Office Property Market Overview

Transcription

1 Office Property Market Overview INDIA QUARTERLY UPDATE JANUARY 213

2 4Q 212 OFFICE Research SYDNEY CENTRAL & forecast BUSINESS report DISTRICT research India office & forecast market Report ECONOMIC BAROMETER Dec-11 Dec-12 REPO RATE 8.5% 8.% REVERSE REPO RATE 7.5% 7.% CRR 6.% 4.25% INFLATION PRIME LENDING Rate DEPOSIT RATE (<1 YEAR) Foreign Exchange INR - USD 9.75% % 1.% % 7.75% - 9.5% 8.% - 9.% INR- Euro Return on Alternative Investments Dec-11 Dec-12 % Change Gold 27,67 3, % SILVER 52,25 6, % EQUITY (BSE SENSEX) 15,881 19, REALTY INDEX 1,55 2, % Note : All values in the above tables are as on 15th of December, 211 and December, 212 MACRO ECONOMIC OVERVIEW GDP growth in the July - September quarter of 212 was 5.3%, contracting marginally from in the last quarter. Headline inflation based on the wholesale price index inched down to 7.2 for the month of November 212, as compared to 7.45% in October 212. It was 9.46% during the corresponding month of the previous year. The Reserve Bank of India reduced the CRR (Cash Reserve Ratio) of scheduled banks by 25 basis points from 4.5 to 4.25% with effect from 3 November 212 to induce immediate liquidity in the market. However, the central bank did not provide any repo rate cut this quarter. India s foreign direct investment (FDI) inflow was around USD1.94 billion in October 212, which was nearly 65% above the same month last year. This quarter, the commercial office markets in India have shown mixed trends. Overall, rents and capital values remained stagnant with a downward bias. Notwithstanding the current economic difficulties, the leasing activity in Mumbai, Delhi and Gurgaon Bangalore remained steady; however, the Chennai, Kolkata and NOIDA markets experienced relatively weak demand. COLLIERS VIEW: Business confidence is up based on the government s keen resolve to introduce numerous fiscal and economic reforms. RBI has indicated that they would positively review lowering the repo rate in 1Q 213. This should increase liquidity in the market; and the positive business environment should lead to recovery in the country s economic growth and increase in demand for commercial and residential real estate. In the medium terms, cities with lower inventory overhang (such as Bangalore and Mumbai) will witness strengthening in the rental and capital values. However in the short term rental values across board will be under stress. INR Crore In Percentage ECONOMIC INDICATORS Gross Domestic Product at Factor Cost 1.% 9.% 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% FDI in Real Estate 16, 14, 12, 1, 8, 6, 4, 2, Jan - Mar 9 Apr - Jun 9 Jul - Sep 9 Oct - Dec 9 Jan - Mar 1 Apr - Jun 1 Jul - Sep 1 Oct - Dec 1 Jan - Mar 11 Apr - Jun 11 Jul - Sep 11 Oct - Dec 11 Jan - Mar 12 Apr - Jun 12 Jun - Sep April -Oct 12 BSE Sensex & Realty Index 1-Oct Oct Oct Nov-12 3-Nov Dec-12 * Rebase to 1 BSE Sensex Realty Index Exchange Rates Oct Oct Octl Nov-12 3-Nov Dec-12 USD Euro * Rebase to 1

3 INDIA 4Q 212 OFFICE MUMBAI Value 3Q 212 4Q 212 CBD % -9% Andheri East % % BKC % 3% Lower Parel 13-2 % % Malad 8-9 % % Navi Mumbai % % Powai 1-12 % % Worli/ Prabhdevi % % Goregaon/ JVLR 8-11 % -5% Kalina % % Thane / LBS 5-1 % % KEY MARKET TRANSACTIONS MumBAI More than 9.3 million sq ft of commercial Grade A office space was available for fit-out in 4Q 212. About 2 of this total available space was concentrated in Andheri East. A number of projects / part of the projects were completed this quarter resulting in the addition of approximately 4 million sq ft of Grade A office space to the city s total inventory. Leasing activity picked up in the Mumbai Grade A office market during 4Q 212 and few large deals were concluded during the quarter. The city s total absorption for 212 totalled around 6.23 million sq ft. Sectors which primarily contributed to this absorption were Banking, Finance Services and Insurance (BFSI) and IT/ITes. Average rental and capital values in Mumbai remained stable in 4Q 212 across all micromarkets due to ample