Table of Contents INDIA MUMBAI DELHI GURGAON NOIDA BENGALURU CHENNAI PUNE HYDERABAD KOLKATA

Transcription

1 INDIA Q1 216

2 Table of Contents INDIA Occupiers expansion plans point to continued momentum in the year ahead for office market 3 MUMBAI Mumbai office absorption doubles on QOQ basis 5 DELHI Delhi office absorption picked up in Q GURGAON Gurgaon witnessed increased uptake of office space in Q NOIDA Market recovery continues in Q BENGALURU Office sector demand up by 13% QOQ; supply witnesses a rebound 13 CHENNAI Chennai office sector absorption drops significantly on a QOQ basis 15 PUNE Pune continued its progression towards a dominant IT-ITeS destination 17 HYDERABAD Demand revival for office sector; nearly 1.27 million sq ft absorbed in Q KOLKATA No Show for Kolkata office market in Q

3 Research & Forecast Report India Office April 216 Occupiers expansion plans point to continued momentum in the year ahead for office market Q1 witnessed over 8 million sq ft of total office update across 9 major cities Bengaluru, NCR, Pune and Hyderabad emerged as key contributors For office sector, year 216 kick started on a positive note with office absorption totaling over 8.8 million sq ft across 9 major cities. This includes pre-commitments of about.8 million sq ft. This was about 11% up from the previous quarter. Strong positive absorption from technology firms helped further gains in occupancy in almost all the cities. The sector was well supported by positive economic sentiments; business confidence index was up by 5% in Jan 216 and the GDP was forecasted at about 7.5%. Further, inflation measured via WPI (Wholesale Price Index) continued to remain in the negative territory at -.91% in February 216. Bengaluru with 33% share remained the top contributor of the demand, followed by NCR (Delhi, Gurgaon and NOIDA), Hyderabad, Pune and Mumbai. Sector wise, tech firms continued to share the significant part of the overall demand. Few notable transactions concluded this quarter including the 62, sq ft lease by Infosys in Pune, 5, sq ft lease by HP in Bangalore and 15, sq ft lease by EXL in NOIDA. Besides this, in a major asset acquisition this quarter, RMZ Corp has acquired Essar s Group Equinox Business Park located at BKC, Mumbai for approximately INR 2,4 crores. With its affordable rents, Hyderabad managed to attract major IT, digital and e-commerce companies which announced their plans for huge investments to bolster their expanding network Economic Barometer Indicators Q1 215 Q1 216 Gross Domestic Product Business Confidence Index Exchange Rates INR - USD INR - EURO Return on Alternative Investments 7.8% 7.5% 53.7% 56.4% Repo Rate 7.5% 6.75% Reverse Repo Rate 6.5% 5.75% Cash Reserve Ratio 4.% 4.% Inflation (WPI) 2-2.6% -.91% Prime Lending Rate 1% % 9.7% - 1% Deposit Rate 3 8% % 7.75% - 8% Parameters Q1 215 Q1 216 Note: 1 Estimates as per International Monetary Fund 2 Wholesale Price Index (WPI), Latest estimates for Feb SBI interest rate < INR 1 crore Term Deposits for 1 Year Source: Government of India, Colliers International India Research QOQ % Change Gold 26,232 27, % Silver 36,983 35, % Equity (BSE Sensex) 27,957 24, % Realty Index 1,692 1, % 4 Research & Forecast Report September 214 Colliers International

4 of technology development centers and facilities in the city. Leading e-commerce player, Amazon committed huge investments to set up its largest facility outside United States and leased approximately 35, sq ft in Raheja Mindspace in HITEC City. Apple, Inc. is also opening its first technology development center in India and has leased 25, sq ft. 12% 1% 8% Gross Domestic Product at Factor Cost Grade A asking rents remained stable in both CBD and SBD areas across the cities. The largest gains from last quarter were seen in Bengaluru s, Outer Ring Road micro market, Hadapsar/Fursungi in Pune and Golf course Road in Gurgaon, where competition for space remains fierce. Percentage (%) 6% 4% 2% With limited new launches in the market, the office construction pipeline increased slightly from Q4. Vacancy levels reduced in almost all the cities due to limited new supply addition. % Q1 25 Q3 25 Q1 26 Q3 26 Q1 27 Q3 27 Q1 28 Q3 28 Q1 29 Q3 29 Q1 21 Q3 21 Q1 211 Q3 211 Q1 212 Q3 212 Q1 213 Source: Government of India, Colliers International India Research Q3 213 Q1 214 Q3 214 Q1 215 Q3 215 Colliers View We anticipate positive momentum in the coming quarter as the overall office leasing pipeline seems strong and is steadily growing. Positive economic growth coupled with increasing business confidence index due to government s proactive policy initiatives will be the few factors influencing the demand for office space in the coming quarter. The majority of markets are enjoying this growth and overall office market sentiments are optimistic. The office market sentiments were further boosted due to some key policy announcements in this quarter. In the union budget 216, The govt. announced removal of Dividend Distribution tax (DDT) for REITs and InvITs. Institutional investors, both domestic and overseas, are demonstrating an increased appetite and willingness to engage in the Indian real estate commercial market. With removal of DDT, we can see listing of REITs in the Indian market soon. Besides this, recently, the govt. has also allowed 1% FDI for e-commerce companies which will help to improve demand for office space in medium to long term. Looking further ahead in 216, high-growth tech companies including e-commerce will continue to create voracious demand. Index Business Confidence Index Jan-1 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 FDI in Real Estate 3 25 Colliers anticipates further decline in vacancy with an uptick in asking rents for the selected Grade A buildings in the next several quarters. Bengaluru will continue to lead the overall leasing volumes. However, cities such as Hyderabad, NOIDA and Pune will continue to outpace many top-tier markets due to affordable rents INR Crore Apr-Dec 15 Source: Government of India, Colliers International India Research 5 Research & Forecast Report April 216 <<India>> Colliers International

