Table of Contents. XYZ developer- (Nov-XX)

Transcription

1 Table of Contents List of Table... 2 List of Figures... 3 List of Charts... 4 Forward... 5 Disclaimer... 5 Chapter I: Introduction... 6 Aim... 6 Objective... 6 Subject-site... 6 Approach and Methodology... 7 Growth pattern and future outlook of thane region... 7 Real estate market dynamics & project appraisal Geographical Catchment... 8 Chapter II: Panvel Present and Future Prospects Site and Site-Location City Growth and Impact on subject site Population Future infrastructure improvement and impact on subject site Future Housing Demand assessment Chapter III: Site surroundings, Percolation probability and Future Development Site characteristics Infrastructure Proposed and ongoing projects in surroundings Determining the future supply Projected future supply base upon the construction time line Impact of airport Chapter: IV: Market Dynamics Macro Market analysis (regional perspective of Real estate markets) Micro Market analysis (Competitive location assessment)

2 Demand percolation assessment Comparative market analysis Product performance Chapter: V: Development Strategy Engineering the density Density creation by bringing the residential end users Augmenting the density by commercial Augmenting the density by creating Resort Augmenting the density by Educational institute Pricing rational Development potential Conceptual phasing and development plan List of Table Table X Population Projections Table X Land demand assessment Table X Proposed projects in and around Panvel Table 4 NMIA phasing plan Table 5 Spatial distance for various sectors to flourish around Airport Table 6 Distance band wise locations Table 7 Comparative analysis of sales and unsold Table 8 Comparative price movement Table 9 Comparative sales velocity movement Table X0 Product performance assessment in the Micro catchment Table XX XBHK cost range analysis Table XX XBHK cost range analysis Table XX XBHK cost range analysis Table X4 Employ above XXL salary bracket in the catchment Table X5 Probable population can be drawn to subject site Table X6 Comparative example of Mahindra SEZ- Chennai and Jaipur with subject site Table X7 IT/ ITsez development considered for deriving co-relation between nearest habitable location and magnitude of supply Table X8 Gap in the education sector in India Table X9 Maharashtra state education sector demand forecasting

3 Table X0 BUA sqft distribution Table XX Residential development mix Table XX Year wise launch strategy residential Table XX Assumptions for finical modeling Table X4 Financial analysis Table X5 Financial analysis summary List of Figures Figure X Site location Plan... 7 Figure X Micro catchment definition... 9 Figure X Khalapur sub Region location in MMR Figure 4 Thane Municipal Corporation Figure 5 Spatial diffusion pattern of Population and growth direction based upon the population density Figure 6 Proposed Rail Infrastructure in MMR Figure 7 Proposed Karjat Panvel passenger rail line Figure 8 Proposed Road network improvement in MMR Figure 9 Site location in context of MMR Figure X0 Site accessibility and surrounding infrastructre Figure XX Present land use of the site and surroundings Figure XX Topography site sections Figure XX Slope analysis and development zone classification Figure X4 Plateau- X photographs looking towards express highway Figure X5 Plateau- X photograph looking towards Matheran hill and old Mumbai Pune Highway Figure X6 Tentative location of proposed development Figure X7 Comparative impact assessment of airports in MMR to ascertain the futre demand arround NMIA Figure X8 Impact of proposed NMIA Figure X9 Typical development strategy followed in Mahindra Sez Figure X0 BUA percentage wise distribution

4 List of Charts Chart XPopulation growth in Panvel (PMC+NMP) Chart X Trend of CAGR in Panvel (PMC+NMP) Chart X Comparative analysis of incremental population from X97X to X0XX Chart 4 Regional Improvement Analysis Chart 5 Comparison of X0- most improving location by X0X Chart 6 Future market composition based upon the analysis Chart 7 MMR market sales-inventory-price Chart 8 Price and Productivity in MMR Chart 9 Suburb wise sales composition as on Sep-XX Chart X0 Suburb wise unsold composition as on Sep-XX Chart XX Suburb wise sales-inventory and months inventory Chart XX Sales composition in the micro market Sep-XX Chart XX Unsold composition in the micro market Sep-XX Chart X4 Micro market with perspective of sold unsold and moths inventory Chart X5 Business turnover in the micro market Chart X6 Price and Productivity in the micro catchment Chart X7 Distance band wise sales movement Chart X8 Distance band wise supply composition Chart X9 Distance band wise price movement Chart X0 Distance to size of the project co-relation Chart XX Year on Year launch plan Chart XX Percentage Distribution of economic activity Chart XX BUA distribution of various economic activity Chart X4 Year on Year launch plan Chart X5 Phase X residential launch plan Chart X6 Phase X residential launch plan Chart X7 Phase X residential launch plan

5 Forward Liases Foras was approached by XYZ developer to conduct Feasibility Study and Best Use Analysis which helps them to take decision on future development plan for the land located at the Shedung, Panvel, District Raigad. The site admeasuring XX0 acres is being considered for development for various purposes that is residential, retail, IT/ Non IT etc. Although its learnt from the XYZ developer that they want to go for the development of just XX7.0X acre applied for under Special Township Policy of Government of Maharashtra. The study had been instituted at macro and micro level. Looking at the scale of development project modeling is developed on the time scale with reference to future dynamics of product change and price appreciations. While, there are many ways to arrive at the price dynamics, we have considered rationales which according to urban economics are most crucial for success of any location. All the recommendations and suggestions mentioned in the report are directly or indirectly governed by scientifically laid down theories and methodologies of Urban Economics. We hope the report will be helpful to Running Acres Estate Pvt. Ltd to get a grip on the local market before commencing the project. Disclaimer The information provided in this report is based on the data collected by Liases Foras. Liases Foras has taken due care in the collection of the data. However, Liases Foras does not warranty the correctness of the information provided in this report. The report is available only on "as is" basis and without any warranties express or implied. Liases Foras disclaims all warranties including the implied warranty of merchantability and fitness for any purpose. Without prejudice to the above, Liases Foras will not be liable for any damages of any kind arising from the use of this report, including, but not limited to direct, indirect, incidental, punitive, special, consequential and/ or exemplary damages including but not limited to, damages for loss of profit goodwill resulting from: The incorrectness and/or inaccuracy of the information available on or through the Site Any action taken, proceeding initiated, transaction entered into on the basis of the information available in this report Terms of usage, Except as expressly permitted below, users of this report should not copy, modify, alter, reverse engineer, disassemble, sell, transfer, rent, license, publish, distribute, disseminate or otherwise allow access to all or any of the Information. 5