availability of stock and new developments in the pipeline. The Maharashtra State Road Development Corporation (MSRDC) has opened a second flyover, named Patlipada, on the Thane- Ghodbunder Road. A total of four flyovers the Patlipada, Waghbil, Kapurbawdi and Manpada were planned on this road, of which Waghbil and Patlipada flyover are now operational; work on the Manpada flyover is in the final stages and is expected to be operational by the end of January 213. COLLIERS VIEW: 4Q 212 witnessed an increase in absorption of office space. The demand showed a clear preference for premium quality office space. We anticipate that in short to medium term the rental values for such properties will command a premium due to limited supply. Though, overall market rentals will witness stability on account of demand/supply equilibrium. -INR Per Sq.ft. Per Month Q28 Navi Mumbai 6% CBD Lower Parel 2% Andheri East 4Q28 Malad 5% BKC Goregoan / JVLR 8% Worli / Prabhadevi Powai 1% Lower Parel BKC 8% Malad Navi Mumbai Kalina 1% Grade a Capital 4Q29 4Q21 Powai Worli/ Prabhdevi 4Q211 Goregaon / JVLR 4Q212 Thane / LBS 22% CBD 1% Andheri East Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A Kalina Thane / LBS 4Q213F Covidien Boomerang 9,9 Andheri Lease Lhoist Sahar Plaza (Windfall) 6,63 Andheri Lease QAD India Techniplex 15, Goregaon Lease Vertex Group Sigma IT Park 22,49 Rabale Lease Visa The Capital 2, BKC Lease Woodfield Systems (India) Ltd. NITCO Biz Park 1, Thane Sale Kohinoor Square Kohinoor Group 779, Central Mumbai 213 Marathon Icon Marathon Group 175,5 Central Mumbai 213 Mindspace IT SEZ Bldg. No.11 K Raheja Corp 4,5 Navi Mumbai 213 Colliers International p. 3

4 INDIA 4Q 212 OFFICE DELHI About 1.6 million sq ft of Grade A office space was ready for fit-out in 4Q 212. The majority of this supply was located in SBD locations such as Jasola and Saket. Nehru Place 1% Connaught place 2% Value 3Q 212 4Q 212 delhi Nehru Place % Connaught Place % 2% Netaji Subhash % % Jasola % -5% Saket % 1% No new supply was added during the surveyed quarter to the Delhi commercial Grade A office stock. Occupier demand remained steady during the quarter. A number of small transactions were concluded in the CBD while SBD locations like Jasola and Saket recorded few mid-size transactions. Amid steady occupier demand and limited supply availability the rental values for Grade A offices remained stable in almost all micromarkets. Capital values remained stable in almost all micro-markets and no major activity was witnessed in the sales market. However, the state government has announced the new circle rates with effect from 5 December 212 in the capital. As per the notification, the circle rate in Category A colonies went up by 2%, in Category B by 5% and the rest by 22%. At present, there are eight categories of colonies in Delhi (A through H). The circle rate is the minimum rate for registration of COLLIERS VIEW: While the demand has come down marginally as compared to previous years, the rental values remained stable during 212. Most of the developers are adopting a wait and watch approach awaiting for new announcement on city development plans. No major supply is expected in near term except in Aerocity which is an emerging location in Delhi near International Airport. We anticipate rental values to remain stable due to limited supply and muted demand. -INR Per Sq.ft. Per Month Q28 Nehru Place 4Q28 Saket 29% Grade a Capital 4Q29 Connaught Place 4Q21 Jasola 4Q211 4Q212 Saket Jasola 59% Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A 4Q213F 4 35 KEY MARKET TRANSACTIONS Franklin Templeton Ashoka Estate 5,2 Barakhamba Road Lease Oriflame Corporate One 5, Jasola Lease State Bank of India Jeevan Bharti 2, Connaught Place Lease Thales Group Konnectus 18,45 Minto Road Lease USG Corporation DLF Jasola 1,71 Jasola Lease Caddie Commercial Tower Caddie Hotel 1, Aerocity 213 DLF Towers Okhla DLF Ltd. 42, Okhla 213 Ambience Commercial Tower Ambience Group 15, Vasant Kunj 213 p. 4 Colliers International

