY
Markets to witness residential real estate growth For investment purpose, the new residential developments located in peripheral areas alongside the
commercial developments are most attractive. Pune witnesses multidirectional growth of residential projects in various locations such as Pimpri, Chinchwad, Chakan & Talegaon in North Viman Nagar
Kharadi & Wagholi in East, Baner, Hinjewadi, Wakad & Pashan, Kothrud, Bavdhan & Wajre in west and Undri & Kondhwa in the South.
Trade Flows Bolster Industrial Demand in Asia and the Americas

> Despite anemic U.S. job growth, demand for North American industrial
warehouse space and modern distribution centers remains strong. In Q1 2013, the North American vacancy rate declined for the eighth straight quarter, down 20 basis points to 8.20%. Canadas vacancy rate stands at 4.13%.
21.95 21.83 21.02 20.61 20.04 16.20 14.70 14.70 13.23 13.23
Upcoming Infrastructure Driving Citys Growth
Top Ten Global Retail Rents USD/SqFt/Year

$3,052 $2,087 $1,994 $1,325 $1,223 $1,114 $930 $871 $836 $834 New York, NY, Fifth Avenue Hong Kong, Queens Road Central Hong Kong, Canton Rd, Tsim Sha Tsui New York, NY, Madison Avenue London, Old Bond Street Hong Kong, Causeway Bay Zurich, Bahnhofstrasse Sydney, Pitt Street Mall Milan, Via Monte Napoleone Paris, Champs lyses
> Combined with the arrival of international brands such as Apple,

Zara, and Topshop, in addition to luxury brands expanding their presence, the Australian CBD is once again a popular shopping destination. Pitt Street Mall in Sydney was ranked the 8th most expensive in Colliers High Street survey.
> Thanks in part to a recent drop in exports to the United States, Mexico
Ofce Absorption in Million sq ft among major 7 cities in India
has seen slowing economic growth. In Q1 2013, several Mexico City industrial warehouses were vacated, slightly increasing the vacancy rate to 3.49%.
une is a classic example of the real estate market where commercial activities lead the residential development in the city. Pune has a large manufacturing base, with many manufacturing as well as automobile companies having large plants. In last one decade the city has also emerged as a prominent IT/ITeS destination. Residential demand in the city is mostly from the large population of working professionals and the older generation retired from the mid-management cadre from Mumbai who find this place attractive due to affordability, peace and proximity to Mumbai. The
Collierss Pick: The areas that will witness maximum uptake would be those having commercial or industrial activities such as Hinjewadi, Magarpatta, Viman Nagar, Kharadi, Wagholi, Chakan, Pimpri, Bavdhan, Warje & Talegaon.
city also attracts students who are compelled by the citys offering of quality education. A large share of the upcoming premium residential space in Pune is in the form of township developments, the majority of which is concentrated in and around the IT and industrial hubs. In the past, the city has seen considerable appreciation in property values. The government is also actively participating in the economic growth of the city by undertaking various infrastructure projects such as Pune Metro, Bus Rapid Transit (BRT) and High Capacity Bus Route.
6-Month Change in Rent**

Factors Driving Growth
12.5% 11.1%
Rising per capita income reflects in demand for houses Gradual shift in the demographic profile with more service professionals with higher
LEGEND
> While occupier demand for industrial property in Brazil remains strong,
Favorable exchange rate (INR/USD) 1 $ = INR 56.45
> Demand for flagship space in London continues to exceed supply,
OFFICE PROPERTY MARKET OVERVIEW

INDIA
QUARTERLY UPDATE | JUlY | 2013
Residential Property Market Overview

INDIA
QUARTERLY UPDATE | AUGUST | 2013
driven largely from international retailers seeking a share of the spoils. This is leading to some notable rental growth in the West Ends core locations, with Regent Street witnessing double digit annual rental growth.
the market now appears to have stabilized into a more rational mode of sustained growth. So Paulo has seen positive net absorption, in spite of the final tally in 2012 showing a 23% decrease over the previous year.
> Demand for Beijings logistics properties remained as strong as it has

been since 2011. Rents grew by 11.41% year-over-year as of the end of Q1 2013. Shanghais industrial sector remained stable, with average asking rents for ground floor premises of high quality facilities in both the logistics and workshop sectors unchanged.
> So Paulo and Rio de Janeiro remain leaders in shopping quality