6 Chapter I: Introduction Aim Aim of the study is to carry out the best use analysis, market feasibility report with growth pattern and future outlook of the subject-site with objectives of: Objective The potential of the subject-site with regards to all the formats of Real Estate such as Residential, Commercial, Retail, and Hospitality sectors. Recommendation on the relative shares of residential, retail and commercial, hotel, and educational development, at the subject-site. Specific recommendations regarding products, price and amenities. Specific timelines for various development elements (phase wise development) Determining the market efficient achievable outright / lease rates for various elements A detailed financial model for various options to be calculated that is Total Revenue, Total Cost, Monthly Cashflow, Peak Negative Cashflow, Equity & Debt component, Return on Investment, Return on Equity, NPV, IRR Subject-site The subject-site is located in the extreme fringe of Panvel Municipal Council at Shedung, Panvel. The site has an access from Old Pune highway and is surrounded by the Forrest area on its three sides. Site has few dynamic features such as a manmade lake, four plateaus at different level with distinguish character and view. 6

7 Figure 1 Site location Plan Approach and Methodology Approach to study will be divided into two key components, a.) Growth pattern and future outlook of Panvel region and b.) Real estate market dynamics & project appraisal. Growth pattern and future outlook of thane region The human spatial mobility to a specific region depends on the internal magnet of the region and external factors influencing it, which is the business districts and infrastructure connecting convenience into day to day life. Land use, population, economic profile of the area, demographic profiles of the population to be mapped for Thane regions and sub regions. Existing physical and social infrastructure, proposed infrastructure projects etc to be mapped as per time scales. Understanding and evaluation of future impact on real estate market by estimating change in size of business districts, improvement in Infrastructure, etc. based upon the various scenario methods ranging from pessimistic growth to highly optimistic growth. 7

8 Real estate market dynamics & project appraisal Trends and pattern of real estate market will be subjected to two key components, performances of adjoining markets (macro market perspective) and performance of local market (micro market perspective). Macro market perspective: To understand the real estate market behaviour trend and respectively impact on the Thane market, Mumbai Metropolitan Region (MMR) is defined as Macro Catchment. Micro market perspective: To overcome the limitation of macro market analysis and validate the key findings it is very much important to revaluate the findings with micro level catchment analysis. Catchment Analysis: Detailed understanding of the projects within the range of 5 km with respect to project performance, sales, inventory, months inventory, sales velocity, business turn over, etc. Following will be the key questions which we will try to answer with the help of this study. What is the size of supply and absorption and how is the future outlook? What should be the efficient price at which market maintains momentum? What is the outlook of the supply and demand? Geographical Catchment Macro catchment definition: Entire MMR region with regard to commercial, retail, hospitality and education market assessment. Micro catchment definition: Micro catchment consists of Vashi, Sanpada, Belapur, Kharghar, Owe, Taloja, Kalmboli, Panvel, Ulwe etc. Red boundary in the following map defines the micro catchment within MMR. 8

9 Figure 2 Micro catchment definition 9

10 Chapter II: Panvel Present and Future Prospects Site and Site-Location Subject site is located on the extreme South- East sub region of MMR, known as Khalapur Sub-Region, Red marked area in figure-x shows the Khalapur Sub-Region. Khalapur sub region is located adjoining to the Panvel Sub-region; figure- 4 shows the location of Panvel Municipal Council (PMC) boundary and New Panvel boundary which is developed under CIDCO. Subject-Site is located approximately 6Km away from the PMC boundary. Figure 3 Khalapur sub Region location in MMR Figure 4 Thane Municipal Corporation City Growth and Impact on subject site Population The demographic characteristics which are the emerging trend in population growth, its characteristics, spatial distribution, are sure to have a profound influence on the structure and size of the city. It is therefore essential and important to study the dynamics of population growth and structure of city. The analysis is expected to reflect questions such as What is the spatial population growth direction in MMR? What is the prevailing population base in the Panvel Municipal council (PMC) and Navi Mumbai Panvel (NMP)? What could be the future rate of growth in PMC and NMP? What will be the future requirement of Housing in the region? 10

11 Spatial diffusion characteristics Spatial diffusion pattern of population in MMR is concentrated towards the Northern region (Vasai-Virar) and North-East direction towards Kalyan- Dombiwali. Figure 5 Spatial diffusion pattern of Population and growth direction based upon the population density. 5km 10km Site location 20km 30km 40km Future pattern for the spatial diffusion can be evaluated based upon the following two aspects. X. Natural expansion due to improvement in the connectivity (or convenient) and unaffordability of real estate in the hinterland i.e. increasing population density in the Northern region (extended western suburb). 11