5 INDIA 4Q 212 OFFICE GURGAON More than 14 million sq ft of Grade A office space was available for fit-out in 4Q 212. Most of the available supply was concentrated on Golf Course Road, Golf Course Road Extension, Udyog Vihar, NH-8 up to Manesar. DLF Cyber City NH8/Udhyog Vihar 21% During the surveyed quarter, construction activities remained upbeat and several projects / parts of the projects contributing more than.5 million sq ft of Grade A office space were added to the city s total inventory. Golf Course Road/ Ext /Sohna Road 51% Manesar 17% Institutional Sectors / Sushant Lok MG Road 2% 5% Value Gurgaon 3Q 212 4Q 212 M. G. Road % -1% Golf Course Rd./ Ext /Sohna Rd. NH8/Udhyog Vihar % -7% % 1% Manesar % 5% Institutional Sectors / Sushant Lok % 1% This quarter a number of projects / parts of the projects were launched, admeasuring about 1 million sq.ft. Most of these projects are expected to be completed by the end of 215 and will add about 1 million sq ft of Grade A office space to the city s total inventory. Occupier demand remained strong and a number of mid-size (2, to 25, sq ft) transactions were recorded during 4Q 212. The total absorption recorded during the year was to the tune of 4 million sq ft. values recorded a marginal increase in the range of 1 to 2% in select micro-markets such as Golf Course Road, Golf Course Extension Road and Sohna Road. However, rental values remained under pressure in the CBD and declined by 2%. All other micromarkets witnessed steady rents. COLLIERS VIEW: In view of the sustained trend of cost-saving initiatives adopted by most of the office occupiers, Udhyog Vihar and Sohna Road will remain the most preferred location because of affordable rentals and location advantages. The office rental value growth will be capped in medium term due to existing vacancy and the forthcoming new supply. -INR Per Sq.ft. Per Month Q28 MG Road Golf Course Road/Ext /Sohna Road 4Q28 Grade a Capital NH8/Udhyog Vihar 4Q29 Manesar 4Q21 Institutional Sectors / Sushant Lok Golf Course Road/Ext /Sohna Road (IT) 4Q211 NH8/Udhyog Vihar (IT) Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A 4Q212 Manesar (IT) 4Q213F KEY MARKET TRANSACTION AB Sciex India Plot No , Udyog Vihar Lease ACS Xerox Park View Business Tower 4, Sohna Road Lease Mudra Communications Ltd. Platinum Towers 3, Udyog Vihar Lease Pepsico Ltd. Pioneer Urban 15, Golf Course Ext Rd. Lease SAP India Vatika Towers 9,5 Sector 54 Lease DLF Building 14 Tower D DLF Ltd. 731,8 NH Success Tower Suncity Projects 2, Golf Course Ext Rd. 213 Unitech Infospace, Gurgaon Phase 2 Building 7 Unitech Ltd. 432, NH Colliers International p. 5

6 INDIA 4Q 212 OFFICE noida noida 3Q 212 4Q 212 During 4Q 212, about 8.8 million sq ft of Grade A and Grade B office space was available for fit-out. More than 9% of this supply was IT/ITeS office space located primarily in Sectors 16A, 62 and Sectors 125 to 143 along the NOIDA Expressway. Following the previous quarter, construction activities remained upbeat and about 1.5 million sq ft of Grade A office space was added to the city s total inventory. Projects / part of the projects contributing to this new supply include Ansal Corporate Park by Ansal API and Advant IT Park, Tower-B by Advant Group, both located at Sector 143. A new project, Ithum, was launched by Beaver International in Sector 62 this quarter. The project, measuring approximately.5 million sq ft, is expected to be completed by the end of Institutional Sectors (Sec.16A, 62, % Commercial Sectors (Sec 18).2% Industrial Sectors (Sec. 1-9, 57-6, 63-65) (Grade B) 8.6% Commercial Sectors (Sec 18) (Grade B).7% Grade A Capital Value Institutional Sectors (Non IT) Institutional Sectors (IT) Comercial Sectors Industrial Sector % -11% % -5% % -7% % Occupier demand remained bleak but few large floor plate deals were concluded during 4Q 212. The total absorption in 212 accounted for more than 2 million sq ft of Grade A office space. values declined to the tune of 2 to 3% in the institutional and industrial sectors this quarter however, rents in the commercial sector remained