India Real Estate 3494 PDF

RESEARCH
INDIA REAL ESTATE

RESIDENTIAL AND OFFICE
JULY - DECEMBER 2015
AHMEDABAD | BENGALURU | CHENNAI | HYDERABAD | MUMBAI | NCR | PUNE
INDIA REAL ESTATE
RESEARCH
CONTENT
04 INDIA
09 AHMEDABAD
12 BENGALURU
17 CHENNAI
22 HYDERABAD
27 MUMBAI
33 NCR
38 PUNE
Hetal Bachkaniwala
Vice President - Research
INDIA
INDIA REAL ESTATE
RESEARCH
RESIDENTIAL MARKET
In fact, the upward pressure on

prices is being felt in the coming
six months, with Bengaluru likely
to be the first city to start this trend
with a 7% price rise in H1 2016.
Encouraged by the improving sales
volume, we believe that developers
will start pushing new projects
in the coming six months. In H1
2016, new launches and sales are
estimated to jump by 8% and 10%,
400,000
300,000
458,228
359,548
419,439
329,630
309,730
274,109
244,944
263,720
100,000
466,422
368,568
200,000
2011
2012
2013
2014
2015
Source: Knight Frank Research
Note: The top eight cities are Mumbai, NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata
and Ahmedabad
FIGURE 2
HALF-YEARLY NEW LAUNCHES AND ABSORPTION TREND IN

THE TOP EIGHT CITIES
LAUNCHES
ABSORPTION
200,000
175,000
150,000
125,000
100,000
50,000
25,000
122,402
133,556
75,000
131,445
142,671
Price growth across all the eight

cities continues to fall, but there
is no imminent threat of a sharp
correction. The unwinding of
unsold inventory has helped in
stabilising prices and hence, we do
not expect prices to fall.
500,000
113,499
121,051
Steady sales volume and restricted

new launches have helped in
bringing down the stress level in
the residential market, with the
unsold inventory reverting to the
2013 level. While Mumbai leads
in this unwinding, Hyderabad and
Pune follow.
ABSORPTION
150,471
138,165
NCR led in terms of sales volume

growth at 15% during H2 2015.
However, Mumbai and Chennai
are still lagging behind, with a fall
in sales volume by 6% and 9%,
respectively.
LAUNCHES
159,259
135,644
While sales grew by 3% during

H2 2015 compared to H2 2014,
launches continued to fall by 13%.
The recovery in sales was largely
on account of the better-thanexpected sales volume during the
festive season.
ANNUAL NEW LAUNCHES AND ABSORPTION TREND IN

THE TOP EIGHT CITIES
Number of units
NCR (-20%), Mumbai (-36%) and

Bengaluru (-27%) witnessed the
sharpest drops in new launches
during 2015.
FIGURE 1
Number of units
2015 ended with the lowest

number of new launches and sales
volumes across the top eight cities
of India since 2010. While the sales
volume during the year was similar
to that in 2014, new launches fell
sharply, by 21%.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
Note: The top eight cities are Mumbai, NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata
and Ahmedabad
respectively, compared to the

same period of the previous year.
Pune and Bengaluru continue to
be among the best performing
residential markets in the country,
with low quarters to sell unsold
inventory and minimal age of
unsold inventory.
NCR continues to be the worst

performing market in India, as
it will take more than four years
to unwind the existing unsold
inventory of 206,000 units. This
is significantly higher than the
average time of less than three
years that other cities will take.
FIGURE 3
UNSOLD INVENTORY LEVELS IN THE TOP EIGHT CITIES

720,000
680,000
660,000
714,972
710,340
691,591
600,000
714,577
620,000
691,300
640,000
644,345
Number of units
700,000
H1 2013
H2 2013
H1 2014
H2 2014
H1 2015
H1 2015

FIGURE 4
CITY-WISE HALF-YEARLY NEW LAUNCHES

H1 2015
H2 2015
H1 2016 E
32,000
12,762
18,135
13,900
9,102
6,340
8,500
BENGALURU
PUNE
CHENNAI
8,062
7,491
9,070
21,400
28,284
29,870
NCR
8,372
10,680
10,760
29,458
34,000
28,000
8,000
5,457
5,740
5,300
16,000
18,887
20,776
16,998
Number of units
24,000
HYDERABAD
KOLKATA
AHMEDABAD
0
MUMBAI
FIGURE 5
CITY-WISE HALF-YEARLY ABSORPTION

H1 2015
H2 2015
H1 2016 E
35,000
25,000
20,000
15,524
20,740
16,449
9,091
9,420
9,000
7,123
7,780
7,450
5,883
8,036
8,345
7,751
9,075
8,077
5,000
22,234
29,684
28,367
10,000
25,000
23,800
26,000
15,000
28,446
34,135
29,868
Number of units
30,000
NCR
BENGALURU
PUNE
CHENNAI
HYDERABAD
KOLKATA
AHMEDABAD
0
MUMBAI
INDIA REAL ESTATE
RESEARCH
FIGURE 6
CITY-WISE UNSOLD INVENTORY LEVEL

H2 2014
H1 2015
H2 2015
150,000
35,183
33,517
31,477
35,183
36,950
35,874
41,205
41,368
39,782
HYDERABAD
KOLKATA
AHMEDABAD
3,510
3,620
3,650
3,490
3,540
3,600
2,640
2,730
2,770
PUNE
39,123
37,846
36,354
4,820
4,830
4,880
BENGALURU
CHENNAI
4,530
4,600
4,660
39,123
37,847
36,354
4,650
4,780
4,990
NCR
NCR
105,525
98,734
PUNE
MUMBAI
100,968
BENGALURU
191,370
195,828
206,028
50,000
4,500
4,580
4,580
100,000
204,070
194,510
181,151
Number of units
200,000
CHENNAI
HYDERABAD
KOLKATA
AHMEDABAD

FIGURE 7
CITY-WISE PRICE MOVEMENT

H1 2015
H2 2015
H1 2016 E
6,000
4,000
2,000
7,900
7,990
8,000
Weighted avg. price ( ` /sq.ft.)
8,000
0
MUMBAI
Note: The prices indicated for each city are the weighted average price

FIGURE 8
CITY-WISE QTS VS AGE OF UNSOLD INVENTORY ANALYSIS

17
HYDERABAD
Age of unsold inventory in quarters
15
MUMBAI
13
NCR
CHENNAI
11
AHMEDABAD
PUNE
BEGALURU
KOLKATA
7
5
5
13
11
15
17
Note: The size of the bubble indicates the

quantum of unsold inventory. QTS is the quarter
19 to sell unsold inventory
QTS
OFFICE MARKET
STOCK
400
21.0%
20.0%
19.0%
20%
18.0%
300
15.8%
454
360
490
393
525
432
561
472
100
408
330
200
2011
2012
2013
2014
2015
16%
12%

FIGURE 2
NEW COMPLETIONS AND ABSORPTION- ANNUAL

NEW COMPLETION
ABSORPTION
50
40
30
34.8
38.6
35.5
40.8
10
36.3
33.6
20
43.1
32.2
Rents in most of the cities have

increased steadily since the last
two years. Going forward, this
trend is expected to continue in
the coming six-month period, with
Pune and Bengaluru projected to
grow at the fastest pace.
24%
500
mn sq.ft
H2 2015 also observed a healthy

growth in absorption and new
launches, at 11% and 7%,
respectively. However, new
completions are expected to grow
at a faster pace of 8% in the next
six months, compared to just 4%
in absorption growth.
VACANCY (RHS)
600
In terms of absorption, 2015

managed to surpass the 2014
numbers. While 38.3 mn sq ft of
space was absorbed during 2014,
it increased by 7% in 2015.
Chennai and Pune led in terms
of annual absorption growth, at
37% and 15%, respectively. In
terms of new completions, NCR
and Bengaluru witnessed the
fastest growth, at 56% and 13%,
respectively.
OCCUPIED STOCK
48.3
41.2
Similar to 2014, demand surpassed

new completions in 2015 as well.
While 40.8 mn sq ft of office space
was absorbed in 2015, only 35.5
mn sq ft was delivered. This helped
in bringing down the vacancy level
in the past year.
FIGURE 1
OFFICE SPACE STOCK AND VACANCY LEVELS- ANNUAL
mn sq.ft.
Vacancy levels in India reached an

eight-year low of 15.8% in 2015.
Bengaluru had the lowest vacancy
level in the country, at 8%, and
Pune followed with 11.3%.
2011
2012
2013
2014
2015