12 Thousands XYZ developer- (Nov-XX) X. Percolation from highly unaffordable developed urban area to affordable developing urban regions, i.e. development towards the Kalyan- Dombivali. In both the given conditions, the likely chances of forced development in the Panvel region seems difficult as Navi Mumbai can still accommodate the population with affordable price range and convenience. Moreover, there is no emerging or developing urban area in the region. Present population in Navi Mumbai Panvel and Panvel municipal council Population in the region of Navi Mumbai Panvel is increasing by the 9.06% CAGR (Compounded Annual Growth Rate) from X00X to X0XX, while the Panvel Municipal council population is increased by 5.66% CAGR from X00X to X0XX. Population in the Panvel Urban area (NMP+PMC) was X,85,9X7 souls in X00X which increased to X,75,46X souls in X0XX with the CAGR of 7.X8%. Chart 1Population growth in Panvel (PMC+NMP) Chart 2 Trend of CAGR in Panvel (PMC+NMP) (Source: Respective Year Census Data) 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% CAGR CAGR CAGR CAGR (Source: Respective Year Census Data) Population growth in the Panvel triggered after X99X after the quality of infrastructure and connectivity improved at Panvel. CAGR of the Panvel urban area is maximum in the entire MMR, although we cannot neglect the base effect in case of Panvel because the population base was so less that a minor increase also shows maximum growth. 12

13 Thousands XYZ developer- (Nov-XX) Chart 3 Comparative analysis of incremental population from X97X to X0XX 2,000 1,800 1,600 1,400 1,200 1, TMC KDMC VVMC NMMC MBMC UMC Panvel Base POP 1971 Increment from Increment from Increment from Increment from Comparative incremental increase graph between the Thane Municipal Corporation (TMC), Kalyan Dombivali Municipal corporation (KDMC), Vasai Virar Municipal corporation (VVMC), Navi Mumbai Municipal corporation (NMMC), Ullasnagar Municipal Corporation (UMC) and Panvel urban area (PMC+NMP) show that although the growth rate of population in Panvel is highest (7.X8%) but the absolute increase in the population is X,89,546. Panvel percentage of incremental increase is maximum in the defined municipal corporation, this suggest that population growth may continue in the region provided there is better infrastructure and connectivity in the region. Future infrastructure improvement and impact on subject site Growth of a region is dependent upon parameters like infrastructure improvement, zoning or land use regulation and increase in economic activity. However, to ascertain growth of the various regions, we have primarily focused only on the improvements that are expected to occur in various regions to improved connectivity in MMR. To access future improvement on proposed development, reduction in travel time is calculated based upon the improvement in the infrastructure. Lower Parel is considered to be a destination point, as the net intensity of the economic activity in MMR falls towards island city which draws maximum number of employees. The sub regions that have high reduction in travel time to and from the Island city due to infrastructure development will have higher chances of growth in future. 13

14 Subject site location and future development As we discussed in the beginning of the chapter, the subject site is located in the Khalapur sub region of the MMR. The comparative growth percentage for the Khalapur is derived based upon the improvement (reduction in travel time) due to proposed infrastructure. 14

15 Figure 6 Proposed Rail Infrastructure in MMR Figure 7 Proposed Karjat Panvel passenger rail line Subject site As per the X5 th May X0XX, Hindustan Times- Mumbai edition; Mumbai Railway Vikas Corporation (MRVC) has approved a feasibility study for the extension of the line between Panvel and Karjat. This means that Harbour line services could be extended up to Karjat and suburban trains could run between Panvel and Karjat in the future. 15

16 As per the proposed plan document, the Railway line supposed to be started by January X0XX and end by December X0X5. Figure 8 Proposed Road network improvement in MMR Considering the proposed road development at regional level, there is no sign of further improvement of the road adjoining the subject site, although the cumulative improvement of the network may reduce the travel time. Development of the Trans Harbour link will be the key development for improved road connectivity to the Lower Parel as the travel time will reduce drastically. As per the development plan time lines, Trans Harbour link should be started by end of June X0XX and should get completed by end of June X0X8. Comparative infrastructure impact assessment on Khalapur region Maximum reduction in the travel time means maximum improvement from the preliminary analysis output; sub-region like Uran, Khopate, Panvel and rest of the Uran region will be getting maximum benefit out of this development. 16

17 Remaining Areas of Vasai Vasai-Navghar Nallasopara Sub - Region VVNA Rural Sub - Region Ambernath Sub Region Ulhasnagar Sub Region Virar Sub - Region Badlapur Sub Region VVNA Coast Sub - Region Mira-Bhayander South Kalyan Ulhas TMC Sub Region Bhiwandi Sub Region KMC Sub Region Bhiwandi Rural Sub Region North Kalyan Tehsil Sub Karjat Sub Region NMMC (Excl. 15 Villages) Eastern Suburb Western Suburb NMMC ( 15 Villages) Pen Region Rest Panvel Sub Region Rasayani - Panvel Khalapur Sub Region Karnala Sub Region Alibag Region Uran Sub - Region Khopta Sub Region Panvel Sub - Region Rest Uran Sub Region XYZ developer- (Nov-XX) Chart 4 Regional Improvement Analysis 70% 60% 50% 40% 30% 20% 10% 0% The above chart clearly indicates that the maximum improvement will be in the Uran, Khopate, Panvel and rest of the Uran region post that Pen, Rasayani- Panvel and rest of the Panvel will have better connectivity. The Khalapur sub-region where our subject site is located will have lesser improvement than above mentioned locations and better than the remaining regions of MMR. Further to understand the time line base important, ten (X0) highly affected regions are compared below. Chart 5 Comparison of X0- most improving location by X0X0 80% 60% 40% 20% % Pen Region Rest Panvel Sub Region Rasayani - Panvel Khalapur Sub Region Khalapur Sub Region Uran Sub - Region Khopta Sub Region Panvel Sub - Region Rest Uran Sub Region NMMC (Excl. 15 Villages) Development time line shows the maximum change in improvement post X0X8. One cannot deny the fact that the Trans Harbour link is very important for the growth of this region. 17