5 Research & Forecast Report Mumbai Office April 216 Mumbai office absorption doubles on QOQ basis IT-ITeS occupiers strengthen Mumbai s office absorption The year started with a good note as the office absorption doubled in Mumbai, from.49 million sq ft in Q4 215 to.93 million sq ft in Q The Information Technology- Information Technology enabled Services (IT-ITeS) sector dominated the city s office absorption with over 38% (.35 million sq ft) of the total absorption, followed by Banking, Financial Services and Insurance (BFSI) with.15 million sq ft (16%), Pharma with.14 million sq ft (15%) and Manufacturing with.13 million sq ft (14%). The maximum number of office transactions were concluded in the western suburbs (.32 million sq ft), including BKC, Andheri, Malad and Goregaon, followed by Central Mumbai (.18 million sq ft) including Lower Parel, Worli and Elphinstone West and the Central Suburbs (.17 million sq ft) including Vikhroli, Powai and Kanjurmarg. A number of small and mid-sized transactions, averaging to 22, sq ft took place in Q In major office transactions, NCR Corporation took about 9, sq ft in Mindspace SEZ located in Navi Mumbai. Another transaction was concluded by Quintiles Research India and Transunion Software, which took more than 7, sq ft at G-Corp at Thane and One IndiaBulls at Lower Parel, respectively. City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* *Indicative Grade A rents in INR per sq ft per month **Nariman Point, Ballard Estate & Fort % CHANGE QOQ YOY CBD** 2-25 % % Worli/Prabhadevi % -5% Lower Parel % % BKC % % Kalina 15-2 % % Goregaon / JVLR 1-11 % % Andheri East 9-13 % 5% Malad 8 1 % % Powai % 4% Navi Mumbai 7-1 % 6% Thane / LBS 6-75 % % During Q1 216, no major project was added into the city inventory. However, a few new projects were launched including; Adani Inspire (.8 million sq ft) by Adani Realty at BKC and K-Raheja Platinum (.3 million sq ft) 6 Research & Forecast Report September 214 Colliers International

6 by K-Raheja Group at Andheri (East); these projects are expected to be complete by early 217. Currently, about 7 million sq ft of Grade A office supply is available for fit out in Mumbai, among which majority of the supply is located in the western suburbs (56%) including BKC, Andheri (E), Malad and Goregaon / JVLR, followed by Central Mumbai (29%) and rest 15% in Navi Mumbai and CBD locations. Despite an increase in demand, the rents and capital values remained unchanged in all of the micro markets. In a major acquisition this quarter, RMZ Corp has acquired Essar Group s Equinox Business Park located at BKC for approximately INR 2,4 crores. The 1.25 million sq ft business park consists of four towers out of which three are already leased out to tenants including Nissan Motors, Acropolis, Crompton Greaves and Lafarge, besides the offices of Essar and the newly constructed fourth tower of about 5, sq ft is ready for fit-outs. Colliers View We anticipate an increase in absorption momentum in the coming quarters, and the demand will largely be driven by sectors like IT-ITeS and BFSI. Developers will continue to focus on project completions, resulting in substantial new supply in the coming quarter in areas such as the western suburbs and Navi Mumbai. Rents for select premium projects in various micro markets will continue to demand premium in the medium term and will thus result in marginal increase in overall rental values in Central and South Mumbai locations. Top 5 Transactions of Q1 216 Million Sq.ft Rental Values INR Per SF Per Month Quarter Wise Absorption Average Rental And Capital Value Trend 3 3, Forecast 25 25, Q Q1 29 Q1 21 Q Q4 Q3 Q2 Q1 Q1 212 Q1 213 Q1 214 Q1 215 Q1 216 Q1 217F Q1 218F 2, 15, 1, 5, Captial Values INR Per SF CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE NCR Corporation Mindspace 9, Airoli Lease Quintiles Research India Pvt Ltd G-Corp 74, Thane Lease Transunion Software One India Bulls 7, Lower Parel Lease Deloitte Lotus Corporate Park 6, Goregaon East Lease Siemens Birla Aurora 5, Worli Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Seawood Grand Central Tower I & II L & T Infrastructure 1,35, Navi Mumbai 216 Godrej BKC Godrej Group 1,2, BKC 216 Kohinoor Square Kohinoor Group 8, Dadar 216 Notes: 1. Office Market: The major business locations in Mumbai are the CBD (Nariman Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandra Kurla Complex (BKC) and Andheri Kurla stretch. Powai, Malad and Vashi are the preferred IT/ ITES destinations, while Airoli at Navi Mumbai and Lal Bahadur Shastri Marg are emerging as new office and IT-ITeS submakets. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

