Real Estate Highlights 2008 Q1

Knight Frank Real Estate Highlights Quarter 1 2008
Research
Real Estate Highlights

India • Quarter 1 2008
Contents
Mumbai 2
Pune 6
National Capital Region

(NCR) 9
Kolkata 16
Bengaluru 19
Hyderabad 22
Chennai 25
Palm Beach Galleria, Navi Mumbai
Executive summary
! Notwithstanding the global uncertainties arising out of the subprime meltdown,
potential slowdown in US and weakening of the dollar, the real estate demand in India
across sectors remains strong on the back of phenomenal economic performance.
! Office sector, owing to increasing employment and business generation, is driving the
demand for retail, residential and hospitality segments. It emerged as the most dynamic
sector of 2007, with increase in demand resulting in consistent rise in rental values.
! With a number of infrastructure initiatives underway, viz. the metro rail and upgradation
of airports, real estate activities in major cities are expected to strengthen further. City
boundaries will continue to expand to accommodate growing demand and new real
estate centres will emerge on the real estate map.
! Consistent demand, rising capital and rental values and easy availability of capital have
led to widespread real estate development activity. Going forward, the year 2008 is
expected to see an infusion of approximately 87 mn.sq.ft. in the office sector,
182 mn.sq.ft. in the residential sector and 36 mn.sq.ft. in the retail sector in the seven
major locations of the country.
! Economic growth indicators along with demand-supply analysis point towards a

decrease in marginal rate of growth of real estate values over the medium term and a
possibility of reaching a plateau by end-2008 - barring a few exceptions. This will be
due to supply build-up in the next 12-15 months rather than lack of demand.
02 Real Estate Highlights Quarter 1 2008 Knight Frank
Figure 1
New Office Supply in Mumbai Mumbai

30
Market Overview
Mumbai property market continued on its growth path over the last year. With demand, outstripping
22.56 supply, the values continued to be upward bound, with consistent rise across all sectors.
20
Area (mn.sq.ft.)
The Mumbai office market remained strong with decreasing vacancy rates and high demand creating
opportunities for new construction across the city. The Suburban Business Districts (SBD) of
16.23
Bandra Kurla Complex and Andheri remained the preferred choice for many corporate entrants. Other
11.55 commercial micro-markets such as Goregaon and Jogeshwari have also witnessed robust leasing activity.
10
6.33 Consequently, rentals values have increased owing to the supply constraint in Grade-A office space and the
4.68
subsequent rise in demand. Besides, the emergence of Navi Mumbai as an important IT/ITES hub and other
upcoming developments such as the Navi Mumbai SEZ and the International Airport has drastically altered
the socio economic and demographic profile of the region.
0
2008 2009 2010
Not many new malls came up in Mumbai over the last 12-18 months. Despite this, the city's retail sector
Year
continues to thrive, backed by strong spending power of high-income group as well as the positive wealth
Total supply : 22.56 mn.sq.ft.
effect induced by the buoyant local stock market last year. One of the most active retail market has been
Area Cumulative Area that of Navi Mumbai, where a number of large retail projects became operational in the recent times.
Source: Knight Frank Research
On the residential front, the city witnessed developments of numerous new age complexes. The gradual
rise in interest rates had inevitably slowed homebuyers in the first and second quarter of 2007 but as the
year progressed, the residential market slowly gained back momentum. This was evident from rising
occupancy levels and price rise in the subsequent quarters. The suburbs and extended suburbs continue to
absorb the demand emanating from the land-strapped Island city, with residents opting to take advantage
of lower costs and newer large-scale residential developments here.
Figure 2
Office Values for Mumbai

500 60,000
50,000
400
Techweb Centre, Oshiwara Orchid City Centre, Mumbai Central
Rs./sq.ft. per month
40,000
300
30,000
Office Supply and Demand
200 Demand for office space in Mumbai continues to be driven by the IT/ITES, financial services, telecom,
20,000 pharma and insurance sectors. Approximately 5.5 mn.sq.ft. of office space was taken up in Mumbai in
2007, more than half of which were pre-leases. Strong demand for temporary office space was also
100
10,000 observed during the year. Suburbs and Central Mumbai locations have been the forerunner in office space
absorption, witnessing maximum demand from new entrants as well as corporates looking out for
0 0 expansion.
Lower Parel
BKC / CST Road
Andheri (E)
Powai
Malad - Mindspace
Thane
Navi Mumbai
Worli - Prabhadevi
Fort/Ballard Estate/Churchgate
Nariman Point
Approximately 5.24 mn.sq.ft. of office space was added to the Mumbai office stock by end 2007. Majority
of this new space (more than 60%) came up in the Suburban Business district of Bandra Kurla Complex and
Andheri Kurla road. Substantial supply totalling to approximately 3.5 mn.sq.ft. is expected in Lower Parel
from redevelopment of erstwhile mill lands over the next six months. Around 22.5 mn.sq.ft of new office
space is expected to come up in Mumbai by 2010-end. However, this does not take into account the supply
expected to come up from SEZ's of Navi Mumbai and Thane, which totals upto additional 10 mn.sq.ft.
Landmark office projects that became operational in 2007 include Silver Metropolis by Silver Group and
Locations
Titanium by K Raheja on the Jogeshwari Western Express Highway, Dynasty By Kanakia Group in
Rental Values Capital Values
Andheri (E), Kingston Tower A by Hiranandani Group at Powai, Marathon Innova by Marathon group at
Source: Knight Frank Research Lower Parel, etc.
www.knightfrank.com
Knight Frank Real Estate Highlights Quarter 1 2008 03
Figure 3
On the other hand, projects like Commerz by Oberoi Group at Goregaon, Kingston Tower-B at Powai, office
New Residential Supply in Mumbai projects on Jupiter mill and Elphinstone Mill by India Bulls are some of the major upcoming office projects
60
that are expected to be ready for fit-outs in mid 2008.
56.64
Navi Mumbai and Thane remained to be the alternative office markets especially for the IT/ITES sector.
48.75
Several built-to-suit office complexes, IT Parks and SEZs are coming up in this region, work on which have
already started. Approximately 2.09 mn.sq.ft. of new office supply is scheduled to come up in these
40
locations in 2008.
Area (mn.sq.ft.)
36.05
Office Price and Rentals

20 There has been a steady growth of rental values, across all the micro-markets of Mumbai. Over the last year,
12.7 the base rentals in the CBD and Off CBD locations of Nariman Point and Fort have moved up by
7.89 approximately 35-40%. Rental Values for CBD and Off CBD locations currently range between
Rs.300-600/sq.ft. per month and Rs.200-300/sq.ft. per month respectively. SBD of Andheri Kurla and
0 Central Mumbai locations have also seen healthy appreciation in the range on 60-80%. The rentals in
2008 2009 2010 Central Mumbai micro-market currently hover around Rs.250-450/sq.ft. per month whereas for Andheri
Year Kurla road it is in the range of Rs.125-200/sq.ft. per month. The peripheral markets of Thane and Navi
Total supply : 56.64 mn.sq.ft. Mumbai, though exhibiting lower growth rate than the other business districts of Mumbai, have still
witnessed an increase in the range 20-30%.
Area Cumulative Area
Source: Knight Frank Research BKC which has seen the highest value land transaction coming its way in the year 2007, has emerged has
one of the most expensive office location in Mumbai where rentals for new office space have touched
Rs.500/sq.ft. per month at present.
Residential Supply and Demand

The residential market in Mumbai is presently witnessing acute shortage of ready apartments in the
mid-end segment. Under-construction projects are being booked at a swift rate with buyers reserving
apartments long ahead. Majority of the newly constructed or under-construction properties listed in our
database have an occupancy of close to 80% depicting strong demand situation.
The residential demand has shifted from South Mumbai to North Mumbai owing to new supply and
comparatively lower price points. In addition, with Suburban Business District emerging as a favoured office
destination, employees in these organizations prefer affordable and new accommodations in the suburban
locations in close vicinity.
Figure 4
Residential Capital Values The year 2007 saw as addition of approximately 33 mn.sq.ft. of residential space to the residential stock.
Bulk of this space, amounting to about 75% of the total supply in 2007, is concentrated in the suburban
60,000
locations from Bandra to Dahisar and Kurla to Mulund. The residential developments on the mill lands of
Central Mumbai have also added substantially to the current stock.
50,000
Some of the prominent projects of the year that are completed or nearing completion are Casa Grande by
40,000 Ashford Housing Corporation at Lower Parel, Beaumonde Towers by Sheth Builders and Raheja Princess by
K Raheja Universal at Prabhadevi, Oberoi Woods by Oberoi Group at Goregaon, Dreams by HDIL group at
Rs./sq.ft.
30,000 Bhandup, etc.
20,000 The year 2008 will see an infusion of about 36 mn.sq.ft. of residential space. This takes into account the spill
over of delayed projects, which were scheduled to be completed in 2007. Majority of this supply is again
10,000 concentrated in the suburban locations.
0 Residential Price
South Mumbai
Worli
Bandra (W)
Andheri (W)
Goregaon to Borivili
Ghatkopar (E)
Thane
Vashi
Prices have increased in every part of the city in the last 12 months, though the rates in which they have
risen have varied across the city.
Powai and Central Mumbai locations of Worli, Lower Parel and Prabhadevi have witnessed maximum
appreciation in the range of 40-50%. Worli, Lower Parel and Prabhadevi have capital values ranging from
Locations
Rs.25,000-35,000/sq.ft. whereas Powai and Chandivali at present command capital values ranging between
Minimum Maximum Rs.6,000-13,000/sq.ft.
Figure 5
Other suburban locations from Ghatkopar to Mulund and Goregoan to Borivali have also seen a healthy
New Retail Supply in Mumbai appreciation over the past year in the range of 25-35%. Capital values for projects in Bandra, Khar and
10 Santacruz range from Rs.15,000-30,000/sq.ft. Andheri, Vile Parle and Juhu have also gained prominence
8.14 with capital values ranging between Rs.8,000-15,000/sq.ft. Ghatkopar, Vikroli, Bhandup and Mulund in the
Central Suburbs and Goregaon, Malad, Kandivali and Borivali in the western suburbs command capital
values in the range of Rs.6,000-8,500/sq.ft. and Rs.6,500-9,000/sq.ft. respectively. Capital values in Thane
and Navi Mumbai have remained stable over the year with current capital values ranging from
Area (mn.sq.ft.)
Rs.4,500-6,000/sq.ft.
5.23
5
Retail Supply and Demand
Retail supply has remained considerably stagnant over the year in the Island city with only one mall coming
up in this region. Orchid City Centre Mall at Mumbai Central is the latest mall in Island City, houses brands
2.91
from the Future Group among other tenants. The year 2008 will see an infusion of about 5.2 mn.sq.ft. of
retail supply with 16 malls coming up in the city.
0
2008 2009-10 Significantly, a number of malls replete with entertainment, retail and leisure components have come up in
Year the suburbs and Navi Mumbai in 2007. The newest entrants to the mall scene in the suburbs include
Total supply : 8.14 mn.sq.ft. Mega Mall (500,000 sq.ft.) at Jogeshwari Link Road and Thakur mall (150,000 sq.ft.) at Dahisar, while
Palm Beach Galleria (300,000 sq.ft.), Raghuleela Mall (250,000 sq.ft.) and City Centre (300,000 sq.ft.) have
become operational at Vashi. Though, a number of malls have come up in Navi Mumbai, demand has not
been very robust and this is evident from slower absorption rates and lower conversion rates in most of the
new malls.
Retail Rentals
The rental and capital values across the high streets and malls, witnessed an average appreciation in the
range of 20-30% in the last one year. The retail rentals existing in the CBD of Nariman Point are in the
range of Rs.275-400/sq.ft. per month, while the retail rates at Lower Parel are in the range of
Rs.300-450/sq.ft. per month,. Suburban locations like Andheri and Malad have retail rentals quoted within a
range of Rs.150-350/sq.ft. per month whereas existing mall rentals and high street retail rentals in Bandra
are in the range of Rs.300-800/sq.ft. per month.
Outlook
Figure 6
The year 2007 was marked with some landmark decisions for the real estate market of Mumbai, foremost of
Retail Rental Values which is the repealing to the Urban Land Ceiling and Regulation Act (ULCRA) 1976. With Government of
800 Maharashtra scrapping the ULCRA, the mega-polis of Mumbai along with Thane and Navi Mumbai will see
an infusion of around 25,000 acres of land. However, only a small portion of this land may be vacant, with
the rest either encroached by slums or embroiled in litigations. It is believed that ULCRA, which according
600 to most developers is hampering affordable construction, will cause the property prices to sober down by
15-20% in the long run and also help bring transparency.
Mumbai's office market has appreciated considerably over the last one year and will continue to do so.
400
Rental values for office market will continue their climb, but an infusion of close to 12 mn.sq.ft. of fresh
supply, 70% of which will be in the Grade-A category, will serve to arrest the steep rate of increase of office
space values. According to Knight Frank Research, Mumbai office space values across micro-markets will
200
witness an increase of 15-25% over the next few quarters and this will be much lower that what has been
witnessed in the last few months. Going forward, the trend of suburbanization will continue, with locations
like BKC and Andheri gaining furthermore importance. If Mumbai Metropolitan Region Development
0
Authority's (MMRDA) decision to develop three new business growth centres near Vasai, Kalyan and
Lower Parel
Malad
Vashi
Haji Ali / Kemps Corner
Linking Road
Mulund
Andheri
Kanjurmarg, along the lines of the BKC comes through, it will ease pressure off the SBD in the forthcoming
years.
On the residential front, in the face of substantial planned supply (approximately 36 mn.sq.ft.) expected to
enter the market in 2008, values are expected to somewhat soften and undergo a 15-25% increase over the
next one year. Here again, variations will be observed across micro-markets. As in case of office market,
Locations
suburbs will gain prominence even in the residential market.
Minimum Maximum
www.knightfrank.com
With a number of infrastructure projects in the pipeline, the construction activities in the region will step-up
even further. Thane along with Navi Mumbai will be come favourable option for home-buyers in the middle
income category.
Organised retailing in the city has grown manifold and has become a popular retail format. However,
several malls are being built in the same locations leading to clustering of malls and tapping of the same
catchment area. If this is not taken care of, the success of the new malls will be affected.
Departmental stores, hypermarkets and supermarkets, discount stores and speciality malls are expected to
drive the organised retail in the city, as they tend to have a higher conversion rate. With high quantum of
new format retail space in the pipeline, differentiations will be the all-important element. Innovation,
striking the right tenant mix, effective mall management and provision of ample parking space are also the
components that will decide the future success of mall development. Rental values in the retail market are
expected to appreciate by around 15-20% in the next 12-18 months.
The adjudications of 2007 will have significant repercussion on the real estate scenario of Mumbai. It began
with augmenting of the FSI (to 4) for BKC, the Dharavi Redevelopment Project, noteworthy land auctions at
BKC and the scrapping of the Urban Land Ceiling (Regulation) Act (ULCRA). All these developments may
help to reduce the current demand-supply mismatch and will have an impact on the spiralling real estate
values in the long run.
Figure 7
New Office Supply in Pune Pune