18 Future Housing Demand assessment Improving convenience and employment opportunity will always create pull factor for the population which will eventually lead to increasing demand for the housing. Table 1 Population Projections As we have already discussed, the improved connectivity in the region is definitely going to act as the population growth driving factor. Presently, Panvel (NMP+PMC) has shown the population growth at 7.X8 CAGR, considering the infrastructure improvement and the historical trend of the CAGR in Panvel, we can say that the growth may remain in range of 6.0% to 7.0% for next X0 years (i.e. till X0XX). As in X0XX population base is going to increase this rate will further decrease and remain in the range of 6.5% to 5.5% between X0XX and X0XX. Future projection for the Panvel region is developed by considering the growth of 6% in the years of X0XX to X0XX while, 5% growth in the years of X0XX to X0XX. Population Incremental increase in population Demand of houses considering House Hold size of 4.5 Population X0XX X,85,9X7 Projected Population for 6% CAGR 6,78,767 4,9X,850 X,09,5XX Projected Population for 5% CAGR XX,X7,640 4,58,87X X,0X,97X Table 2 Land demand assessment The projection for the future housing indicate that for next X0 years there will be population increase of 4,9X,850; considering the house hold size of 4.5 demand for housing will be X,09,5XX in the period of X0XX-X0XX; where else in the period of X0XX-X0XX population will be increased by 4,58,87X person which turns out to be demand for X,0X,97X housing units. Cumulative housing demand in the next X0 years will turn out to be X,XX,494 housing units in the Panvel region. Housing demand BUA required Land Future land requirement in acres X09,5XX.XX 7,66,65,6X0 5,XX,X0,4XX X956 X0X,97X.59 7,XX,80,XX6 4,75,86,744 X8XX Land requirement for the overall development will be X776 acres (X5X8Ha) by considering the FSI is X.5 and Residential will be the 60% of overall development. 18

19 Chapter III: Site surroundings, Percolation probability and Future Development This chapter primarily talks about the location and surroundings of the subject site and assessment of subject site with reference to its topography, accessibility, availability of basic infrastructure at subject site. The chapter also assesses probable chance of percolation of population density to subject site by playing with cost arbitrage, and determines the market movement in the future considering the development of proposed projects on various time lines. Site characteristics Subject site is located approximately 5XKm away from the Lower Parel and X4km away from the Panvel located in the Khalapur sub region of MMR. Subject site admeasures around XX0 acres of land. Site is under the development jurisdiction of Raigad district. Figure 9 Site location in context of MMR Subject site The subject site is accessible from the old Mumbai-Pune highway, with possibility of multiple entries to subject site; although there is just one entry point at present. There are three critical elements in the proximity of the subject site; an education institute, a fuel station and a resort. 19

20 Figure 10 Site accessibility and surrounding infrastructure Fuel station Education Institute Aayush Resort The subject site is located in the Green Zone, surrounded by the forest land with undulating terrain. Key advantage of the subject site is the scenic beauty of the location with no development permission in the surrounding area. Net maximum elevation considering the level ±0.0 at express highway is X75mt. Figure 11 Present land use of the site and surroundings 20

21 Figure 12: Topography site sections C A E D D B A B C E (Source: Liases Foras) 21

22 Perceptual topography analysis distinguishes the site into three component favourable zone for development (approximately X5% of total site area), semi-development zone (approximately 40% of total site area) and unfavorable zone for development. Based upon the topographical analysis, we suggest that the site is divided into four plateaus. Plateau-X is at the lowest level having direct connectivity old Mumbai- Pune high way one of the largest flat terrain available for development on the subject site. Plateau- X is a rectilinear in nature, situated on +XX0.0mt above considering old Mumbai Pune high way as ±0.0 with the view of the forest on the southern side. Plateau- X is located on the western edge of the subject site, at level +XX5mt considering level ±0.0 on old Mumbai Pune highway. Plateau-4 is the highest point on the subject side divided into two parts Plateau-4a and Plateau- 4b situated at an average level of +X75 mt considering level ±0.0 on old Mumbai Pune highway. Figure 13 Slope analysis and development zone classification Unfavora Semi- Platea u- 3 Platea u- 4b Plate au- 4a Plateau - 2 Plateau - 1 Favorable 22

23 Figure 14 Plateau- X photographs looking towards express highway Figure 15 Plateau- X photograph looking towards Matheran hill and old Mumbai Pune Highway Infrastructure The subject site is located in the fringe area of the Panvel Municipal council and Navi Mumbai. Panvel is approximately X4 Km away from the main city, this clearly indicates that the infrastructure need to be developed by the developers. For provision of water supply, there are already one manmade lake and one well for the water supply. In terms of electricity developer can directly approach the supplier as HIRCO- Hiranandani Palace Garden, Panvel has signed an MoU with Tata Power, similarly for other physical infrastructure one have to build a MoU with respective suppliers to facilitate the end users. Proposed and ongoing projects in surroundings Panvel and its surroundings are widely discussed as the future destination for real estate investment as well as for residents due to proposed Trans harbor link and Navi Mumbai Airport. In the given condition there is a chance of oversupply in the market. However, the positive side is, if so many projects take off, supply will itself bring the demand. To understand the issues related future market we have drawn the following analysis based upon the collected information on future proposed project and approximate land area of the project. 23

24 Figure 16 Tentative location of proposed development (source: Liases Foras) Determining the future supply How we analyze the type of development Calculation for area under residential Per year construction Launch date The analysis is drawn based upon the six key parameters to access the future supply of the market. The criteria are possible type of development based upon size of the land parcel, amount of supply it proposed projects will bring into the market under residential category, yearly possible construction for each type of project, required time line for the completion of construction and the most important aspect year of project launch. Development type is derived from the information collected through various stack holders and then appraised based upon the land area. (i.e. if the land area is greater than or equal to X00 acres than the project will be launched as a township project. ) In case of pure residential development FSI is calculated at X.5, with loading of +XX% is considered, while for township project, the area of commercial is deducted based upon the revised township policy (if the land area is less than X47 acres X5% of BUA will be commercial, if the land area is greater than X47 acres and less than 494 acres X0% of BUA will be commercial and if the land area is greater than 494 acres X5% of BUA will be commercial.) FSI is considered at X.X with +XX% loading. Per year construction is derived based upon the prevailing construction practice and assumption large the land parcel faster the construction Launch date is assumed from the industry information and prevailing past pattern of project launch. 24