7 Research & Forecast Report Delhi Office April 216 Delhi office absorption picked up in Q1 216, BFSI top contributor BFSI & IT-ITeS occupiers strengthen the office absorption A confident approach from occupiers resulted in absorption of.34 million sq ft in Q1 216, which is more than double, compared to last year s same period of only.1 million sq ft. BFSI (72%) and IT-ITeS (21%) were the primary contributors of this demand, followed by Manufacturing (7%) and other sectors (1%). Connaught Place remained the most preferred micro market among occupiers; metro connectivity and proximity to government offices continue to trade well for this location. Besides, a few deals were concluded in emerging office market Aerocity, near the airport. In this quarter, a trend was seen, where occupiers who are looking to expand within Delhi were acquiescent on the Grade B office spaces, where occupiers can avail bigger office spaces at low rentals. Various small ticket size deals averaging about 9,3 sq ft, kept the overall lease market alive, of which a few notable office deals were, lease of 15, sq ft by HDFC Bank in Ambience Corporate Tower Rohini at Rohini; 2, sq ft by Transaction Solution International in DLF Prime Tower located at Okhla; 19, sq ft lease by IDFC in Express Tower at ITO and another 16, sq ft lease by ICICI Lombard in Redfort Capital Towers by Parsvanath Group located at Connaught Place. City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* *Indicative Grade A rentals in INR per sq ft per month **Connaught Place ***Netaji Subhash Place % CHANGE QOQ YOY CBD** % -1% Nehru Place % 6% Saket % % Jasola 9-13 % -2% NSP*** 7-12 % % Okhla % % 8 Research & Forecast Report September 214 Colliers International

8 During the quarter, no new project/ parts of the project were completed or launched. In Delhi, more than 1.3 million sq ft of vacant office space was available for fit-outs, of which 32% was located in Netaji Subhash Place; 23% in Saket; 18% in Jasola; 14% in Nehru Place and 13% in CBD. Also there are two ongoing projects by Parsvanath Developer at Tolstoy Lane and K G Marg. These projects are expected to be ready by the end 216. Rents in Delhied remained stable in Q1 216 across all the micro markets except, Saket and Okhla where rents decline on average by 5% QOQ. Similarly, capital values remained stable across all the micro markets. Colliers View We expect similar momentum to continue in coming quarters; however the city has a very limited new supply in the pipeline, which will directly pull down the vacancy levels. Occupiers looking for expansion within Delhi limits will keep eyeing for options in the peripheral areas at low rents and longer lease period. Overall rents are expected to remain on the same levels in near term; however, few micro markets like Connaught Place, Jasola and Ohkla may see marginal appreciation due to limited supply. Million Sq.ft Rental Values INR Per SF Per Month Quarter Wise Absorption Q4 Q3 Q2 Q1 Average Rental And Capital Value Trend 3 Forecast , 35, 3, 25, 2, 15, 1, 5, Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Captial Values INR Per SF Q1 215 Q1 216 Q1 217F Q1 218F Top 5 Transactions of Q1 216 CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE HDFC Bank Ambience Corporate Tower Rohini 15, Rohini Lease Transaction Solution International DLF Prime Tower 2, Okhla Lease IDFC Express Tower 19, ITO Lease ICICI Lombard Redfort Capital Tower 16, Connaught Place Lease Bhushan Auto Finance Videocon Tower 15,31 Jhandewalan Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION NBCC Plaza NBCC Ltd. 1,3, Kidwai Nagar 216 RPS Infinia RPS Developer 1,2, Mathura Road 216 Skipper House Govt. Trust 16, Barakhamba Road 216 Notes: 1. Office Market: The commercial areas in New Delhi can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola and Saket. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

9 Research & Forecast Report Gurgaon Office April 216 Gurgaon witnessed increased uptake of office space in Q1 216 Controlled supply kept rents stable in most of the markets Gurgaon s commercial real estate market recorded about.7 million sq ft of office space uptake in the first quarter of 216 as compared to.45 million sq ft in previous quarter but about 3% less from the figures in Q IT-ITeS and BFSI with 59% and 17% share, respectively, remained the prime sectors contributing to this demand. Apart from this, manufacturing and pharma sectors also leased smaller office spaces during the quarter. A few notable transactions this quarter were the 14, sq ft office lease by Grey Orange in Bestech Business Park located at NH8, 9, sq ft by Markit in Ambience Tower located at DLF Phase III and 6, sq ft by Pernord Ricard in DLF Building No. 8 located in DLF Cyber City. This quarter saw total available vacant stock of 9.6 million sq ft ready for fit outs. The areas that have majority of this vacant stock were Udyog Vihar and Industrial Sectors (33%), National Highway (NH) 8 (19%), Golf Course Road Ext / Sohna Road (15%) and Manesar (11%). Golf Course Road, MG Road, DLF Cyber City and Institutional Sectors are left with very limited supply and altogether contribute about 2% of the total vacant stock. The city witnessed completion of Eros Corporate Square (.12 million sq ft) by Eros Group at Sector 69. New projects launched in this quarter include DLF New Project (.7 million sq ft) by DLF Group at NH-8, City Escape (.25 million sq ft) by Capital Group City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* *Indicative Grade A rentals in INR per sq ft per month % CHANGE QOQ YOY MG Road % 2% DLF Cyber City (IT) 1-11 % 11% Golf Course Road % 18% Institutional Sectors (Sec 44, 32, 18) Golf Course Road Ext./ Sohna Road 6-9 % % 6-75 % % National Highway % -1% Udyog Vihar & Industrial Sectors % % Manesar % -2% 1 Research & Forecast Report September 214 Colliers International