20
18.37
Market Overview
Pune real estate sector has witnessed rapid growth in year the 2007. As before, maximum development has
14.20
continued in peripheral regions due to lack of large land parcels in central locations. Out of this, majority of
development is concentrated in eastern and western part of Pune.
Area (mn.sq.ft.)
The Rajiv Gandhi Infotech Park at Hinjewadi was one of the first developments to take place in the
10
peripheral locations of the city. Hinjewadi's strategic location, with proximity to the Mumbai-Pune
expressway and the Mumbai-Bangalore highway has supported other developments in the region. Of late,
7.02 7.18
the eastern corridor along Nagar Road upto Magarpatta has also come up as a preferred location for the
financial sector as well as the IT/ITES companies.
4.17
Buoyed by strong economic conditions, favourable demographics and consumer spending, Pune continues
0
to grow at a rapid pace, a factor which is encouraging national retailers to continue expansion plans and
2008 2009 2010
overseas retailers to continue to seek opportunities in the Pune market. Organised retailing has increasingly
Year
shifting towards the newer residential pockets of Bavdhan, Hinjewadi, Baner etc due to their proximity to IT
Total supply : 18.37 mn.sq.ft. destinations.
Area Cumulative Area The residential market in Pune continues to remain strong, aided by strong demand from the IT/ITES sector.
Source: Knight Frank Research The developers have geared up to keep pace with the rise in quality demand leading to a significant change
in project profiles, housing patterns and facilities offered. Increase in demand was spread throughout all size
categories, but were most prevalent at the high end segment of the market.
In 2007 a number of projects in the eastern zone obtained the SEZ status. This includes the 400-acre
Magarpatta City by Magarpatta Township Development & Construction Company Limited, a 4 mn.sq.ft. of
IT hub EON Free Zone by Panchshil Realty at Kharadi and SP Infociti by SPCL located at Sholapur Road.
Figure 8
Office Values for Pune

80 10,000
8,000 Pune Central, Ganesh Khind Road Exotica, Koregoan Park

60

6,000
Approximately 9.31 mn sq.ft of office space was added to stock by end 2007, out of which nearly 60%
40
came up in the eastern zone, mainly in locations like Kharadi, Kalyani Nagar and Viman Nagar. On the other
4,000
hand, Hinjewadi, in the western zone contributed 20% to the total new supply in 2007. In Pune, the trend
of leasing built-to-suit campus style facilities has continued in Pune. The total office space absorption in
20
2,000 Pune in 2007 doubled from 2006 and was reported to be approximately 5.5 mn.sq.ft. Besides this,
pre-leases to the tune of 1 mn.sq.ft were also done in the same year.
0 0 Amongst projects that became operational in 2007, note can be of TechPark on Airport Road, SP Infociti on
Yerwada/Airport Rd.
Baner
Aundh
Bund Garden Road
Senapati Bapat Road

Karve Road/Kothrud
Hadapsar
Nagar Road
Kalyani Nagar
Sholapur Road, Cybercity at Hadapsar, and GigaSpace and Weikfield IT Park at Vimannagar. In 2008,
approximately 7.02 mn sq.ft of office space is expected to enter the market of which the eastern zone shall
be responsible for approximately 67% of the total supply. Important projects to be completed in 2008
include Commerzone at Yerawada, Cerebrum at Kalyaninagar and Eternia at Wakdewadi.
Locations
www.knightfrank.com
Figure 9
New Residential Supply in Pune
The eastern and western zone in Pune has seen the maximum real estate development over the past one
60
year. Together with this, these regions witnessed strong leasing activity, thereby leading to reasonable
appreciation in rental values for office space. Eastern zone office rentals which have increased by 25-30%
47.65 over the last one year are currently at since the values in 2007 and current values in this zone are in the
43.07 range of Rs.35-45/sq.ft. per month. In the western zone, the rentals underwent an appreciation of 10-15%
40
and are presently Rs.50-60/sq.ft.
Area (mn.sq.ft.)
31.61
Office space rental values in the central zone range between Rs.60-70/sq.ft. per month, reflecting an
increase of around 20% over last year's values. In upcoming eastern and northern locations like Manjiri,
20 Shevalwadi and Phursungi average rental values range between Rs.30-35 /sq.ft.per month
11.46
4.58
0 Rapid residential construction which had been taking place in various newly developed pockets of Pune like
2008 2009 2010 Baner is starting to slow down due to an increase in vacancy rates combined with increasing prices. As
Year
anticipated, IT development in the city did not match the rapid residential development, resulting in lower
occupancy rates.
On the contrary, traditional residential pockets in the central zone like Model colony, Senapati Bapat Road,
etc have almost nil vacancy. This can be attributed to the dearth of new residential supply in the region.
Source: Knight Frank Research Many old developments have been demolished to give way to new high rise developments due to limited
land availability in prime locations.
Approximately 26.21 mn sq.ft. of residential space has been added to the market in 2007, of which about
35% each has been contributed by the western zone and eastern zone. Some of the prominent projects
which were added to stock in 2007 are Sigma One Phase I in Kothrud, Kumar Presidency in Koregaon Park,
Water Front and Fortaleza in Kalyani Nagar etc. In 2008, 31.61 mn.sq.ft. of new residential supply
expected to enter the Pune market. However, of the total supply projected, some of the developments may
get spilled over to 2009, on account of deliberate project delays incase a slowdown in the market is
perceived.
A large share of the upcoming Grade A residential space is contributed by the various townships in Pune
a majority of which is concentrated in and around IT hubs. Blue Ridge, a 138 acre township by Paranjpe
Figure 10 schemes has been launched in western zone, near Hinjewadi, and it has residential and IT development
Residential Capital Values along with other facilities.
12,000
Residential Price
10,000 The upmarket residential locations of Central zone like Boat Club Road, Prabhat Road, etc command values
ranging between Rs.8,000-12,000/ sq.ft which denotes a appreciation of about 20-30% over the rates
8,000 existing in 2007. Senapati Bapat Road is witnessing an unprecedented growth in office projects, mainly due
to the International Convention Centre, which also houses many IT/ITES companies. This has escalated
Rs./sq.ft.
6,000 demand for high and mid-end residential projects. The price range for residential properties in this
micro-market is between Rs.5,500-7,500/sq.ft.
4,000
In northern zone the Pimpri Chinchwad Municipal Corporation (PCMC) which is the industrial twin of Pune,
2,000 residential properties are in the range between Rs.2,800-3,500/sq.ft. These locations which predominantly
cater to the middle income group have seen an appreciation of 15-20%.
0
Western zone capital values vary based on the location and amenities provided. Most projects in this zone
Koregaon Park
Boat Club Road
Deccan
Kalyaninagar
Aundh
Kothrud
Karve Road
Sopan baug / Uday Baug
command values ranging between Rs.3,050-4,500/sq.ft reflecting an appreciation of 10-15% over the
previous year's values. For instance, the new township project by Paranjpe schemes in Hinjewadi had been
launched at Rs.3,050/sq.ft.
In eastern zone, development of IT hubs and the construction of two new townships have led to an
appreciation of 15-25% in the capital values. Residential properties in these locations command prices of
Locations
Rs.2,700-6,000/sq.ft. On the other hand, the appreciation in southern zone is 20-25% with capital rates
Minimum Maximum ranging between Rs.3,000-5,500/sq.ft.
Figure 11
New Retail Supply in Pune
The prime locations in Pune where retail developments have traditionally been flourishing are concentrated
10
in the CBD locations of MG Road, Camp, JM Road and FC Road.
Amongst the notable retail projects, Ascent Mall which houses Pune Central (93,654 sq.ft) has become
operational this year. Besides, other malls like Krome (120,000 sq.ft.) on Solapur Road and Ishanya
6.60 (500,000 sq.ft), an interior specialty mall where Home Town and Crome have already started their
Area (mn.sq.ft.)
5.50 operations, are the latest entrants to the mall scene of Pune.
5
A supply of approximately 1.28 mn.sq.ft entered the Pune retail market in 2007, while around 13 new malls
totaling to 1.35 mn.sq.ft of retail space is expected to enter the market by the end of 2008.
3.64
Key retail projects scheduled to be completed in 2008 include One Center Port (200,000 sq.ft) on
1.86 Ganeshkhind Road, Down Town (200,000 sq.ft) at Erandwane, Gold Mall (313,095 sq.ft) and Dolphin Mall
1.10
(150,000 sq.ft.) at Hadapsar Road.
0
2008 2009 2010
Year Retail Rentals

