Property Insight Q1 Blue May 2019 CITIXXXXX 14-05-2019 · affordable housing, from the earlier prevailing 8%. The cities classified as metros are Delhi NCR (Delhi, Noida, Greater

INDIA REAL ESTATE OVERVIEW

PROPERTY INSIGHTSIndia Quarter1, 2019

Introduction

Economy

During the October-December quarter, growth of the Indian economy slipped to 6.6%, primarily due to weaker

domestic and external demand, higher oil prices and slightly tight financial conditions. Private consumption,

further slowed to 8.4% in the third quarter, while investment demand remained at 10.6% in the third quarter.

India’s retail price inflation rate was under check at 3.38 percent in October and declined thereafter to 2.11 percent

in December ‘18. During the October-December period, industrial output grew at a slightly slower pace of 3.63% as

compared to 5.9% in the same period of the previous year.

GDP estimates have been revised downwards from 7.4% in the February policy to 7.2% now, with the domestic

economy facing headwinds on account of the slowdown in the global economy, ongoing trade tensions, rise in

crude prices and domestic investments having slowed down. But India’s consumer confidence improved for the

second quarter in row and domestic consumption driven by public expenditure and an increase in disposable

incomes through tax benefits is a major driver going forward.

Introduction

GDP growth rate & Repo Rate

POLICY UPDATES

GDP Growth Repo rate

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q22018

Source: World Bank, RBI

Note: GDP numbers for Q3 2018 correspond to the Oct – Dec quarter

Q32018

GST rate cut to 5% for residential projects and 1% for affordable housingprojects

In the 33rd GST counsel meeting, the Group of Ministers panel decided to reduce the prevailing GST on under-

construction residential projects, which had been a long-standing demand from both developers as well as

buyers. The GST Council acting upon the new definition for affordable housing (60 sqm carpet area and priced at

INR 45 lakhs in metros and 90 sqm carpet area and priced at INR 45 lakhs in non-metros) reduced GST to 1% on

affordable housing, from the earlier prevailing 8%. The cities classified as metros are Delhi NCR (Delhi, Noida,

Greater Noida, Gurugram, Faridabad and Gaziabad), Kolkata, Hyderabad, Mumbai, Bengaluru, Chennai.

For all other under-construction projects, the GST was cut from 12% to 5% with the Input Tax Credit (ITC) facility

also rescinded. This received mixed reactions as the removal of input tax credit was seen as largely negating the

GST cut with developers hinting at an increase in costs which could lead to a price hike. The government in a

further clarification allowed developers to either choose the older GST of 12% with applicable input tax credit or

switch to the new 5% GST tax regime. However, this choice was available only for projects which were still under-

construction as of March 31, 2019. New projects launched after April 1, 2019 were to go ahead with the new GST

rate only. While the ITC benefit was discontinued as developers were not providing clarity on the extent of the

benefit being passed on to the buyers, the benefit of the new norms should largely be seen for new project

launches post April 2019. By taking away the ITC clause and reducing the GST, the government has largely eased

the process and created a more level playing field for both buyers and developers.

Introduction

Increase in holding period for unsold inventory

ndNotional rent exemption on 2 house and rollover of capital gains forndpurchase of 2 home

RBI REPO rate cut

In the wake of the high inventory levels amid slowly recovering sales, the government in the interim budget 2018-19

announced an extension in the period of applicable tax on unsold inventory to 2 years. By doing so, government has

eased off the burden from developers and gave them some needed room to clear off their existing unsold units. But

this may be less effective as the new launches will be coming at a competitive price and with reduced GST.

The government in the Interim Budget also allowed exemption on notional rent from a second house which was to be

treated as self-occupied. It also allowed a rollover of capital gains for purchasing two residential houses from 1 and

increasing the limit to up to INR 2 crores. This was aimed at spurring homebuying activity and allow some more

liquidity in the hands of homeowners.

The Reserve Bank of India in its latest Monetary Policy Committee meeting announced a reduction of 25 bps in the

repo rate, which now stands at 6.0%. This marks the second successive rate cut by the central bank, though the

stance continues to remain neutral. The focus remains on managing inflationary pressures, though growth

figures high on the agenda as well for the central bank.