10 at Sector 66 and two small scaled projects measuring.1 and.6 million sq ft by a local developer and Landmark Group respectively, both at Udyog Vihar. These projects are expected to be completed by early 217. Rents remained stable in Q1 216 in most of the micro markets, except Golf Course Road and Udyog Vihar and Industrial Sectors, where rents increased at an average of 5% QOQ. This is primarily due to a few large transactions closed in 215 in select commercial buildings that have started asking a premium price over others, pushing up the base rental values of these micro markets. Capital values remained stable across all the micro markets. Colliers View Going forward, we anticipate an increase in office absorption with clients looking to consolidate their various offices under one roof. Also, the occupiers based in Cyber City and M G Road are evaluating to renew their existing lease or relocating to other inexpensive locations such as Sohna Road and along NH8. Micro markets like Udyog Vihar and Institutional Sectors will continue to remain the most preferred office locations, due to location advantages and rents. Rents are expected to remain on the same levels due to the decent vacancy levels and robust under-construction developments in the pipeline, especially in micro markets, such as the NH-8, Southern Peripheral Road and Golf Course Extension Road. Million Sq.ft Rental Values INR Per SF Per Month Quarter Wise Absorption Q4 Q3 Q2 Q1 Average Rental And Capital Value Trend Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Q1 215 Q1 216 Forecast Q1 217F Q1 218F 4, 12, 1, 8, 6, 4, 2, Captial Values INR Per SF Top 5 Transactions of Q1 216 CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Grey Orange Bestech Business Park 14, NH-8 Lease Markit Ambience Corporate Tower 9, DLF Phase 3 Lease Pernord Ricard DLF Building No. 8 6, DLF Cybercity Lease Paytm Plot No 19 5, Udyog Vihar Lease Ibibo Group Unitech Business Zone 4, Key under construction projects Golf Course Road Extension BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION ASF Insignia Phase II ASF Infrastructure 1,4, Gwal Pahari 216 Reach Commercia Reach Promoters 55, Sohna Road 216 Unitech Infospace - Tower V Unitech Ltd. 5, NH Lease Notes: 1. Office Market: The prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also emerging as the city s new office destination. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

11 Research & Forecast Report NOIDA Office April 216 Market recovery continues in Q1 216 IT-ITeS sector contributed over 8% in the total office absorption The NOIDA office market continued to be on its recovery trajectory on the back of IT-ITeS sector with office absorption ticking over.38 million sq ft in 1Q 216. However, overall transaction volumes were 17% less QoQ basis. Expansion and relocation by IT-ITeS companies were the primary demand drivers, which continued to be the dominant sector of leasing office space in NOIDA during this quarter. There was also some demand from publishing and manufacturing companies who leased smaller office spaces in Institutional Sectors. Location wise, about 54% of transactions were concluded in sectors along NOIDA Expressway, followed by 43% in Institutional Sectors and 3% in commercial sectors. The most significant leasing transaction for Q1 216 took place at NOIDA Expressway - Sector 143, with EXL leasing 15, sq ft in Blackstone SEZ. Apart from this, Oxford University Press signed a 51, sq ft lease at World Trade Tower and Tavant Technologies took 5, sq ft in Okaya Blue Silicon Cyber Park in Sector 62. City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* Indicative Grade A rentals in INR per sq ft per month *Sector 18 **Sector 16A, 62, ***Sector 124, 57-6, % CHANGE QOQ YOY Commercial Sectors* % -1% Institutional Sectors (Non IT)** Institutional Sectors (IT)** 8-1 % 9% 45-6 % -5% Industrial Sector (IT)*** % % Developers refrained from launching any new project, also no new project/ parts of the project were completed during the quarter. Contrasting this trend, the NOIDA authority has advanced its plan for 25 acres mixed use project in Sector 94, with an aim to transform NOIDA into the main business and entertainment hub. This project will house commercial spaces, entertainment zones, a habitat centre and residential high-rises. In Q1 216, more than 11 million sq ft of vacant office 12 Research & Forecast Report September 214 Colliers International

12 space was available for fit-out, of which 84% was located in Industrial Sectors like Sector 1 to 9, 57 to 6 and 63 to 65, rest 16% was located in Institutional Sectors, including locations like Sector 16A, Sector 62 and Sectors 125 to 142. Vacancy levels posted a marginal decline as no new commercial/it-ites office space was added during the quarter. In Q1 216, rents in most of the micro markets remained stable, except Commercial Sectors where rents declined by 5% QOQ. Similarly capital values remained largely stable across the city during the quarter. Colliers View With number of infrastructure projects in advance stages and metro corridor work along NOIDA Expressway picking up, NOIDA will continue to attract occupiers looking for affordable rents. IT-ITeS sector is likely to drive the demand in the coming quarter. Mid-scale companies will continue to prefer Institutional Sectors due to affordable rents while large corporates and MNCs will prefer NOIDA expressway. An upward pressure on rents is expected in the Institutional Sectors due to limited supply addition. Meanwhile, other micro markets are expected to remain stable. Million Sq.ft Rental Values INR Per SF Per Month Quarter Wise Absorption Q4 Q3 Q2 Q1 Average Rental And Capital Value Trend 9 14, 8 Forecast 12, , 8, 6, 4, 2, Captial Values INR Per SF Top 5 Transactions of Q1 216 Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Q1 215 Q1 216 Q1 217F Q1 218F CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE EXL Blackstone SEZ 15, Sector 143 Lease Oxford University Press World Trade Tower 51, Sector 16B Lease Tavant Technologies Tolexo Okaya Blue Silicon Cyber Park Okaya Blue Silicon Cyber Park 5, Sector 62 Lease 25, Sector 62 Lease Radiate e Service Independent Building 19, Sector 58 Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Wave One Wave Infratech 1,, Sector I Thum Beaver International 5, Sector Cosmic Corporate Park III Cosmic Group 5, Sector Notes: 1. Office Market: NOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and , industrial sectors include Sec 1-9, 57-6 and while sector 18 is the most developed commercial sector. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