FIGURE 3
NEW COMPLETIONS AND ABSORPTION- HALF-YEARLY

NEW COMPLETION
ABSORPTION
20
mn sq.ft
15
10
16.4
17.9
18.5
20.4
15.7
17.9
19.7
22.5
17.0
18.6
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
INDIA REAL ESTATE
RESEARCH
Hetal Bachkaniwala
AHMEDABAD
RESIDENTIAL MARKET
AHMEDABAD MARKET TRENDS
The situation in Ahmedabads
residential markets deteriorated
in 2015. While the sales volume
continued to fall, new launches
made a quick recovery.
FIGURE 1
AHMEDABAD MARKET TREND- ANNUAL

LAUNCHES
ABSORPTION
The sales volume in Ahmedabad

fell by 9% during 2015 to 16,826
units from 18,490 a year ago. This
is the citys lowest sales volume in
the last six years and has nearly
halved from its peak of 30,000
units in 2012.
40,000
30,000
23,867
25,592
14,011
18,490
15,552
16,826
10,000
30,758
30,577
20,000
45,120
29,694
Number of units
50,000
2011
2012
2013
2014
2015
On the other hand, new launches

have recovered by 11% during
2015, to 15,552 units from 14,011 in
2014. This has increased the stress
in the market and worsened the
oversupply situation in the city.

FIGURE 2
However, H2 2015 brings in some

cheer, with a positive sales volume
growth compared to the same
period last year. Fuelled by the
festive season during the second
half of the year, demand pushed
the sales volume up by 13%.
AHMEDABAD MARKET TRENDS - HALF-YEARLY

LAUNCHES
ABSORPTION
WT. AVG. PRICE (RHS)
12,000
3,000
10,000
2,800
2,400
8,062
7,751
7,491
9,075
9,070
8,077
2,000
4,991
8,019
4,000
9,021
10,472
Number of units
2,600
6,000
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
` / sq ft
8,000
2,200
2,000
Going forward, we expect new

launches to increase by 13%
during H1 2016, with North and
East Ahmedabad leading the
way. However, the sales volume
will witness a muted growth,
as homebuyer sentiment is still
lackadaisical.
MICRO-MARKETS OF THE AHMEDABAD

Micro-market
Central
10
Locations
Paldi, Vasna, Navrangpura, Maninagar, Dudeshwar, Ambawadi
East
Naroda, Vastral, Nikol, Kathwada Road, Odhav
North
Gota, New Ranip, Tragad, Chand Kheda, Motera
South
Narol, Vatwa, Vinzol, Hathijan
West
S G Highway, Prahlad Nagar, Bopal, Thaltej, Science City Road
INDIA REAL ESTATE
The premium market of

Ahmedabad witnessed a
phenomenal recovery in sales
volume during H2 2015. While
sales were up by 30% in this
segment, new launches dropped
by 60%.
FIGURE 3
MICRO-MARKET SPLIT OF LAUNCHED UNITS

H2 2014
H1 2015
H2 2015
2,500
2,000
959
1,825
2,617
578
1,747
636
1,725
1,891
1,670
500
1,458
2,103
1,118
1,500
270
503
1,450
Number of units
3,000
1,000
EAST
NORTH
SOUTH
WEST
0
CENTRAL
MICRO-MARKET-WISE RESIDENTIAL SALES

H1 2015
H2 2015
Fewer new launches and the

steady growth in sales volume
have boosted project prices in
the premium segment, with H2
2015 observing a 9% price growth
compared to H2 2014.
Number of units
3,000
2,500
2,000
1,500
353
647
813
2,852
2,474
2,760
2,391
2,190
2,691
1,095
1,050
1,228
1,328
1,390
1,584
1,000
500
CENTRAL
EAST
NORTH
SOUTH
WEST
West Ahmedabad is the worst

performer among the citys zones.
High ticket sizes and a supply glut
are the primary reasons for such
the poor performance reported by
this zone.
Central Ahmedabad is currently
the best performing market, as
restricted supply and steady
demand have helped in bringing
down the quarter to sell unsold
inventory there.
FIGURE 5
MICRO-MARKET-WISE QTS VS AGE OF INVENTORY

14
CENTRAL
Premium markets in Ahmedabad

are locations where the average
ticket size of new launches is
above `15 mn. Some of the
citys prominent premium
market locations are Ambawadi,
Navrangpura, Shahibaug,
Bodakdev, Jodhpur and
Prahladnagar.
Lack of investor interest in the
peripheral markets due to poor
price performance has shifted
the focus back to the premium
locations.
FIGURE 4
H2 2014
RESEARCH
WEST
NORTH
SOUTH
11
EAST
With poor price appreciation and a

supply glut in the rest of the citys
zones, investor focus has shifted
back to Central Ahmedabad. This
has helped in pushing up the sales
volume in this zone during the last
12 months.
5
5
11
14
QTS
11
Sangeeta Sharma Dutta

Lead Consultant - Research
BENGALURU
12
INDIA REAL ESTATE
RESEARCH
RESIDENTIAL MARKET
BENGALURU MARKET TREND- ANNUAL
LAUNCHES
80,000
70,000
Majority of these launches were

observed in the distant peripheral
locations of South Bengaluru, such
as Chandapura, Electronics City,
Begur and Hosa Road
North Bengaluru accounted for
45% of the total new launches in
the premium housing segment
(ticket size of above INR 20 mn),
in areas such as Hennur Road,
Thanisandra and Hebbal
40,000
68,134
55,701
49,684
51,918
10,000
78,300
57,366
30,000
2011
2012
2013
2014
2015

FIGURE 2
BENGALURU MARKET TRENDS - HALF-YEARLY

LAUNCHES
ABSORPTION
40,000
5,500
30,000
5,000
` / sq ft
25,000
20,000
15,000
29,870
28,367
5,000
4,500
28,284
29,684
10,000
21,400
22,234
Number of units
35,000
32,589
28,445
Almost 88% of the total new

launches in H2 2015 in the budget
housing segment (ticket size of
below INR 2.5 mn) were in South
Bengaluru
50,000
20,000
Weighted average price continued

to move upwards. H2 2015 saw
weighted average price increase
by 4%.
While other markets saw decline
in new launches, South Bengaluru
bucks the trend in H2 2015. An
increase of 30% in new launches
Y-o-Y was witnessed in the South.
60,000
67,773
50,692
New launches continue to fall

Y-O-Y in H2 2015 as compared to
H2 2014, to the tune of 13%; sales
witnesses a marginal recovery of
4% during the same period.
On the other hand, H2 2015
performed better as compared to
the number of launches in H1 2015
by 32%
ABSORPTION
90,000
63,261
41,944
Absorption, although the lowest in

three years, fell by just 7% in 2015
vis--vis 2014
FIGURE 1
35,545
27,256
This can be largely attributed

to the cautiousness shown by
developers in the first half of
the year, restricting their project
launches
BENGALURU MARKET TRENDS
Number of units
On an annual basis, steep decline

in new project launches observed
in 2015, to the tune of 27% as
compared to 2014 - the lowest
number of launches in five years
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
4,000
Notably, 66% of the total new

launches witnessed in Bengaluru
belonged to the ticket size of INR
2.5-7.5 mn
13
MICRO-MARKETS OF THE BENGALURU

Micro-market
Central
Locations
MG Road, Lavelle Road, Langford Town, Vitthal Mallya Road, Richmond Road
East
Whitefield, Old Airport Road, Old Madras Road, KR Puram, Marathahalli
West
Malleswaram, Rajajinagar, Yeshwanthpur, Tumkur Road, Vijayanagar
North
Hebbal, Bellary Road, Hennur, Jakkur, Yelahanka, Banaswadi
South
Koramangala, Sarjapur Road, Jayanagar, JP Nagar, HSR Layout, Kanakapura Road,

Bannerghatta Road
Demand in Bengaluru witnessed
sluggish growth of 4% in H2 2015
vis--vis H2 2014.
FIGURE 3