Transmission of previous rate cuts have been slow and not done in full measure. Some banks in anticipation of the

repo rate cut had already cut their MCLR and thus home loan rates as well. However, more benefits need to be

passed on to the consumers. The RBI announcement of banks moving their interest rate benchmarking to

external benchmarks from April 1, also does not seem to have been implemented across the board. Rate cut

transmissions and moving to external benchmarks by the wider banking industry could pave the way for causing a

further reduction in interest rates for consumers and this should have a positive impact on home loan growth.

Impact on Residential Sector

RBI’s push for external benchmark linked lending rates

The Reserve Bank of India came out with an Internal Study Group report in October 2017 which was a review on the

efficacy of the MCLR based lending system. A major sore point was the transmission of rate cuts as per the monetary

policy and hence consumers not getting the full benefit of a relaxed interest rate regime. Considering that we moved

from base rate to MCLR based interest rates largely following on from the fact that MCLR was more sensitive to policy

rate signals, the stickiness of loan rates despite a proactive and easing repo rate environment has not really been

beneficial to consumers. In fact, with the banks free to decide their MCLR and the spread over MCLR, the lending rates

have not shown enough decline despite the accommodative stance of the monetary policy since 2015.

The report recommended to move to linking the interest rates to an external benchmark like Treasury Bills,

Certificate of Deposit rate or the RBI’s policy repo rate. Also, key recommendations included giving banks a free

hand to decide the spread over the external benchmark and to keep it constant over the loan tenure while the

periodicity of setting the loan rates was to be made quarterly compared to the once a year process followed earlier.

The idea was to migrate all PLR/base rate/MCLR linked loans to the new regime by a fixed date without any

conversion fee to be charged by the banks.

The underlying philosophy behind the above recommendations was to make the entire process of setting lending

rates by banks transparent and to improve monetary transmission. While banks would not have discretion over the

benchmark rate, they would have complete freedom to fix the spread over the external benchmark for new

borrowers. The fixed spread over the benchmark through the tenure of the loan would limit the scope for any

arbitrary adjustment by banks in resetting the spread over time for existing borrowers. This entire exercise would

have led to enhanced flexibility in setting the lending interest rates by banks in response to changing monetary

policy signals.

There were as usual various differing views, with banks largely showing an unwillingness towards the new system.

Their main concerns were:

The new system did not work since banks were funded by retail deposits where deposit rates had not changed

much and hence the external benchmark was not a viable option.

Banks could not manage their interest rate risk with fixed interest rate-linked liabilities against floating interest

rate linked assets likely to cause an asset-liability mismatch.

MCLR regime hadn’t had a long enough run to check its efficacy.

Banks should have flexibility of changing the spread during the tenure of the loan.

Ÿ

Ÿ

Ÿ

Ÿ

Impact on Residential Sector

What is however, interesting to note is that though the RBI asked for banks to move to the new external benchmark

by April, 2019, it has now postponed the implementation even as it holds additional consultations with all

stakeholders.

Even during the early discussions, foreign banks had shown an active interest in moving to this new regime which

is also quite popular across western economies. In fact, Citi is the only bank in the country that currently offers a

loan product that already is linked to 3 months T-bill as its external benchmark and follows a quarterly reset of the

interest rate, while also allowing seamless movement across MCLR to the TBLR (Treasury Bill Benchmark linked

Lending Rate).

In anticipation of moving to an external benchmark linked lending rate, SBI has also announced linking its deposit

accounts over INR 1 lakh to the repo rate from May 1, 2019.

This is likely to show the way for other banks to move ahead and accept the change while moving to a regime

where an external benchmark-based lending rate regime is the way to go, to allow for better monetary policy

transmission consumer benefit even as banks create appropriate safeguards for themselves to manage their

interest rate risks and their profitability during the transition phase.

Certain key points for consideration are:

Switching to an external benchmark would be equivalent to RBI setting an incontrovertible “standard” on the interest

rate fluctuations on loan products; banks will be free to decide the spread giving them more independence there.