and diversity, achieving the most expensive rents and the focus of growth for luxury brands. Brazils High Street rents are the most costly in Latin America. So Paulos luxury shopping street Rua Oscar Freire saw a 15% growth in asking rents over the previous year. Rua Garcia DAvila in Rio de Janeiro saw rents grow by 6.7%.
income range Falling Rupee making NRI investments more lucrative High commercial absorption indicates sustained demand growth Source: Maharashtra Economic Survey, RBI, Colliers International India Research
EMEA APAC
> In Hong Kong, high quality warehouse buildings are nearly fully
occupied. Those users seeking to expand or rationalize their real estate costs have had to consider the option of split operations in lower quality buildings.
All Rents in USD * Exchange Rate as of March 31, 2013
3.9%
PARIS
2.2%
HELSINKI GENEVA TOKYO HONG KONG LONDON - (HEATHROW)
> Most U.S. high street rents grew over last year. In New York, Fifth
Avenue rents grew by 11 percent. At $3,052 per square foot, Fifth Avenue rents are the most expensive in the world. On Las Vegas Boulevard, asking rents grew by 25 percent. Philadelphias Walnut Street showed the biggest gains in the U.S., with 33.8 percent growth.
> Indian economic growth remained sluggish through the end of 2012,
however we expect industrial activity to improve, thanks to recent government actions. These include the government-proposed National Investment and Manufacturing Zones and the newly approved 51% foreign direct investment in multi-brand retail trading.
MIN
SK
OSL
SIN
GAP ORE
SYD
NEY
* December 2013 Rent (USD/PSF/YR) ** Local currency
58
THE INTERNATIONAL INDIAN July - August 2013
56
THE INTERNATIONAL INDIAN
THE INTERNATIONAL INDIAN
57
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Office Property Market Overview

research India office & forecast market Report

Research SYDNEY CENTRAL & forecast BUSINESS report DISTRICT

MACRO ECONOMIC OVERVIEW

Jan - Mar 13 Apr-July 2013

FDI in Real Estate

BSE Sensex & Realty Index

Return on Alternative Investments

Source: Colliers International India Research

INDIA | 3Q 2013 | OFFICE MUMBAI

AVAILABLE Supply in Prime Areas

Lower Parel 20%

Andheri East 24% BKC 15%

Grade a Capital Values

CITY OFFICE BAROMETER

AVERAGE RENTAL AND CAPITAL VALUE TREND

20,000 150 15,000 100 10,000 50

KEY MARKET TRANSACTIONS CLIENT

KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME

Capital Values -INR Per Sq.ft.

Thane / LBS 25,000

INDIA | 3Q 2013 | OFFICE DELHI

AVAILABLE Supply in Prime Areas

Grade a Capital Values

CITY OFFICE BAROMETER

50,000 Capital Values -INR Per Sq.ft.

0 Connaught Place Nehru Place Jasola Saket Netaji Subhash

Connaught Place Nehru Place Saket Jasola Netaji Subhash

Rental Values -INR Per Sq.ft. Per Month

30,000 200 25,000 20,000 15,000 10,000 5,000 0 0

KEY MARKET TRANSACTIONS CLIENT

KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME

Capital Values -INR Per Sq.ft.

AVERAGE RENTAL AND CAPITAL VALUE TREND

INDIA | 3Q 2013 | OFFICE GURGAON

AVAILABLE Supply in Prime Areas

Golf Course Road Ext./Sohna Road 36%

MG Road 5% DLF Cyber City Golf Course Road 4% 4%

Institutional Sectors (Sec44, 32, 18) 3%

Grade a Capital Values

CITY OFFICE BAROMETER

Capital Values -INR Per Sq.ft.

Golf Course Road

National Highway 8 (IT)

Udyog Vihar & Industrial Sectors

Golf Course Road Ext./Sohna Road (IT)

AVERAGE RENTAL AND CAPITAL VALUE TREND

Udyog Vihar & Industrial Sectors (IT)

Institutional Sectors (Sec44, 32, 18)

Golf Course Road Ext./Sohna Road

KEY MARKET TRANSACTION CLIENT

KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME

INDIA | 3Q 2013 | OFFICE nOIDA

AVAILABLE Supply in Prime Areas

Grade A Capital Values

CITY OFFICE BAROMETER

Capital Values -INR Per Sq.ft.

Institutional Sectors (Non IT)

Institutional Sectors (IT)

Rental Values -INR Per Sq.ft. Per Month

AVERAGE RENTAL AND CAPITAL VALUE TREND

KEY MARKET TRANSACTIONS CLIENT

KEY UNDER CONSTRUCTION PROJECTS BUILDING NAME