H2 2014
H1 2015
H2 2015
In terms of sales growth,

West Bengaluru leads with
30% increment Y-o-Y. Metro
connectivity and availability of
lifestyle projects is attracting
home-buyers in the region.
10,000
8,000
8,973
4,759
7,403
11,008
7,888
7,050
8,260
6,811
10,725
4,293
1,947
3,075
6,000
55
0
30
Number of units
12,000
CENTRAL
EAST
NORTH
SOUTH
WEST
4,000
2,000
0
West Bengaluru the best

performing market in the city with
lowest QTS
FIGURE 4

H2 2014
H1 2015
South Bengaluru, in spite of having

the highest launches, performed
poorly in H2 2015
H2 2015
14,000
10,000
8,000
6,000
48
74
29
6,681
5,034
7,698
7,439
6,455
7,401
12,003
8,901
11,618
4,000
CENTRAL
EAST
NORTH
SOUTH
2,275
1,771
2,938
Number of units
12,000
2,000
0
14
East Bengaluru, accounting for

almost 50% of the new launches
in the INR 2.5-5 mn ticket size,
also saw increased sales in H2
2015, while marginal decline was
observed in North and South
Bengaluru.
WEST
INDIA REAL ESTATE
RESEARCH
FIGURE 5

CENTRAL
10
EAST
WEST
NORTH
SOUTH
5
5
10
11
12
QTS
OFFICE MARKET
The Bengaluru office market
continued to lead the way with the
highest office space absorption
in the country. With 5 mn sq ft
transacted in H2 2015, the city
recorded a total absorption of
11.10 mn sq ft in 2015.
The absorption in 2015 emerged

as the highest in four years, falling
marginally short of the absorption
in 2011.
Bengaluru attracted substantial
occupier interest in 2015, the
demand being driven primarily
by the IT/ITeS and e-commerce

sectors.
E-commerce accounted for 3.4 mn
sq ft absorption in 2015, including
pre-committed deals of 3.2 mn
sqft, compared with 0.5 mn sq ft
transacted in 2014.
FIGURE 1

NEW COMPLETION
ABSORPTION
13
12
11
10
9
mn sq.ft
8
7
6
5
4
7.4
9.4
7.2
9.5
7.5
10.4
8.5
11.1
4.3
11.5
3
2
2011
2012
2013
2014
2015
15
VACANCY (RHS)
140
120
12%
11%
10%
10%
100
8%
8%
8%
80
7%
6%
60
4%
118.0
108.3
122.5
113.3
128.0
119.3
20
114.0
102.3
40
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
2%
0%
FIGURE 3
The weighted average rental

values witnessed an increase of
6%, from `48.5/sq ft/month in H2
2015 to `51.5/sq ft/month in H2
2015.
NEW COMPLETION
ABSORPTION
7.0
6.0
mn sq.ft
5.0
4.0
3.0
5.5
6.0
1.0
4.5
5.0
2.0
4.0
6.1
Going forward, the weighted

average rentals are expected to
increase by 7% from the current
values in H2 2015 to around `55/
sq ft/month in H2 2015.
OCCUPIED STOCK
4.5
4.4
Going forward, owing to improving

business sentiment and the
macroeconomic scenario, we
expect the office market to sustain
its momentum in H1 2016 as
well and envisage absorption of
approximately 6 mn sq ft.
STOCK
109.5
97.9
The total absorption during H2

2015 was 5 mn sq ft, while 4.5 mn
sq ft of new office space came
online.
OFFICE SPACE STOCK AND VACANCY LEVELS- HALF-YEARLY
3.0
6.0
The city is progressively

witnessing additions to its total
office space stock, currently
standing at 122.5 mn sq ft, with
the occupied stock at 113.3 mn sq
ft.
FIGURE 2
mn sq.ft.
Consistent absorption and slightly

improved new completions
contributed to steady vacancy
rates in H2 2015, maintaining it a
level of 8%.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
FIGURE 4
45
44.0
55.0
50.0
48.5
47.5
47.0
INR / sq.ft./month
50
45.5
49.0
55
51.5
WEIGHTED AVERAGE RENTAL MOVEMENT
40
35
30
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016E
16
INDIA REAL ESTATE
RESEARCH
Yashwin Bangera
Assistant Vice President - Research
CHENNAI
17
RESIDENTIAL MARKET
We forecast that H1 2016

will experience launches and
absorption levels to the tune
of 8,500 and 9,000 units a
modest drop of 7% and 1% YoY,
respectively.
35,000
30,000
25,000
20,000
18,695
20,556
15,442
18,511
5,000
24,846
24,444
10,000
37,079
29,422
15,000
2011
2012
2013
2014
2015

FIGURE 2
CHENNAI MARKET TRENDS - HALF - YEARLY

LAUNCHES
ABSORPTION
4,700
12,000
10,000
6,000
6,340
9,420
8,500
9,000
2,000
9,102
9,091
4,000
4,300
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
3,900
MICRO-MARKETS OF CHENNAI
Micro-market
Central Chennai
18
4,100
Locations
Anna Nagar, Adyar, Kilpauk, T. Nagar, Alandur
West Chennai
Porur, Ambattur Mogappair, Iyyappanthangal, Sriperumbudur
South Chennai
Perumbakkam, Chrompet, Sholinganallur, Guduvancheri, Kelambakkam
North Chennai
Tondiarpet, Kolathur, Madhavaram, Perambur
` / sq ft
4,500
8,000
7,318
10,343
Going forward, we expect H1 2016

to be better than H2 2015, as the
first half of the year constitutes
the festival season in Chennai
and developers prefer to launch
their projects during this time of
the year. However, YoY growth
will be hampered, as the market
sentiment is yet to recover from the
aftermath of the floods.
ABSORPTION
37,041
28,013
However, the unsold inventory has

proved to be a silver lining, as it
has continuously trended down
since H1 2013, from approximately
43,800 units to the current 36,350
units.
LAUNCHES
40,000
11,377
10,212
H2 2015 experienced a 13%

drop in launches and a 9% drop
in sales, while prices grew at a
nominal 1.5% YoY, the lowest in
five years.
FIGURE 1
CHENNAI MARKET TRENDS ANNUAL
Number of units
Development activity continued to

erode as stakeholder confidence
threatened to weaken further
in the face of the infrastructure
breakdown during the recent
floods. However, the impact was
not as bad as expected.
CHENNAI MARKET TRENDS
Number of units
Annual demand and supply levels

dropped to five-year lows in 2015
as homebuyers and developers
continued to shy away from the
market, waiting for more concrete
signs of revival.
INDIA REAL ESTATE
The QTS of the Chennai residential

market has been trending upward
steadily, from 6.1 quarters in H2
2013 to 7.4 quarters in H2 2015.
The budget segment in Chennai
has traditionally underperformed in
the overall market, as it is plagued
with endemic infrastructure and
connectivity issues, and the
current slowdown has caused it to
regress further. Currently, it holds
about 10.5 quarters of unsold
inventory compared to the 7.4 of
the overall market.
Central Chennai emerged as the
best performing micro-market
in H2 2015, with a QTS and
inventory age of seven quarters
each. Comprising locations mostly
included in the strong premium
H2 2015
7,000
6,000
5,000
4,000
1,746
5,763
3,202
3,195
3,170
1,873
SOUTH
WEST
2,693
2,385
3,008
1,000
757
9
960
2,000
1620
160
306
3,000
6,735
6,190
5,534
Landmark Constructions, Doshi

Housing, Emami Constructions,
Vijay Raja Group and Godrej
Properties were the most active
during this period and contributed
to over half of the units launched
during H2 2015.
H1 2015
SOUTH
WEST
0
CENTRAL
NORTH
FIGURE 4

H2 2014
H1 2015
H2 2015
7,000
6,000
5,000
4,000
3,000
2,000
1,000
306
222
184
Demand has decelerated by 9%