25 Table 3 Proposed projects in and around Panvel Projects Probable Development Total land area in acres Area under Residential in million sqft Tentative date for starting constructions Assumed per Year construction in sqft Required year for completion of residential Tentative dates for end of construction HIRCO SEZ Commercial X50 X0X4 844X45 0 X0X4 - HIRCO Commercial XX X0X0 X655X8 0 X0X0 Commercial - HIRCO Township X50 X0.8X X008 5XX966 X0 X0X8 Residential Indiabulls Residential X008 XX5000 XX X0X0 Greens Indiabulls Golf Residential 5X 4.4X X0XX XX78X4 X9 X0XX Kalpataru Residential XX X.86 X007 XX4400 X4 X0XX Marathon Residential 5X 4.4X X0X0 XX78X4 X9 X0X9 Neelkhant- Township X54 XX.XX X0XX 5454XX X0 X0XX Harigramkevale Neelkhant-Pale Township XX X0X5 4084X4 X9 X0X4 K Raheja Residential X0 X.69 X0X5 XX8X7X XX X0X8 Universal Entertainment Township X0X4 X9X4X7X XX X0X5 city Mumbai IT and Township X0X5 X9X4X7X XX X046 Telecom city Energy city Township X0X0 X9X4X7X XX X05X Vijay Wadhwa Residential X5 X.97 X0X4 X74879 X7 X0XX Urban Infra Residential XX0 X0.X9 X0X7 4X955X XX X040 Urban Infra X Township X66 X8.07 X0XX 894X66 X0 X04X Akruti-X Township X X0X6 XX79690 XX X0X7 Akruti-X Township X00 X0.X8 X0X4 X0000X4 X0 X0X4 Akruti-X Township X6 X0X7 X5569XX XX X0X8 Akruti-4 Township X6 X0X8 X5569XX XX X0X9 Mayfair Residential 5 0.4X X0XX 8X466 5 X0X8 25

26 Projected future supply base upon the construction time line Future supply is projected based upon the two key assumptions; Panvel market share can be increase from 4% to maximum X8% of total market share as the present developed market of Navi Mumbai and Extended Central Suburb (X4% to X8%). The second key assumption considered to project the sales is, market cycle. Real estate market cycle move from efficient market to inefficient market and vice versa. Chart 6 Future market composition based upon the analysis Market Supply increment Market will be moving towards efficient phase from X0X6 and inefficiency from X0X0. The key point to be considering here is the market share of a project should not be increased more than X5%. Impact of airport In case of the proposed development the second most critical and influential project on the development of Panvel and its surrounding region is Navi Mumbai International Airport (NMIA). The key question here is: will the development of NMIA have any significant amount of impact on the subject site? To answer this question we have carried out the spatial analysis of existing Mumbai International Airport and its influence. Phasing of proposed Navi Mumbai airport NMIA project is divided into four phase, operation period of phase X will start from X0X8 as per the proposed development information as per feasibility study for NMIA by The Louis Berger Group Inc. and CIDCO. 26

27 Table 4 NMIA phasing plan Phase/Year Runway dimensions As per the feasibility study report, following are the key highlights of the Phase plan. Phase X (X0XX-X4 to X0X6-X7): In Phase X, the airport is initially designed with a level of service adequate to satisfy the demand of X0 million passengers. This is accomplished by providing NMIA with one runway and one processing terminal building with one associated pier for both domestic and international passengers Phase X (X0X7-X8 to X0XX-XX): The Phase X development at the airport is designed to meet the demand for X5 million passengers. In this phase, an additional runway is built to meet airside demand along with one processing building with one associated pier for both domestic and international passengers. Phase X (X0XX-XX to X0X6-X7): The Phase X development of the airport is designed with a level of service adequate to satisfy a 45 million passenger s demand by adding a parallel pier within the terminal building complex so one handles domestic and the other international passengers. Phase 4 (X0X7-X8 to X0XX-XX): The airport is ultimately designed with a level of service adequate to satisfy a 60 million passenger s demand by providing NMIA with additional boarding gates and apron area to satisfy the additional demand. Phase X Phase X Phase X Phase 4 (X0X6-X7) (X0XX-XX) (X0X6-X7) (X0XX-XX) X700m X 60m (Runway-X) X700m X 60m (Runway- X) - - Passenger Terminal Area (sq.mt.) XXX,X6X X7X,0X0 4XX,X05 459,486 Capacity (MPPA) X0 X Cargo Terminal Area (sq.mt.) XX,994 47,598 77,X69 X0X,46X Capacity (tons) X6X,954 57X,X76 X,X57,5X5 X,49X,946 Aircraft hangars XX (Source: CIDCO) Impact assessment study To access the impact due to development of NMIA, we have studied the existing situation of CSIT Mumbai. The study inferred the impact into the three segments; High impact zone limited to XKm to 5Km from Airport- the high impact zone will cater the all necessary demand for Airport to perform such as, hospitality, retail, offices etc; The medium impact zone has the probability of attracting few tourist at lower lease rental- the zone impact will be upto 9 Km while the remaining region 27

28 will only have advantage that they have accessibility to airport which is defined as Low/ No impact zone. Figure 17: Comparative impact assessment of airports in MMR to ascertain the futre demand arround NMIA High Mediu Low/ High Lower Parel CBD Mediu Subject site Low/ Nature of demand based The Airport will bring in demand mostly related to the hospitality upon the proposed Airport sector, closely followed by housing, commercial or other sectors. Table 5 Spatial distance for various sectors to flourish around Airport. Sector Probable distance from Entry point of Airport Hospitality, Convention center etc Housing for Airport Employee Office space for Cargo Consultant Regional Offices of International consulting firms Xkm to XKm 5Km XKm to XKm 7Km to 9 Km The analysis suggests that the maximum distance for percolating demand will be limited to 7Km to 9Km. Taking this into account our subject site is located around X4Km, which means at present condition in Mumbai and keeping airport into the center, Kandivali (E) is located at the distance of XXKm to X4Km. Does Kandivali have any impact of CSIT apart from the notion that we have accessibility to the airport? 28