Should we follow a single external benchmark, or one can choose from T-bills, CDs and repo rate

Linking deposit rates to external benchmark while protecting retail depositors

Monetary policy periodicity being quarterly, external benchmark reset should also be quarterly which is a more

dynamic method

Ÿ

Ÿ

Ÿ

Ÿ

Real Estate Market Snapshot

Residential

Q-O-Q increase in new unit

launches during Q1 2019

6%

Share of mid segment in overall

unit launches in Q1 2019

51%

Contribution of Mumbai,

Bengaluru and Pune in new

launches during Q1 2019

66%

Total retail transactions

in Q1 2019

Total retail transactions

in Q1 2019

2.2 msf 78.4 msf

Retail

Pan-India vacancy in malls

12.4%

Office

Gross leasing in Q1 2019,

150% growth y-o-y

13.0msf

New supply in Q1 2019, 11.7%

growth q-o-q

15.1 msf

Net absorption in Q1 2019,

two-fold growth y-o-y

11.7 msf

Indian Residential Sector Overview

Ahmedabad and Mumbai witnessed

strong growth in launches

Affordable Segment

Mumbai and Bengaluru contributed

nearly 63% of total launches

Mid Segment

Hyderabad contributed 50% of

new launches in Q1 2019

High-end Segment

Hyderabad, Pune and Ahmedabad witnessed

launches in the luxury segment during Q1 2019

Luxury Segment

New Launches in Q1 2019 (in units)

Affordable Mid High-end Luxury

Ahmedabad Bengaluru Chennai Delhi-NCR Hyderabad Mumbai Pune

Unit launches increased slightly by 5% q-o-q across the top 7 cities (Delhi-NCR, Bengaluru, Mumbai, Chennai,

Hyderabad, Pune, and Ahmedabad) during Q1 2019. Mumbai contributed the maximum to new launches with a

37% share followed by Bengaluru and Pune both contributing 17% share each. Except Bengaluru, Chennai and

Delhi NCR all other cities recorded a q-o-q growth in launches in Q1 2019, with Ahmedabad, Hyderabad and

Mumbai witnessing the maximum q-o-q growth.

Key Trends

23%

69%

36%

53%

33%

3% 3% 3%12%

54%

22%

25%

60%

37%

8%

43%

89%

43%

4%

11%

3%

64%

Mid segment saw an improved share in new launches with nearly 50% share of the overall units launched in

Q1 2019, followed by the affordable segment with a 39% share. Both mid and affordable segments witnessed q-o-q

growth of 5% and 28% respectively. Mumbai and Bengaluru continued to see maximum launches in the mid

segment while Mumbai and Pune contributed most towards launches in the affordable segment with both cities

combining for nearly 58% of total launches in this category. High-end projects saw a q-o-q drop of 42% in

launches; however, luxury segment recorded a rise of 53% q-o-q in launches on the back of new projects in

Hyderabad, Ahmedabad and Pune.

Buyers across all cities continued to prefer mid and affordable segment options due to their relative low-ticket

sizes and availability across major residential corridors. Homebuyers’ preference towards completed and close

to completion projects remained intact mainly to avail the benefits of no GST on completed projects which have

received occupancy certificate (OC).

1Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune.

The GST council has recently reduced GST rates on under-construction properties. The rates have reduced from

8% to 1% for affordable homes and from 12% to 5% for other categories. Also, the size which constitutes

affordable housing has also been revised to 60 sq. mtr in metro cities and 90 sq mtr in non-metro cities, with the

price fixed at INR 45 lakhs across cities.

3%6%

Mumbai ...................................................................................... 1

Delhi-NCR .................................................................................. 4

Bengaluru .................................................................................. 7

Index

Residential Overview

Mumbai

New unit launches continued to rise during Q1 2019

with an increase of 20% q-o-q and were at nearly

15,600 units. On a y-o-y basis, new launches were up

nearly 1.5 times in Q1 2019 compared to Q1 2018.

Majority of the new projects were launched in

Extended Eastern and Western sub-markets of the city

with both contributing nearly 49% of new launches.

Thane sub-market followed with a 24% share in launches.