YoY in H2 2015 and over half the
buyers bought apartments priced
under `5 mn.
H2 2014
610
294
695
Absorption numbers dropped

by 18% in the South zone, while
increased homebuyer interest
in more affordable locations in
the West, such as Thiruverkadu,
caused demand to increase 12%
YoY in that zone.
Number of units
Buyers responded favourably

to the increasing and lowerpriced supply in the West zone.
Western micro-markets, such as
Thiruverkadu, saw an increase
in traction due to an increased
uptake of the lower-priced
inventory and good connectivity
with SBD locations such as Mount
Poonamallee High Road and
Valasaravakkam.
FIGURE 3
Number of units
Buyer behaviour has been largely

consistent across the last three
periods, with an inevitable dip in
demand for South Chennai due to
the floods.
RESEARCH
0
CENTRAL
NORTH
segment, this performance can be

attributed to the steady demand
and steep fall in launches that this
zone has been experiencing over
the last six quarters.
Relatively affordable residential
prices, proximity to employment
hubs and improving social
infrastructure continue to drive the
South and West micro-markets.
North Chennai is the worst
performing micro-market, with a
QTS and age of inventory of just
over 10 quarters, though its QTS
has been reducing over the last
four analysis periods.
19
FIGURE 5

CENTRAL
WEST
NORTH
SOUTH
13
12
11
10
9
8
7
6
5
5
10
11
12
13
QTS
OFFICE MARKET
FIGURE 1

NEW COMPLETION
ABSORPTION
8.0
mn sq.ft
6.0
4.0
4.5
5.6
6.8
3.3
4.2
3.5
2.6
3.7
2.1
5.1
2.0
2011
2012
2013
2014
2015
The Chennai office space market

moved from strength to strength
as demand rose for the third
consecutive year.
2015 recorded 5.1 mn sq ft of
absorption, 37% higher than the
3.7 mn sq ft absorbed during
2014. 2015 also witnessed 2.1 mn
20
sq ft of office space come online,

compared to 2.6 mn sq ft in the
previous year.
Spiralling absorption numbers,
coupled with falling supply, has
pushed down vacancy levels from
24% in 2013 to 15.4% at the end of
2015.
H2 2015 experienced the highest

absorption levels of any half-yearly
period in the history of the Chennai
office space market on the back
of big-ticket transactions by Yes
Bank, AstraZeneca, Sutherland
and Ericsson among others.
INDIA REAL ESTATE

STOCK
70
VACANCY (RHS)
25%
22.9%
60
18.9%
50
We expect the demand pipeline to

continue to be strong, while supply
shows signs of revival.
20%
19.0%
15.4%
40
15%
13.4%
30
10%
20
58
45
59
47
60
51
61
53
5%
57
44
10
This will boost rental levels even

further, with an estimated 4% rise
in H1 2016 compared to H1 2015.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
0%

FIGURE 3

NEW COMPLETION
ABSORPTION
mn sq.ft
2.5
2.0
1.5
1.1
1.9
0.9
2.0
1.2
3.1
1.4
2.4
0.5
1.5
1.8
1.0
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
FIGURE 4
49
52
47
48
50
45
46
45
48
44
50
52
54
52
INR / sq.ft./month
We estimate that the strong

demand pipeline will push
absorption levels up 20% YoY in
H1 2016, while around 1.4 mn sq ft
is expected to come online during
the same period.
OCCUPIED STOCK
43
Severe shortage of good quality

office space in prime areas has
turned the market in favour of
landlords, who are asking for
higher rents from tenants with each
passing quarter.
FIGURE 2
mn sq.ft.
Rental values have seen a

sustained rise since 2012 on
the back of steady demand
and a lesser amount of office
space inventory coming online in
successive years.
RESEARCH
42
40
38
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016E
21
Yashwin Bangera
Assistant Vice President - Research
HYDERABAD
22
INDIA REAL ESTATE
RESEARCH
RESIDENTIAL MARKET
18,643
18,428
13,050
15,111
11,197
14,903
8000
22,725
19,050
12,000
19,919
16,902
16,000
2011
2012
2013
2014
2015
FIGURE 2
HYDERABAD MARKET TRENDS HALF YEARLY

LAUNCHES
ABSORPTION
3,900
9,000
8,000
6,000
3,600
5,000
4,000
3,000
2,000
1,000
` / sq ft
7,000
3,300
5,300
7,450
However, steady demand over

the last three half-yearly periods
shows a positive undercurrent and
leads us to believe that a modest
recovery in absorption levels of 5%
YoY during H1 2016 is warranted.
20,000
5,740
7,780
This prolonged consolidation is

expected to persist in H1 2016 as
well, as developers wait for further
inventory unwinding to continue.
24,000
5,457
7,123
These factors helped residential

prices, which have been moving
at a steady clip, to grow at a 3.1%
YoY during H2 2015.
ABSORPTION
5,151
7,829
Steady absorption, coupled with

falling demand, has reduced the
unsold inventory levels to their
lowest point since 2010.
LAUNCHES
7,899
7,282
The end of the year did show

some promise in terms of supply,
as H2 2015 saw an 11% growth
in the number of units launched
compared to the previous period.
On the other hand, the festive
season did not boost absorption
levels, which stayed largely
stagnant.
FIGURE 1
HYDERABAD MARKET TRENDS ANNUAL
Number of units
While the sales volume fell

marginally, by 1% in 2015
compared to the previous year,
new launches dropped by a more
pronounced 14% during the same
period.
HYDERABAD MARKET TRENDS
Number of units
2015 ended on a flat note as the

Hyderabad residential market
has yet to show definite signs of
recovery in market activity, albeit
demand has stayed virtually the
same as in 2014.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
3,000
MICRO-MARKETS OF HYDERABAD
Micro-market
HMR Central
Locations
Begumpet, Banjara Hills, Jubilee Hills, Panjagutta, Somajiguda
HMR West
Kukatpally, Madhapur, Kondapur, Gachibowli, Raidurgam
HMR East
Uppal, Malkajgiri, L. B. Nagar
HMR North
Kompally, Medchal, Alwal, Quthbullapur
HMR South
Rajendra Nagar, Shamshabad
23
It is clear from the adjoining

chart that the Central zone is the
healthiest market today, as it has
the lowest QTS, and comparatively,
24
4,000
3,500
3,000
2,500
HMR
CENTRAL
HMR
EAST
HMR
NORTH
2,990
3,590
3,991
609
835
166
500
246
322
867
1,000
399
76
59
1,500
907
634
657
2,000
HMR
SOUTH
HMR
WEST
the youngest unsold inventory

among all the residential markets
of Hyderabad. This could be
attributed to the limited inventory
and inherent supply constraints in
this zone.
West Hyderabad follows closely on
the same parameters. Its relative
health can be gauged quite clearly
from the fact that it has a lower
QTS and that its inventory also
gets liquidated much quicker
than the other markets, despite
having the largest block of unsold
inventory.
North Hyderabad holds the oldest

inventory, while South Hyderabad
will take the most time to liquidate
its existing unsold inventory.
East Hyderabad has a QTS of
5, which is much below the
8.4-quarter average of the
Hyderabad market as a whole.
This can be attributed to the
drastic reduction in unsold
inventory levels due to the steep
drop in development activity.
FIGURE 4

H2 2014
H1 2015
H2 2015
5,000
4,000
3,000
2,000
1,000
HMR
CENTRAL
HMR
EAST
4,536
4,077
4,603
The relative positions of the

markets have not moved
significantly over the last two
years either. This capacity to
maintain equilibrium underscores
the efficient interplay of supply
and demand in the Hyderabad
residential market.
4,500
383
463
425
The QTS of the Hyderabad

residential market has ranged
between eight and nine quarters
over the last five years and
currently stands at 8.4 quarters,
at the same level as at the end of
2014.
H2 2015
909
958
1,350
Pacifica, Prestige, Lansum,

HomeAway and Ashoka Builders
were the most active during this
period and contributed to well over
half the units launched during H2
2015.
H1 2015
1,056
826
620
The premium segment, which

traditionally performs better than
the overall market, came under
pressure early this year, as its QTS
level exceeded that of the market.
The situation worsened in H2 2015,
as demand flattened out in this
segment.
H2 2014
945
798
782
East Hyderabad has seen

development interest plummet
in recent years, as homebuyer
activity has greatly fallen short of
expectations. This lack of supply
has, however, helped reduce
unsold inventories to a large
extent.
Number of units
While the West zone continues

to dominate the residential
market, northern locations, such
as Jeedimetla and Aminpur
particularly, saw greater
development interest compared to
their counterparts on the southern
and eastern peripheries.
FIGURE 3
Number of units
The annual trend in launches

shows a clear decline; however, the
half-yearly trend over the last three
periods shows supply numbers
stabilising gradually.
HMR
NORTH
HMR
SOUTH
HMR
WEST
INDIA REAL ESTATE
RESEARCH
FIGURE 5