13 Research & Forecast Report Bengaluru Office April 216 Office sector demand up by 13% QOQ; supply witnesses a rebound IT-ITeS and technology companies strong demand drivers During the first quarter of 216, Bengaluru witnessed total office sector absorption of 2.65 million sq ft noting a 13% quarterly uptick over the last quarter. IT-ITeS, (also comprising of technology start-ups and e-commerce companies) continued to remain the leading sector driving office sector demand with 88% share in overall absorption. Apart from this, BFSI comprised 6% share in total deal volume. Notable transactions during this quarter were HP leasing nearly 5, sq ft in Maruthi Concorde Tower on Hosur Road - Electronic City and JP Morgan taking up 2, sq ft in Embassy Golf Links Business Park on Intermediate Ring Road. Of the total deals transacted in this quarter, nearly 62% is attributed to pure expansions, while another 35% is accounted for by relocation and consolidation activity in the market. City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* *Indicative Grade A rentals in INR per sq ft per month **Northern part of ORR - KR Puram till Hebbal % CHANGE QOQ YOY CBD 9-13 % % Outer Ring Road (Marathahalli - Sarjapur) Outer Ring Road (North)** % 21% 6-7 2% 15% Bannerghatta Road % 9% Hosur Road 25-4 % % EPIP Zone/ Whitefield % % Electronic City % 8% Due to some large sized ticket transactions, Hosur Road- Electronic City accounted for 25% of total gross absorption, followed by EPIP Zone/Whitefield and Outer Ring Road Marathahalli to Sarjapur Road, each of which comprised a 14% and 13% share, respectively. Limited supply availability at Outer Ring Road resulted in demand spillover to above mentioned areas. 14 Research & Forecast Report September 214 Colliers International

14 New supply more than quadrupled on a quarter on quarter basis and stood at about 1.96 million sq ft. Of the total completions, most significant was the completion of RGA Tech Park admeasuring 1. million sq ft which became operational on Sarjapur Road. Other locations which witnessed the remainder supply included Whitefield, Bannerghatta Road, Electronic City, Hosur Road, Jayanagar and Kanakpura Road. New project launches during this quarter stood at nearly 2.19 million sq ft comprising upcoming developments from Fern & Prestige, RMZ Corp and Bonsai, all of which are set for completion next year. Nearly 6% of new projects were launched on Outer Ring Road. Rents and capital values largely remained stable across micro markets. However, office rentals on Outer Ring Road (Marathahalli - Sarjapur) appreciated by 8% due to low vacancy and continually high demand. Outer Ring Road (North) office rentals too, saw a 2% uptick due to demand spillover from other micro markets. Colliers View Going forward, the growth of new sectors such as e-commerce, technology giants and entrepreneurial ventures will drive strong office sector demand in the city. New space take-ups, for both small and large office formats will push the vacancy downwards for most micro markets, mainly EPIP Zone/Whitefield and Electronic City, amongst others. Rents are likely to witness an upswing in Outer Ring Road Marathahalli- Sarjapur Road and CBD due to limited availabilities. Top 5 Transactions of Q1 216 Million Sq.ft Rental Values INR Per SF Per Month Quarter Wise Absorption Average Rental And Capital Value Trend Q4 Q3 Q2 Q1 Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Q1 215 Q1 216 Forecast Q1 217F Q1 218F 12, 1, 8, 6, 4, 2, Captial Values INR Per SF CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE HP Maruthi Concorde Towwer 5, Electronic City Lease JP Morgan Embassy Golf Links 22, Intermediate Ring Road Lease Arris India Pvt. Ltd. Senate 187, Ulsoor Road Lease GE Prestige Shantiniketan 185, Whitefield Lease Infosys Confident Octans 15,2 Electronics City Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Embassy Tech Village - 7B Block Embassy Group 8, Outer Ring Road 216 Mantri Cornerstone A&C Mantri Developer 7, Indiranagar 216 Brigade Lakeshore Brigade Group 6, Whitefield 216 Notes: 1. Office Market: Prime office properties in Bengaluru can be divided into three principal sub-market CBD/Off CBD (MG Road, Millers Road, Vittal Mallya Road etc.) the SBD (Banerghatta Road & Outer Ring Road (ORR) and PBD (Hosur Road, EPIP Zone, Electronic City and Whitefield). 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