Affordable and mid-segment housing continued to be

the preferred options for homebuyers. To cater to this

demand, developers continued to launch projects in

these categories, with mid-segment projects contributing

nearly 56% of total launches followed by the affordable

segment with a 40% share during Q1 2019.

Buyers are still preferring to purchase ready to

move in or nearing possession properties across all

sub-markets.

Share of launches in price segments

Unit launches gather momentum

Source: Cushman & Wakefield Research

1

South

South Central

Far North

Central

North East

North

Location

48.0 - 75.0

46.0 - 83.0

12.5 - 20.0

27.0 - 61.0

15.0 - 24.0

28.0 - 50.0

2017

48.0 - 75.0

46.0 - 83.0

12.5 - 20.0

27.0 - 61.0

15.0 - 24.0

28.0 - 50.0

2018

55.0 - 85.0

46.0 - 83.0

27.0 - 61.0

30.0 - 60.0

12.5 - 20.0

15.0 - 24.0

Q12019

Average Capital Values – High-End (INR ‘000/sf)

South

South Central

Far North

Central

North East

North

Location 2017

40.0 - 50.0

45.0 - 58.0

10.0 - 16.0

23.0 - 45.0

10.0 - 14.0

20.0 - 30.0

2018

40.0 - 50.0

45.0 - 58.0

10.0 - 16.0

23.0 - 45.0

10.0 - 14.0

20.0 - 30.0

Q1 2019

40.0 - 50.0

45.0 - 58.0

10.0 - 16.0

23.0 - 45.0

10.0 - 14.0

20.0 - 30.0


For details on project launches, refer Annexure

The values in the legend are in INR/sf.

2018 Q1 2019

< 7,500 7,501 - 25,000 25,001 - 40,000 > 40,000

45%

51%

4%

63%

23%

13%1%0%

69%

19%

8%4%

2017

Average Capital Values – Mid Segment (INR '000/sf)

Launches – segment-wise across submarkets (%)

Submarkets Affordable Mid High-end Luxury Total (Number of units)

Eastern Suburbs

Western Suburbs

South Central

Thane

Navi Mumbai

0%

0%

0%

5%

63%

84%

86%

0%

85%

0%

16%

14%

100%

0%

37%

0%

0%

0%

0%

0%

2,116

1,054

136

3,675

865

With, Reserve Of India (RBI) reducing the repo

rate to 6% recently, we expect the banks will pass on

this benefit to home buyers which will eventually

result into reduced home loan EMIs and thus will

provide a push to demand in the coming quarters.

The reduction in GST rates from 8% to 1% for under-

construction affordable homes and from 12% to 5%

for other homes will also provide positive

momentum to homebuying activity. However, home

buyers are still preferring ready possession or

nearing completion projects to avail the benefit of

no GST on completed homes.

The extended Eastern and Western suburbs of

Mumbai along with select locations in Navi Mumbai

and Thane witnessed completion of projects during

the quarter. With improved launches in the extended

suburbs, Navi Mumbai and Thane will continue to

lead the construction activity in the near future. We

are likely to see developers push for early

completion of ongoing projects, as buyers are

preferring ready to move in or nearing completion

projects.

The capital and rental values have largely remained

stable in both the mid and high-end segments across

most of the markets. Going forward we expect capital

values across majority of sub-markets will remain

stable except select peripheral locations which may

see a marginal rise in capital values.


KEY TO SUBMARKETS:

Eastern Suburbs: Sion, Wadala, Kurla, Chembur, Ghatkopar, Vikhroli, Powai, Chandivali, Kanjurmarg, Bhandup, Mulund

Western Suburbs: Andheri, Jogeshwari, Goregaon, JVLR, Malad, Kandivali, Borivali, Dahisar

South Central: Worli, Prabhadevi, Lower Parel / Parel, Dadar, Matunga

Thane: Thane, Ghodbunder Road

Navi Mumbai: Airoli, Ghansoli, Rabale, Koparkhairane, Vashi, Turbhe, Sanpada, Nerul, Belapur, Kharghar, Panvel

% indicates proportion of unit launches in different segments within a submarket.