29 Figure 18 Impact of proposed NMIA It is quite clear that the demand will be in the immediate catchment of 7Km to 9Km as it is the only point at our subject site where the residents would have the notional satisfaction that they are closer to the airport. 29

30 Millions XYZ developer- (Nov-XX) Chapter: IV: Market Dynamics The chapter discussed about the market efficiency at regional level as well as micro catchment level to answer the following questions: What is the regional level (MMR) environment for real estate development? Is the same trends also followed by the local (Panvel) market? What is the trend of Panvel market with reference to price and productive? What percentage of market share is contributed by Panvel considering the entire MMR? How Panvel market is performing against the other locations of Navi Mumbai? Will Panvel able to attract demand percolation from Navi Mumbai? What product and cost range is performing best in the Panvel market? Macro Market analysis (regional perspective of Real estate markets) Chart 7 MMR market sales-inventory-price Regional market perspective helps us to understand the overall real estate market condition with reference to its performance, sales, inventory and price movements Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 0 InventoryIndex SalesIndex MMR market is getting worse as the price and inventory keeps increasing and sales continues to decline. 30

31 Chart 8 Price and Productivity in MMR % % %2.18%2.04% % Mar % Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep % 1.57%1.39% 1.55% 1.26%1.33% 1.53% 1.37% Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep % 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% PriceIndex SalesVelocity Price and productivity Any efficient market will try to maintain X.75% of sales velocity. The MMR market has shown constant decline in the velocity from the June X009 to September X0XX. Reason behind the constant decline is the user s unaffordability as against the constant price increase from Rs 5,784 per sqft in June X009 to Rs XX,X84 per sqft in September X0XX where the velocity declined from X.86% to X.X77%. Market sales composition Maximum sale in the market is contributed by the Navi Mumbai and Central Extended Suburb as against the maximum unsold which is available in the Western Suburbs. Panvel contributes 4% of the MMR market share. Chart 9 Suburb wise sales composition as on Sep-XX Chart 10 Suburb wise unsold composition as on Sep-XX Central Suburb Ext 17% Navi Mumbai 18% Thane 11% Island city 9% Western Extende d Suburb 16% Panvel 4% Central Suburb 10% Western Suburb 15% Navi Central Mumbai Suburb 11% Ext 13% Thane 9% Western Extended Suburb 13% Island city 15% Panvel 6% Central Suburb 13% Western Suburb 20% 31

32 Millions XYZ developer- (Nov-XX) Chart 11 Suburb wise sales-inventory and months inventory X9.XX 8.XX X7.X0 X6.55 X8.07 XX.X5 X8.XX X6.X Island city Panvel Central Suburb Western Suburb Western Extended Suburb Thane Central Suburb Ext Navi Mumbai 0 Sales Inventory MonthsInventory (RHS) The comparative analysis of sales-inventory and months inventory suggest that markets like Thane, Central Extended Suburb and Navi Mumbai are better performing than rest of the suburbs. The most volatile market for investment is Island city where the months inventory is as high as 60 followed by Panvel where one can see the inventory of 54 months. Island city is already a grown and matured market as against the Panvel which is just an emerging market with an oversupply scenario. Even the price bracket offer by the Panvel market is way below that of Island city. Macro market analysis can only emphasize the corresponding risk attached to the market. It is very much important to dig deep enough before reaching any conclusion. Micro market analysis and Spatial analysis may help to answer the questions related to the market performance the possible way for development. Micro Market analysis (Competitive location assessment) Market sales composition The definition of micro market or the competitive locations is based upon the geographical region s proximity to Panvel. Entire Navi Mumbai region is defined as the competitive location for the Panvel region. Maximum sale during the September quarter X0XX is registered in Kharghar followed by Panvel region. It is noteworthy that maximum unsold stock is available in Panvel, whereas in an ideal condition it should be in Kharghar. 32

33 Chart 12 Sales composition in the micro market Sep-XX Chart 13 Unsold composition in the micro market Sep-XX Vashi 0% Taloja 4% Sanpada 0% Airoli Dronagiri 3% 0% Ulwe 13% Panvel 21% Nerul 3% Ghansoli 0% Kalamboli 13% Kamothe 15% Karanjade Kharghar 2% 25% Koparkhai rane 1% Vashi Panvel 35% 0% Sanpada 0% Ulwe 11% Taloja 5% Airoli 5% Ghansoli 1% Kalamboli 10% Kharghar 16% Kamothe 7% Karanjade 3% Koparkhai Nerul rane 5% 0% These contrasting compositions highlight the threat of oversupply in the Panvel. Moreover, the prices are not lucrative enough to attract the investments. Chart 14 Micro market with perspective of sold unsold and moths inventory Inventory Sep-12 quarter sales Months Inventory Business turnover Maximum business turnover in the September quarter is registered in Kharghar, Ulwe and Panvel. 33