stable. COLLIERS VIEW: The market is facing stiff competition from other preferred location like Gurgaon. Occupier demand has come down significantly in 212 as compared to previous years and market witnessed an overall contraction of rental values by 5%. In view of large upcoming supply in the pipeline and lower demand from IT/ITeS companies, rental values will continue to remain under pressure in medium term. -INR Per Sq.ft. Per Month Q29 Institutional Sectors (Non IT) 4Q29 4Q21 Institutional Sectors (IT) 4Q211 4Q212 Commercial Sectors Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A 4Q213F KEY MARKET TRANSACTIONS Benare (Domestic BPO) Assotech One 12,5 Sector 62 Lease Haskoning India Green Boulevard 11, Sector 62 Lease Lumata Digital Green Boulevard 25, Sector 62 Lease Powertec Energy Individual Building 25, Sector 63 Lease Samsung Engineering Advant IT Park 1, Sector 142 Lease Amigo Cyber Park Amigo Park Inc. 25, NOIDA Expressway 213 Corporate Park Ansal API 186,24 NOIDA Expressway 213 Oxygen SEZ 3C Group 25, NOIDA Expressway 213 p. 6 Colliers International

7 INDIA 4Q 212 OFFICE CHENNAI Approximately 14 million sq ft of Grade A office space was available for fit-out this quarter. The majority of this supply was located along the OMR IT Corridor. OMR (IT Corridor) 51% GST Rd 3% No major new supply was added to the city s inventory during the quarter. Velachery 1% Vadapalini % chennai 3Q 212 4Q 212 Occupiers demand remained sluggish but leasing in Special Economic Zones remained active and most of the supply in the SEZs was absorbed as soon as it became available. The city s annual absorption in 212 was about 3 million sq ft which was almost half of 211 absorption. Demand was primarily concentrated in Guindy, Ambattur and OMR as companies are looking at these places for relocation, taking into consideration accessibility, amenities and ease of commuting for employees Ambattur 2 Guindy (SBD) 6% Grade a Capital CBD 1 Value CBD % -9% Guindy (SBD) 5-6 % 6% Ambattur 25-3 % 3% OMR (IT Corridor) 25-4 % % GST road 35-4 % % KEY MARKET TRANSACTIONS values for Grade A office space remained stable during the survey period despite moderation in demand due to supply / demand equilibrium. COLLIERS VIEW: Office space demand in Chennai is mostly limited to existing enterprises expanding or relocating which is either a move for more compliant properties or for lower rentals or to a location wherein companies can attract the right human resources. Demand is still primarily driven by IT/ITeS. Due to ample supply in the city, locations closer to the city are charging nominal rentals and thus making properties away from the city less attractive.with limited space in traditionally preferred micro-markets such as Guindy, new micro-markets such as Ambattur (for ITeS) and OMR (for IT) are more sought after. There will be downward pressure on rental values. -INR Per Sq.ft. Per Month Q28 CBD 4Q28 4Q29 Guindy (SBD) 4Q21 Ambattur 4Q211 4Q212 OMR (IT Corridor) Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A 4Q213F 4 2 Barclays DLF SEZ 69, Manapakkam Lease Calsoft Espee Tech Park 4, Ekkatuthangal Lease EpiSource Prince Infocity2 35, IT Corridor Lease Maveric Systems DLF SEZ 2, Manapakkam Lease Tata Capital Centineal Square 13, Ashok Nagar Lease Purva Moneta Puravankara Projects 3, Guindy 213 Ramanujan IT City Little Wood Tower Block D Tata Realty & Infrastructure 6, Taramani 213 SP InfoCity Shapoorji Pallonji Group 1,2, OMR 213 Colliers International p. 7