2

A total of 7.3 msf of incremental Grade A office supply is expected by end-2019.

Select sub-markets like Thane-Belapur Road, Malad - Goregaon and BKC are expected to drive overall

demand in future. We expect IT-BPM and Professional services shall show strong performance along

with flexible spaces operators and telecom & media sector in near future.

With vacancies across most sub-markets likely to see a marginal drop, we expect rents to marginally

appreciate in key office corridors like BKC, Andheri – Kurla and Powai.

RentalsVacancyAbsorption

Office

Leasing Vacancy Rentals

Retail mall leasing is expected to witness improved with select Grade A quality malls witnessing churn

and new retail players entering the market which is likely to result in improved leasing activity. Also,

upcoming malls in the BKC submarket, which are expected to complete during 2019-2020 are also

expected to healthy leasing by retailers.

Rental growth is expected to be led by select, quality projects with superior performance on account of

lease renewals and a tenant churn with demand being restricted to such quality developments.

Upcoming quality projects shall also aid rental growth in their respective submarkets.

Select main street locations are also expected to see appreciation in rental values going forward, as they

are witnessing increased demand from retailers.

Retail

Residential

Launches Buyer sentiment Price

Outlook

Developers will continue to launch affordable and mid-segment category projects across all sub-

markets in coming future. Extended Eastern and Western Suburbs along with Thane and Navi Mumbai

are expected to witness majority of new launches.

The extended suburbs of Eastern and Western Mumbai Metropolitan Region are expected to see more

growth in terms of demand due to availability of affordable and mid-segment projects across all

locations and may also see marginal price growth going forward.

With majority of under-construction projects registered on MahaRERA, there is growing perception of

reduced risk of project delays giving homebuyers the confidence of timely delivery of their homes.

3


Delhi-NCR

New unit launches were recorded at 2,220 units

during Q1 2019 which was higher by 73% on a y-o-y

basis. Though the number of launches were muted

(4% q-o-q drop), new launch activity was headlined by

prominent national and regional developers with a

good track record for project execution. Entry of such

developers is expected to lend some impetus to a

market which continues to grapple with high unsold

inventory amidst only a gradual pick-up in sales activity.

Gurugram, which recorded 60% of the new unit

launches in Q1 2019, saw activity in the micro-markets of

Dwarka Expressway, Sohna Road, Golf Course

Extension Road and Old Gurugram. New projects in

Noida were launched in Sector-75 & Noida Expressway. Source: Cushman & Wakefield Research



Prominent developers headlining new launches

South-West

South-East

Gurugram*

South-Central

Noida

Central

Location

32.0 – 51.032.0 – 49.0

24.0 - 35.024.0 - 35.0

*10.0 – 16.2*10.0 – 16.2

25.0 - 45.025.0 - 43.0

7.0 – 9.07.0 – 9.0

60.0 - 95.060.0 - 90.0

20182017

33.0 – 53.0

24.0 - 35.0

28.0 - 45.0

63.0 - 98.0

10.0 – 16.2

7.0 – 9.0

Q1 2019


2018 Q1 2019

< 3,500 3,501 - 8,000 8,001 - 20,000 > 20,000

89%

37.8%

60.5%

2017

17%

52%

31%

Average Capital Values – High-End (INR ‘000/sf)

South-East

South-Central

Gurugram*

Noida*

Location 2018

20.0 – 25.0

23.8 – 33.3

*4.5 – 9.0

*4.0 - 6.5

20.0 – 27.0

24.0 – 35.0

*4.5 – 9.0

*4.0 - 6.5

2017

4.5 - 9.0*

20.0 – 25.0

23.8 – 33.3

4.0 - 6.5*

Q1 2019

Average Capital Values – Mid Segment (INR '000/sf)

*Capital values have been recalibrated historically


4

In a trend similar to the previous quarter, mid segment constituted the majority share of 89% in new unit launches

indicating the thrust by developers on this segment which garners the maximum demand from customers. New unit

launches in the high-end segment had an 11% share of the total.