34 Chart 15 Business turnover in the micro market Price movement We have seen that the maximum business turnover is at Kharghar, Ulwe, Panvel, Kamothe and Kalamboli. Considering the price movement and the yearly appreciation, Kalmboli has shown the maximum appreciation of XX% from December X0XX to September X0XX, while Panvel, Kharghar and Kamothe have shown the increase of XX% on annual base in last XX months. Although, Ulwe has shown the maximum business turnover in last quarter, the price appreciation in the location is just 6% as the location is developing location. Location Sep-XX Dec-XX Mar-XX Jun-XX Sep-XX YoY change Airoli 6,X90 6,X96 6,XXX 6,5X4 6,506 X% Ghansoli 6,XX7 6,X00 6,X5X 6,X0X 6,704 X0% Koparkhairane 7,764 7,8X5 8,XX8 8,587 8,6X5 X0% Vashi 6,8X7 6,84X 7,700 8,X00 X6,0XX XX4% Sanpada XX,000 XX,000 XX,500 X0,XX5 X0,X68-8% Nerul 9,946 XX,XX6 XX,6XX XX,659 XX,779 X4% Kharghar 5,478 5,595 5,6X9 6,055 6,X74 XX% Kamothe 4,554 4,676 4,788 5,078 5,XX5 XX% Kalamboli 4,49X 4,88X 5,04X 5,X07 5,9XX XX% Taloja X,556 X,4X8 X,6X7 X,69X X,770 X0% Khanda X,800 X,800 X,800 X,800 X,800 0% Colony Panvel X,895 4,0X4 4,067 4,X90 4,504 XX% Ulwe 4,X60 4,X48 4,479 4,47X 4,6X0 6% Dronagiri NA NA NA X,67X X,690 Price Productivity Price movement in the micro market shown increase of Rs 987 per sqft from December X0X0 to September X0XX as against the sales velocity 34

35 decline from the X.XX% in December X0X0 to X.55% in September X0XX. Chart 16 Price and Productivity in the micro catchment % % 1.66% 1.51% 1.16% 1.15% 1.22% % 2.50% 2.00% 1.50% 1.00% % 0 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep % Sum of Price Sum of sales velocity Price in micro market increases at a slow pace as compared to the MMR and velocity is keep declining. This suggests the overall slowdown in the market and the lack of effective demand. In a nutshell, market is witnessing an oversupply. Demand percolation assessment In the given condition where market is under correction and slow down, the key question arises, can we garner demand for our subject site? To access the future probability of a natural shift of demand and analysis of sales; inventory and price are derived at various distance bands on half yearly basis. Entire Micro Market is spread from X4Km distance to 66Km distance band (distance is calculated from Lower Parel). Entire sprawl is divided into X4 distance band to retrospect the market demand. Entire Micro Market is spread from X4Km distance to 66Km distance band (distance is calculated from Lower Parel). Entire sprawl is divided into X4 distance band to retrospect the market demand. 35

36 Millions XYZ developer- (Nov-XX) Table 6 Distance band wise locations Distance Band Locations Distance Locations Band X4Km-X7Km Kalamboli, Kharghar (P) 45Km-48Km Kalamboli (P), Karanjade, Kharghar (P), Palidevad, Panvel (P) X7Km-X0Km Koparkhairane, Nerul (P), 48Km-5XKm Karanjade, Kharghar (P), Panvel Sanpada, Vashi X0Km-XXKm Airoli (P), Ghansoli, Kamothe(P), Koperkhairane, Nerul (P) XXKm-X6Km X6Km-X9Km X9Km-4XKm 4XKm-45Km Airoli (P), Kamothe(P), Nerul (P), Kharghar (P), Panvel, Ulwe Kharghar (P), Nerul, Panvel, Taloja, Ulwe Kalamboli (P), Kharghar (P), Kamothe (P), Ulwe (P) Kalamboli (P), Kharghar (P), Kamothe (P), Ulwe (P), Panvel (P) Chart 17 Distance band wise sales movement 5XKm-54Km 57Km-60Km 60Km-6XKm 6XKm-66Km >66Km (P), Taloja (P) Panvel (P), Taloja (P) Kharghar Kalamboli Kamothe, Khanda Colony Panvel (P) H Subje ct 24Km-27Km 27Km-30Km 30Km-33Km 33Km-36Km 36Km-39Km 39Km-42Km 42Km-45Km 45Km-48Km 48Km-51Km 51Km-54Km 57Km-60Km 60Km-63Km 63Km-66Km >66Km Distance band analysis suggests that the locations between X9Km 4X Km are the best performing locations since XHY X0-XX to XHY XX-XX. The subject-site is located in the distance band of 5XKm to 54Km and 36

37 Millions XYZ developer- (Nov-XX) at this distance band, market sales have declined by almost 50% from XHY X0-XX to XHY XX-XX. Chart 18 Distance band wise supply composition Subje ct H 2H 24Km-27Km 27Km-30Km 30Km-33Km 33Km-36Km 36Km-39Km 39Km-42Km 42Km-45Km 45Km-48Km 48Km-51Km 51Km-54Km 57Km-60Km 60Km-63Km 63Km-66Km >66Km It is evident that the maximum supply will happen at a distance band of X9 Km- 4X Km. Apart from that, the same magnitude of the supply is also observed at distance band of 5Xkm- 54km where sales is just miniscule. This could be the major threat for future development on the subject site. 37

38 Chart 19 Distance band wise price movement H FY H FY Subje 24Km-27Km 27Km-30Km 30Km-33Km 33Km-36Km-39Km 39Km-42Km 42Km-45Km 45Km-48Km 48Km-51Km 51Km-54Km 57Km-60Km 60Km-63Km 63Km-66Km >66Km According to the market, distance band analysis of consumer purchasing preference is at X9Km- 4XKm at an average price of Rs 5,X57 per sqft, while the projects at distance of 5XKm- 54Km are offered at the average price Rs 4,74X per sqft. Although price arbitrage is there but as against the trade off to increasing travel distance and under developed locations, viability of the price is questionable to generate enough sales and that is what we observe in distance band wise sales analysis. Comparative market analysis Comparative market analysis will give us the referential analysis, how is the market performing with respect to regional market, micro market, town and locations around subject site. The subject site location contributes to the X% of MMR sales having unsold stock of X.98mn sqft. Month s inventory of the location around subject site is the maximum at X8X which means at present price without any new supply, the market requires X8X months to sell the unsold stock. 38