Total supply : 6.60 mn.sq.ft. Rental and capital values in the retail market of the city have been rising since 2005 and various newly
developed real estate pockets have emerged as new retail destinations. In the western zone, Aundh has
developed into a significant retail destination along with other residential and IT/ITES developments. Retail
Source: Knight Frank Research rental values have gone up to almost Rs.150/sq.ft per month having a 40% increase as compared to the last
year's values.
In the eastern zone, Nagar Road and Mundhawa-Kharadi bypass road are amongst the fast growing retail
locations due to their proximity to various IT developments. This has led to an appreciation of 20% in rental
values to a present value of almost Rs.110/sq.ft per month. In the Central zone, the rental values on
Senapati Bapat Road have increased by around 40% escalating to Rs.180/sq.ft per month owing to the
presence of the ICC (International Convention Centre).
Outlook
With the current accelerated growth in real estate sector, Pune has emerged as a promising market for
office space development along with retail and residential. Major demand drivers have been the IT/ITES
sector as well as the expanding automobile industry. The demand for office space is expected to remain
Figure 12
buoyant in the forthcoming months, with an expected appreciation of around 15-20% in office space rental
Retail Rental Values
values. Residential and retail prices, riding on the back of the active office sector, shall continue to attract
250 investor interest and will witness a price appreciation of around 15-20% - 25-30% respectively.
Pune is increasingly becoming an investor friendly destination as it has seen considerable appreciation in
200 property values in last 3-4 years coupled with strong space demand. Also, the Maharashtra Industrial
Development Corporation (MIDC) have been offering various incentives like exemption in stamp duty,
150 electricity waivers, refund of octroi, etc. thus making Pune a favoured destination for IT/ITES companies.
The JNNURM fund of 270 crores is facilitating the infrastructure development in Pune. Three major flyovers
have become operational along with the development of newer roads while a metro rail is being planned
100
and a new airport is underway. These initiatives will provide the requisite environment to support future real
estate growth in the city.
50
Besides, the above a new government legislation permits building to be built upto a height of 100 meters
considering certain parameters.Consequently, Pune's skyline would be redefined with high rises in
0
residential and office developments. Further, the recently repealed Urban Land Ceiling and Regulation Act
Yerwada/Kalyani Nagar
Camp
J.M Road
Dhole Patil Road
Bund Garden Road
Aundh
Senapati Bapat Road
Karve Road/Kothrud
have released around 17,000 acres of land, mostly in peripheral locations, thereby auguring expectations of
stabilising the property rates in sometime in future.
Locations
Minimum Maximum
www.knightfrank.com
Figure 13
New Office Supply in NCR National Capital Region (NCR)

150
Market Overview
127.63
The real estate market in the National Capital Region (NCR) has experienced large-scale as well as wide
spread development in the last few years. Real estate opportunity in the region has transformed Gurgaon
100 and Noida into sought after destinations of the country. The primary reason behind the rise in development
Area (mn.sq.ft.)
86.31 in Delhi's neighbouring towns is the lack of availability of land in the capital. As per the Gurgaon Master
Plan 2021, Haryana Urban Development Authority (HUDA) plans to develop around 37,069 hectares of
land across 115 sectors (including the industrial sectors). On similar lines, the Ghaziabad Development
50 Authority (GDA) has ensured that the districts of Greater Noida, Bulandshahr, Meerut, etc. also provide
41.32
potential for real estate development. Further, Delhi Development Authority (DDA) plans to release some
29.20
more land parcels for development near Dwarka, close to the domestic airport.
12.11
National Capital Region (NCR) Delhi is the hub of commercial activities ranging from small
0
2008 2009 2010 entrepreneurships to large-scale industries as well as the IT/ITES sector. Rising office space demand has led
Year
to the development of neighbouring satellite towns like Gurgaon, Noida, Ghaziabad, Faridabad, etc. In
order to accommodate increasing demand, local bodies have been encouraged to promote district centres
at Janakpuri, Dwarka, Saket, Jasola and community centre at Laxmi Nagar in Delhi. These off-CBD locations,
Area Cumulative Area district centres and peripheral business districts are undergoing rapid commercialisation.
The residential growth in the region is following a radial pattern with substantial development taking place
in the peripheral locations of Delhi, viz. development of new sectors in Faridabad. New residential pockets
have formed owing to the active residential development around Gurgaon undertaken by developers like
Unitech, Emaar MGF and Gaursons, as well as projects taken up by Ansals towards east of Delhi.
Retail market in the city has witnessed intensification in various micro-markets, particularly in peripheral
locations where organised retail space has come up in a big way. New retail destinations in Delhi include
locations like Saket, Rajouri Garden, Preet Vihar. Notable mall developments, reflecting organised retail
expansion in the peripheral markets, include Ambience Mall and DLF Mall in Gurgaon and Great India Place
in Noida. Significantly, around 58 malls are expected to enter the NCR retail market in 2008.
South City I, Gurgaon Ambience Mall, NH-8

Major demand in the NCR office market has been witnessed from IT/ITES companies and multiple office
options model adopted by multinational companies. Close to 11 mn.sq.ft. of office space was leased in NCR
Delhi in 2007. Out of this about 40% comprised pre-leases and 60% of the total demand was absorbed in
Gurgaon. Considering the SEZ projects announced, which are due to be completed by 2010-2011, NCR
Delhi will have a considerable quantum of office supply, thereby surpassing other Indian cities in the
forthcoming years. With majority of the SEZs in pipeline being concentrated in Greater Noida, Faridabad
and Manesar, NCR is expected to have nearly 150 mn.sq.ft. area in 2010 out of which 29.6 mn. sq.ft. will
come up in 2008 alone. Office developments in emerging markets on NCR fringes like Kundli, Sonepat (IT
SEZ) and Faridabad (IT Parks and SEZ) are at various planning stages.
Figure 14
Delhi
Office Values for NCR
In Delhi, Netaji Subhash Place, Saket and Jasola have emerged as major supply zones in office space
400 50,000
segment. Due to excellent connectivity with satellite locations through the metro rail, Connaught Place has
renewed the interest for office space among the corporates in 2007. City Centre project by Municipal
40,000 Corporation Delhi on Minto Road is also a landmark project under construction in Lutyen's Delhi. Around
300 0.97 mn.sq.ft. of new office space is expected to come up Delhi in 2008.
30,000
Gurgaon
200
With infrastructure developments like flyovers and expressways and owing to its proximity to the airport,
20,000
Gurgaon has become a favoured office destination. NH-8 has witnessed substantial activity in the office
segment in Gurgaon with Cyber City buildings being leased to corporate majors. Golf Course Road and
100
10,000 Sohna Road are the new zones where most of the office space projects are coming up. The city will further
see the infusion of approximately 11.2 mn.sq.ft. in 2008. Besides, IMT Manesar, in the vicinity of Gurgaon,
will be offering approximately 1.14 mn.sq.ft. in 2008.
0 0
Connaught Place
Nehru Place
Okhla Industrial Area
Mohan Cooperative Area
Gurgaon
Noida
Bhikaji Camaji Place
Noida and Greater Noida

In recent times, Noida has become the preferred destination of companies with larger format. Locations like
Sector-62 and Taj Expressway are favoured by the corporates and IT companies to locate their offices. With
estimated 11% share in office supply, Noida will witness the infusion of around 7.45 mn.sq.ft., while
Greater Noida will have new office space supply of about 3.83 mn.sq.ft. in 2008.
Locations
Other Markets
Approximately 10 IT parks and SEZ projects have been announced in Faridabad, which are at conceptual
Source: Knight Frank Research stage and are expected to contribute to the NCR office market by 2010-11. The announcement of
extension of Delhi Metro project till Kundli has triggered the pace of development on the fringes of Delhi.
Kundli (Sonepat) is expected to add 10 mn.sq.ft. of office space supply in NCR by 2010.

A non-uniform trend-line in rental growth of NCR office space market has been observed. In CBD,
Connaught Place, with an appreciation of 20% over the last year's values, the present rentals are recorded
between Rs.250-350/sq.ft per month whereas capital values vary between Rs.22,500-45,000 per sq.ft.
based on its proximity from inner circle.
Gurgaon witnessed 32% rental appreciation during the first quarter in 2007, however presently rentals have
stabilised to some extent and vary between Rs. 85-110/sq.ft. per month for non-IT and Rs.55-70/sq.ft.
per month for IT buildings. Capital values on NH-8 hover between Rs.13,000-16,000/sq.ft. whereas prime
location like MG Road commands Rs.18,000-20,000/sq.ft. In Manesar, capital values vary between
Rs.6,500-7,500/sq.ft.
Ongoing rentals in Noida for non-IT buildings are Rs.100-150/sq.ft. per month at key locations like Sectors
16 and 18 whereas IT buildings command Rs.45-65/sq.ft. per month. Noida office space rental values have
appreciated at a rate of 40% on an average since the last year. Capital values are the highest in CBD,
Sector-18 with a price band of Rs.18,000-24,000/sq.ft. whereas peripheral locations on the Taj Expressway
command Rs.6,500-7,500/sq.ft. Rental values in Greater Noida vary between Rs.25-40/sq.ft. per month and
capital values vary between Rs.4,000-6,500/sq.ft.
www.knightfrank.com
Figure 15
New Residential Supply in NCR
300
Delhi
With the commissioning of Delhi Metro, the residential locations of Dwarka and Rohini have experienced
237.12 substantial appreciation in capital values. Most of the residential construction in Delhi primarily constitutes
of “Builder Floors” in the already developed areas. This is primarily because of non-availabilty of land parcels
200 in the city. Parsvnath has two projects under construction in north and west Delhi. DLF has also acquired
Area (mn.sq.ft.)
land for development in south Delhi. The total residential supply expected in Delhi by 2010 is
153.48
2.65 mn.sq.ft.
111.66
100 Gurgaon
83.64
Upcoming residential growth pockets in Gurgaon include Golf Course Road, Sohna Road, DLF Phase V
41.82 (Nirvana Country) and sectors 47, 56, 57. Gurgaon accounts for about 53.68 mn.sq.ft. of total residential
space coming up by 2010, of which about 22.34 mn.sq.ft. shall be ready by 2008. Projects in Gurgaon and
0
Manesar have achieved an occupancy rate of 80%.
2008 2009 2010
Year
Noida
Noida has been one of the most sought after residential markets in NCR with recorded occupancy of 75%.
Area Cumulative Area The stretch along the Greater Noida Expressway has large quantum of office development planned and
thus is expected to see demand for quality residential space. Noida has around 41.17 mn.sq.ft. of
residential space coming up by the year 2010, out of which 1.74 mn.sq.ft will be added in 2008 alone. The
sectors along the Greater Noida Expressway are expected to receive the maximum (approximately 95%) of
the total supply.
Greater Noida
The residential development was earlier concentrated in the sectors Omega I, II; Gamma I, II; Beta I, II;
Delta II, III, Alpha I, II. With the increase in demand, development is shifting towards sectors Zeta II; Eta II;
Omicron I, II, III; Phi I, II, III; Chi I, II; Psi II; Sigma I, II, III, IV; Pi I, II. The locations of the future include
Sector Tau, Swarn Nagari, sectors Mu I, II; Nu I, II; Xu I, II, Kappa I, II; Eta I, II; Iota I,II. Approximately
27.72 mn.sq.ft. of residential space shall come up in Greater Noida by 2010 and 5.12 mn.sq.ft. will be
added in 2008 alone.
Faridabad
A large number of residential projects were announced in Faridabad in the year 2007. Even Surajkund-
Badkal area has seen substantial development over the last 2 years. However, as the market is primarily
investment driven, there has been very little end-user demand in the area. The Delhi metro is expected to
be extended to the satellite township in the near future and this is expected to increase the number of
people willing to settle down in Faridabad. A total of 37.42 mn.sq.ft. of residential development is proposed
to come up in the city by 2010 out of which 0.83 mn.sq.ft. will be added by the end of 2008.
Ghaziabad
The locational advantage has been one of the primary drivers for the growth of residential market in
Ghaziabad. The construction of the Delhi metro has already begun and is expected to boost the housing
demand in the region. The city is estimated to have a considerable supply of 66.19 mn.sq.ft. out of which
14.63 mn.sq.ft. will be added in 2008, thereby responsible for contributing around 28% of the total
estimated supply of NCR. The development is concentrated more in the Indirapuram area along the NH-24.
There are also various residential projects coming up along the NH-58, leading to Meerut.
Sonepat/Panipat/Kundli and Bhiwadi/Dharuhera/Rewari/Alwar