8 INDIA 4Q 212 OFFICE BENGALURU (BANGALORE) More than 11.5 million sq ft of Grade A office space was available for fit-out in Bangalore this quarter. Most of this supply was concentrated in areas such as the EPIP Zone, Whitefield, Electronic City and Outer Ring Road. Electronic City 15% Bannerghatta Road 2% Outer Ring Road 27% Approximately 1.75 million sq ft of office space was added to the city s total inventory this quarter. CBD 6% Hosur Road Value CBD 8-1 % 6% Hosur Rd. 2-4 % % EPIP Zone/ Whitefield bengaluru 3Q 212 4Q % 3% Electronic City % % Bannerghatta Rd Outer Ring Rd % 5% Occupiers demand for Grade A office space remained steady and a few large floor plate deals were executed during 4Q 212. The IT/ ITeS sector remained the major contributor of this demand. The yearly absorption of Grade A office space was around 8 million sq ft during 212 which was approximately 6% of the total absorption of last year. Outer Ring Road, Whitefield and Electronic City remained the more preferred office locations. In addition, an increased interest is being observed in the North Bangalore micromarket. The area is getting attention with the development of the KIADB Industrial area and a few Special Economic Zones like Hinduja and Karle SEZ. Amid cautious market sentiments and more prime office supply in the pipeline, the average rental values remained stable across all micromarkets this quarter. COLLIERS VIEW: Unlike in 211 and 212, there are fewer 1,+ sq.ft. requirements in the market. Most of the demand is being generated by small and medium IT enterprises. Demand is still primarily from IT companies; Due to uncertainty in the future performance of IT companies developers are refraining from speculative developments. There is ample proposed inventory pile up in the city, we anticiapate a lot of it will be deferred. values will remain stable due to the low rental base. -INR Per Sq.ft. Per Month Q28 - CBD EPIP Zone/ Whitefield 46% 4Q28 Grade a Capital Hosur Road 4Q29 EPIP Zone/ Whitefield 4Q21 Electronic City 4Q211 Bannerghatta Road 4Q212 Outer Ring Road Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A 4Q213F 6 KEY MARKET TRANSACTIONS Britannia Ltd. Prestige Shanthiniketan 7, Whitefield Sale Mindteck Prestige Atlanta 68, Koramangala Lease Netmagic SVR Platinum 11, Electronic City Lease Novel Group GNR Tech Park 145,51 Hosur Road Sale Onmobile E City 1, Electronic City Lease Verizon Prestige Tech Park 6, Outer ring road Lease Bagmane Constellation - Pheonix Bagmane Developers 45, SBD 213 Hiranandani Ashford Hiranandani Group 437,5 Electronic City 213 Prestige tech park III Prestige Group 379,1 SBD 213 p. 8 Colliers International

9 INDIA 4Q 212 OFFICE KOLKATA About.28 million sq.ft. of new supply was added to the Kolkata Grade A office inventory this quarter. activities were slow and the projects which were due for completion this quarter were deferred to the next quarter. Similarly, no new Grade A office projects were launched in the Kolkata market, however, a few projects launched previously were re-launched this quarter. Sector-5 31% Ballygunge Circular Road East Kolkata 65% Kolkata 3Q 212 4Q 212 The rental market remained slow and only a few deals were concluded during 4Q 212. Most of these leases were in the PBD micromarkets such as Sector 5 and New Town Rajarhat. Average rents for Grade A remained stable during the quarter, but in view of the overall dismal market sentiments, landlords have started reducing asking rents Grade a Capital Value CBD % Ballygunge Circular Rd % % East Kolkata % % Sector % % PBD (New Town, Rajarhat) % % COLLIERS VIEW: values are stable at the moment, but there will be significant downward pressure due to low demand from IT/ITeS sector, the traditional demand driver. Few companies are setting up offices in Kolkata. We anticipate that most of the demand in Kolkata in near term will be based on consolidation requirements. East Kolkata Rajarhat, Sector V, Topsiya and By-pass will continue to be the preferred areas because of better infrastructure, better grade buildings and lower rentals. 5 CBD (Park St,Camac St,AJC Bose Road) Ballygunge Circular Road East Kolkata Sector-5 PBD (New Town, Rajarhat) Q28 4Q28 4Q29 4Q21 4Q211 4Q212 4Q213F -INR Per Sq.ft. Per Month Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A KEY MARKET TRANSACTIONS Burckhardt Compression Eco Space 14, New Town, Rajarhat Lease CDE Asia Limited Eco Space 8,8 New Town, Rajarhat Lease ICICI Bank Ltd. BIPL 6, Sector 5, Saltlake Lease Indian Coast Guard Synthesis Business Park 45,6 New Town, Rajarhat Lease Nomura Institue of Capital Market Research Globsyn 33, Sector 5, Saltlake Lease Sunrise Spices Corporate Park 12, Sector 5, Saltlake Sale Ideal Unique Centre Ideal Group 7, EM Bypass 213 IT Godrej Simocco Phase 2 Godrej Waterside 1,, Sector 5, Saltlake 213 Unitech Infospace, Kolkata Phase 3 B Unitech Ltd. 1,36,8 Rajarhat 213 Colliers International p. 9