15 Research & Forecast Report Chennai Office April 216 Chennai office sector absorption drops significantly on a QOQ basis IT-ITeS continues to drive demand for expansion and new occupiers Even though Chennai s office sector continued to witness interest from corporate occupiers for expansion and entry of new players, absorption levels dipped by nearly 34% over the previous quarter as a number of transactions are still in execution stages. The first quarter of 216 recorded nearly.77 million sq ft absorption volume, out of which 86% is attributed to the IT-ITeS sector. Other sectors such as BFSI and Consulting, too, accounted for nearly 7% and 4% share each in the total transaction volume. Despite moderate absorption recorded in this quarter, expansions by existing corporates accounted for nearly 66% of entire leasing volume, while entry of new corporates was noted nearly at 7%. Relocations by existing corporates within different micro markets accounted for the remainder of transaction volume. Renault Nissan Technology Business Centre (RNTBCI) (18, sq ft), Citibank (48, sq ft), Lennox (38, sq ft) and Barry Wehmiller International (38, sq ft) were amongst some prominent corporate occupiers that leased spaces on GST Road, Old Mahabalipuram Road (OMR -Pre Toll) and Guindy micro markets respectively. City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* *Indicative Grade A rentals in INR per sq ft per month **OMR I (Madhya Kailash Perungudi- Toll gate I) ***OMR II (Thoraipakkam to Sholinganallur) & OMR III (Semmencherry to Siruseri) % CHANGE QOQ YOY CBD % 7% Off CBD % 5% Ambattur 3-38 % 17% OMR (Pre Toll)** % 12% OMR (Post Toll)*** % 7% Mount-Poonamallee Road 5-6 % % GST Road % 7% Approximately 33% of total absorption in this quarter was concentrated in OMR-Pre Toll corridor as this remains a preferred location for occupiers to consolidate and expand 16 Research & Forecast Report September 214 Colliers International

16 operations. GST Road (23%) and OMR Post Toll (12%) too accounted for substantial share of leasing in this quarter due to availability of vacant stock comprising large floor plates. Only 2, sq ft new supply became operational during this quarter, of which 71% came up in OMR Pre Toll in the form of non-it space. Off-CBD witnessed the influx of remainder 55, sq ft non-it space on Nelson Manickam Road. Rents across some micro markets increased slightly. OMR - Pre Toll noted a 7% quarterly uptick due to persistent high demand coupled with low supply infusion. CBD and Off CBD, too, witnessed 3-5% rental appreciation due to preference for inner city areas. Colliers View Expansion and consolidation plans by corporate occupiers, mainly in the IT-ITeS, BFSI and technology sectors coupled with the entry of new companies may lead to stronger office sector absorption in the upcoming quarter. Paucity of new supply coupled with lower vacancy may put upward pressure on office rents in micro markets such as OMR-Pre Toll, CBD and Mount Poonamallee Road. Overall vacancy in Chennai may further dip from the current 11% levels to single digit owing to steadily improving office sector demand and continual supply crunch. Million Sq.ft Rental Values INR Per SF Per Month Quarter Wise Absorption Q4 Q3 Q2 Q1 Average Rental And Capital Value Trend 15 1, Forecast 9, 7,5 6, 4,5 3, 1,5 Captial Values INR Per SF Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Q1 215 Q1 216 Q1 217F Q1 218F Top 5 Transactions of Q1 216 CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE RNTBCI Ascendas Cybervale 18, GST Road Lease Citibank Ramanujan IT City 48, OMR Lease Lennox Ascendas International Technology Park 38, OMR Lease Barry Wehmiller International Tamarai Tech Park 38, OMR Lease Virtusa AKDR Tech Park 34, OMR Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Chennai One SEZ South Block IG3 infra Ltd 1,2, Ramanujan IT City - Cambridge Block Pallavaram Thoraipakkam Road 216 TRIL 8, OMR 216 Ramanujan IT City - Infinity Block TRIL 45, Rajiv Gandhi Salai 216 Notes: 1. Office Market: Prime office properties in Chennai are located in seven principal sub markets: CBD, Off CBD, Ambattur, OMR I, II & III, Mount-Poonamallee Road, GST Road. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

17 Research & Forecast Report Pune Office April 216 Pune continued its progression towards a dominant IT-ITeS destination About 1.15 million sq ft of office space leased in Q1 216 Pune witnessed healthy demand from the IT-ITeS sector as the market experienced over 1.15 million sq ft of absorption in Q The overall absorption in this quarter is 16% lower than the previous quarter. Hinjewadi and Airport Road / Pune Station continued to remain as the most preferred locations by major occupants with about 56% and 26% share respectively, in the total absorption, followed by CBD (7%), Nagar Road (5%), Hadapsar / Fursungi (4%) and Kalyani Nagar and Bavdhan (2%). Occupiers from the IT- ITeS sector were the primary contributors to this demand, sharing a whopping 94% of the total absorption. The average deal size was about 45, sq ft which is 36% more than the previous quarter. Few notable transactions concluded this quarter include the 62, sq ft lease by Infosys in Ascendas Phase II (ITTP) - Juniper building located at Hinjewadi Phase 3.In another major transaction, Northern Trust Bank has pre-committed nearly 25, sq ft at EON Free Zone - Phase II which is currently under construction. Over 4 million sq ft was available for fit outs in Pune office market, of which 24% was located in Hinjewadi. The city witnessed new supply of about.64 million sq ft, in the form of few small projects, at Baner, Phugewadi, Chinchwad, City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* *Indicative Grade A rentals in INR per sq ft per month % CHANGE QOQ YOY Baner % 7% Bund Garden % 2% Airport road/pune station % 17% Aundh % 5% Senapati Bapat Road % 18% Bavdhan % 8% Kalyani Nagar % 8% Nagar Road % 12% Hinjewadi % 16% Hadapsar/Fursungi % 14% Kharadi % 19% 18 Research & Forecast Report September 214 Colliers International