Apart from the above mentioned micro-markets of NCR Delhi, substantial residential development is also
coming up in Sonepat, Panipat and Kundli as well as in Bhiwadi, Dharuhera, Rewari and Alwar. Altogether
these pockets will account for 37.64 mn.sq.ft of residential space by 2010 out of which 5.41 mn.sq.ft. will
come up by 2008.
Though these markets are currently investor driven, end-user demand is expected to grow in future as office
developments come up in these locations.
Figure 16
Residential Price
Residential Capital Values
50,000
Delhi
The capital values in Dwarka and Rohini are in the range of Rs.4,200-4,800/sq.ft. The current values in these
locations have seen an appreciation of 25% and 45% respectively over the last year. Chanakyapuri
40,000
commands the maximum residential capital values of around Rs.45,000-50,000/sq.ft., with marginal
appreciation in the past year owing to the saturation of residential stock. Mayur Vihar in east Delhi has seen
30,000 the average capital values appreciate by over 100% since 2004.
Rs./sq.ft.
20,000 Gurgaon
In Gurgaon, Sohna Road commands an average capital value of around Rs.3,250/sq.ft., an increase of
10,000
around 20% since 2007 values. The capital values in DLF Phase V have gone up by 40% over the last year
and the average rate currently is Rs.6,000/sq.ft. Meanwhile, the average capital values in DLF Phase II and IV
are in the range of Rs.5,000-5,500/sq.ft.
0
Chanakyapuri
Jor Bagh
Greater kailash I & I
Pockets in Gurgaon (A Grade)
Noida
Greater Noida
East Delhi (Mayur Vihar, Preet Vihar, IP extention)
Ghaziabad
Faridabad
Noida
The residential capital values in the prime sectors (14, 14A, 15, 15A) of Noida are in the range
Rs.4,000-6,250/sq.ft. The rates have undergone an appreciation of approximately 55% since last year and
the maximum increase was in sectors 92, 93 and 93A. The average residential rates in these sectors are
around Rs.5,000/sq.ft. The recently launched Jaypee Greens in Sector 128 on the expressway has been
launched at Rs.6,100/sq.ft.
Greater Noida
The residential capital values in Sector Phi and Omega have appreciated by over 45% since last year and
have reached an average present value of Rs.2,900/sq.ft. In sectors Alpha, Beta and Gamma, the residential
capital values have risen by 20% since last year and by 60% since 2005 and are presently reported to be
Locations Rs.3,000/sq.ft. Sector Tau, near Pari Chowk, has seen an appreciation of about 31% in residential capital
Minimum Maximum values since last year and are currently quoted at Rs.2,450/sq.ft.

Faridabad
The average appreciation in the major locations in Faridabad has been in the range of 30-35%. The location
near the Surajkund Lake is the most sought after residential pocket in Faridabad owing to good connectivity
with Gurgaon and is commanding an average residential capital value of around Rs.4,775/sq.ft. Projects in
sectors 78 and 89 are however still available at an average rate of Rs.1,850/sq.ft.
Ghaziabad
The capital values in Vaishali and Indirapuram have gone up by 45% since last year. Vaishali, in proximity to
east Delhi is commanding an average capital value of Rs.2,950/sq.ft. while the average residential capital
values in Indirapuram (which has access through the NH-24) is Rs.2,800/sq.ft. Residential apartments are
also under construction on the NH-58, available at an average rate of Rs.1,600/sq.ft.
Sonepat/Panipat/Kundli and Bhiwadi/Dharuhera/Rewari/Alwar

Residential capital values in Sonepat/Panipat/Kundli range between Rs.1,350-1,950/sq.ft. and have gone up
by 30-80% in the last one year. Maximum appreciation has been in plot prices in Kundli. On a similar note,
Bhiwadi/Dharuhera/Rewari/Alwar has residential values ranging between Rs.1,600-2,100/sq.ft. and these
have appreciated by an average of 30% since last year. Dharuhera commands the maximum rates of
around Rs.1,900-2,100/sq.ft. due to its proximity to Manesar and Gurgaon.
www.knightfrank.com
Figure 17
New Retail Supply in NCR
30 Delhi
Apart from the already established retail destinations of Connaught Place, Karol Bagh, Khan Market, South
25.90
Extension, etc. a number of malls have come up in west Delhi and south Delhi in the last 2-3 years.
Approximately 5.81 mn.sq.ft. of retail space is expected to enter the Delhi market by 2010. Around
20 19.39 4.05 mn.sq.ft. of new retail space was delivered in 2007 while approximately 4.77 mn.sq.ft. will be added
Area (mn.sq.ft.)
in 2008.
13.12
Gurgaon
10 Gurgaon is expected to receive a total of 7.18 mn.sq.ft. of retail space by 2010. Approximately
6.27
6.51 1.52 mn.sq.ft. of retail space became operational in 2007, with another 2.43 mn.sq.ft. estimated to be
added in 2008. Also, the stretch along the NH-8 is expected to develop as a major retail corridor with
prestigious projects like Ambience Mall (operational) and DLF's Mall of India in the pipeline. MG Road is set
0
to see more retail activity with malls like Unitech's Gurgaon Central under construction. With better
2008 2009 2010
connectivity through NH-8, and the proposed metro rail, Gurgaon is ready to give stiff competition to the
Year
malls in south Delhi.

Noida
Source: Knight Frank Research The total retail space proposed for Noida is around 0.31 mn.sq.ft. by 2008. The recently operational mall
project 'Great India Place' (900,000 sq.ft.) by Unitech has put Sector 18 amongst the most preferred retail
pockets in Noida. The scope for retail market growth in Noida is very extensive due to the absence of
multiple business districts, thereby making way for the healthy co-existence of the organised and the
unorganised retail.
Greater Noida
Greater Noida has a good quantum of residential space under construction and thus the organised retail
market has good growth prospects. The location having traditional retail presence in Greater Noida is the
Alpha Commercial Belt. However, over the years, other sectors have been developed by the Greater Noida
Development Authority, which has led to increased retail activity in the sectors Omega and Tau. The total
retail space coming up till 2008 is approximately 2.07 mn.sq.ft.
Ghaziabad
Ghaziabad has around 3.63 mn.sq.ft. of retail space coming up by the year 2010 of which 1.52 mn.sq.ft.
will come up by 2008. The major growth areas are Indirapuram, along the NH-24 and the GT Road. As a
spill-over, even Meerut (NH-58) is proposed to see good amount of retail development. Ghaziabad has
excellent retail catchment and is also very close to the satellite towns of Noida and Greater Noida. The
Mahagun Mall (450,000 sq.ft.) and The Gateway mall (500,000 sq.ft.) are some of the large scale projects
planned for the future.
Faridabad
Organised retail is slowly expanding in Faridabad with development of new residential sectors.
Approximately Faridabad will contribute to 1.57 mn.sq.ft. of retail space by in 2008. Most of the
development is occurring along the NH-2, known as Mathura Road. Being an old industrial town, Faridabad
has a large customer base and these malls intend to cash in on this catchment. Crown Interiors is the largest
mall (600,000 sq.ft.) under construction in Faridabad and is expected to be operational in 2008.
Sonepat/Panipat/Kundli
Organised retail is trickling down to the fringe areas like Sonepat, Panipat and Kundli which will account for
approximately 3.38 mn.sq.ft. retail space by the year 2010. Out of this Panipat is expected to receive the
maximum supply of 1.72 mn.sq.ft. by 2010, of which a total of 0.67 mn.sq.ft. will be added in 2008.
Dharuhera and Bhiwadi shall have around 0.92 mn.sq.ft. of retail space ready by the year 2009. The retail
scenario in this area has not been able to pick up much due to the presence of the strong retail market of
Gurgaon in the neighbourhood.
Figure 18
Retail Rentals
1,600 Delhi
The Central Business District (CBD) of Connaught Place which has undergone an 45% increase in rentals
1,400
over the last one year currently commands an average rental of Rs.800/sq.ft. per month. Retail rentals in
1,200 Vasant Kunj and Khan Market have also seen an appreciation of approximately 40%, while Saket has
witnessed appreciation of about 25%. The average rentals quoted in these locations presently are
1,000
Rs.700/sq.ft. per month, Rs.1,250/sq.ft. per month and Rs.500/sq.ft. per month respectively.
800
Gurgaon
600
The average rentals on the MG Road are in the range of Rs.200-250/sq.ft. per month, reflecting a 15%
400 increase since last year. The average rental values on Sohna Road have appreciated by 30% and in DLF
200 Phase V by 55%. Currently, the rentals reported in these locations are Rs.120/sq.ft. per month and
Rs.90/sq.ft. per month respectively.
0
Faridabad
Connaught Place
South Ex
Khan Market
GK I
Gurgaon
Noida
Ghaziabad
Noida
The average retail rentals in the upmarket Sector 18 have gone up by 40% since last year. The ongoing
average rentals in this sector are in the range of Rs.250-300/sq.ft. per month. However, the unorganised
Atta market has seen very little change in rentals.
Locations
Minimum Maximum Greater Noida

Source: Knight Frank Research The region near the famous Pari Chowk (Knowledge Park) is commanding the highest rentals of
Rs.110-130/sq.ft. per month. The retail rentals here have gone up by around 35% since last year. Omaxe
Connaught Place (OCP) is commanding an average rental of Rs.90/sq.ft. per month. Sector Omega
commands the maximum average rental of Rs.100/sq.ft. per month.
Ghaziabad
Indirapuram has seen an average appreciation of 20% in retail values since last year and are currently
quoting rentals at a range of Rs.125-150/sq.ft. per month. Locations like Kaushambi and Vaishali have seen
appreciation of 25% and are commanding an average rental of Rs.250/sq.ft. per month. This is mainly
because of the increased residential activity these locations are experiencing.
Faridabad
The rental values on the Mathura Road have gone up by 30% on an average since last year. The area is
commanding an average rental of Rs.108/sq.ft. per month. The reason behind the considerable
appreciation can be attributed to the large residential base that exists there.
Sonepat/Panipat/Kundli
Retail rentals in Sonepat/Panipat/Kundli and Dharuhera/Bhiwadi/Rewari/Alwar are almost the same and
average at about Rs.50/sq.ft. per month. This value denotes a 30-40% increase over the rates quoted last
year.
Outlook
Given the project delivery schedule, NCR Delhi real estate market will witness robust activity in the
forthcoming 2-3 years. Induction of economic activities coupled with rapidly developing infrastructure will
bring in more interest from the investors lobby.
With RBI indications to stabilise the home loan interest rates, the NCR market is expected to witness growth
in the residential sector which will further propel development of residential projects in the peripheral
markets of Noida, Gurgaon and Faridabad with an average appreciation of 15%. Besides, infrastructure
initiatives like the commencement of the Metro line across Gurgaon, Faridabad, Kundli and Noida and
other satellite towns in NCR will lead to further appreciation of upcoming areas by making them more
accessible for end-users.
www.knightfrank.com
With the overall region on a growth trajectory, office activities will be on upswing. The development of a
number of SEZ projects in the region will make office space available in surplus with competitive rates.
Projects like IT parks and large format office buildings will be good investment options with assured returns.
Focus in office space segment may shift to Noida and Greater Noida from Gurgaon because of the
consistent upscaling of project formats and infrastructure. Office values in the region are expected to
appreciate by around 12-18% in the next 12-18 months.
Retail in NCR will also be on an upswing with huge projects coming up in next 2-3 years. The trend of malls
in the neighbourhood is expected to catch up soon. Larger format malls are emerging on the canvas of
Gurgaon and Noida with multiple brands under one roof. This can be attributed to increased spending
power which gives a reason for specialty malls in these markets. The retail rental market in prime locations
like Connaught Place, Khan Market, South Extension will grow further by around 12-18%. New peripheral
retail destinations like Dwarka and Saket will be the preferred destinations for organised retail in the region.
Figure 19
New Office Supply in Kolkata Kolkata