HMR CENTRAL
HMR EAST
HMR NORTH
HMR SOUTH
HMR WEST
22
20
18
16
14
12
10
8
6
4
0
10
15
20
25
30
QTS
OFFICE MARKET
FIGURE 1

NEW COMPLETION
ABSORPTION
8.0
mn sq.ft
6.0
4.0
4.5
5.6
5.1
4.1
6.7
3.7
5.0
4.7
3.9
4.6
2.0
2011
2012
2013
2014
2015
The Hyderabad office space

market continues its upward trend
as demand stays robust and
supply tapers down for the second
straight year.
2015 recorded 4.6 mn sq ft of
absorption, marginally lower than
the 4.7 mn sq ft absorbed during
2014. 2015 also saw 3.9 mn sq
ft of office space come online,

compared to the 5 mn sq ft in the
previous year.
Robust absorption numbers,
coupled with falling supply, has
pushed down vacancy levels from
17.7% in 2013 to 14.4% at the end
of 2015.
H2 2015 experienced the highest

absorption levels of any halfyearly period in history on the
back of big-ticket transactions
by Qualcomm, Salesforce,
Unitedhealth Group and J.P.
Morgan.
25
STOCK
70
VACANCY (RHS)
20%
18.6%
60
16.7%
18%
16.3%
16%
14.6%
50
We expect the demand pipeline to

continue to be strong, while supply
shows some signs of revival.
14.4%
14%
12%
40
10%
30
8%
6%
20
62
52
65
55
67
57
4%
61
51
10
This will boost rental levels even

further, with an estimated 7% rise
in H1 2016 compared to H1 2015.
We estimate that the strong
demand pipeline will push
absorption levels up 23% YoY in
H1 2016, while close to 1.9 mn sq
ft is expected to come online H1
2016.
OCCUPIED STOCK
60
49

passing quarter.
FIGURE 2
mn sq.ft.
Rental values have been increasing

steadily since 2012 and picked
up momentum especially after
H2 2014, post the resolution of
the Telangana issue, as demand
started trending up significantly.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
2%
0%
FIGURE 3

NEW COMPLETION
ABSORPTION
3.5
mn sq.ft
3.0
2.5
2.0
1.5
1.9
2.7
1.5
1.4
2.4
3.1
1.9
1.8
0.5
3.0
1.9
1.0
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E

FIGURE 4
42
43
44
40
37
37
37
38
37
39
40
36
INR / sq.ft./month
42
36
34
32
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016E
26
INDIA REAL ESTATE
RESEARCH
Vivek Rathi
MUMBAI
27
RESIDENTIAL MARKET
MMR MARKET TRENDS
28
80,000
62,345
67,715
39,663
62,581
20,000
109,229
74,094
40,000
121,615
85,978
60,000
2011
2012
2013
2014
2015

FIGURE 2
MMR MARKET TRENDS - HALF-YEARLY

LAUNCHES
ABSORPTION
8,500
40,000
35,000
30,000
20,000
15,000
10,000
5,000
7,500
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
7,000
` / sq ft
8,000
25,000
16,998
29,868
The premium South and Central

Mumbai markets witnessed a tenfold jump in new project launches,
to 956 units in H2 2015 compared
to just 100 units in H2 2014.
100,000
20,776
34,135
The MMR has an unsold inventory

worth `2,020 bn, of which `595 bn
is in the South and Central Mumbai
markets.
120,000
18,887
28,446
The South and Central Mumbai

markets are critical for the industry
because of their value. Even
though they represent just 3%
of the MMRs unsold inventory
volume, they contribute a massive
29% to its value.
140,000
26,833
36,505
The Peripheral Central Suburbs

(Kalyan, Karjat, Kasara, etc.) and
Navi Mumbai are the worst hit,
seeing launches lower by 44% and
59%, respectively.
ABSORPTION
114,710
96,226
Developers in the peripheral

markets are the most concerned.
Many put brakes on new project
plans in H2 2015.
LAUNCHES
35,512
31,210
As a result of such demandsupply dynamics, the annual price

increase in the region stood at just
3%, presenting a great opportunity
for homebuyers.
MMR MARKET TREND- ANNUAL
Number of units
In H2 2015, 23% less or 20,776

houses were launched, compared
to the same period last year.
Demand shrunk by 6% to 34,135
houses.
FIGURE 1
Number of units
Drastic reduction in new project

launches to combat demand
slowdown, averted price correction
in the MMR residential market.
INDIA REAL ESTATE
RESEARCH
MICRO-MARKETS OF THE MMR

Micro-market
Locations
Central Mumbai
Dadar, Lower Parel, Mahalakshmi, Worli, Prabhadevi
Central Suburbs
Sion, Chembur, Wadala, Kurla, Ghatkopar, Vikhroli, Bhandup, Mulund
Navi Mumbai
Vashi, Nerul, Belapur, Kharghar, Airoli, Panvel, Ulwe, Sanpada
Peripheral Central Suburbs
Kalyan, Kalwa, Dombivli, Ambernath, Bhiwandi, Mumbra, Karjat
Peripheral Western Suburbs
Vasai, Virar, Boisar, Palghar, Bhayandar, Nala Sopara
South Mumbai
Malabar, Hill, Napean Sea Road, Walkeshwar, Altamount Road, Colaba
Thane
Naupada, Ghodbunder Road, Pokhran Road, Majiwada, Khopat, Panchpakhadi
Western Suburbs
Bandra, Andheri, Goregaon, Kandivali, Borivali, Santacruz, Vile Parle
FIGURE 3

H2 2014
H1 2015
H2 2015
10,000
9,000
7,000
6,000
5,000
4,000
PERIPHERAL
CENTRAL
SUBURBS
1,390
3,133
2,686
3,012
NAVI
MUMBAI
2,486
3,918
CENTRAL
SUBURBS
100
32
208
9,780
4,325
5,469
CENTRAL
MUMBAI
560
6,630
2,224
2,724
1,000
5,240
5,194
3,224
2,000
748
3,000
1,935
1,473
Number of units
8,000
0
PERIPHERAL
WESTERN
SUBURBS
SOUTH
MUMBAI
THANE
WESTERN
SUBURBS

FIGURE 4

H2 2014
H1 2015
H2 2015
12,000
8,000
6,000
PERIPHERAL
CENTRAL
SUBURBS
PERIPHERAL
WESTERN
SUBURBS
4,330
3,671
4,555
NAVI
MUMBAI
145
125
220
CENTRAL
SUBURBS
7,663
5,904
7,451
6,218
4,554
5,443
CENTRAL
MUMBAI
11,555
8,716
9,677
3,068
2,728
3,056
2,000
794
674
636
4,000
3,097
2,733
2,074
Number of units
10,000
0
SOUTH
MUMBAI
THANE
WESTERN
SUBURBS
29
Even though demand shrunk by

6% in the MMR, Thane bucked the
trend with a growth of 13%.
Good connectivity to office
markets, coupled with the right
ticket size products made Thane
successful in attracting buyers.
Incidentally, Thanes Majiwada
Kasarvadavali belt also featured as
a top investment destination in our
last report.
Incremental infrastructure in terms
of the 32-km Mumbai Metro Line
4 (WadalaGhatkoparThane
Kasarvadavali) is scheduled for
implementation in 20172023.
Employment hubs in the peripheral
business district (PBD), which
includes the office markets of
Thane and Navi Mumbai, have an
office stock of 23 mn sq ft, out of
which 5.4 mn sq ft is present in
localities such as Wagle Estate
and Ghodbunder Road, Thane.
Going forward, we estimate an
incremental office space addition
of 13.7 mn sq ft in the PBD in
the next five years (20162020).
Of this, approximately 5 mn sq
ft (62,500 jobs) will be in Wagle
Estate and Ghodbunder Road.
A silver lining emerged in the

MMR residential market, in terms
of lower unsold inventory and
QTS. The MMR QTS has come
down from 12 in Dec 2014 to 11
in Dec 2015 on account of the
sharp decline in new launches. At
181,000 units, the unsold inventory
is 11% lower than its previous
204,070 units.
Going forward in H1 2016,
infrastructure thrust, the improving
office market and stable house
prices will aid the housing market
revival.
The Central and state governments
are pushing critical transit-oriented
infrastructure projects in the MMR
and aim at completion by 2019.