18 Bhosari and Bavdhan locations. Quarter Wise Absorption Occupier interest led various developers to launch many small and mid sized projects admeasuring over 1 million sq ft. Major projects includes, Nandan Probiz (.3 million sq ft), Prestige Point (.15 million sq ft) and Gravity. These projects are currently in various phases of construction and are expected to be completed in next two years. Million Sq.ft During the quarter, the rents for prime office property increased in the range of 2 8% QOQ across all the micro markets, except Airport road/pune station, where rents remain unchanged. Capital values also increased on an average by 7% QOQ across Pune. Reportedly, Prestige Group is under talks with B U Bhandary Builders to set up an 8, sq ft IT park on a six acre land parcel in Pune Q4 Q3 Q2 Q1 Average Rental And Capital Value Trend Colliers View The commercial supply will remain restricted in short term, thus rents may go up marginally in most of the markets. Moreover, new buildings with better amenities will continue to charge premium and push the average rents upwards. Vacancy levels are on the decreasing trend since last eight quarters and continue to remain so due to limited new completion in the coming quarters. However, the increased tenant demand will now start to trigger the new launches in the city. Rental Values INR Per SF Per Month Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Q1 215 Q , Forecast 7, 6, 5, 4, 3, 2, 1, Q1 217F Q1 218F Captial Values INR Per SF Top 5 Transactions of Q1 216 CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Infosys Ascendas Phase II (ITTP)- Juniper Tower 62,75 Hinjewadi Phase III Lease Concentrix Tech Park One Tower D 6, Yerwada Lease Vodafone Mantri 47,33 Nagar Road Lease Qlogic Tech Park One Tower C 4, Yerwada Lease Tata Consultancy Services Suzlon Sun Lounge 31, Hadapsar Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Acendas Phase II Acendas 615, Hinjewadi 216 Nandan Probiz Nandan Buildcon 3, Balewadi 217 Prestige Point Amba Group 15, Bajirao Road 218 Notes: 1. Office Market: The prime office sub-markets of Pune include CBD (Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp), Off CBD (Aundh, Airport Road and Kalyani Nagar) and the eastern corridor, along with Nagar Road and Kharadi, which have emerged as a preferred location for financial and IT/ITES companies. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

19 Research & Forecast Report Hyderabad Office April 216 Demand revival for office sector; nearly 1.27 million sq ft absorbed in Q1 216 Expansion by technology companies attracts more occupiers Hyderabad witnessed robust demand from corporate occupiers in the first quarter of 216 as gross leasing volume of 1.27 million sq ft was noted in the city. Though this represents a quarterly decline of 15%, major IT, digital and e-commerce companies announced plans for huge investments to bolster their expanding network of technology development centers and facilities in Hyderabad. IT-ITeS sector accounted for 82% of cumulative deal volume. City Office Barometer INDICATORS Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* *Indicative Grade A rentals in INR per sq ft per month % CHANGE QOQ YOY CBD % % Off CBD 5-6 % % SBD 45-5 % 12% PBD 25-3 % % Leading e-commerce player, Amazon committed huge investments to set up its largest facility outside United States and leased approximately 35, sq ft in Raheja Mindspace in HITEC City. Apple, Inc. is opening its first technology development center in India and has leased 25, sq ft in WaveRock facility in Nanakramguda. Despite a dip in absorption, it is evident that the state government s measures to attract leading global players are paying off as expansions by existing tenants accounted for as much as 37% of total deal volume. New entrants to the city accounted for more than a third of the total leasing volume in this quarter. Availability of large floor plates and quality office spaces 2 Research & Forecast Report September 214 Colliers International

20 at competitive rents led to 76% gross absorption being concentrated in Suburban Business District (SBD). Nanakramguda with 4% and HITEC City with 32% share respectively, have emerged as the two most sought after locations by corporate occupiers in this micro market. New supply influx of.93 million sq ft was noted as two blocks of an IT-Special Economic Zone (IT-SEZ), Phoenix Avance Business Hub in HITEC City were completed in this quarter. However, no new projects were launched in this quarter as developers concentrated on completing existing projects. Rents and capital values remained stable across micro markets. Million Sq.ft Quarter Wise Absorption Q4 Q3 Q2 Q1 Colliers View With a change in occupier sentiment and large scale developments coming up, transaction activity is expected to further firm up in the upcoming quarter. A strong demand and supply scenario is expected to prevail in the city going forward. Locations such as Gachibowli, Madhapur, IT corridor of HITEC City, Kondapur, Nanakramguda will continue to witness strong demand as the city emerges as a preferred location for technology firms due to comparatively cheaper rents. While rents will largely remain stable, large scale space take up in SBD may put an upward pressure on rents in the short term. Vacancy levels may increase in medium to long term due to substantial new supply influx. Rental Values INR Per SF Per Month Average Rental And Capital Value Trend 5 Forecast Q1 215 Q2 215 Q3 215 Q4 215 Q1 216 Q2 216F Q3 216F Q4 216F Q1 217F Captial Values INR Per SF Top 5 Transactions of Q1 216 CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Amazon Raheja Mind Space 35, HITEC City Lease Apple WaveRock 25, Nanakramguda Lease Development Bank of Singapore WaveRock 2, Nanakramguda Lease Incessant Technologies Q City 6, Nanakramguda Lease Deloitte DivyaSree Trinity 32, HITEC City Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Knowledge City Salarpuria Sattva 1,54, Raidurg 216 Meenakshi IT Campus Meenakshi Group 1,3, Gachibowli 217 Amsri Brain Storm Amsri Builders 9, Gachibowli 217 Notes: 1. Office Market: The prime office sub markets of Hyderabad include CBD (Banjara Hills Road No. 1,2, 1 and 12), Off CBD (Begumpet, Somajiguda, Raj Bhavan Road, S.P. Road, Himayath Nagar, Off Banjara Hills and Jubilee Hills), SBD (Madhapur, Gachibowli, Manikonda, Kondapur, Nanakramguda) and PBD (Pocharam, Uppal and Shamshabad) 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