12
11.31 Market Overview
10 Kolkata has witnessed considerable change in its real estate landscape over the past few years. The year
8.83 2007 witnessed considerable real estate activity with hectic residential development, increased office space
8 absorption and retail penetration. Conducive government policy has improved the perception of the
Area (mn.sq.ft.)
general socio-political environment in both the city and the state. A number of infrastructure projects were
6 also initiated during the past year, leading to increased investor interest in the city. This includes the
5.31 clearance for the proposal for East-West Metro connecting Kolkata's twin city Howrah in the west with the
4
IT hub at Salt Lake Sector V.
3.52
2.48
At present, the city is undergoing extensive development in all directions. While most of the activity is
2
taking place in the eastern suburbs of Salt Lake and New Town Rajarhat, the western part of Kolkata
comprising Howrah has also attracted a number of developers to set up large projects. Several major
0
developers with pan-India presence as well as a few international players have entered the Kolkata market.
2008 2009 2010
Year Besides, at a time when scarcity of land has been pushing property prices steadily northward, Kolkata's real
Total supply : 11.31 mn.sq.ft. estate market has been strengthened by a 150-acre windfall, with the National Textile Corporation (NTC)
Ltd having sold nine of its 12 sick units on the fringes of the city for conversion into residential or
commercial properties. Majority of these NTC mills, idling since 2002-03, are located in Hooghly and
North 24-Parganas districts and will be converted into housing estates or shopping malls by the new
owners.
Greenfield Heights, Rajarhat Homeland, Bhawanipore

Figure 20
Office Values for Kolkata
The office market in Kolkata continues to be driven by the IT/ITES sector. Suburban locations of New Town
120 10,000
Rajarhat and Salt Lake Sector V met the demand emanating from the IT/ITES sector whereas non-IT
companies like the banking and insurance sector preferred the CBD and Off CBD locations. Off-CBD
100
8,000 locations like Park Circus and Rash Behari Connector continue to complement the CBD of Dalhousie.
80 In addition, the rise in corporate activities in the city has led to an increased demand for serviced office
6,000
spaces. Due to the lack of quality business centres, most companies have leased space in star category
60 hotels in the city. Approximately 2.5 mn.sq.ft. of office space was taken up in Kolkata in 2007 which is
4,000 about 60% more than what was absorbed in 2006.
40
Approximately 2.76 mn.sq.ft. of office space was added to the total office stock by end 2007. Majority of
20
2,000 this new stock came up in Salt Lake Sector V. Key projects like Omega by TCG Real Estate, Globsyn Crystals
by Globsyn & Intelligent Infrastructure Ltd. and Infinity Benchmark by Infinity Infotech Parks Ltd. at
Salt Lake are few of the major office projects which became operational in 2007.
0 0
Dalhousie
Camac Street
Park Street
Salt Lake
Many new projects are in the pipeline in Rajarhat as well as Salt Lake Sector V. With the planned
infrastructure development in place, Rajarhat is expected to become the next IT/ITES centre in the city in
the next 3-4 years. Bantala, Batanagar and Jagdishpur will also emerge as important alternative IT
destinations with government approving a number of IT SEZs in these locations. By the end of 2008,
Locations
around 5.31 mn.sq.ft. of new office supply is expected to be infused into the market.
www.knightfrank.com
Figure 21
New Residential Supply in
Kolkata The base rentals in the off-CBD locations of Park Street, Camac Street have appreciated by 15% over the
60 previous year and are currently ranging between Rs.90-105/sq.ft. per month. Salt Lake, a preferred
destination for the IT/ITES sector has witnessed maximum appreciation of about 20%. The prevailing rental
value for the region is at Rs.55/sq.ft. per month. However, there has been no significant appreciation in
rental values for the CBD location of Dalhousie Square area in the last year and they are stable at
40 39.80
Rs.45-65/sq.ft. per month. Rajarhat, the upcoming peripheral location for the IT/ITES sector, has average
Area (mn.sq.ft.)
rental values at Rs.42/sq.ft. per month.
24.71 Residential Supply and Demand

20
15.56
Kolkata has seen considerable shift in consumer preference for housing needs over the last few years. In the
15.09
past one year alone, a number of large township developments have been announced in the outskirts of the
9.15
city by national and foreign players. These include the 390-acre Kolkata West International City located at
Howrah by the Indonesia-based Salim Ciputra Group and the 100-acre Uniworld City by Bengal Unitech in
0
Rajarhat. Recently, two global real estate investment companies, Walton Street Capital and Starwood
2008 2009 2010
Capital have announced their participation in the development of an integrated township in Uttarpara,
Year
around 25 kms from Kolkata. The 313-acre township, to comprise residential, office, retail and other
infrastructure facilities, by Bangalore-based Shriram Properties shall consist of 20 mn.sq.ft. of developed
Area Cumulative Area area when completed in the next 3 years.
In another important development, Kolkata-based Eden Group and UK-based REIT Asset Management will
construct a residential project worth Rs.10 billion spread over more than 72 acres in Maheshtala, in
south-west Kolkata, over the next five years.
In view of the investments and developments taking place in Kolkata, the city is set to receive around
40 mn.sq.ft. of residential space in the forthcoming 2-3 years as against approximately 8 mn.sq.ft. of supply
added to the stock in 2007. Out of the total new supply expected, around 9.15 mn.sq.ft. will enter the
market in 2008. Already majority of the residential projects under construction in the Rajarhat region have
been completely booked and are awaiting completion in 2008. The 5,000 hectare satellite township of
Rajarhat, which had been planned to accommodate around 5-7 million people, currently has several high
profile developers as well as state government promoters present in the region.
Residential Price
Figure 22
Residential real estate in Kolkata witnessed a stable growth in values, unlike the other metros where prices
Residential Capital Values have stabilised or even marginally dipped after a considerable rise in 2006. While established prime
9,000 locations like Ballygunge and Alipore witnessed price appreciation of around 12-18%, mainly due to the
shortage of new supply, upcoming locations like Rajarhat in the east and Behala in the south saw
8,000
considerable appreciation of about 30-45% in the past one year. Presently, residential values in Rajarhat
7,000 exist at around Rs.3,200/sq.ft.
6,000
Although there are no residential projects currently underway, Salt Lake, too, saw a rise in residential values
Rs./sq.ft.
5,000 which can be attributed to the IT hub of Salt Lake Sector V in the vicinity. Locations further north like Jessore
4,000 Road and VIP Road, which has a number of mid-end residential projects, had price appreciation of around
20-25% over the past one year and are currently quoted at a range of around Rs.2,500-2,800/sq.ft.
3,000
2,000
1,000
Kolkata witnessed increased organised retail penetration over the past one year in 2007. While a number of
0
national and international brands already have their presence in the city, several large retailers have
Ballygunge
Alipore
South of Park St
Behala
New Town Rajarhat
Salt Lake
announced their plans of entering the city. Subhiksha is scheduled to launch around 17 stores in the next
few months just as Reliance Retail has been given the contract to redevelop Park Circus municipal market.
On the other hand, foreign retailer Germany's Metro AG has already been allowed to set up operations in
the city, at the southern end of the EM Bypass.
Locations
Minimum Maximum

Figure 23
The demand for retail has been further encouraged by the advent of large departmental stores like
New Retail Supply in Kolkata Shoppers' Stop, Pantaloons, Westside, etc. Besides these, the Future Group will launch its first
“Central” mall in Kolkata in the next two years. The mall, to be spread over 0.3 mn.sq.ft., will see more
10
than 400 brands selling products under one roof and will be located in Ballygunge Circular Road.
Significantly, around 1.48 mn.sq.ft. of retail space came in to the market during the past one year, with
7.9 another 2.8 mn.sq.ft. being under construction and scheduled to be ready in 2008. By the end of 2010,
over 20 malls are expected to be operational in the city. The 1 mn.sq.ft. South City Mall, on Prince Anwar
Area (mn.sq.ft.)
Shah Road, was one of the major retail projects which became operational in 2007. Amongst the notable
5.1
5 projects scheduled to be operational in 2008 on EM Bypass include Mani Square, comprising 0.35 mn.sq.ft.
of retail space besides a 0.13 mn.sq.ft. of IT block, with four anchor tenants to its credit and will host the
2.8 city's first IMAX screen, first McDonald's Drive-Thru, a Spencer's hypermarket and the third Westside.
An important observation over the last 2 years has been the shift of the organised retail market towards east
and north-eastern part of the city, with a total of 6 malls being underway in Rajarhat. This is primarily due
0
to the presence of IT in the region, which has also been responsible for creating a residential catchment for
2008 2009-10 retail to thrive.
Year
Total supply : 7.9 mn.sq.ft. Retail Rentals

Area Cumulative Area Retail space values have undergone considerable change with the advent of organised retailing in the city.
While established retail markets of Park Street and Camac Street have seen prices appreciating by around
35% during the last year, other highstreet retail markets like Gariahat and Rashbehari Avenue witnessed an
increase of approximately 30%.
Presently, Park Street has average rental value of Rs.300/sq.ft. per month, up from the previous values of
Rs.220/sq.ft. a year ago. Emerging retail markets like Rajarhat and Salt Lake where majority of the malls are
under development have had a price appreciation of about 25-30% and are currently quoted at about
Rs.90/sq.ft. per month and Rs.150/sq.ft. per month respectively.
Outlook
Kolkata has come a long way from its bureaucratic straitjacket years, with the present government
providing a number of incentives as well as taking up various steps to curb disorganised real estate
development by way of entering in to joint ventures with developers. With over 20 large format malls, more
Figure 24
than 11 mn.sq.ft. of IT/ITES office space and 40 mn.sq.ft. of residential space by the year 2010, the city is
set to become one of the foremost real estate destinations of the country, providing tough competition to
other metros. While office space is will see prices appreciate by around 25-35%, on account of the supply
350 lined up, retail and residential prices shall continue to appreciate by around 15-25% in the next 12-18
months.
300
A number of star category hotels have also been announced in the city, including brands like Hilton,
250
JW Marriott and Rradisson, with others like Novotel, Ginger and Lemon Tree biding their entry. Besides, the
200
Tata Motors factory, two large steel plants, several approved SEZs, a nuclear power plant in the anvil, the
extension of the primary airport and a secondary sea port, huge investments into roads and rapid transport
150 infrastructure have also led to the overall attractiveness of the city.
100 However, Kolkata runs the risk of over-pricing its land. This has resulted in delaying the entry of IT major like
Infosys in to the city. Besides, facilities management companies are also paying up more to building
50 managers than they would in established office space hubs like Bangalore, Pune or Hyderabad. Thus, with
control over these pricing hiccups, Kolkata can expect to expediently maintain its steady growth.
0
E.M.Bypass
Camac Street
Gariahut
Rashbehari Avenue
New Town (Rajarhat)
Park Street
Salt Lake
Locations
Minimum Maximum
www.knightfrank.com
Figure 25
New Office Supply in Bangalore Bengaluru

40
Market Overview
The real estate market of Bengaluru showed a steady albeit slow growth in 2007. A significant development
32.57 in the first quarter of 2007 was the approval of the City Development Plan (CDP)-2015 for Greater
Bengaluru. The revised CDP permits a FAR upto 3.5, which would result in taller buildings in future. The
Area (mn.sq.ft.)
CDP also proposes to set up five satellite towns around the city. The State Government has also
20 19.97
commenced related infrastructure developments to improve connectivity across the city, which includes the
Metro, the Monorail, elevated road to Electronic City, Peripheral Ring Road, expressway to the upcoming
11.66 12.6 international airport at Devanahalli and widening of the existing roads.
8.31
The office market in Bengaluru continued to remain buoyant with high absorption rate in the CBD. The IT
corridor stretching from Whitefield in the east to Bannerghatta Road in the south along the Sarjapur Outer
Ring Road witnessed the completion of major office developments, which were pre-leased prior to their
0
completion.
2008 2009 2010
Year With four malls becoming operational during 2007, the organised retail market in Bengaluru saw a robust
Total supply : 32.57 mn.sq.ft. growth. While the traditional retail market continues to remain active across the key micro-markets of the
city, several malls coming up in the city indicates the rise of organised retailing in Bengaluru.
Source: Knight Frank Research The residential market witnessed a slow down in the sale of properties as well as a stabilisation of prices in
the past year. However, this did not prevent the developers from launching new projects in the city. In the
south region, Kanakapura Road, JP Nagar, Bannerghatta Road and Hosur Road emerged as new residential
micro-markets. In the south-east quadrant, Sarjapur Outer Ring Road had a dominant supply of residential
space last year. Most of the projects launched in 2007 were high-end developments catering to the
increasing needs of HNIs and expatriates.
Reflecting the optimism of the real estate market in Bengaluru, three local developers Sobha developers,
Purvankara and Brigade group came up with their IPOs. Also, major developers in the city diversified into
the hospitality sector to minimise risk and to cash in on the demand-supply gap existing in this sector.
Figure 26
Office Values for Bengaluru