39 Table 7 Comparative analysis of sales and unsold Last XX months sales (mn sqft) Percentage to MMR sales Unsold stock (mn sqft) Months Inventory MMR X7.X5 XX6.X8 X9 Navi Mumbai and Panvel (Catchment) 7.X6 X9% XX.X7 XX Panvel (XXKm- 66Km) X.54 4% Subject site Distance band (5XKm- 54Km) 0.X4 X% X.98 X8X Subject site has higher weighted average price than the Panvel market, We have already discussed the threat related to price in the demand percolation. Table 8 Comparative price movement Price YoY change Sep-XX Dec-XX Mar-XX Jun-XX Sep-XX MMR X00XX X0598 X08X5 XXX78 XXX85 7.4X% Navi Mumbai and Panvel (Catchment) 5X4X 5X6X 5X7X 5XXX 55X0 X.9X% Panvel (XXKm- 66Km) X894 40XX X88 450X XX.90% Subject site Distance band (5XKm- 54Km) 4X86 4X6X 4X46 44XX 474X XX.X0% As against the price, sales velocity in the nearby location of subject site is the lowest at 0.4X% which translates into the gestation period of XX7months. Table 9 Comparative sales velocity movement Sales Velocity Sep-XX Dec-XX Mar-XX Jun-XX Sep-XX MMR X.55% X.X4% X.XX% X.5X% X.X7% Navi Mumbai and Panvel (Catchment) X.X6% X.X5% X.XX% X.66% X.55% Panvel (XXKm- 66Km) 0.77% X.XX% 0.88% X.X9% X.X0% Subject site Distance band (5XKm- 54Km) 0.99% 0.58% 0.5X% 0.60% 0.4X% The above analysis clearly suggests that not only our subject site but the entire Panvel is facing the oversupply scenario. Scenario is worst in the locations around the subject site. However, it does not mean that opportunity is not there. On the flipside, this is the right moment to play with the market inefficiency with unique products (villa) and correct valuation. 39

40 Product performance In present market condition the question arises is, Which product should we offer? What should be the cost range? What should be the area? To access the product performance analysis is divided into the two parts; part X will talk about the product performances in the micro market and derive the best performing products while in second stage of analysis, suggested product will be analyzed with microscopic view to derive the best performing cost range and area. The product performance is derived based upon the theory that the product which has higher sales and respectively balanced supply of the product is the best performing product. Based upon the theory, best products in the micro market are XBHK, XBHK and XBHK respectively. Table 10 Product performance assessment in the Micro catchment Product Last XX month sales Unsold Supply Percentile Product Efficiency X X/X BHK 88,80X X96,XX6 X85,0X7 X% XBHK X,6X0,405 4,784,8XX 6,405,XX8 4X% XRK 7X,477 X74,X57 X47,6X4 X% X X/X BHK X06,90X 650,9X0 957,8XX 8% XBHK X,8X0,0XX X0,900,45X X4,7X0,474 X00% XRK X,X70 X,X75 4,445 0% X X/X BHK X,800 X,845 5,645 0% XBHK X,XXX,088 4,88X,700 6,094,788 XX% 4 X/X BHK - - 0% 4BHK XX6,906 5X6,090 6XX,995 X% 5BHK 6,000-6,000 0% Duplex X7,X08 59,6X5 76,94X 0% Duplex XBHK - - 0% Duplex 4BHK - 7,685 7,685 0% Penthouse X,660 X4,706 X8,X66 0% Penthouse XBHK % Penthouse XBHK X,560 - X,560 0% Villas - 69,60X 69,60X 0% XBHK cost range analysis Cost range analysis is derived in focusing on the Panvel market only; based upon the analysis most efficient cost range in the XBHK is Rs XX lac to Rs XX lacs with an average super built-up area of 6X6 sqft, post 40

41 Table 11 XBHK cost range analysis XYZ developer- (Nov-XX) that cost range of Rs X5lac to Rs X0 lac and Rs X0lac to Rs X5lac is performing better in the market. Cost range Efficiency Percentile Average Area Cost range Last XXmonth sales Unsold Supply X5 Lac - X7 Lac 8X6X 900 9X6X X4% 450 X7 Lac - X9 Lac X7X4X X7667X X040XX X4% 6X0 X9 Lac - XX Lac X56XX XX8X XX% 6XX XX Lac - XX Lac 80X46 X0500X X85X49 X00% 6X6 XX Lac - X5 Lac X7867 7XX64 89XXX XX% 6XX X5 Lac - X0 Lac 6XXX XXXX67 87% 657 X0 Lac - X5 Lac X5X7X9 X994X9 56% 68X X5 Lac - 40 Lac XX07X XX05XX X5X606 X6% Lac - 45 Lac X4X5 X6495 X99X0 4% 7X4 XBHK cost range analysis In case of XBHK, the most efficient cost range is in the range of Rs 50 lac to Rs 55 lac with an average super built-up area of XX4Xsqft. Table 12 XBHK cost range analysis Cost range Efficiency Percentile Average Area Cost range Last XXmonth sales Unsold Supply XX Lac - X5 Lac 4X80 47X5 9X05 X% 675 X5 Lac - X0 Lac 55XX0 54XXX X7% 9X8 X0 Lac - X5 Lac 4475X 4045X 85X0X X4% 968 X5 Lac - 40 Lac X467 X4805X X9% Lac - 45 Lac X7968 8XX65X 57% Lac - 50 Lac 5X755 8X79X XX6548 X8% X Lac - 55 Lac X07558 XX8X X09840 X00% XX4X 55 Lac - 60 Lac 7794X 6X04X4 698X77 5X% XX40 60 Lac - 65 Lac XX570 XX7X89 X58759 X4% XX7X 65 Lac - 70 Lac 5X858 4XX9X X5% XX67 70 Lac - 75 Lac 7XX8 0 7XX8 7% XX88 75 Lac - 80 Lac X88X6 X XX6 X4% XX96 80 Lac - 90 Lac XX40 X480 X7X0 X% XX40 XBHK Cost range analysis In case of XBHK, the most efficient price range is Rs70lac to Rs75lac with an average super built up area of X400 sqft. 41