1.7%11%


0%

0%

0%

0%

100%

72%

0%

0%

28/%

Delhi

Gurugram

Noida

0%

0%

0%

0

1340

880



KEY TO SUBMARKETS:

Gurugram: Excludes Manesar, Sohna

Noida: Excludes Greater Noida, Noida Extension


Average capital values increased by around 4% in

the submarkets of South & Central Delhi as demand

for properties in these areas was higher in the

secondary market compared to the limited supply.

Capital values in Gurugram & Noida were largely

range-bound due to enough availability to meet

demand for property in these areas. Rental values also

increased by 1-4% q-o-q for both high-end and mid

segment properties in South & Central Delhi with

demand for rented properties picking pace in these

areas.

New completions were witnessed in residential

corridors including Dwarka Expressway, Sohna Road,

New Gurugram, Greater Noida West and Noida

Expressway during the first quarter of 2019. More

projects are scheduled for completion in the

upcoming quarters in Dwarka Expressway and Noida

Expressway as several developers continue to

maintain the impetus on execution of existing projects

in the city.

Insolvency and RERA interventions such as bringing

in the state-owned NBCC to execute stalled projects in

the city (primarily in Noida) is likely to help restore some

lost buyer confidence in the real estate market. In

another partnership between two private developers,

the project management arm of ATS Group will

complete three projects of Logix Group in Noida. These

measures will put to rest some of the consumer

dissatisfaction in Delhi NCR which has emerged from

significant delays in completion timelines of projects.

5

The second half of 2019 is likely to see infusion of 5.6 msf of new office space in Delhi NCR in office

corridors including Golf Course Road Extension and NH8 in Gurugram as well as Noida Expressway,

some of which might get deferred further.

Leasing is expected to maintain a positive momentum in the upcoming quarters, with the non-CBD

region of Gurugram expected to lead the office transaction activity.

Overall market rents are likely to remain largely similar in the upcoming quarter.


Office


New unit launches expected to remain steady in the upcoming quarter, especially on account of general

elections which may likely slow down the approval process for projects.

Sales are expected to maintain a steady pace with a gradual improvement in buyer sentiment.

The high unsold inventory in Delhi NCR is likely to keep capital prices largely range-bound across most

submarkets.


Apparels, lifestyle and F&B brands are likely to be the major demand drivers for retail spaces with

international retailers planning to expand in the city, in continuation of the prevailing market trend.

The second half of 2019 is expected to see addition of 1.7 msf of mall space across Delhi and Noida, which

is expected to garner healthy occupancy levels based on preleasing activity in these developments.

Stable demand & space availability will keep rentals across malls and main streets largely similar, even

though select malls with high occupancy levels might see some increase in rents.

Retail

Residential

Outlook

6

< 2,800 2,801 - 8,000 8,001 - 20,000 > 20,000


Bengaluru

The successful implementation of Karnataka RERA

is evident in the improved in market sentiment in the

city’s real estate market, both from the buyers’ and

developers’ end. The city recorded 7,652 new units

launched during the first quarter of 2019.

Mid segment, which finds maximum favour with

the city’s working population, contributed nearly 64%

to the total launches during the quarter. Units in the

affordable category contributed 33% of the total. In

order to optimize the overall ticket sizes and aid

affordability, developers in the city have been

reducing unit sizes, a trend which has been observed

in new unit launches over the last 12-18 months.

Unit launches increasing; buyer sentiment improving


1%




Q1 2019

33%

64%

3%

2018

28%

52%

19%

1%

2017

13%

80%

2%

5%


Average Capital Values – High-End Segment (INR '000/sf)

2017

7.5 - 11.5

18.0 - 21.0

18.0 - 21.0

7.5 – 11.5

8.5 - 12.0

6.5 - 10.0

2018

7.5 - 11.5

18.0 - 21.0

18.0 - 21.0

7.5 – 11.5

8.5 - 12.0

6.5 - 10.0

Average Capital Values – Mid-End (INR '000/sf)