100 10,000
80 8,000
60 6,000
Sobha Tulip, JP Nagar Salarpuria Infozone, Electronic City
40 4,000 Office Supply and Demand

Bengaluru continues to be one the top IT destinations in the country. Though the IT/ITES sector remains the
20 2,000
major demand driver for office space in the city, other sectors like biotechnology and textile industry have
further fuelled the demand for office space. According to Knight Frank Research approximately
13.5 mn.sq.ft. of office space was leased in Bangalore in 2007, 30% of which is constituted of pre-
0 0
commitments. The new CDP predominantly favours the office market in terms of the revised FAR around
Koramangala
Cunnigham Road
Indira nagar
OuterRing Road
Banerghatta Road
Electronic city
Residency Road
Whitefield
M G Road
the planned metro stations. Besides, the plan has identified all major arterial and sub-arterial roads as
Mutation Corridors, which would further enhance the office developments along these corridors.
The IT corridor saw major office developments in the form of built-to-suit campuses and IT SEZs. Bengaluru
has been sanctioned 16 IT/ITES SEZs, of which three SEZs are already operational and four are under
Locations construction in the north and southeast locations of the city. According to Knight Frank Research,
Rental Values Capital Values approximately 13 mn.sq.ft. of new office space entered the market in 2007. It is estimated that a fresh
supply of 8.3 mn.sq.ft. will be ready in 2008.
Figure 27
In a notable development, the state government awarded the 9,187-acre Knowledge City project at Bidadi
New Residential Supply in to DLF last year. This project is expected to change the dynamics of the Mysore Road in the southwest
Bangalore region. Meanwhile, Sarjapur Outer Ring Road will continue to contribute a major share of total supply of
80 office space in the southeast quadrant of the city.
72.45
63.83 Office Price and Rentals

60
Rental values in the CBD increased by 50% over the last year and reached as high as Rs.100/sq.ft.
per month. A further increase in these values is expected due to the lack of new supply. Values have
Area (mn.sq.ft.)
increased by 45% in the off-CBD locations and the current rental values range between Rs.60-70/sq.ft.
40
36.66 per month.
27.17
In the peripheral locations, office space rentals have increased by 30-40% in the last one year. On Sarjapur-
20 Outer ring Road, the rental values vary within a range of Rs.50-60/sq.ft. per month. Rental values in the
south and southeast locations have shown an increase of 30% over the year. The rentals in Bannerghatta
8.62
Road increased considerably since 2006 and are currently quoted in the range of Rs.50-60/sq.ft. per month.
0 The average rentals in Hosur Road and Electronic City vary between Rs.30-40/sq.ft. per month. The rentals
2008 2009 2010 in Whitefield saw a decline and are currently stable at Rs.25-35/sq.ft. per month.
Year

The IT sector employees and NRIs are driving the demand for customised high-end residential properties in
Source: Knight Frank Research Bengaluru. The demand for residential set-ups with amenities has led to townships projects in the peripheral
locations. The International airport at Devanahalli and the improved connectivity to the city through the
four-laned Bellary Road are the key drivers for the rapid real estate developments in the north. Due to
availability of land parcels, high-end villas and row house projects are coming up in the north, east and
southeast locations of city.
As compared to 2006, the residential market witnessed a slowdown in the sale of residential properties in
2007. The increase in loan rates and speculation of the prices to decrease in future affected the growth of
the residential sector in most of the micro-markets of the city. As compared to this, the residential units
launched in the vicinity of the CBD are sold out due to the high demand from HNIs and expatriates.
Supply in CBD is comparatively lower as only few high-end projects of 8-14 units were launched in 2007.
There is massive concentration of residential projects in the east and south-east locations due to the
proximity to the IT corridor. While, south of the city will have an influx of approximately 8 mn.sq.ft. of
residential space by the end of 2008, the eastern quadrant will have a residential supply of 8.6 mn.sq.ft. in
Figure 28 2008.
With the International airport to be operational in 2008, the northern location is estimated to have a
18,000
residential supply of 8 mn.sq.ft. approximately within this year. According to Knight Frank Research, a total
of around 27 mn.sq.ft of residential space will come up in 2008, as against the estimated addition of about
15,000
16 mn.sq.ft. to the stock in 2007.
12,000
Residential Price
Rs./sq.ft.
9,000 Due to high demand and low supply in the CBD, prices have appreciated by 75-80% in 2007 and are
currently in the range of Rs.12,000-17,000/sq.ft. However, the capital values in the off-CBD locations have
6,000 shown a marginal increase of 15% over the year. Residential capital values in the east range between
Rs.2,500-3,700/sq.ft. and in the West, the average capital value is around Rs.4,800/sq.ft. In the southern
3,000 location, the prices have remained steady with a nominal increase of 10-15% and the capital values here
currently hover around Rs.2,800-4,000/sq.ft. The residential properties within the proximity of the
0 upcoming International airport reported an increase of over 30% and are currently priced at
M.G. Road
Koramangla
Indira nagar
Sadashiv nagar
Malleshwaram
J.P. Nagar
Basavangudi
Rajaji Nagar
Rs.2,500-4,500/sq.ft. The capital values for villas are quoted in the range of Rs.5,000-6,800/sq.ft.

Locations The organised retail sector in Bengaluru which had seemed to lag behind the other cities, witnessed robust
Minimum Maximum growth in 2007. The demand for luxury retail and international brands from the burgeoning cosmopolitan
culture in the city, is leading to considerable growth of malls across all micro-markets in the city.
www.knightfrank.com
Figure 29
Presently, the operational malls in the city are fully occupied, while the malls under construction have been
New Retail Supply in Bangalore pre-leased by major retail brands. High street retail also continues to be in demand resulting in a high
15 absorption rate across various locations in city.
12 Knight Frank Research estimates that about 16 new malls will come up in the city, totaling to approximately
2.64 mn.sq.ft., in 2008. Prime retail supply in the CBD would come from the UB City mall with a built-up
10.6 area of 0.15 mn.sq.ft. which would be operational in 2008. Organised retail space of 1.6 mn.sq.ft. is
10
coming up at Whitefield and Sarjapur Outer Ring Road in expectation of the upcoming residential supply in
Area (mn.sq.ft.)
these locations.
7.97
5
Retail Rentals
The booming retail market in Bengaluru has resulted in steady increase in rental values across the prime
locations of the city with the mall rentals undergoing an increase of 30% in the last one year. Rental values
2.64
1 for high street retail properties increased by 20% during the year. Rental values in Brigade Road range
0 between Rs.350-450/sq.ft per month and in MG Road values are Rs.250-300/sq.ft per month. In
2008 2009 2010 Commercial Street, highstreet rentals quoted are Rs.250-350/sq.ft. per month, while in secondary
Year micro-markets, rentals were in the range of Rs.100-150/sq.ft. per month over the year. Meanwhile, in
Total supply : 12 mn.sq.ft. peripheral locations, rental values quoted are Rs.55-70/ sq.ft. per month.

Outlook
North Bengaluru is the fastest growing micro-market in the city due to the development of the new
International airport. This location is witnessing rapid developments in residential, office, hospitality and
healthcare sector as well. Whitefield and Sarjapur Outer Ring Road is slated to have a predominant supply of
residential and office space due to the presence of the IT/ITES sector in the quadrant.
The quantum of supply that is lined up in all the sectors may restrict the price appreciation. The capital
values in the residential sector are projected to remain stagnant over the medium term. Demand for office
space in the CBD has increased after the Metro rail work has started, leading to sharp increase in rental
values and is speculated to steadily increase by around 20-30% in the near future. The rental values in the
retail sector are projected to increase progressively this year, to the tune of about 25-35%.
Bengaluru's rapid growth has created several problems relating to traffic congestion and infrastructural
obsolescence which is limiting the growth of the real estate sector in city. The construction of the Metro is
causing bottlenecks along its route as the government had not planned alternate routes prior to its
Figure 30 commencement. Envisioning the potential growth of the city, the state government had planned new
Retail Rental Values infrastructure initiatives which would now be delayed due to its collapse.
500 The new International airport scheduled to open in the first quarter of 2008 would give another dimension
to the city's spiralling growth. The airport would also fuel the augmentation of the retail and logistics sector
400
as well as increasing the prospects for investments in other sectors. The city will witness all around growth
in future on completion of the ongoing infrastructure projects. These projects would further add more
potential growth corridors along the peripheral locations of the city. The proposed SEZs for the textiles and
300
biotechnology sector, satellite towns and the Metro is bound to change the perspective of the city in the
years to come.
200
100
0
Airport Road
M G Road
Brigade Road
Commercial Street
Jayanagar
Koramangala
Indira Nagar
Malleshwaram
Locations
Minimum Maximum

Figure 31
New Office Supply in Hyderabad Hyderabad

60
Market Overview
Real estate development continued unabated in Hyderabad in 2007. The IT boom has led to the
44.06 development of many other sectors, especially in the contiguous pockets of Hitech city. While various
40 micro-markets have seen a substantial growth, the concentration of development has been confined to the
Area (mn.sq.ft.)
36.08
western and north-western regions.
Positive government policies and proposed infrastructure projects has helped to propel the growth of the
20 office real estate market in the city and continues to do so. While the existing companies have gone in for
17.88 18.19
expansion and consolidation, several new corporates have set up base in the in the city. The interest shown
by these IT/ITES companies have led to a steady demand for office space over the years and the city
7.98
developers have geared up to offer large built-to-suit as well as ready space facilities.
0
Banjara Hills and Jubilee Hills continue to be considered as premium residential locations, though over the
2008 2009 2010
last 24 months, large residential developments have increasingly been taken up in suburban and peripheral
Year
locations of Gachibowli, Madhapur, Kompally, Kukatpalli, Kondapur, etc. The retail segment has also
Total supply : 44.06 mn.sq.ft. received a significant boost with the boom in the IT/ITES sector and the changing lifestyle of the younger
generation. Currently, the city presents a unique mix of well established local brands along with national
and international retailers, with some large apparel retailers viewing Hyderabad as one of the most
profitable markets.
Silicon Towers, Madhapur Ashoka Metropolitan Mall, Banjara Hills