1 The Mumbai Trans Harbour Link

has secured the environment
clearance, and the bidding
process will begin in March
2016.
2 Mumbais coastal road has

secured the forest and CRZ
clearances. The bidding
process will begin in June 2016.
3 The metro rail for the Dahisar

to DN Nagar, Dahisar East to
Andheri East, and Cuffe Parade
FIGURE 5
PERIPHERAL WESTERN SUBURBS

SOUTH MUMBAI
THANE
WESTERN SUBURBS
CENTRAL MUMBAI
CENTRAL SUBURBS
NAVI MUMBAI
PERIPHERAL CENTRAL SUBURBS
20
17
14
11
5
5
11
14
QTS
30
17
20
to SEEPZ corridors has been

expedited. Construction is to
begin this year.

4 The Navi Mumbai International

Airport construction contract is
to be awarded by June 2016.
Amidst demand revival, new

launches are to be lower and
prices stagnant on account of
the inventory backlog.
INDIA REAL ESTATE
RESEARCH
OFFICE MARKET
The IT/ITeS occupier thrust also
ensured a jump of 34% in the
average deal size, from 27,700 sq
ft in H2 2014 to 37,300 sq ft in H2
2015.
FIGURE 1

NEW COMPLETION
16.0
As a result of the improving

demand-supply equation, the
vacancy level trended down from
22.6% in H2 2014 to 20% in H2
2015.
12.0
10.0
12.0
6.0
7.6
6.2
9.2
7.3
5.8
7.5
2.0
2011
2012
2013
2014
2015
FIGURE 2

STOCK
OCCUPIED STOCK
VACANCY (RHS)
140
120
23%
22.5%
22.6%
mn sq.ft.
22%
21.9%
100
21%
80
60
20.0%
40
20%
121
79
19%
118
94
20
19.7%
114
89
The IT/ITeS industry remained an

active consumer of office space in
the relatively affordable, yet well
connected peripheral markets of
6.0
4.0
With an 83% jump in demand,

e-commerce raised its head. The
sector generated 122,000 sq ft of
office demand in H2 2015, led by
players such as Amazon, Zomato
and Toppr.
The demand share of the PBD
(Thane and Navi Mumbai)
increased from 32% in H2 2014 to
53% in H2 2015 on account of the
robust demand from the IT/ITeS
industry.
8.0
112
87
The manufacturing sector boosted

its share even further, with leading
engineering and pharmaceutical
companies taking up more space
in H2 2015 compared to the same
period last year.
14.0
mn sq.ft.
Surpassing the BFSI sector, the

IT/ITeS industry emerged as the
top occupier of office space in
the MMR, contributing 46% of the
demand in H2 2015 compared to
26% in H2 2014.
ABSORPTION
14.5
8.0
In H2 2015, new completions

comprised 3.5 mn sq ft or 45%
lower and absorption was at 5
mn sq ft or 3% higher than same
period last year.
Thane and Thane-Belapur Road.
106
82
In 2015, demand exceeded supply

for the first time in the MMR since
2008, as only 5.8 mn sq ft of new
project completions were recorded
against an occupier demand of 7.5
mn sq ft.
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
18%
31
FIGURE 3

NEW COMPLETION
ABSORPTION
8.0
mn sq.ft
6.0
4.0
2.9
2.5
6.4
4.8
2.3
2.5
3.5
5.0
2.9
2.8
2.0
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
BUSINESS DISTRICT-WISE RENTAL MOVEMENT
Business district
Rental value range

in H2 2015 (`/sq ft/
month)
6-month change
BKC & off-BKC
210310
2%
CBD & off-CBD
160260
-2%
Central Mumbai
150190
2%
PBD
5070
3%
SBD Central
80130
-1%
SBD West
90130
3%
Owing to the improved demandsupply dynamics, office market

rents are trending up.
Government focus, and IT/
ITeS and manufacturing sector
leadership will improve the MMR
office market prospects, going
forward.
New completions will grow by 26%
in H1 2016 and absorption will
improve steadily by 9%, translating
into a lower vacancy level of 19.7%
compared to 21.9% during the
same period last year.
32
INDIA REAL ESTATE
RESEARCH
Ankita Sood
Consultant - Research
NCR
33
RESIDENTIAL MARKET
The growth rate of the weighted

average price has been witnessing
a downward trend since 2013, and
has slowed down considerably,
from 6% in H1 2013 to a mere 1%
in H2 2015.
This muted price growth of three
years indicates that residential
real estate is facing a strong price
resistance against unattractive and
unaffordable prices in NCR.
34
120,000
100,000
79,577
48,630
63,458
48,800
20,000
100,259
74,094
60,000
40,000
110,751
93,986
80,000
2011
2012
2013
2014
2015

FIGURE 2
NCR MARKET TRENDS - HALF-YEARLY

ABSORPTION
50,000
4,600
45,000
4,550
40,000
35,000
4,500
30,000
25,000
4,450
20,000
4,400
15,000
10,000
5,000
0
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
4,350
4,300
` / sq ft
LAUNCHES
28,000
26,000
Along with the impact of

macroeconomic factors, delays in
the delivery of some major largescale projects had put buyers on
the back foot.
140,000
34,000
23,800
On the other hand, demand

also witnessed a recovery in H2
2015. The market registered a
15% recovery in sales in H2 2015
compared to the same period in
2014.
160,000
29,458
25,000
However, developers released their

pent-up supply in the market in
H2 2015, pinning new launches at
34,000 units a 15% increase from
H1 2015.
180,000
45,000
20,630
Residential projects under the

Haryana governments Affordable
Housing Policy 2013 contributed
significantly to the new launches in
NCR in H1 2015.
ABSORPTION
172,571
117,559
New launches in NCR have been

on a constant decline since 2010.
The average number of launched
units has come down from 86,000
in 2010 to 31,700 units in 2015.
LAUNCHES
200,000
34,577
28,000
Piling-up inventory and a low sales

velocity led developers to restrict
the supply of new launches in
2015.
FIGURE 1
NCR MARKET TREND- ANNUAL
Number of units
Dropping to 63,460 units in 2015,

new launches registered a 20% dip
YoY compared to the same period
in 2014.
NCR MARKET TRENDS
Number of units
NCR saw the leanest year in terms

of new launches since 2010.
INDIA REAL ESTATE

H2 2014
Gurgaon registered a 13% uptick

in sales in H2 2015 compared to
the same period in 2014. Fresh
launches in New Gurgaon and New
Sohna have provided buyers with
several options in the steep price
market of Gurgaon.
Though 2015 was the leanest
in terms of new launches, the
slowdown in sales velocity has
pushed the QTS to nearly five
years.
The unsold inventory stands at
approximately 206,028 units till
December 2015.
Pushed by the affordable and
mid-segment demand, Ghaziabad
and Greater Noida are the best
performing markets of NCR, with a
QTS of 14 and 15, respectively.
14,000
12,000
6,368
4,664
4,811
10,000
8,000
344
254
260
7,790
3,620
5,886
18,401
5,240
13,903
12,002
15,138
9,068
2,000
95
573
71
4,000
FARIDABAD
GHAZIABAD
GREATER
NOIDA
GURGAON
NOIDA
3,080
3,753
3,421
DELHI
3,944
4,774
4,451
GURGAON
NOIDA

FIGURE 4

H2 2014
H1 2015
H2 2015
14,000
Number of units
12,000
10,000
8,000
6,000
4,179
5,064
4,882
2,000
8,986
10,846
10,518
4,000
382
396
463
Affordability drives sales in the

micro-markets of Greater Noida
and Ghaziabad. Both these
markets together make up a
considerable 64% share of the
overall sales in H2 2015.
16,000
6,000
DELHI
FARIDABAD
GHAZIABAD
0
GREATER
NOIDA
FIGURE 5