4.5 – 6.75

7.0 – 10.0

4.5 – 6.5

5.0 – 7.0

7.0 – 11.0

6.5 – 8.5

6.5 – 7.5

10.0 – 12.5

4.3 - 6.0

2018

4.5 – 6.75

7.0 – 10.0

4.5 – 6.5

5.0 – 7.0

7.0 – 11.0

6.5 – 8.5

6.5 – 7.5

10.0 – 12.5

4.3 - 6.0

2017

4.5 – 6.75

8.0 – 11.0

5 – 7

5.5 – 7.5

8.0 – 11.5

7.5 – 9.5

6.5 – 7.5

9.5 – 13

4.5 - 6.5

Q1 2019

Central

South East

North

East

South

Off Central I

South West

Off Central II

North West

Location

Central

South

Off Central

North

East

Central

Location

North Bengaluru (areas including Thanisandra, Hosahalli) witnessed the launch of more than 3,000 units during

Q1, with many prominent developers launching their projects over the last 6 months. Demand for residential real

estate aided by a strong office market and infrastructure developments like the upcoming metro corridor are

adding to the attractiveness of North Bengaluru as a hotspot for residential developments

Q1 2019

8 - 12

18.0 - 21.0

18.0 - 21.0

7 – 11.8

9 - 13.0

7.5 - 11.0

7



23%

0%

0%

0%

81%

0%

0%

0%

77%

100%

100%

0%

7%

0%

100%

100%

0%

0%

0%

0%

12%

0%

100%

0%

North

East

North East

North West

South

Central

South East

South West

0%

0%

0%

0%

0%

0%

0%

0%

3,060

79

187

0

2,192

0

1,744

390


KEY TO SUBMARKETS:

North: Hebbal, Bellary Road, Yelahanka, Doddaballapur Road, Hennur Road, Thanisandara Road, Hebbal, Jakkur, Devanahalli

East: Marathahalli, Whitefield, Old Airport Road, Old Madras Road, Budigere Cross, Whitefield, Old Airport Road

North-west: Malleshwaram, Rajajinagar, Tumkur Road, Malleshwaram, Rajajinagar, Yeshwantpur

South: Jayanagar, J P Nagar, Kanakapura Road, Bannerghatta Road, BTM Layout, Banashankari, Koramangala

Central: Brunton Road, Artillery Road, Ali Askar Road, Cunningham Road, Lavelle Road, Palace Cross Road,

Off Cunningham Road, Ulsoor Road, Richmond Road, Sankeys Road

South-east: Sarjapur Road, Outer Ring Road (Marathahalli- Sarjapur), HSR Layout, Hosur Road


North submarket contributed 40% of the new

unit launches with Jakkur, Hosahalli and

Thanisandara Road witnessing activity during the

quarter. South submarket with a 29% share of the

new launches saw action in Jayanagar, J.P Nagar,

Anekal, Gotigere, and Begur Hobli.

Around 7,420 units were completed during the

quarter with 36% of these completed units in the

North submarket in various locations including

Hebbal, Yelahanka and Devanahalli. The South-East

micro-markets of Sarjapur Road, Varthur,

Doddakennahalli had a share of 30% in the overall

completions in Q1 2019.

Capital Values in both the high-end and mid

segments saw a growth of 5-10% during Q1 2019 on

the back of improved sales and are likely to remain

on an upward trajectory in the quarters ahead.

8

9


Vacancy is likely to remain stable with the rise in demand being met by existing space availability coupled

with an upcoming supply addition of 0.23 msf of retail space in the next quarter.

Apparel and F&B sectors shall continue to be the major demand drivers for retail with international brands

expanding their footprint in the city.

Retail

Bengaluru is expected to have additional new supply of around 2.8 msf of office space in the

upcoming quarter.

Rentals are likely to rise in select micro-markets with tight vacancies even as upcoming supply is

likely to be pre-leased to a great extent.


Office


Mid segment will continue to garner the maximum attention with developers continuing to maintain focus

on launches in this segment.

High demand is likely to exert an upward pressure on capital values, which have already increased by 10 –

15% in the last 12 months.

Residential

Outlook

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Documents

Property Insight Q1 Blue May 2019 CITIXXXXX 14-05-2019 · affordable housing, from the earlier prevailing 8%. The cities classified as metros are Delhi NCR (Delhi, Noida, Greater