Figure 32
Office Values for Hyderabad
While around 4.15 mn.sq.ft of new office space is estimated to have entered the office market in 2007, the
70 8,000
current year is expected to see the infusion of approximately 17.88 mn.sq.ft of new office space supply. Out
60 7,000 of this, the peripheral markets of Madhapur, Gachibowli, Manikonda, Kondapur and Nanakramguda shall
contribute around 14.92 mn.sq.ft. while the distant peripheral markets of Shamshabad, Pocharam and
6,000
50 other HADA localities shall add another 2.67 mn.sq.ft. Combined, these two micro-markets would thus
5,000 have nearly 98% of the total stock addition in 2008.
40
4,000 A large share of the total Grade-A office space coming up in the city can be attributed to the projects taken
30 up by DLF, Lanco, K Raheja, etc. The Cybercity project (1.74 mn.sq.ft) in Gachibowli by the DLF Group is a
3,000
notable development underway. Another recently launched project is that by Lanco Hills in Manikonda
20
2,000 which will have 12 IT office towers, 6 SEZ and 6 non-SEZ projects.
10
1,000 The Hyderabad office market continued to witness substantial leasing activity in 2007. An estimated
0 0
3.5 mn.sq.ft. of office space was absorbed during the year which is similar to the take-up in 2006. As
before, the IT/ITES companies remain the major demand drivers for Grade-A office space to about 85% of
Madhapur
Raj Bhavan Road
Somajiguda
Himayat Nagar
Begumpet
Jubilee Hills
Banjara Hills
the total space absorbed.
In the absence of any significant development in the CBD and off-CBD locations of Begumpet and
Somajiguda, primary peripheral locations like Madhapur, Gachibowli, Nanakraguda and Raiguda catered to
the rising demand emanating from the IT/ITES sector. Smaller offices essentially from the BFSI sector
Locations
however preferred to be located in suburban micro-markets of Banjara Hills and Jubilee Hills. These locations
Rental Values Capital Values captured a demand of about 10% of the total demand and the space requirement varied from
Source: Knight Frank Research 5,000-15,000 sq.ft.
www.knightfrank.com
Figure 33
New Residential Supply in
Hyderabad The buoyancy of the real estate market resulting from heightened corporate interest has led to considerable
appreciation of office capital and rental values in Hyderabad. Since the first quarter of 2007, rental and
60 58.11
capital value appreciation across the various micro-markets has been in the range of 35-80% across various
micro-markets of the city. The rental values in the peripheral micro-markets of Madhapur and Gachibowli
are still relatively lower than those in the other established office markets of the city and currently range
between Rs.45-70/sq.ft. per month. Banjara Hills and Jubilee Hills, the prime suburban locations, have seen
40
a growth of almost 70% over the last one year since January 07, with current values varying between
Area (mn.sq.ft.)
31.65 Rs.60-70/sq.ft. per month. Though no new Grade-A supply has been added in the CBD and off-CBD, these
26.46 micro-markets continue to command high rentals with an appreciation of around 45-80% over the rentals
22.86 quoted in early 2007. The location advantage and proximity to the airport were the primary factors that
20
were responsible for a current rental value of Rs.50-60/sq.ft. per month in Begumpet.
8.79
0 In the residential sector, as in the office market, most of the new developments are concentrated in the
2008 2009 2010
western zone. In 2008, it is estimated that the residential market would have an additional supply of
Year 8.79 mn.sq.ft. The locations of Madhapur, Gachibowli, Gopanpalli, Kukatpalli, Manikonda, Kondapur, etc.
Total supply : 58.11 mn.sq.ft. will contribute around 69% to the total new supply that will enter the Hyderabad residential market.
Around 6.7 mn.sq.ft. of new residential supply is estimated to have come up in the year 2007.
The demand for Grade-A residential development in Hyderabad has consistently strengthened due to the
fast growth of the IT/ITES industry that has fueled the demand for quality developments. Micro-markets
such as Banjara Hills, Jubilee Hills, etc. are still considered as premium residential locations due to good
connectivity to office hubs like Madhapur and Gachibowli. Construction activity in this micro-market is
mainly observed on the inner roads of Banjara Hills Road No. 10 and 12 and is characterised by
well-designed independent houses and standalone buildings.
The housing requirement of the Madhapur-Gachibowli corridor has resulted in the development of
large-scale Grade-A projects by major developers such as L&T Infocity, Indu Group, IVRCL, Emaar-MGF,
Myhome, IJM, etc. Since these peripheral locations lack quality social infrastructure as observed in other
centrally located areas in Hyderabad, most of the supply as well as demand has been concentrated towards
gated community projects providing all amenities, support social infrastructure and quality built-up space.
Apart from IT/ITES employees, other segments favouring peripheral locations include the upper-middle and
high-end section of the local population, out-of-state-investors, etc. A noticable trend in the buyer
Figure 34 behaviour of this city is the consistent demand for villas and row houses. However, of late, the demand for
Residential Capital Values apartment units has been gaining popularity among the local residents as well.
8,000
Residential Price
The residential market has witnessed a substantial increase in capital values over the last year, with price
6,000
appreciation ranging from 30% to as high as 50% in various micro-markets of the city. Prime locations such
as Banjara Hills and Jubilee Hills continue to be favoured micro-markets and have witnessed an appreciation
of approximately 40-50% since the first quarter of 2007. Currently, the capital values in these locations
Rs./sq.ft.
4,000
range between Rs.5,500-7,000/sq.ft.
Upcoming locations like Gachibowli, Marredpally and Madhapur have also witnessed a substantial increase
2,000 of around 30-45% in capital values. These micro-markets currently command capital values of around
Rs.3,500-5,500/sq.ft.
0
Banjara Hills
Jubilee Hills
Srinagar Colony
Begumpet
Secundrabad
Madhapur
Gachibowli
With the saturation of the CBD and off-CBD micro-markets, the suburban micro-markets of Banjara Hills and
Jubilee Hills have become the new destinations for organised retailing in Hyderabad. In addition to these
suburban locations the peripheral micro-markets like Madhapur and Gachibowli have the largest share of
Locations organised retail projects that would enter the market by end-2008. The total organised retail space that is
Minimum Maximum under-construction and will be available in peripheral micro-markets by end-2008 is approximately
5 mn.sq.ft. Totally around 9 malls are expected to come up in the city in 2008.
Figure 35
As compared to this only around 1.6 mn.sq.ft. of new retail space is estimated to have entered the
New Retail Supply in Hyderabad Hyderbad market in 2007. Hill Ridge Mall in Gachibowli (800,000 sq.ft.) and Inorbit Mall in Madhapur
6 (625,000 sq.ft.) are two notable retail developments in the peripheral micro-markets. In all, approximately
5.28 mn.sq.ft of new retail supply will enter the Hyderabad market by end-2008.
5.28
Demand for organised retail development, too, in Hyderabad has grown significantly in 2007. This
coincides with the the consolidation of IT/ITES industry and the subsequent construction of several Grade-A
4
residential projects. Two notable malls that have been completed in 2007 include Lumbini Mall and
Area (mn.sq.ft.)
Ashoka Metropolitian Mall in the suburban locations of Banjara Hills, Nagarjuna Circle, Jubilee Hills, etc. It is
estimated that the total absorption of retail space in Hyderabad in 2007 was around 85%.
2
Retail Rentals
Retail rental values across the high streets of Banjara Hills and Jubilee Hills as well as in the CBD of
Begumpet, have appreciated by about 25-65% in the past one year. Banjara Hills and Jubilee Hills currently
0 command rental values of around Rs 120-200/sq.ft. per month. Other micro-markets like Begumpet and
2008 Panjagutta now command retail rental values of Rs.100-150/sq.ft. per month signifying an increase of
Year around 10-25% as compared to values commanded in January 2007. There was also an increase of around
45% in the micro-market of Madhapur in the past one year, with current rentals being an average of
around Rs.110/sq.ft. per month.
Area

Outlook
The demand trends in the Hyderabad market provide for attractive office space development opportunities,
catering to the needs of IT/ITES and R&D focused companies. Going forward, major portion of the
demand for office space will continue to emanate from the IT/ITES segment primarily due to competitive
rentals vis-à-vis other cities, better infrastructure facilities, and availability of large, high quality construction.
Also, demand from other sectors like biotechnology, pharmaceutical and other knowledge based industries
is estimated to rise. Owing to the large amount of supply that is lined up in the current year, office rentals
are expected to rise by 10-20% across the office locations in Hyderabad.
Large-scale residential development in Hyderabad is reflecting the growth in the IT/ITES sector in the city.
As per HUDA (Hyderabad Urban Development Authority) estimates, approximately 80,000 units per year
will be needed to cater to the backlog, replacement of old and unusable units and the provision for
additional population. The new amendment, Government Order 86 has significantly impacted the future
development of the residential market as well. While the order does lay down strict guidelines for building
Figure 36
activity in the central locations, it has provided a greater scope for the development of larger projects in the
Retail Rental Values peripherial locations. Taking into consideration the above mentioned factors, Knight Frank Research
250 estimates that in the current year, the residential market in Hyderabad will see an appreciation of 20-35% in
residential capital values. This is substantially lower than that witnessed in the previous quarters as the rising
demand will be catered to with the numerous projects that are coming up in the market.
200
With the development of the office and residential sectors, the upward trend of the retail sector has resulted
in traditional markets slowly giving way to organised retail. Diverse population base have opened newer
150
retailing avenues, predominantly in the suburban and peripheral locations. In the coming 12-18 months,
retail rentals are expected to appreciate further by approximately 10-25%. However, it is to be noted that
100 although there are significant planned developments to tap the potential of the retail demand, the long
term success of this sector will be principally defined by the strategic focus of these retail projects.
50
Hyderabad is poised to witness a well-rounded growth and development in and around the city. The
construction of the Outer Ring Road (ORR) which would connect all the national and state highways, the
0 development of the new International airport at Shamshabad, the setting up of the Knowledge corridor in
Somajiguda
Banjara Hills
Panjagutta
Jubilee Hills
Ameerpet
Begumpet
Kukatpalli
Madhapur
the Ranga Reddy district, the development of Fab City and clearance of several SEZ projects are some of the
key initiatives that would lead to this.
Locations
Minimum Maximum
www.knightfrank.com
Figure 37
New Office Supply in Chennai Chennai

30
Market Overview
25.10
Chennai real estate market has been witnessing steady growth in the last few years, one of the prime factor
of which being the progressive legislative reforms in the city. This development can also be attributed to the
20 growth of the IT/ITES sector and the availability of bigger land parcels in the city which has led to the
Area (mn.sq.ft.)
emergence of new pockets of growth in the suburban and peripheral locations.

15.60
The IT/ITES sector has been the main demand driver behind the office space development in the city and is
responsible for majority of the activity happening in this segment. The IT corridor project on the Old
10 9.50
Mahabalipuram Road has been attracting considerable interest since its inception, thereby leading to
8.10
7.50 substantial capital and rental appreciation in the region in a relatively short span of time. Further, the
six-laning of this highway will address the accessibility issues and renew corporate interest in the location.
0 Residential properties in Chennai have witnessed a significant increase in prices in the past year. The
2008 2009 2010 traditional mindset of constructing independent housing units has given way to a preference for apartments
Year due to a number of factors such as the increase in the number of nuclear families, the growing influence of
neighbouring cities, rise in the urban middle class population and the acceptability of debt financing. This
has also led to the growth of new residential pockets around the city like Mogappair, Sriperambudur and at
Area Cumulative Area various nodes along the Old Mahabalipuram Road (OMR).
After a period of lull, the demand for organised retail space is on the rise and this is reflected in the number
of malls coming up around the city. Although the year 2007 did not see the entrance of any new mall in the
Chennai retail market, the demand from retailers and brands has been high as is evident from the
pre-leasing of under-construction malls.
Figure 38
Office Values for Chennai