DELHI
FARIDABAD
GHAZIABAD
GREATER NOIDA
NOIDA
GURGAON
18
Approximately 23,800 units were

sold in the second half of 2015,
compared to 20,630 units in
H2 2014, thus registering a YoY
increase of 15%.
H2 2015
18,000
Both Greater Noida and Ghaziabad

have established themselves as
affordable residential choices, with
the lowest capital values in NCR.
Gurgaon also contributed
significantly to the new launches
in NCR in H2 2015, taking up 27%
of the overall pie. A substantial
35% of the new launches fall in the
`2.57.5 mn category.
H1 2015
20,000
59
166
65
Affordable and mid-segment

project launches saw a push in
Ghaziabad, with 79% of the total
new launches falling in the `<5 mn
category.
FIGURE 3
Number of units
Greater Noida continues to have

the maximum number of project
launches in NCR, with a 40%
share of the total new launches in
H2 2015. A massive 88% of the
new launches fall in the `2.55 mn
category.
RESEARCH
16
14
12
10
8
6
12
14
16
18
20
22
24
26
28
30
32
34
36
38
QTS
35
OFFICE MARKET
FIGURE 1

NEW COMPLETION
Gurgaon emerged as the most

preferred business district in
NCR, taking up 66% of the total
absorption pie.
The office stock in NCR stood at

139 mn sq ft till the end of Dec
2015, of which 108 mn sq ft is
occupied stock.
The influx of pent-up project
completions in the second half
has been instrumental in nudging
the vacancy levels from 20.7% in
H1 2015 to 22% in H2 2015, with
the micro-market of Greater Noida
contributing significantly to the
new supply.
12.0
mn sq.ft
10.0
8.0
6.0
8.1
7.6
11.1
7.4
2.0
7.0
6.6
4.0
9.6
6.4
Quality office space attracts

occupiers, and instead of high
volume, it was the high-value
transactions that characterised the
market in 2015.
14.0
2011
2012
2013
2014
2015
FIGURE 2

STOCK
OCCUPIED STOCK
VACANCY (RHS)
23%
160
140
22%
22%
120
mn sq.ft.
A pent-up supply of 11 mn sq ft
in the NCR market led to a 37%
growth in new completions in 2015
compared to the previous year.
ABSORPTION
12.6
7.2
The NCR office market maintained

its absorption appetite, achieving
a total of 7.4 mn sq ft of absorbed
space at the end of 2015.
100
80
21%
21%
21%
60
20%
20%
121.6
96.5
126.0
101.0
131.7
104.4
138.7
108.1
143.2
111.6
40
20
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
19%
18%
36
22%
INDIA REAL ESTATE
7.0
6.0
5.0
4.0
3.0
4.1
4.1
5.5
3.7
7.0
3.7
4.5
3.5
1.0
4.0
3.5
2.0
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
FIGURE 4
67
68
64
66
62
64
62
58
60
56
58
56
54
53
However, quality office space in

micro-markets such as Gurgaon is
expected to witness a significant
upward pressure on price.
8.0
52
Going forward, we expect the

weighted average rentals to
increase by 5% from the current
values in H2 2015 to around `67
per sq ft per month in H1 2016.
ABSORPTION
53
The weighted average rental values

witnessed a sharp increase of 11%,
from `58 per sq ft per month in H2
2014 to `64 per sq ft per month in
H2 2015.
NEW COMPLETION
53
Going forward, we expect the

office market of NCR to sustain
its half-yearly momentum in H1
2016 as well, and envisage the
absorption of approximately 3.5
mn sq ft.
mn sq.ft
The total absorption during H2

2015 was 3.7 mn sq ft, while 7 mn
sq ft of new office space came
online.
FIGURE 3
INR / sq.ft./month
On the half-yearly demand side,

office leasing in NCR saw a
marginal 10% dip in leasing activity
in H2 2015 compared to the same
period in 2014.
RESEARCH
52
50
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016E
37
Hetal Bachkaniwala
PUNE
38
INDIA REAL ESTATE
RESEARCH
RESIDENTIAL MARKET
The majority of these new launches

would be focused in peripheral
areas, such as Wagholi, Dhanori,
Hinjewadi, Shivane, Pisoli and
Pirangut, among others.
We estimate that most of these
new launches will be at 2015
prices, as the scope for a price rise
is limited, given the huge unsold
inventory in these locations.
50,000
40,000
30,000
45,372
38,795
33,580
34,870
30,890
36,260
10,000
55,971
48,017
20,000
2011
2012
2013
2014
2015
FIGURE 2
PUNE MARKET TRENDS - HALF-YEARLY

LAUNCHES
ABSORPTION
25,000
5,000
4,800
15,000
13,900
16,500
5,000
18,130
20,740
10,000
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
` / sq ft
20,000
12,760
15,520
Going forward, developers are

expected to push new launches
during H1 2016 on the back of the
steady sales volume. We expect a
9% jump in new launches during
H1 2016 compared to H1 2015.
60,000
16,700
20,150
The price growth in Pune has

fallen from above 12% to less than
2% over the last three years. This
consistent drop in price growth
presented a good opportunity for
homebuyers to buy property.
ABSORPTION
54,147
45,725
Nonetheless, new launches are

still happening at old prices. The
majority of the new launches
during H2 2015 are in price ranges
similar to those of H1 2015.
LAUNCHES
16,880
14,720
However, encouraged by the

consistent growth in sales volume,
developers were back in action
during H2 2015. New launches
increased by 9% during H2 2015
compared to H2 2014.
FIGURE 1
PUNE MARKET TREND- ANNUAL
Number of units
While the sales volume grew

marginally by 4% during 2015
compared to the previous year,
new launches dropped by 8%
during the same period.
PUNE MARKET TRENDS
Number of units
2015 was the best time to buy

property in Pune, as the steady
sales volume and stagnant
price growth provided an ideal
opportunity for homebuyers.
4,600
4,400
Micro markets of Pune

Micro-market
Central
Locations
Koregaon Park, Boat Club Road, Erandwane, Deccan,
Kothrud, Model Colony
East
Viman Nagar, Kharadi, Wagholi, Hadapsar, Dhanori
West
Aundh, Baner, Wakad, Hinjewadi, Bavdhan, Pashan
North
Pimpri, Chinchwad, Moshi, Chikhali, Chakan, Talegaon
South
Kondhwa, Ambegaon, Undri, Dhayari, Warje, Sinhgad Road
39
South Pune witnessed a

phenomenal recovery in the
last two years. One of the worst
performing zones in H1 2014, it
has emerged as one of the best
performing markets in H2 2015.
The QTS (quarters to sell unsold
inventory) has fallen from 9 in H1
2014 to less than 5.7 in H2 2015.
A steady sales volume, fewer new
launches and lower ticket sizes
have helped South Pune improve
its performance compared to the
citys other zones. The advantage
of being located between the
two major employment hubs of
Hinjewadi in the east & and the
40
H2 2014
H1 2015
H2 2015
6,000
5,000
4,000
3,000
4,842
3,046
5,470
2,796
5,120
5,710
5,316
2,374
2,733
3,336
1,666
4,057
1,000
382
554
160
2,000
CENTRAL
EAST
WEST
NORTH
SOUTH

FIGURE 4

H2 2014
H1 2015
H2 2015
6,000
5,000
4,000
3,000
5,308
4,254
6,307
4,611
3,633
3,714
4,853
3,351
4,966
1,000
4,963
4,013
5,444
2,000
414
273
310
The stress level in the premium

segment is reducing due to falling
launches and a steady sales
volume. While the sales volume
has remained consistent, in the
range of 180 - 240 units in each
of the six-monthly periods since
2013, new launches have been
decreasing steadily from 492 units
in H2 2013 to zero during H2 2015.
Some of the prominent locations
in the premium segment are
Koregaon Park, Boat Club Road,
Kalyani Nagar, Prabhat Road and
Bhosale Nagar.
Number of units
Despite its low ticket size,

the budget segment is not
witnessing sufficient traction due
to the considerable distance of
these projects from the major
employment centres of the city.
Additionally, the lack of social
infrastructure has resulted in
a lukewarm response from
homebuyers towards this segment.
Some of the prominent locations in
the budget segment are Lonikand,
Pirangut, Pisoli, Phursungi and
Shivane.
FIGURE 3
Number of units
Mid-segment housing is leading

in terms of sales traction. The
maximum sales traction is being
witnessed in the mid segment
(ticket size between of `2.5 mn - 10
mn), with the premium (ticket size
above `20 mn) and budget (ticket
size below `2.5 mn) segments
lagging behind.
CENTRAL
EAST
WEST
NORTH
SOUTH
Hadapsar-Kharadi belt in the west

has sustained homebuyer interest
in this zone.
West Pune continues to be the
best performing zone in Pune,
with a QTS of 5.7 in H2 2015.
Strong demand, on the back
of the incremental employment
generation in Hinjewadi and
Wakad, has helped this zone
sustain in terms of sales volume.
The situation in Central Pune has
worsened, as sales volume in this
zone has been falling consistently
since 2013. Higher ticket sizes and
a lack of investor interest have
resulted in Central Punes poor
performance.
INDIA REAL ESTATE
RESEARCH
FIGURE 5
CENTRAL
EAST
WEST
NORTH
SOUTH
11
10
6
5
11
QTS
OFFICE MARKET
FIGURE 1