21 Research & Forecast Report Kolkata Office April 216 No show for Kolkata office market in Q1 216 Only 17, sq ft of Grade A office space absorbed In Q1 216, Kolkata office absorption remained weak due to gloomy response from the occupiers and only 17, sq ft of absorption was witnessed, which is 32% less than as compared to the previous quarter s absorption of 25, sq ft. IT-ITeS occupiers topped the chart with over 37% of the total, followed by FMCG with 16% and pharmaceuticals with 14%. Major transactions during the quarter included the lease of 3, sq ft office space by Fosma Meritime in Godrej Water Side and the lease of 26, sq ft by ICFAI Business School in an Individual Building. Micro market wise, Sector V / New Town remained the preferred micro market among occupiers, with 95% share in the total absorption. A few small deals were also concluded in the CBD micro markets. Developers continued to remain watchful in launching new projects because many of the large office spaces are currently struggling with leases / sales due to the limited new entrants and the absence of expansion plans of existing occupiers. City Office Barometer INDICATORS Q3 215 Q4 215 Q1 216 Q2 216F Vacancy Absorption Construction Rental Value Capital Value Rental Values MICRO MARKETS RENTAL VALUE* % CHANGE QOQ YOY CBD** % % SBD*** % -4% Sector V 4-48 % 4% PBD **** % % *Indicative Grade A rentals in INR per sq ft per month **Park Street, Camac Street, Chowranghee Road, AJC Bose Road *EM Bypass, Topsia, Ruby ****Rajarhat This quarter, the city witnessed completion of Srijan Corporate Park II by Srijan Group admeasuring.92 million sq ft, located at Sector V. In Kolkata, more than 3.8 million sq ft of vacant office space was available for fit-out, of which 46% was located in PBD, which includes micro markets like New Town and Rajarhat, 45% was located in Sector V and rest 8% was located in CBD, SBD and other peripheral areas like Narendrapur, Sonarpur and Madhyamgram. Rents across Kolkata remained stable during the quarter, except SBD which recorded a 4% quarterly decline due to 22 Research & Forecast Report September 214 Colliers International

22 limited demand. Similarly, capital values remained stable across all the micro markets. On the investment front, Chennai-based Shriram Group is planning to invest INR 1, crores for developing a mixed-use project at Uttarpara, Hooghly. The project will consist of affordable housing ranging from INR 12 lakh to INR 3 lakh and IT complex, hospital and educational institutions. The first phase of the project is likely to start in the second quarter of 216. Colliers View The overall market sentiment remained dull in the first quarter. However, developers are optimistic about the upward absorption trend in the coming quarters. The city is expected to witness only a few new launches, as developers are more focused on finishing their existing ventures. On the infrastructure front, with the current pace of construction work of Metro line 2 & 3, it is likely to be operational by end of 218, with which the real estate activities between Howrah Maidan to Salt Lake, Sector V and Diamond Park to Mahakaran will improve further. In the mid-term, rents are expected to remain stable in across Kolkata, primarily because of existing vacancy and low absorption base. Million Sq.ft Rental Values INR Per SF Per Month Quarter Wise Absorption Q4 Q3 Q2 Q1 Average Rental And Capital Value Trend 12 12, Forecast 1 1, 8 8, 6 6, 4 4, 2 2, Q1 28 Captial Values INR Per SF Q1 29 Q1 21 Q1 211 Q1 212 Q1 213 Q1 214 Q1 215 Q1 216 Q1 217F Q1 218F Top 5 Transactions of Q1 216 CLIENT BUILDING NAME AREA (sq ft) LOCATION LEASE / SALE Fosma Meritime Godrej Waterside 3,35 Sector V Sale ICFAI Business School Plot no. Y1 26, Sector V Lease Nestle DLF IT Park 16, Rajarhat Lease Pantaloons Megatherm 1, Sector V Lease Oracle Martin Burn 9, Sector V Lease Key under construction projects BUILDING NAME DEVELOPER AREA (sq ft) LOCATION POSSESSION Technopolis 2, Forum Projects 1,2, Bantala 216 PS Srijan Tech Park II PS Group & Srijan 925, Sector V 216 Primac Tower Primac Group 47, Sector V 216 Notes: 1. Office Market: The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd, AJC Bose Rd), East Kolkata (EM Bypass, Topsia, Ruby), Salt Lake/ Sector V and New Town / Rajarhat. 2. Rents/Capital Value: Market average of indicative asking price for Grade A office space. 3. Available Supply: Total Grade A office space being marketed for sale or lease in surveyed quarter. 4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter. 5. All the figures in the report is based on market information as on 25th March Research & Forecast Report April 216 <<India>> Colliers International

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