80 10,000
70 9,000
Jain Sagarika, Santhome Chennai Citi Centre, RK Salai
8,000
60
7,000 Office Supply and Demand
50
6,000 The IT/ITES sector has surpassed the finance and manufacturing sectors as the major occupier of office
40 5,000 space in the city. This can be attributed to the active promotion of the sector by the government, presence
of suitable manpower pool and this has led to increasing interest by way of investments. Apart from IT,
30 4,000
telecom and banking and financial sector are the other two key sectors which are generating demand for
3,000
20 office space in Chennai. Close to 8.7 mn.sq.ft. of office space was leased in Chennai in 2007.
2,000
10 As most of the space coming up in the city is for the IT/ITES sector, the office options available for BFSI
1,000
sector are limited. This has resulted in an increase in lease rates for the BFSI sector in the current locations.
0 0
Liberalised FSI rates have led to the concentration of office space predominantly in IT/ITES sector. As such, if
Mount Road
Guindy
Seruseri
Anna Nagar
OMR
Nungambakkam High Road
the development continues in the current manner it could lead to a situation of over supply in the market.
Knight Frank Research estimates that approximately 7.5 mn.sq.ft. of office space will be made available in
2008, while around 9 mn.sq.ft of new office space was added to the stock in 2007. The concentration of
upcoming supply will be primarily around the southern and western locations.
The IT corridor on OMR continues to be the front-runner in new office space supply with around
Locations 3.86 mn.sq.ft coming up in region by 2008 and this includes many SEZ projects as well. Other key locations
Rental Values Capital Values include Poonamallee High Road, Ambattur and Guindy, which were formerly important industrial estates of
the region.
Figure 39
Some of the notable projects which have been recently launched include a project by Srinivas Shipping,
New Residential Supply in who is planning to come up with 1.1 mn.sq.ft of office space as a joint venture with two Belgian investors.
Chennai Other projects currently underway include the 6.6 mn.sq.ft DLF Info-City at Manapakkam, The Gateway by
60 Sriram Properties with an estimated space 5.5 mn.sq.ft coming up at GST Road, India Land Tech Park at
Ambattur and Estancia by Arun Excello which is coming up with 2.7 mn.sq.ft of office space. Presently,
most of these projects are in different stages of development.
41.80
40 Office Price and Rentals
Area (mn.sq.ft.)
Increasing demand for quality office space has seen the emergence of erstwhile industrial estates, like
27.80
Ambattur and Guindy, into potential office destinations. The current rental values on the IT corridor along
Old Mahabhalipuram Road are in range of Rs.35-40/sq.ft. per month, while Guindy and Ambattur are
20
seeing rental values between Rs.25-30/sq.ft. per month.
14.10 14.00
13.70
The CBD and Off-CBD locations have witnessed an increase of 25-30% in office rentals since last year,
which can be chiefly attributed to the lack of supply in these locations. The CBD and off-CBD locations like
0 Mount Road and T Nagar are witnessing current values of about Rs.60-65/sq.ft.per month
2008 2009 2010
Year
Over the past year, the residential market has seen increasing capital values and high absorption rates. One
Area Cumulative Area of the main reasons behind this development is the demand emanating from the employees of the IT/ITES
Source: Knight Frank Research sector. Of late, owing to the rising cost of housing, the rental housing market is increasingly being
considered as the preferred mode of housing for the middle income group,.
There is a high demand for residential units in the southern parts of the city like Old Mahabalipuram Road,
Tambaram and Velachery due to their proximity to the IT/ITES hubs. Other emerging residential locations
include suburban pockets of Mogappair, Porur, and Mount-Poonamallee Road. High-end luxury apartments
are coming up in locations like Adyar and Thiruvanmiyur. An estimated 13.7 mn.sq.ft of residential space is
expected to come up in 2008, an increase of 11.2 mn.sq.ft from the previous year. The southern region
alone is expected to contribute about 63% of the residential supply this year.
Reputed out-of-state developers like Hiranandani, Purvankara, Ozone and Mantri have made forays into the
city last year with their flagship projects, viz. the Hiranandani Upscale, Purva Swanlake, Metrozone and
Mantri Synergy respectively. Local developers, too, announced a number of township projects last year,
notable amongst them being Estancia by Arun Excello and Shyamala by Ceebros. ETA Star, a subsidiary of
Figure 40
ETA-Ascon Dubai, is coming up with a township project near Sriperumbudur close to the electronic corridor.

18,000
Residential Price
The residential property prices in the city have witnessed a significant increase in prices. The central
15,000 locations of the city sets the bench mark in property prices, the highest being at Boat Club Road with
capital values ranging from Rs.15,000-17,000/sq.ft., the prices appreciating by around 10-15% since the
12,,000 past year. Other prominent locations of Nungambakkam, T Nagar, Mylapore, RA Puram, Alwarpet and
Mylapore witnessed an appreciation of about 15% and currently have a capital value range of
Rs./sq.ft.
9,000 Rs.5,500-9,800/sq.ft.
In the western part of the city, heightened residential activity is currently being observed at Moggapair,
6,000
which has seen capital values increase to Rs.5,500/sq.ft. Industrial suburbs like Ambattur and Guindy are
commanding capital values ranging from Rs.1,500-2,800/sq.ft., up from the previous year's rates by
3,000
approximately 10-12%.
0 In the north, the widening of the Ennore expressway is expected to give impetus to the area, while in the
Egmore/Kilpauk
Boat Club
Poes Garden
T Nagar
R A Puram
Ashok nagar
Vadapalani
Guindy
south the locations in and around the IT-corridor is witnessing considerable rise in property prices ranging
from Rs.3,000-4,500/sq.ft., reflecting increase in prices by about 10-12%.
Locations
Minimum Maximum
www.knightfrank.com
Figure 41
New Retail Supply in Chennai
There has been a perceptible shift in retail activity from the CBD to the southern and south-western parts of
10
the city. The relative saturation of space around the CBD and the growth of residential market towards the
8.40 south, predominantly along the IT corridor, have led the retail growth towards these locations.
7.12
The absorption levels are very high for most of the new retail supply coming into the market with practically
no vacancy. There is an increasing demand for organised retail space both in the CBD and in the suburbs,
Area (mn.sq.ft.)
which can be gauged by high level of pre-leasing activity taking place in retail. Forum Mall (700,000 sq,ft)
5 by Prestige group in Vadapalani is the latest entrant in the Chennai mall scenario.
4.48 The supply of malls within the city is set for an increase with around 4.48 mn.sq.ft of mall space expected
to come up in 2008. Ampa Centre One (660,000 sq.ft.) by Ampa Housing Development and Orchid Mall
2.64
(230,000 sq.ft.) by Alliance projects are few of the mall developments that are expected to be ready by
2008 end. A total of 20 organised retail projects have been announced having a total built-up area of
1.28
9 mn.sq.ft. which will be concentrated around the CBD and suburban areas. National level developers like
0
the Prestige Group, DLF and Ozone Group are poised to enter the retail market adding to the growing retail
2008 2009 2010
development in the city.
Year

Retail Rentals
Rental values are showing a marked increase in the retail segment of Chennai. Retail space in Chennai will
Source: Knight Frank Research increase as currently the available space in the organised retail market is not sufficient to service the
growing market requirements. The high returns on retail have resulted in a growing investor interest in the
sector.
The rates in the CBD locations vary from Rs.70-150/sq.ft.per month for lease. In the Off-CBD locations the
rentals values vary from Rs.50-90/sq.ft per month and the suburban locations are witnessing values
between Rs.40-65/sq.ft per month.
Outlook
Chennai always had a strong infrastructure base and favourable number in terms of skilled manpower.
However, in the past, the city had increasingly found itself marginalised with respect to other cities like
Figure 42 Bangalore and Hyderabad due to lack of legislative support and proactiveness. Of late, this phenomenon
Retail Rental Values has been reduced to a large extent with the city becoming a force to reckon within the property market
increasingly aware of its potential and currently growing at a rapid pace.
160
On account of large amount of supply that is lined up, the rate of increase in values of the office sector is
140
expected to slowdown with marginal growth in values to be in the range of 10-15% over the medium
120 term. While the demand-supply mis-match will lead to a steady rise in rentals for mall space, residential
capital values will rise by a moderate 15-20% during the same period.
100
80
Real estate growth in Chennai can be largely attributed to the rapid expansion of its information technology
industry and the simultaneous rise in the purchasing power of the middle class segment. The relative
60 saturation of the Information Technology industry in neighbouring cites and the timely legislative reforms in
Chennai has resulted has also contributed to the shift in prominence towards the city. Chennai is now seen
40
as a lucrative property destination due to its cost effectiveness and availability of skilled manpower. The
20 exodus of people from the city in search of better employment, which was earlier the norm, has currently
abated to a large extent leading to greater demand for dwelling units and increasing the inflow of
0
corporations, both national and multinational, into the city.
Pursawaikam
Nungambakkam High Road
Anna Salai
Dr.Radhakrishnan Salai
Besant Nagar
Anna Nagar
Adyar
T Nagar
Locations
Minimum Maximum

Real Estate Highlights Quarter 1 2008 Knight Frank
Research
Knight Frank Research provide strategic advice, consultancy services and forecasting to a wide range
The Real Estate Highlights is of clients worldwide including developers, investors, financial and corporate institutions. All recognise
prepared by Knight Frank the need for the provision of expert independent advice customised to their specific needs.
India Research.
Knight Frank Research Reports are also available at www.knightfrank.com
General enquires should be addressed to:
Gulam M. Zia Americas Europe Africa Asia

National Director - Advisory Services
gulam.zia@in.knightfrank.com USA UK South Africa China
Canada Belgium Botswana Hong Kong
Tel: +91 22 2267 0876
Fax: +91 22 2267 0899 Caribbean Czech Republic Kenya India
Bermuda France Malawi Indonesia
Malvika Chandra
malvika.chandra@in.knightfrank.com
Germany Nigeria Malaysia
Australasia Ireland Tanzania Singapore
Sangeeta Sharma Australia
sangeeta.sharma@in.knightfrank.com
Italy Uganda Thailand
New Zealand Poland Zimbabwe
Chetanbir Kaur
Portugal Zambia
chetanbir.kaur@in.knightfrank.com
Russia
Maureeta Lopez Spain
maureeta.lopez@in.knightfrank.com
The Netherlands
Anmol Haval
anmol.haval@in.knightfrank.com
© Knight Frank 2008
This report is published for general information only. Although high standards have been used in the preparation of
Binita Patel the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by
binita.patel@in.knightfrank.com
Knight Frank Research or Knight Frank for any loss or damage resultant from the contents of this document. As a
general report, this material does not necessarily represent the view of Knight Frank in relation to particular
Jyothi Shree Lakshmi properties or projects. Reproduction of this report in whole or in part is allowed with proper reference to Knight
jyothi.lakshmi@in.knightfrank.com Frank Research.
Sunil Vattekat
sunil.vattekat@in.knightfrank.com
Vivek Jala
vivek.jala@in.knightfrank.com
Vidhu Saxena
vidhu.saxena@in.knightfrank.com
www.knightfrank.com
www.knightfrank.com

Real Estate Highlights 2008 Q1

Загружено:

Сведения о документе

Исходное описание:

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Real Estate Highlights 2008 Q1

Загружено:

Авторское право:

Доступные форматы

Knight Frank Real Estate Highlights Quarter 1 2008

Real Estate Highlights

National Capital Region

Palm Beach Galleria, Navi Mumbai

! Economic growth indicators along with demand-supply analysis point towards a

New Office Supply in Mumbai Mumbai

Office Values for Mumbai

Office Price and Rentals

Residential Supply and Demand

30,000 Bhandup, etc.

Haji Ali / Kemps Corner

Source: Knight Frank Research

New Office Supply in Pune Pune

Office Values for Pune

8,000 Pune Central, Ganesh Khind Road Exotica, Koregoan Park

Office Supply and Demand

Senapati Bapat Road

Rental Values Capital Values

Source: Knight Frank Research

Boat Club Road

Year Retail Rentals

Dhole Patil Road

Bund Garden Road

Senapati Bapat Road

Source: Knight Frank Research

New Office Supply in NCR National Capital Region (NCR)

South City I, Gurgaon Ambience Mall, NH-8

Office Supply and Demand

Okhla Industrial Area

Mohan Cooperative Area

Bhikaji Camaji Place

Noida and Greater Noida

Office Price and Rentals

Sonepat/Panipat/Kundli and Bhiwadi/Dharuhera/Rewari/Alwar

Greater kailash I & I

Pockets in Gurgaon (A Grade)

East Delhi (Mayur Vihar, Preet Vihar, IP extention)

Source: Knight Frank Research

Sonepat/Panipat/Kundli and Bhiwadi/Dharuhera/Rewari/Alwar

Area Cumulative Area

Minimum Maximum Greater Noida

New Office Supply in Kolkata Kolkata

Greenfield Heights, Rajarhat Homeland, Bhawanipore

Source: Knight Frank Research

rental values at Rs.42/sq.ft. per month.

24.71 Residential Supply and Demand

New Town Rajarhat

Source: Knight Frank Research

Total supply : 7.9 mn.sq.ft. Retail Rentals

New Town (Rajarhat)

Source: Knight Frank Research

New Office Supply in Bangalore Bengaluru

Office Values for Bengaluru

Sobha Tulip, JP Nagar Salarpuria Infozone, Electronic City

40 4,000 Office Supply and Demand

63.83 Office Price and Rentals

Total supply : 72.45 mn.sq.ft.

Retail Supply and Demand

Area Cumulative Area

Source: Knight Frank Research

New Office Supply in Hyderabad Hyderabad

Silicon Towers, Madhapur Ashoka Metropolitan Mall, Banjara Hills

Raj Bhavan Road