10 INDIA 4Q 212 OFFICE PUNE Approximately 4.5 million sq ft of Grade A office space was available for fit-out in Pune during 4Q 212. Most of this supply was concentrated in the micro-markets of Kharadi, Hadapsar, Fursungi, Hinjewadi and Nagar Road. No new major supply was added to the city s total inventory this quarter. Similarly, no major office projects were launched except a small 5, sq ft project by Chordia Group in Baner. Hadapsar/Fursungi 8% Hinjewadi 26% Nagar Road 1 Kharadi 21% Baner 6% Bund Garden Airport road/ pune station Aundh 3% Senapati Bapat Road 3% Bavdhan Kalyani Nagar 7% pune 3Q 212 4Q 212 During this quarter, overall occupier demand for office space has contracted, however, a few large floor plate deals were signed during 4Q 212 and more than a million sq ft of Grade A office space was leased in micro-markets such as Hadapsar, Bavdhan, Hinjewadi and Wakewadi. IT/ITeS and the automobile sectors were the main occupiers for commercial space Grade a Capital Value Baner 4-5 % % Bund Garden % % Airport Rd % Aundh 4-45 % % Senapati Bapat 6-9 % -3% Bavdhan 35-4 % % Kalyani Nagar 45-6 % % Nagar Rd % 5% Hinjewadi 3-4 % 8% Hadapsar/ Fursungi 35-5 % 6% Kharadi 4-5 % 7% Restricted supply in both IT and SEZ has led to a marginal upward pressure in the rental values for Grade A buildings in select micromarkets resulting in an average increase of around 5% in rents across micro-markets. COLLIERS VIEW: Rents are expected to remain stable in view of upcoming supply in eastern corridor locations such as Viman Nagar and Kharadi. IT/ITES will continue to play a vital role in Pune s overall absorption. This could be attributed to the projects that have already seen pre-commitments or long-established interest from various IT/ITES companies. -INR Per Sq.ft. Per Month 1Q28 Baner Bund Garden 4Q28 Airport road/ pune station Aundh 4Q29 Senapati Bapat Road 4Q21 Bavdhan Kalyani Nagar 4Q211 Nagar Road Hinjewadi 4Q212 Hadapsar/ Fursungi Grade A /Capital : Indicative asking price for Grade A office space. Prime Office Average Trends: Average market rental values for Grade A Kharadi 4Q213F KEY MARKET TRANSAcTIONS Credit Suisse Wipro Campus 2, Hinjewadi Lease inautix Magarpatta Tower 8 15, Hadapsar Lease Netscout Bajaj IT Park 52, Wakdewadi Lease NVIDIA Commerzone 26, Yerwada Lease Symantec EON IT Park 99, Kharadi Lease Synechron Embassy 54, Hinjewadi Lease Commerzone Building 5 K Raheja Corp. 35, Jail Road 213 DLF IT Park, Pune Phase 2 Building 6 DLF Ltd. 75, Hinjewadi 213 SP InfoCity, Fursungi Building 6 Shapoorji Pallonji Group 5, Fursungi 213 p. 1 Colliers International

11 INDIA 4Q 212 OFFICE OFFICE SUBMARKETS Mumbai The major business locations in Mumbai are the CBD (Nariman Point, Fort and Ballard Estate), Central Mumbai (Worli, Lower Parel and Parel), Bandra Kurla Complex (BKC) and Andheri Kurla stretch. Powai, Malad and Vashi are the preferred IT/ITES destinations, while Airoli at Navi Mumbai and Lal Bahadur Shastri Marg are emerging as new office and IT/ITES submarkets. Delhi The commercial areas in New Delhi metropolitan area can be broadly classified into the CBD (Connaught Place), SBD Nehru Place, Bhikaji Cama Place, Netaji Subhash Place, Jasola and Saket. Gurgaon The prime business locations in Gurgaon are MG Road, Golf Course Road, Cyber City and Udyog Vihar. Manesar on the outskirts of Gurgaon is also emerging as the city s new office destination. NOIDA NOIDA market is comprised of sectors broadly classified as institutional, industrial and commercial sectors. Institutional sectors include sec 16A, 62 and , industrial sectors include sec 1-9, 57-6 and while sector 18 is the most developed commercial sector. Chennai Prime office properties in Chennai are located in four principal sub-markets: the