NEW COMPLETION
With demand consistently

outstripping supply, vacancy levels
have witnessed a free fall from
28% in 2009 to 11% in 2015.
5
4
mn sq.ft
3
2
2.5
4.5
2.7
5.2
3.6
4.0
H2 2015 recorded one of the

highest absorptions, at 3 mn sq
ft. This was 26% higher than H2
2014, when 2.4 mn sq ft of space
was absorbed. Certain largesized deals by companies such
as HSBC, Siemens and Northern
Trust Bank have helped in pushing
the absorption numbers to this
level.
ABSORPTION
2.2
3.0
In terms of new completions,

only 2.7 mn sq ft of office space
was delivered during the year led
by Blue Ridge in Hinjewadi and
Commerzone in Yerwada. This was
higher by 6% from the 2.5 mn sq ft
delivered during 2014.
On the other hand, new

completions have remained tepid
at 1.1 mn sq ft during H2 2015.
Although this is more than double
the 0.5 mn sq ft achieved during
H2 2014, it is still considerably
lower in comparison to absorption.
3.6
3.2
Office space demand in Pune

continues to outstrip new
completions for the fourth straight
year. 2015 recorded 5.2 mn sq ft of
absorption, which was 15% higher
than the 4.5 mn sq ft mark in 2014.
2011
2012
2013
2014
2015
41

STOCK
60
25%
20%
20%
50
16%
15%
40
15%
11%
30
9%
10%
56.3
47.9
57.5
51.0
58.3
53.2
10
54.8
45.8
20
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E
5%
0%

FIGURE 3

NEW COMPLETION
ABSORPTION
3.5
3.0
mn sq.ft
This will put additional pressure on

rents, which are estimated to rise
by 22% in H1 2016 compared to
H1 2015.
VACANCY (RHS)
70
While absorption is expected to

hold steady at its H1 2015 level of
2.2 mn sq ft, new completions are
estimated to drop further in H1
2016, by 44% to 0.86 mn sq ft.
Since no new major office projects
are expected to be completed in
the coming six months, vacancy
levels will witness a further fall to
the single-digit level.
OCCUPIED STOCK
54.3
43.4

passing quarter.
FIGURE 2
mn sq.ft.
Rental values have been on a

steady rise since 2012 as demand
continues to surpass new supply.
Currently, the weighted average
rent in Pune is around `56 per sq
ft per month - 50% higher than in
2012.
2.5
2.0
1.5
1.5
2.2
1.1
3.0
0.9
2.2
0.5
2.4
0.5
2.0
2.1
1.0
H1 2014
H2 2014
H1 2015
H2 2015
H1 2016 E

FIGURE 4
61
65
56
47
50
55
40
39
37
43
45
41
50
37
INR / sq.ft./month
60
35
H1 2012 H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016E
42
INDIA REAL ESTATE
RESEARCH
43
COMMERCIAL BRIEFING
For the latest news, views and analysis
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RESEARCH
Dr. Samantak Das

Chief Economist and
National Director, Research
samantak.das@in.knightfrank.com
RESIDENTIAL AGENCY
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National Director, Residential
mudassir.zaidi@in.knightfrank.com
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National Director, Office Agency
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Executive Director, Capital Markets
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Knight Frank India research provides development and strategic advisory to a wide range of
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RESEARCH

INDIA REAL ESTATE

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

INDIA REAL ESTATE

INDIA REAL ESTATE

In fact, the upward pressure on

Source: Knight Frank Research

HALF-YEARLY NEW LAUNCHES AND ABSORPTION TREND IN

Price growth across all the eight

Steady sales volume and restricted

NCR led in terms of sales volume

While sales grew by 3% during

ANNUAL NEW LAUNCHES AND ABSORPTION TREND IN

NCR (-20%), Mumbai (-36%) and

2015 ended with the lowest

Source: Knight Frank Research

respectively, compared to the

NCR continues to be the worst

UNSOLD INVENTORY LEVELS IN THE TOP EIGHT CITIES

Source: Knight Frank Research

CITY-WISE HALF-YEARLY NEW LAUNCHES

CITY-WISE HALF-YEARLY ABSORPTION

INDIA REAL ESTATE

CITY-WISE UNSOLD INVENTORY LEVEL

Source: Knight Frank Research

CITY-WISE PRICE MOVEMENT

Weighted avg. price ( ` /sq.ft.)

Source: Knight Frank Research

CITY-WISE QTS VS AGE OF UNSOLD INVENTORY ANALYSIS

Source: Knight Frank Research

Note: The size of the bubble indicates the

Source: Knight Frank Research

NEW COMPLETIONS AND ABSORPTION- ANNUAL

Rents in most of the cities have

H2 2015 also observed a healthy

In terms of absorption, 2015

Similar to 2014, demand surpassed

OFFICE SPACE STOCK AND VACANCY LEVELS- ANNUAL

Vacancy levels in India reached an

Source: Knight Frank Research

NEW COMPLETIONS AND ABSORPTION- HALF-YEARLY

Source: Knight Frank Research

INDIA REAL ESTATE

AHMEDABAD MARKET TREND- ANNUAL

The sales volume in Ahmedabad

On the other hand, new launches

Source: Knight Frank Research

However, H2 2015 brings in some

AHMEDABAD MARKET TRENDS - HALF-YEARLY

WT. AVG. PRICE (RHS)

Going forward, we expect new

Source: Knight Frank Research

MICRO-MARKETS OF THE AHMEDABAD

Naroda, Vastral, Nikol, Kathwada Road, Odhav

Gota, New Ranip, Tragad, Chand Kheda, Motera

Narol, Vatwa, Vinzol, Hathijan

S G Highway, Prahlad Nagar, Bopal, Thaltej, Science City Road

INDIA REAL ESTATE

The premium market of

MICRO-MARKET SPLIT OF LAUNCHED UNITS

MICRO-MARKET-WISE RESIDENTIAL SALES

Fewer new launches and the

Source: Knight Frank Research

In fact, the upward pressure on

Price growth across all the eight

Steady sales volume and restricted

NCR led in terms of sales volume

While sales grew by 3% during

NCR (-20%), Mumbai (-36%) and

2015 ended with the lowest

NCR continues to be the worst

Rents in most of the cities have

H2 2015 also observed a healthy

In terms of absorption, 2015

Similar to 2014, demand surpassed

Vacancy levels in India reached an

The sales volume in Ahmedabad

On the other hand, new launches

However, H2 2015 brings in some

Going forward, we expect new

The premium market of

Fewer new launches and the

West Ahmedabad is the worst

Premium markets in Ahmedabad

With poor price appreciation and a

Majority of these launches were

Almost 88% of the total new

Weighted average price continued

New launches continue to fall

Absorption, although the lowest in

This can be largely attributed

On an annual basis, steep decline

Notably, 66% of the total new

In terms of sales growth,

West Bengaluru the best

South Bengaluru, in spite of having

East Bengaluru, accounting for

The absorption in 2015 emerged

The weighted average rental

Going forward, the weighted

Going forward, owing to improving

The total absorption during H2

The city is progressively

Consistent absorption and slightly

We forecast that H1 2016

Going forward, we expect H1 2016

However, the unsold inventory has

H2 2015 experienced a 13%

Development activity continued to

Annual demand and supply levels

The QTS of the Chennai residential