CBD, the IT Corridor, the SBD and the PBD. The SBD comprises Guindy, Manapakkam, Velachery and other areas. The PBD primarily includes Ambattur and GST Road, while the IT Corridor is the Old Mahaballipuram Road (OMR) in south Chennai. Bengaluru (Bangalore) Prime office properties in Bengaluru can be divided into three principal sub-market CBD, the SBD consisting of Banerghatta Road & Outer Ring Road (ORR) and PBD including Hosur Road, EPIP Zone, Electronic City and Whilefield. Pune The prime office sub-markets of Pune include Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp (CBD), while the Off CBD includes Aundh, Airport Road and Kalyani Nagar, among other locations. The eastern corridor, along with Nagar Road and Kharadi, have emerged as a preferred location for financial and IT/ITES companies. Kolkata The major business locations in Kolkata are CBD (Park Street, Camac Street, Chowranghee Rd), SBD (AJC Bose Rd, Ballygunge circular Rd, East Kolkata), East Kolkata and PBD (New Town & Rajarhat). The area around Park Street, Camac Street and AJC Bose road houses number of high-rises commercial buildings such as Chatterjee International Centre, Tata Centre, Everest House and Industry House among others. City Barometer Increasing as compared to previous quarter Decreasing as compared to previous quarter Remained stable from previous quarter Colliers International p. 11

12 INDIA QUARTERLY UPDATE OCTOBER 212 INDIA QUARTERLY UPDATE NOVEMBER 212 3Q 212 May 212 MID-YEAR 212 RETAIL TOP 1 GLOBAL RETAIL STREETS* (USD PER SQUARE FOOT PER YEAR) RENT (USD)** ANNUAL CHANGE (%) STREET/PRECINCT New York Fifth Avenue,. Hong Kong Queen's,. Road Central, Central (tie) Hong Kong,. Canton Road (tie) London Old Bond St.***,. Paris Avenue des***, flat Champs-Élysées Hong Kong -,. Causeway Bay New York. Madison Avenue Zurich Bahnhofstrasse flat Milan (. ) Via Monte Napoleone Sydney Pitt Street Mall (. ) Source: Colliers International * selected cities ** exchange rate as of March 31, 212 *** Zone A rents REGIONAL RETAIL RESEARCH CONTACTS AMERICAS > Ann T. Natunewicz Ann.Natunewicz@colliers.com EUROPE/MIDDLE EAST/AFRICA > Zuzanna Baranowska Zuzanna.Baranowska@colliers.com ASIA > Simon Lo Simon.Lo@colliers.com AUSTRALIA/NEW ZEALAND > Nora Farren Nora.Farren@colliers.com ANN T. NATUNEWICZ Manager Retail Research USA Colliers 212 Global Retail Streets survey found that of 129 locations tracked, 51 posted higher year over year average rental rates, 49 were flat, and 24 were down (5 lacked comparable data). Retailers entering new markets both developed and developing continue to hedge risk by targeting the same one or two premier locations, generating heated competition and outsized rental rate growth in a handful of space-constrained corridors. Companies with the most ambitious long-term expansion plans remain focused on emerging markets with rapidly growing middle-class populations, but recently institutional capital has pulled back somewhat to favor core markets and investments. While economic and political turmoil did affect rental rates in headline-generating markets (such as Cairo and Athens), high streets with strong fundamentals remained remarkably resilient, suggesting, at least for now, some separation between macroeconomic issues and underlying real estate fundamentals. Since we conducted our survey, however, weakening consumer sentiment among affluent shoppers has already begun to impact retailers revenues and could hinder landlords near-term ability to raise rents, suggesting flattening growth rates for the coming year. This spring proved to be a tricky time to conduct global benchmarking, as market sentiment has deteriorated markedly since April. During the past year, virtually every entity making a forecast including Colliers in our 212 U.S. Retail Outlook included a caveat related to not-yet-quantifiable global fallout from Europe s fiscal issues. As the past few months have illustrated, the time to face Eurozone issues has finally arrived, spawning a new wave of financial uncertainty. More than two years post-recession, though, results from our annual survey of High Street rents illustrate that the world s priciest retail corridors continue to attract the most sought-after tenants at lofty rental rates. Eight of Colliers top ten Global Retail Streets in 211 made the list again this year. The big story, however, lies with the explosive year over year rental growth achieved in a handful of markets. Six of our Top 1 grew at double-digit levels year over year in local currency units, five of them by more than 2%. At a regional level, streets in areas that entered 27-8 better-positioned economically Australia, Canada, parts of Eastern Europe had a higher percentage of this year's flat-to-higher rents than those slower to emerge from the recession. We will be watching these areas closely. Even as they represent some of the most attractive destinations for expansion-minded companies and yield-seeking investors, they too are vulnerable to softening consumer demand and, for those with reliable data, encroachment of e-commerce. This report contains two parts. The first summarizes the results of our annual Global Retail Streets survey, conducted in April 212. The second incorporates content from Colliers brokerage and research teams worldwide who contributed market operational metrics, nuanced commentary on retail conditions, and forward-looking opinions on what the next year will hold for consumers, landlords, and investors. Q1 212 RESEARCH MARKET REACTION TO BUDGET Company Change (%) BSE SENSEX Realty Index Anant Raj Inds -6.4 D B Realty -2.2 DLF.15 Godrej Properties HDIL Hubtown Ltd Indiabulls Real Estate Mahindra Lifespaces -.72 Orbit Corp Parsvnath Developers -4.4 Peninsula Land Phoenix Mills Sobha Developers 3.4 Sunteck Realty Unitech Source: Mar 16, 212 P. 1 COLLIERS INTERNATIONAL Finance Minister Pranab Mukherjee started his budget speech in the backdrop of challenging macroeconomic scenario. The finance minister projects the economy to grow by 7.6% in the next fiscal up from 6.9% in He mentioned that due to adverse global economic sentiments there has been a slowdown in the Indian Economy but the fact is India still remains among the front runners in the economic growth in any cross country comparison. The budget aims at faster, sustainable and more inclusive growth across sectors emphasizing on five focus areas including revival of domestic consumption, rapid revival of high growth in private investment, removal of supply bottlenecks, addressing malnutrition in 2 high burden districts and expedite improvement in delivery system, governance and transparency. From a real estate perspective, the budget remained silent on most of the major issues including status of STPIs (Software Technology Parks of India), Real Estate Regulatory Bill, Land Bill etc. however, it mentioned that efforts are on to arrive at a political consensus on the issue of allowing 51% Foreign Direct Investment (FDI) in multi-brand retail. THE KEY HIGHLIGHTS OF THE BUDGET WHICH MAY IMPACT REAL ESTATE SECTOR ARE AS FOLLOWS: - External Commercial Borrowings (ECB) for low cost affordable housing projects. Impact: Real estate companies developing large affordable housing projects with large fund requirements will benefit the most from the easing of external commercial borrowing (ECB) norms as interest rate charged is lower in case of external borrowings in comparison to rates charged by domestic institutions. - Increase in provision under Rural Housing Fund to INR 4, crore from the existing INR 3, crore.impact: It will provide housing finance to targeted groups in rural areas at competitive rates. - Extension of the existing scheme of interest subvention of 1% on housing loans up to INR 15 lakh where the cost of the house does not exceed INR 25 lakh for another year. Impact: This will boost the affordable housing segment by providing cheaper loan to the end users. INDIA 4Q 212 OFFICE Colliers International (India) provides property services to property Investors and Occupiers. 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